nijjer agro foods ltd Directors report

NIJJER AGRO FOODS LIMITED ANNUAL REPORT 2009-2010 DIRECTORS REPORT Your Directors are pleased to present the Twenty-first Annual report of the Company along with the audited accounts for the year ended 31st March 2009. FINANCIAL RESULT (Rs. in Lacs) YEAR ENDED YEAR ENDED 31.03.2009 31.03.2008 Total Income 1213.99 905.24 Profit/(Loss) before interest 211.93 91.91 and depreciation Interest 183.47 251.10 Depreciation 94.85 94.76 Transfer to balance sheet (66.39) (253.95) In view of losses, no dividend is being recommended. OPERATIONS: We are pleased to inform the share holders that during the financial year under review, your Company imported a belt press from China. This was installed and became operational during the year. As a result of this Company could process 1676 MT of Amla to produce amla juice for Patanjali Ayurveda Limited and earned job charges of Rs. 90.45 Lacs. During the year your Company could produce 1300 MT of tomato paste against 75 MT. of last year, however production of chili puree went up marginally to 404 MT against 356 MT of last year. Milk business of the Company continued to be adversely affected during this year also. Due to shortage of availability of milk in the market due to competition and shortage of working capital, Company decided not to operate milk planton its own. Processing of Ketchup on behalf of Nestle was 1313 MT against 2558 MT of last year however during the year Nestle discontinued ketchup processing at our unit. The production of own brand of ketchup went down due to shortage or nonavailability of tomato paste, an essntial ingredient of ketchup. During the year Company also processed 1482 MT of fruit pupls agaisnt 1702 MT of last year. Due to increase in production of tamato paste, and continued non operation of milk plant on its own, the Company ended the year with turnover of Rs. 1213.99 Lacs agianst Rs. 905.24 Lacs of last year, and there is a net loss of Rs. 66.39 Lacs against 253.95 Lacs of last year. Efforts are being made at all levels to add new value added products to the existing product range to increase realisable values per unit of production, and to cut costs to achieve profitability. The Company had arrived at a negotiated settlement with all three financial institutions, and total dues have been cleared. However Company has yet to issue equity shares as per the sanctioned scheme. IFCI Limited has decided to receive cash in place of 0% optionally convertible debentures, out of the amount due a sum of Rs. 76 Lacs is still payable. Due to delay in payment of listing fee trading in the shares of our Company was suspended by BSE. The Company is pursuing the matter with BSE and expects that the trading will start soon. Consequent on the request made DSE has revoked suspension of trading in the shares of our Company, trading will start once DSE start operations. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to requirements of section 217 of the Companies Act, 1956, your Directors confirm that: 1. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures. 2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2009 and the Profit & Loss :Account of the Company for the year ended on that date. 3. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 4. They have prepared the accounts on a going concern basis. DIRECTORS Sh. W.S. Nijjer, Mrs. Navdeep Nijjer and Sh. G.S Kalkat retire by rotation at the forthcoming Annual General Meeting & being eligible, offer themselves for reappointment. Darticulars of the Directors retiring by rotation and seeking re- appointment pursuant to clause 49 of the Listing Agreement with Stock Exchange are as follows: Name of Director Shri W.S. Mrs. Navdeep Shri G.S Kalkat Nijjer Nijjer Date of Birth 26-11-1926 08-03-1962 17-06-1926 Date of Appointment 08-01-1991 27-07-2002 08-01-1991 Qualification Graduate Graduate Doctorate Experience 49 years 9 years 45 years Detail of other NIL NIL NIL Directorship Detail of other Board NIL One NIL Committee FIXED DEPOSITS The Company did not accept fixed deposits during the year and no deposits were overdue for payment as on 31.3.2009. PARTICULARS OF EMPLOYEES None of the employees was in receipt of remuneration in excess of the limits laid down in Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO. As required under The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information is annexed and forms a part of this report. CORPORATE GOVERNANCE A separate report on Corporate Governance along with the Auditors certificate on its compliance is attached and forms part of this report. AUDITORS M/S Lakhwinder Singh & Associates, Chartered Accountants, auditors of the Company hold office until the conclusion of the forthcoming Annual General Meeting & being eligible offer themselves for reappointment. You are requested to reappoint them. AUDITORS OBSERVATIONS ON ACCOUNTS There are delays in deduction/deposit of Provident Fund and Employees State Insurance dues with appropriate authorities and amount due could not be deposited due to financial constraints. Further during the year deduction on account of TDS was not made and no amount was deposited with the authorities. The Company is putting in all efforts to clear the over dues at the earliest. ACKNOWLEDGEMENT The Board wishes to place on record its appreciation for the continued support received from all its employees, IFCI Limited, Bankers, Government authorities and customers. Industrial relations remained cordial during the year. On behalf of the Board of directors SATBIR NIJJER NAVDEEP NIJJER Managing Director Director Place: Regd. Office, Vill: Meharbanpura, PO. Jandiala Guru, Amritsar Date : 15.08.2009 ANNEXURE TO DIRECTORS REPORT Particulars under the Companies (Disclosure of particulars in the report of Board of Directors) Rules 1988. A. CONSERVATION OF ENERGY 1. Measures Taken: With the fall in international prices of crude there is slight decrease in cost of electricity generated from DG sets, but DG sets installed by the Company are quite old and not fuel efficient to the extent needed, this result in higher cost of generation. The cost of electricity purchased from electricity board has also gone up. Due to rise in energy cost your Company continues to give high priority to conservation of energy, proper maintenance and effective usage of equipment used for generation and consumption is being done on an ongoing basis. Due to financial constraints Company could not incur capital expenditure. 2. Additional Investment and Proposal: Due to shortage of funds no additional investment has been made during the year though the Company has plans to add some energy saving equipment. IMPACT OF 1 & 2 The measures of conservation of energy are being taken on continuing basis. 1. Total energy consumption per unit of production as per Form A annexed. B. TECHNOLOGY ABSORPTION Efforts made in technology absorption as per form B are furnished below: Research and Development Steps are continuously being taken for innovation, modification and renovation of production facilities and new product development. This is aimed at development of better products at competitive price to improve profitability. During the year under review the Company has developed in- house fruit juice concentrates. Commercial production is expected to start this year. EXPENDITURE ON R & D a) Capital NIL NIL b) Recurring 20108 63260 c) Total 20108 63260 d) % age of Total Turnover 0.02% 0.06% C. FOREIGN EXCHANGE EARNING AND OUTGO Efforts and initiatives in relation to export The Company has made all efforts to start export but considering the nature of products and international competition being faced by our products it appears to be very difficult to enter export market. Still the Company is putting in all efforts to achieve break through. EARNING AND OUTGO CURRENT YEAR PREVIOUS YEAR (RS.) (RS.) Foreign Exchange Earning 348700 NIL Foreign Exchange Outgo on: Travel 2425904 119400 Packing Materials, Stores and Spares and others 2165000 NIL FORM - A FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY Current Year Previous Year (Rs.) (Rs.) A. Power and Fuel Consumption 1. Electricity Units a) Purchased Unit 974070 811121 Total Amount 5652319 3560828 Rate/Unit 5.80 4.39 2. Own Generation through Diesel Generators Units 337675 134595 Total Amount 3329485 1433437 Rate/Unit 9. 86 10. 65 B. Consumption per unit of Production Electricity & Diesel Oil}: (Due to production of different grade of same product at same time, and due to frequent change in product, mix, figures of energy consumption per unit of production cannot be worked out) Cost per unit of electricity consumed may vary due to levy of minimum chargesand penalty by electricity board and non utilization of minimum units in a particular month. MANAGEMENT DISCUSSION AND ANALYSIS A) Industry structure and Development. i) Fruit and Vegetable processing unit. Fruits and vegetable processing is the main thrust and profitable area of the Company. In the Fruit and Vegetable processing unit the Company processes fresh vegetables i.e. tomatoes, chilli and also produces ketchup. For fruit processing the Company has developed pulps and juices of pear, apple and also juices of kinnu and other citrus fruits. It is very important to add that the raw material for these products is fully dependent on weather conditions, which prevail during the growing period, and the success or failure of a particular season is fully dependent on rain and prevailing temperature during growing and harvesting period. ii) Milk processing unit. Due to shortage of working capital the Company could not run the plant during the current accounting year. However as a result some modifications made in the plant this plant can now be used for processing of fruit juices a new line of business being added by the Company. B) Business Strategy During the year 2008-09 the world economic environment deteriorated. However considering the nature of our products and customers this down trend is not likely to have a major effect on our products, however some impact on our products cannot be ruled out. C) Risks anConcerns Availability of basic raw material of the Company is influenced by vagaries of nature, monsoon, and prevailing temperature during growing period. However due to tough quality parameters being followed during growing and manufacturing process, the Company expects to be in a position to compete with the imported products and will always have advantage over them. Your Company being the supplier of intermediate products to large food companies/chains expects improvement & demand of the products D) Outlook and Cautionary Statement With the all round expectation of good monsoon, increase in per capita income, changing consumer habits, and opening up of mega stores we expect better times during the years to come. The above statement describing the Companys objectives may be forward looking but the actual results may differ materially from those expressed. Important factors that could make a difference to the Companys operations include availability of raw material at right price, availability of adequate working capital, cyclic demand of Companys products, change in Government regulations and tax regimes, economic development in India and other incidental factors. On behalf of the Board of directors SATBIR NIJJER NAVDEEP NIJJER Managing Director Director Place: Regd. Office, Vill: Meharbanpura, PO. Jandiala Guru, Amritsar Date : 15.08.2009