Dear Members,
Your Directors take pleasure in presenting the 23rd Annual Report of the Company together with the Audited Financial Statements along with the Report of the Auditors for the financial year ended March 31, 2014.
Summary of Financial Results:
(Rs. In lacs)
Year Ended 31.03.2014 | Year Ended 31.03.2013 | |
Net Sales | ||
Domestics | 27,314.09 | 20,955.81 |
Exports | 44,710.27 | 30,527.12 |
Total | 72,024.36 | 51,482.93 |
Profit/(Loss) before | ||
Finance Cost, | ||
Depreciation and Taxation | 7,840.98 | 5,080.28 |
Less: Finance Costs | 3,035.72 | 2,989.46 |
Depreciation | 1,299.74 | 1,137.17 |
Profit before exceptional items and tax | 3,505.52 | 953.65 |
Exceptional items | - | 174.34 |
Profit before tax | 3,505.52 | 779.31 |
Less: Provision for Tax (incl. deferred tax) | 192.17 | 6.15 |
Net Profit/(Loss) after Tax | 3,313.35 | 773.16 |
Add: Surplus in statement of profit and loss account at the beginning of the year | 1,286.72 | 513.56 |
Amount available for appropriation | 4,600.07 | 1,286.72 |
Operations
Your Companys Revenue from Operations (Net) increased by 40%, from Rs. 51,482 lacs in 2012-13 to Rs. 72,024 lacs in 2013-14. Profit before Exceptional Items and Taxation increased from Rs. 953.65 lacs in 2012-13 to Rs. 3,505.52 lacs in 2013-14.
For the year ended 31st March,2014, the Operating Profit i.e. EBIDTA was Rs. 7,840.98 lacs, as against Rs. 5,080.28 lacs in the preceding year 2012-13. Profit after Tax was Rs. 3,313.35 lacs for the year 2013-14, compared to Rs. 773.16 lacs for Financial Year 2012-13.
Amalgamation with Coromandel International Limited
Your Directors have, at their meeting held on 24th January, 2014, approved a Scheme of Amalgamation for merger of the Company with its holding company, Coromandel International Limited. Company has received NOC from the Stock Exchanges as required under the Listing Agreement and is in process of obtaining the approval of the shareholders, creditors, Honble High Court of Gujarat, and such other authorities, as may be required. The Scheme will be with effect from 1st April 2014 but would become operative after receipt of all necessary approvals.
Dividend
Considering the sizable funds requirement of the Company for its business expansion in the ensuing year, the Board has not recommended any dividend for the year under review.
Overseas Subsidiary Companies
The Company has Subsidiaries Companies in Australia, Latin America, Argentina, Europe and Mexico, primarily to actively pursue grant of licenses and product registrations in conformity with the local laws of the respective countries/regions.
Sabero Australia Pty Ltd., a wholly owned subsidiary, incurred net loss of Australian Dollar 34,786/ (equivalent to Rs. 19.52 lacs) during the year ended March 31, 2014. Sabero Europe BV, another wholly owned subsidiary, incurred a net loss of Euro 419 (equivalent to Rs. 0.32 lacs) during the year ended March 31, 2014. Sabero Argentina S. A., another subsidiary, generated a net profit of Argentina Pesos 62,741 (equivalent to Rs. 6.08 lacs) during the year ended March 31 2014. Sabero Organics America S.A., Companys subsidiary in Brazil, incurred net loss of Brazilian Real 411,684 (equivalent to Rs. 110.06 Lacs) during the year ended March 31, 2014. Sabero Organics Mexico S.A. de C.V., the Mexican subsidiary, generated net profit of Mexican Dollars of 938,772 (equivalent to Rs. 42.29 Lacs) during the year ended March 31, 2014.
Consolidated Financial Statements
The Ministry of Corporate Affairs, has given a general exemption to Companies from publishing the Annual Report of its Subsidiary Companies wherever a Consolidated Statement has been appended. In view of this, the Annual Report of the Subsidiary Companies, i.e. Sabero Australia Pty Ltd, Sabero Europe B. V., Sabero Argentina S.A., Sabero Organics America S.A. and Sabero Organics Mexico S.A de C.V. have not been annexed.
However, the Accounts of the Subsidiary Companies and the related information will be made available to the Members of the Company on request and will also be kept for inspection in the Registered Office.
A Statement under Section 212(8) of the Companies Act, 1956 is attached and forms part of this Annual Report.
Safety, Health & Environment (SHE)
Companys focus on Safety, Health and Environment continued during the year under review maintaining high safety standards. During the year, the Company took up rebuilding of congested multi-purpose plant to strengthen the plant infrastructure and decongested the work area to provide safe working environment. The Company continued its focus on improving compliance with the applicable environmental regulations and the Company maintained its ISO 14001 Environmental Management System certification. During the year Company had received a notice from GPCB alleging non-compliance with certain environmental parameters and on submission of the relevant particulars by the Company, GPCB has revoked the notice. During the year, the Company has spent significant amount in improving the environmental parameters and treatment of effluents at the factory. The Company has been carrying out regular audits and conducting training programs to promote awareness on Safety, Health and Environment, among the employees.
Management Discussion & Analysis and Corporate Governance Report:
The Management Discussion & Analysis Report highlighting the industry structure and developments, opportunities, risks and uncertainties, future outlook, etc is furnished separately and forms part of this Directors Report.
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate Governance along with a certificate from M/s. Rathi & Associates, Company Secretaries in practice, regarding compliance of the requirements of Corporate Governance is annexed hereto.
Directors
In accordance with Article 70 of the Articles of Association, read with Section 152 and 161 of the Companies Act, 2013, Mr. Kapil Mehan and Mr. M. M. Venkatachalam, Directors of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
During the year under review, Mr. Bhavesh Vora was appointed as an Additional Director and a notice has been received from a shareholder proposing his appointment as a Director of the Company. The details of Directors seeking appointment or reappointment as required by Clause 49 of the Listing Agreement are provided in the Note-11 to the Notice convening the ensuing Annual General Meeting of the Company.
During the year under review, Mr. Jayesh Gandhi and Mr. Sujal Shah have resigned from the office of Director. The Board of Directors wishes to place on record their appreciation for the valuable contribution made by Mr. Jayesh Gandhi and Mr. Sujal Shah during their tenure.
Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the conclusion of ensuing Annual General Meeting and are eligible for re-appointment. Members are requested to approve their re-appointment as the Statutory Auditors of the Company and fix their remuneration.
Cost Auditors
In accordance with the directive received from the Central Government, an audit of the cost accounts relating to products manufactured by the Company is required to be conducted every year, by an auditor with the requisite qualifications as prescribed under Section 233B of the Companies Act, 1956. The Board of Directors had appointed M/s. P.D. Dani and Co., Cost Accountants for the conduct of the cost audit for the year ended March 31, 2014. The report for the year 2012-13 was submitted to the Ministry of Corporate Affairs on 27-09-2013 (Due date: 30-09-2013) and for the year 2013-14, will be submitted on/before due date.
Delisting of securities from Stock Exchanges
During the year under review, the Company has completed voluntary delisting of its securities from Ahmedabad Stock Exchange Limited, Vadodara Stock Exchange Limited and Delhi Stock Exchange Limited.
Disclosures
Information relating to the Conservation of Energy, Technology Absorption, Adaptation & Innovation and Foreign Exchange Earnings and Outgo required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are annexed hereto and forms part of this report.
Information as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is also annexed hereto and forms part of this Report.
Directors Responsibility Statement
Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, Board of Directors hereby confirm:
(i) That in the preparation of the accounts for the financial year ended 31st March 2014, the applicable Accounting Standards have been followed;
(ii) That appropriate accounting policies have been selected and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit/ loss of the Company for the year under review;
(iii) That proper and sufficient care has been taken 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;
(iv) That the Accounts for the financial year ended 31st March, 2014 have been prepared on a going concern basis.
Acknowledgements
The Board of Directors wishes to acknowledge and express their deep appreciation for the dedicated services rendered by employees at all levels and the valuable contribution in improving the performance of the Company. Your Directors also wish to place on record their appreciation for the continued confidence and support extended by all customers, suppliers, financial institutions, banks, shareholders, other business associates and agencies/bodies of the Central Government and that of the Government of Gujarat.
On behalf of the Board of Directors | |
Sd/- | |
Place : Mumbai | M. K. Tandon |
Date : 23rd April 2014 | Chairman |
ANNEXURE "A" TO THE DIRECTORS REPORT
Information under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report.
FORM - A
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
CURRENT YEAR | PREVIOUS YEAR | |
2013-14 | 2012-13 | |
A. POWER & FUEL CONSUMPTION | ||
1) Electricity | ||
a) Purchased Units (kwh) | 225.22 | 221.53 |
Total Amount (Rs.) | 1,462.44 | 1,581.61 |
Rate/Unit (Rs./Kwh) | 6.49 | 7.14 |
b) Own Generation | ||
- Through Diesel generator | ||
Unit(Lac units) | 1.41 | 0.76 |
Diesel consumed (K Litre) | 44.74 | 30.96 |
Unit per litre of Diesel oil | 3.15 | 2.47 |
Rate/Unit (Rs./kwh) | 18.80 | 20.55 |
- Through gas engine | ||
Unit(Lac units) | 46.34 | 67.08 |
Gas consumed (SCM in lacs) | 13.84 | 17.75 |
Amount (Rs. Lacs) | 544.43 | 583.75 |
Unit generated/scm of gas | 3.35 | 3.78 |
Rate/Unit (Rs./kwh) | 11.75 | 8.70 |
2) Fuel for Steam Generation | ||
i. Furnace Oil | ||
Quantity (KL) | Nil | Nil |
Total Amount (Rs.) | Nil | Nil |
Average Rate (Rs. /KL) | Nil | Nil |
ii. HSD (KL) | ||
Total Amount Rs. | Nil | Nil |
Average Rate (Rs./KL) | Nil | Nil |
iii. Natural Gas | ||
Quantity (Scm in lacs) | 113.58 | 119.12 |
Amount (Rs. lacs) | 4,468.24 | 3,926.95 |
Rate/unit (Rs./Scm) | 39.34 | 32.97 |
CONSERVATION OF ENERGY:
The Company remains focused on giving importance to energy conservation covering efficiency in generation, distribution and utilization. The energy saving measures implemented during the year includes, Reduction in energy consumption per unit of production through reduction in cycle time and increasing through-put
Disclosure of particulars with respect to:
a) Research & Development: (R & D)
The in-house R&D focused on establishing process and knowhow for manufacture and commercialization of New Products in sync with the business strategy and continuous improvement on process and operations. During the year 2013-14:
1. Processes were established for new off patent products and combination products for technology absorption and commercialization.
2. Cycle time and Yields improved across products manufactured leading to cost reduction.
3. Processes established for generation of additional Bi-products.
b) Technology Absorption, Adoption and Innovation:
Technology up gradation was pursued by the Company using in-house R&D infrastructure for absorption, adoption and innovation. During the year, the Company made progress in the areas of establishing processes for new off patent products, combination products through new recipe leading to reduction in costs, reduction in generation of effluents and treatment costs with installation and optimum utilization of facilities. Cycle time reduced in key products leading to improved productivity.
c) Foreign Exchange Earnings and Outgo:
(Rs. in Lacs)
CURRENT YEAR | PREVIOUS YEAR | |
2013-14 | 2012-13 | |
1. Foreign Exchange earned | ||
Export of goods on FOB basis | 42,166.96 | 27,338.21 |
2. Outgo of foreign exchange | ||
Raw materials on CIF basis | 14,332.84 | 12,973.98 |
Stores, spares | - | 1.07 |
Capital goods | - | 90.42 |
Export Commission | 738.40 | 344.22 |
Product Registration Expenses | 158.89 | 338.24 |
Interest/Bank charges | 181.56 | 214.96 |
Others | 79.98 | 80.30 |
Total | 15,491.67 | 14,043.19 |
ANNEXURE "B"
Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors Report.
Name | Designation | Remuneration (Rs.) Gross/Net | Qualification | Experience (Yrs) | Date of commencement of employment | Age | Particulars of last employment |
Mr. G. Veera Bhadram | President & Whole-time Director | Gross Rs. 9,325,627/- | Graduation in Agriculture, Post Graduation in Agricultural Economics, PG Diploma in Management | 30 years | 19th December, 2011 | 56 years | Coromandel International Limited Senior Vice President Pesticides SBU |
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