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Directors Report of Deepak Fertilisers & Petrochemicals Corporation Ltd.

Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the Thirty Third Annual Report together with Audited Accounts of the Company for the Financial Year ended 31st March, 2013.

- FINANCIAL RESULTS

The summarised financial results for the year are as under:

(Rs. in Lacs)

2012-13 2011-12

Total Revenue (including Other Income) 2,66,824.04 2,38,219.02

Profit Before Exceptional and Extraordinary Items and Tax 20,057.73 29,005.55

Less: Exceptional and Extraordinary Items - -

Profit Before Tax (PBT) 20,057.73 29,005.55

Less: a) Current Tax (Net) 3,263.44 5,645.01

b) Deferred Tax 2,103.78 2,063.16

Profit / (Loss) for the period 14,690.51 21,297.38

Add: Surplus brought forward 83,055.02 71,225.48

Amount available for Appropriations 97,745.53 92,522.86

Appropriations:

a) Transferred to Debenture Redemption Reserve 1,165.63 1,792.00

b) Transferred to General Reserve 1,475.00 2,135.00

c) Proposed Dividend on Equity Shares (Net) 4,851.40 4,851.22

d) Tax on Proposed Dividend (Net) 754.55 689.62

Surplus carried to Balance Sheet 89,498.95 83,055.02

- MANAGEMENT DISCUSSION AND ANALYSIS

During the year under review, despite tough economic conditions, Total Revenue (including Other Income) increased to Rs. 2,668.24 Crores (including Rs. 652.61 Crores from trading operations) as against Rs. 2,382.19 Crores (including Rs. 487.13 Crores from trading operations) for the previous year. PBT for the year under review stood at Rs. 200.58 Crores as against Rs. 290.06 Crores in the previous year. Profit for the current year was recorded Rs. 146.90 Crores as compared to Rs. 212.97 Crores in the previous year. A further analysis of the performance is available in the Management Discussion and Analysis (MDA), which forms part of this Report, and inter alia, deals adequately with the operations as also current and future outlook of the Company.

- DIVIDEND

Considering the performance of the Company during the year under review, your Directors recommend a dividend @ 55% i.e. Rs. 5.50 per Equity Share (Previous Year 55% i.e. Rs. 5.50 per Equity Share) of Rs. 10 each of the Company for the year ended 31st March, 2013. The proposed dividend (including tax on proposed dividend) will absorb Rs. 56.22 Crores.

- SECURED DEBENTURES

In accordance with the terms of issue of Secured Non-Convertible Debentures of Rs. 10 Lacs each aggregating Rs. 50 Crores and Rs. 125 Crores, earlier issued in favour of Banks / Financial Institutions, your Company during the year under review, has fully redeemed the Debentures of Rs. 50 Crores on its due date, 9th February, 2013 and has redeemed one-third amount of the Debentures of Rs. 125 Crores on its due date, 1st September, 2012.

During the year under review, for General Corporate Purpose (including long term working capital), your Company has issued Secured Non-Convertible Debentures of Rs. 10 Lacs each aggregating Rs. 100 Crores at coupon rate of 9.70% for a period of 3 years and Rs. 250 Crores at coupon rate of 9.71% for a period of 5 years, on Private Placement Basis and these Debentures are listed on the Bombay Stock Exchange Limited (BSE).

- DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(ii) the accounting policies selected had been applied consistently and judgements and estimates made 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 on 31st March, 2013 and of the profit of the Company for that period;

(iii) proper and sufficient care had 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; and

(iv) the annual accounts had been prepared on a ''going concern'' basis.

- CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled ''Corporate Governance'' is attached to this Annual Report.

- CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR initiatives taken by the Company continued during the year under review. A separate section titled ''Corporate Social Responsibility'' is attached to this Annual Report.

- SUBSIDIARY COMPANIES

During the year under review, your Company''s subsidiary, Deepak Mining Services Private Limited (DMSPL) has formed Joint Venture Company, namely, RungePincockMinarco India Private Limited with International Mineral Assets Transactions Pty. Limited (IMAT), a wholly owned subsidiary of RungePincockMinarco Limited, Australia, wherein DMSPL will have 51% equity participation and IMAT will have 49% equity participation, to provide services across the mining sector of India and the surrounding geographies.

Consequently, your Company has now five subsidiaries viz. Smartchem Technologies Limited, Deepak Nitrochem Pty. Limited, Yerrowda Investments Limited, Deepak Mining Services Private Limited and RungePincockMinarco India Private Limited.

A statement pursuant to Section 212 of the Companies Act, 1956 in respect of these subsidiaries is appended to the Balance Sheet. In terms of General Circular No.: 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the annual accounts and other reports specified in Section 212(1) of the Companies Act, 1956 in respect of the subsidiary companies have not been attached to the Balance Sheet. The Company will make available these documents / details to the members of the Company and the subsidiary companies upon request made in this regard to the Company. The Annual Accounts of the subsidiary companies will also be kept for inspection by any member of the Company at its Registered Office and also at the Registered Office of the concerned subsidiary company.

In accordance with the requirements of Accounting Standards prescribed by the Institute of Chartered Accountants of India and aforesaid circular issued by the Ministry of Corporate Affairs, the Consolidated Financial Statements of the Company and its subsidiaries are annexed to this Annual Report.

- INDUSTRIAL RELATIONS

Following a dispute over disciplinary action taken by the management, productivity issues and wage settlement, the workers at Company''s Plant situated at Plot No. K-1, MIDC Industrial Area, Taloja, went on strike on 3rd January, 2013. However, in the absence of the workers, the management staff was operating the Plant, to the extent possible. The workers have called off strike on 30th May, 2013, upon amicable settlement of the aforesaid issues and signing of a Long Term Wage Agreement.

- CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure forming part of this Report.

- SAFETY, HEALTH AND ENVIRONMENT (SHE) INITIATIVES

The main manufacturing location of your Company at Taloja successfully went through the re-certification for renewal of ISO 9001, ISO 14001 and OHSAS 18001. Implementation of the new initiative of 5 S has also been started. It is pertinent to note that for the first time your Company has completed 1,000 days of operation without any reportable accident. Your Company has also accelerated Greening Drive in line with its priorities.

- AWARDS AND ACCOLADES

Your Company has received following recognitions based on its continuing efforts towards conservation of energy and performance:

- Award for excellence in Energy Conservation & Management from Maharashtra Energy Development Agency for consecutive two years.

- Award for excellence in Energy Conservation & Management from Indian Chemical Council.

- An "Energy Efficient Unit" award from Confederation of Indian Industry.

- Fertiliser Association of India Award for the year 2012 for the overall performance in Agri Business.

- DIRECTORS

During the year under review, Shri C. K. Mehta relinquished the position as the Non-Executive Chairman and Director of the Company. The Board of Directors of your Company placed on record its deep and heartfelt appreciation of the services and herculean contribution rendered by Shri C. K. Mehta and appointed him as Chairman-Emeritus. Shri S. C. Mehta who was Vice-Chairman & Managing Director of the Company took over as Chairman & Managing Director of the Company.

Shri R. A. Shah, Shri D. Basu and Shri U. P. Jhaveri, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The present term of Shri S. C. Mehta, Chairman & Managing Director of the Company shall be expiring on 31st July, 2013. The Board of Directors has re-appointed, subject to approval of Members, Shri S. C. Mehta as Chairman & Managing Director of the Company for a further period of 5 years with effect from 1st August, 2013.

The Board of Directors has appointed, subject to approval of Members, Shri Partha Bhattacharyya as Whole-Time Director of the Company and designated him as an Executive Director for a period of five years with effect from 31st October, 2012.

- AUDITORS

M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their appointment, if made, by the Company for the year 2013-14 will be within the limit prescribed under Section 224(1B) of the Companies Act, 1956. The Board of Directors commends their appointment.

- COST AUDITOR

Your Directors have appointed Shri Y. R. Doshi, Cost Accountant as the Cost Auditor for the Financial Year 2012-13. Shri Y. R. Doshi will submit the cost audit report and annexure to the Central Government (Ministry of Corporate Affairs) in the prescribed form within specified time and at the same time forward a copy of such report to your Company.

The Cost Audit Report for the Financial Year ended 31st March, 2012 which was due for filing on 28th February, 2013 was filed with the Central Government (Ministry of Corporate Affairs) on 12th February, 2013.

- PERSONNEL

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the annual report and accounts are being sent to all members of the Company excluding the aforesaid information. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

- ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation to the Governmental authorities, Company''s bankers, customers, vendors, investors and all other stakeholders for their continued support during the year.

Your Directors are also pleased to record their appreciation for the dedication and contribution made by employees at all levels who through their competence and hard work have enabled your Company achieve good performance and look forward to their support in the future as well.

For and on behalf of the Board,

Mumbai S. C. MEHTA

Dated 30th May, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the Thirty Second Annual Report together with Audited Accounts of the Company for Financial Year ended 31st March, 2012.

FINANCIAL RESULTS

The summarized financial results for the year are as under:

(Rs.in Lacs)

2011-12 2010-11

Total Revenue (including Other Income) 2,38,219.01 1,60,064.04

Profit Before Exceptional and Extraordinary Items and Tax 29,005.55 26,443.74

Less: Exceptional Items - 338.09

Profit Before Tax (PBT) . 29,005.55 26,105.65

Less: (a) Current Tax (Net) 5,645.01 5,591.98

(b) Deferred Tax 2,063.16 1,851.26

Profit/(Loss) for the period , 21,297.38 18,662.41

Add: (a) Surplus brought forward 71,225.48 60,917.64

(b) Transferred from Debenture Redemption Reserve - 380.00

Amount available for Appropriations . 92,522.86 79,960.05 Appropriations :

(a) Transferred to Debenture Redemption Reserve 1,792.00 1,792.00

(b) Transferred to General Reserve 2,135.00 1,870.00

(c) Proposed Dividend on Equity Shares (Net) 4,851.22 4,408.65

(d) Tax on Proposed Dividend (Net) 689.62 663.92 Surplus carried to Balance Sheet 83,055.02 71,225.48

Total Revenue (including Other Income) increased to Rs 2,382.19 crores (including Rs 487.13 crores from trading operations) as against Rs 1,600.64 crores (including Rs 268.86 crores from trading operations) for the previous year. PBT for the year under review improved to Rs 290.06 crores as against Rs 261.06 crores in the previous year. Profit for the current year was Rs 212.97 crores as compared to Rs 186.62 crores in the previous year.

DIVIDEND

Considering the continued good performance of the Company during the year under review, your Directors recommend a dividend @ 55% i.e. Rs 5.50 per Equity Share (Previous Year 50% i.e. Rs 5.00 per Equity Share) of Rs 10/- each of the Company for year ended 31st March, 2012. The proposed dividend (including tax on proposed dividend) will absorb Rs 55.90 crores.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis (MDA), which forms part of this Report, inter-alia, deals adequately with the operations as also current and future outlook of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956 your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(ii) the accounting policies selected had been applied consistently and judgments and estimates made 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 31st March, 2012 and of the profit of the Company for that period;

(iii) proper and sufficient care had 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; and

(iv) the annual accounts had been prepared on a 'going concern' basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled 'Corporate Governance' is attached to this Annual Report.

SUBSIDIARY COMPANIES

During the year under review, the Company has acquired additional equity shares of Yarrow Investments Ltd., an associate company, by virtue of which it has become the Subsidiary of the Company under the provisions of the Companies Act, 1956.

Consequently, the Company has now four subsidiaries viz. Smart hem Technologies Limited, Deepak Nitro hem Pty. Limited, Deepak Mining Services Private Limited and Yarrow Investments Limited.

A statement pursuant to Section 212 of the Companies Act, 1956 in respect of these subsidiaries is appended to the Balance Sheet. In terms of General Circular No: 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the annual accounts and other reports specified in Section 212(1) in respect of the subsidiary companies have not been attached to the Balance Sheet. The Company will make available these documents/details to the members of the Company and the subsidiary companies upon request made in this regard to the Company. The Annual Accounts of the subsidiary companies will also be kept for inspection by any member of the Company at its Registered Office and also at the Registered Office of the concerned subsidiary company.

In accordance with the requirements of Accounting Standard prescribed by the Institute of Chartered Accountants of India and aforesaid circular issued by the Ministry of Corporate Affairs, the Consolidated Financial Statement of the Company and its subsidiaries is annexed to this Annual Report.

* INDUSTRIAL RELATIONS

Industrial Relations during the year under review continued to be cordial.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure forming part of this Report.

DIRECTORS

Shri Pranay Vakil, Shri Anil Sachdev and Smt. Parul S. Mehta, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

- AUDITORS

M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their appointment, if made, by the Company for the year 2012-13 will be within the limit prescribed under Section 224(1B) of the Companies Act, 1956. The Board of Directors commends their appointment.

- COST AUDITOR

Your Directors have appointed Shri Y. R. Doshi, Cost Accountant as Cost Auditor for the financial year 2011-12 and the same has been approved by the Central Government.

- PERSONNEL

As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the annual report and accounts are being sent to all members of the Company excluding the aforesaid information. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

- ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation to the Governmental authorities, Company's bankers and customers, vendors and investors for their continued support during the year.

Your Directors are also pleased to record their appreciation for the dedication and contribution made by employees at all levels who through their competence and hard work have enabled your Company achieve good performance year after year and look forward to their support in the future as well.

For and on behalf of the Board,

Mumbai C. K. MEHTA

Dated 18th May, 2012 Chairman


Mar 31, 2011

The Directors have pleasure in presenting the Thirty First Annual Report together with Audited Accounts of the Company for Financial Year ended 31st March, 2011.

FINANCIAL RESULTS

The summarised financial results for the year are as under :

(Rs, in Lacs)

2010 - 11 2009 - 10

Sales (including other income) 1,60,064.04 1,33,288.13

Profit before Depreciation 33,807.44 27,708.34

Less : a) Depreciation 7,146.71 6,433.21

b) Prior years adjustments (net) 175.99 1.73

Profit before Exceptional Items 26,484.74 21,273.40

Less : Exceptional Items 338.09 (2,504.36)

Profit Before Tax (PBT) 26,146.65 23,777.76

Less : a) Provision for Current Tax 5,591.98 6,839.61

b) Provision for Deferred Tax 1,851.26 (295.30)

c) Provision for Wealth Tax 41.00 28.65

Net Profit 18,662.41 17,204.80

Add : a) Balance brought forward 60,917.64 51,177.84

b) Transferred from Debenture Redemption Reserve 380.00 285.00

Amount available for Appropriations 79,960.05 68,667.64 Appropriations

a) Transferred to Debenture Redemption Reserve 1,792.00 1,542.00

b) Transferred to General Reserve 1,870.00 1,750.00

c) Dividend on Equity Shares (net) 4,408.65 3,971.00

d) Corporate Dividend Tax (net) 663.92 487.00

Surplus carried to Balance Sheet 71,225.48 60,917.64

Sales (including other income) increased to Rs. 1,600.64 crores (including Rs. 268.86 crores from trading operations) as against Rs. 1,332.88 crores (including Rs. 293.37 crores from trading operations) for the previous year. PBT for the year under review improved to Rs. 261.47 crores as against Rs. 237.78 crores in the previous year. Net Profit for the current year was Rs. 186.62 crores as compared to Rs. 172.05 crores in the previous year.

DIVIDEND

Considering the continued good performance of the Company during the year under review, your Directors recommend a dividend @ 50 % i.e. Rs. 5.00 per share (Previous Year 45% i.e. Rs. 4.50 per share) on Equity Shares of Rs.10/- each of the Company for year ended 31st March, 2011. The proposed dividend (including Corporate Dividend Tax) will absorb Rs. 51.26 crores.

SECURED DEBENTURES

In accordance with the terms of issue of Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 20 crores and Rs. 18 crores, earlier issued in favour of Financial Institutions, your Company during the year under review has fully redeemed the Debentures on the due date 15th September, 2010 and 30th September, 2010 respectively.

During the year under review, for augmenting the long term resources and for meeting general corporate expenditure, your Company has issued Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 50 crores on Private Placement Basis and these Debentures are listed on the National Stock Exchange of India Limited. These Debentures carry coupon rate of 9.31% and are due for repayment at the end of five years from the date of allotment as per the terms and conditions of issue.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis (MDA), which forms part of this Report, inter-alia, deals adequately with the operations as also current and future outlook of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956 your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(ii) the accounting policies selected had been applied consistently and judgements and estimates made 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 on 31st March, 2011 and of the profit of the Company for that period;

(iii) proper and sufficient care had 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; and

(iv) the annual accounts had been prepared on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled Corporate Governance is attached to this Annual Report.

SUBSIDIARY COMPANIES

The Company has three subsidiaries viz. Smartchem Technologies Limited, Deepak Nitrochem Pty. Limited and Deepak Mining Services Private Limited.

A statement pursuant to Section 212 of the Companies Act, 1956 in respect of these subsidiaries is appended to the Balance Sheet. In terms of General Circular No: 2 / 2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the annual accounts and other reports specified in Section 212(1) in respect of the subsidiary companies have not been attached to the Balance Sheet. The Company will make available these documents/ details to the members of the Company and the subsidiary companies upon request made in this regard to the Company. The Annual Accounts of the subsidiary companies will also be kept for inspection by any member of the Company at its registered office and also at the registered office of the concerned subsidiary company.

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Financial Statement of the Company and its subsidiaries is annexed to this Annual Report.

INDUSTRIAL RELATIONS

Industrial Relations during the year under review continued to be cordial.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure forming part of this Report.

DIRECTORS

Dr. S. Rama Iyer, Shri N. C. Singhal and Shri S. R. Wadhwa, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS

M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, the Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their appointment, if made, by the Company for the year 2011-12 will be within the limit prescribed under Section 224(1-B) of the Companies Act, 1956. The Board of Directors commends their appointment.

PERSONNEL

As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(l)(b)(iv) of the said Act, the annual report and accounts are being sent to all members of the Company excluding the aforesaid information. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

IS ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation to the Governmental authorities, Companys bankers and customers, vendors and investors for their continued support during the year.

Your Directors are also pleased to record their appreciation for the dedication and contribution made by employees at ail levels who through their competence and hard work have enabled your Company achieve good performance year after year and look forward to their support in the future as well.





For and on behalf of the Board,

C. K. MEHTA

Mumbai Chairman

Dated 11th May, 2011


Mar 31, 2010

The Directors present their 30th Annual Report and the audited statement of accounts for the year ended 31st March 2010.

Financial Results 2009/10 2008/09 Net Sales 23335.89 32424.79 Total Expenditure 23724.33 30136.88 Operating profit / (loss) (388.44) 2287.91 Other Income 464.47 623.78 Earnings before Interest, Tax, Depreciation and Amortization 76.03 2911.70 Interest 25.11 28.62 Cash Profit 50.92 2883.08 Provision for Depreciation & Amortization 422.64 342.51 Profit / (loss) before prior period income, exceptional item and Tax (371.72) 2540.57 Prior period Income Exceptional Item - 275.97 Provision for Tax (net) (157.57) 880.46 Excess provision for tax in respect of earlier years written back (net) - 9.20 Balance in Profit & Loss A/c brought forward from the previous year 3830.95 2850.97 Profit available for appropriation 3616.80 4796.25 Appropriations: Equity Dividend 64.22 642.16 Corporate Dividend tax 10.91 109.14 Transfer to General Reserve - 214.00 Balance carried to Balance Sheet 3541.67 3830.95 Rs. In Lakhs

Dividend

Your Directors have recommended payment of Re. 1/- per share as dividend on the equity shares of the Company for the year (previous year Rs. 10/- per share) out of the carried forward profits of previous years.

Operations

Operations at both the business segments of the Company suffered during the year under review due to a combination of factors. Overall sales volume and turnover were lower and there was a sharp decline in value addition.

Labour unrest which began by end of February, 2010 seriously affected sales during the peak month of March, 2010.

The gross revenue for the year under review was Rs. 238.00 Crores (Rs.330.49 Crores in the previous year). The loss before taxes was Rs.3.71 Crores (Rs. 28.16 Crores profit in the previous year) and loss after taxes was Rs.2.14Crores (Rs. 19.42 Crores profit in the previous year)

Pressings Business Segment *

After the steep fait in volumes during the last quarter of 2008/09, the demand grew cautiously during the early part of the year peaking during the last quarter of 2009/10. Realisations however, were much lower resulting in erosion in value addition considerably.

The unfortunate labour unrest over the demand for settlement of wages which started from around 27,h February and lasted right till end March, 2010 at the Goa factories seriously crippled operations and resulted in the principal buyer withdrawing almost all the tooling to ensure uninterrupted production of vehicles. This has dealt a serious blow to the business segment. In the event, the pressings business from Goa factories has almost ground to a trickle - mainly catering to the requirement of engine components of Tata Cummins Ltd.

Bus Body Business Segment

2,373 buses were sold during the year as against 4,509 buses during the previous year. As informed in the last report, the main Bus Body building plant at Goa. which was closed in January 2009 due to lack of demand was re-opened only in June, 2009 albeit, with a far lower capacity utilization due to low demand. But for the timely orders from Tata Motors for domestic buses, the year under review would have been far worse.

The demand for export buses picked up gradually from December 2009 and peaked during the last quarter but the company could not take advantage of this demand pick up due to the unfortunate labour unrest over settlement of wages. Since restoration of normalcy in April, 2010, the demand for buses has been rising. The Directors believe that the set-back suffered in the year gone by were temporary and the Company looks forward to regain lost ground in the coming years.

The Hi Deck bus on the Hispano platform has been undergoing major improvements with higher horsepower engine and other modifications. The proto type buses are currently on trial runs and it is hoped that regular production will commence during the second half of the current year.

HRD and Industrial Relations

Settlement of wages with labour unions effective Is April, 2009 resulted in protracted negotiations eventually leading to a labour unrest beginning February 27* 2010. Production at the Goa factories was severely affected during the last month of the year leading to loss of sales, it is a matter of deep regret that despite all the efforts to revive the Company from its desperate position in 2001/02 to its current position, the workers unions resorted to such uncalled for actions which ultimately harms the workers more than anyone else among all the stakeholders. In the event, firm steps taken by the Company and the help and support received from the promoters and the Govt, resulted in a settlement for three years effective from 1st April, 2009.

Training and other HRD initiatives continued during the year. Despite the incidents at the end of the year, relations with the workers unions were cordial and continue to be so.

Corporate Social Responsibility

Notwithstanding the financial setback suffered, the Company continued with its CSR initiatives during the year under review. Assistance to local students in the form of scholarships and uniforms, emergency ambulance service to the local community, help and assistance in the Polio vaccination drive, Blood donation drive etc., were continued during the year. The Company also contributed to the Eye Camp organized by a local NGO

for the benefit of the local communities.

The Company also participated in sports and cultural activities conducted by various local social organizations.

Corporate Governance

A separate section on Corporate Governance forming part of the Directors Report and the certificate from the Companys auditors confirming compliance of Corporate Governance norms as stipulated in the revised clause 49 of the Listing Agreement with the Stock Exchange is included in the Annual Report.

Finance

As the members are aware, Rs. 703,908,675/- were raised through a Rights issue of shares in 2007-08 out of which a sum of Rs. 92,08,436/- was incurred towards the expenditure for the issue.

Out of the unspent amount of the Rights issue proceeds a sum of Rs. 311,326,387 has been spent as at the end of the year under review and the balance amount is being held as current investment in units of Mutual Funds and Inter Corporate Deposits as on 31s* March, 2010, in line with the resolution passed by the members at the last AGM held on 8.8.2009.

Directors

In line with the retirement policy for Directors adopted by the Board, Mr. D N Naik relinquished office on 8m August, 2009. Mr. Naik was one of the first directors and played an active role in the formative years of the Company. Through-out his long association of 29 years, Mr. Naik made significant contributions for the growth and development and guided the Company effectively during the turbulent years of 2000/01. The Board has placed on record the valuable contributions made by Mr. Naik during his tenure as Director of the Company.

Mr. N R Menon completes his term as the Managing Director of the Company on 31st July 2010. Over the last six years, Mr. Menon has lead the Company admirably and has been instrumental in the all round development of the Company. The Directors place on record their sincere appreciation of the contribution made by Mr. Menon during his tenure as the Managing Director of the Company.

Mr. Steven A. Pinto, an accomplished banker and finance professional was appointed as an Additional Director by the Board on 28th June, 2010 and holds office till the forthcoming Annual General Meeting of the members of the Company. Notice under Section 257 of the Companies Act, 1956 has been received from a member signifying his intention to propose Mr. Pintos appointment as a Director. The Board considers the appointment of Mr. Pinto to be in the interest of the Company.

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Mr. P M Telang and Mr. R S Thakur retire by rotation and are eligible for re-appointment.

Particulars of employees

Information required under Section 217 (2A) of the Companies Act 1956, is annexed to this report.

Energy conservation. Technology absorption and Foreign Exchange earnings/ outgoings

Information required under Section 217 (1) (e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 and forming part of the Directors Report is given as an annexure to this report.

Audit

Messrs Deloitte Haskins & Sells (DHS), who are the Statutory Auditors of the Company, hold office until the ensuing Annual General Meeting. It is proposed to re-appoint them to examine and audit the accounts of the Company for the financial year 2010-11. The auditors have, under Section 224(1) of the Companies Act, 1956, furnished a certificate of their eligibility for re-appointment.

Directors Responsibility Statement

The Company complies with accounting and financial reporting requirements in respect of the financial statements for the year under review. Pursuant to Section 217 (2AA) of the Companies Act 1956 in respect of the annual accounts for the year under review, based on the representations received from the operating management, the Directors confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and have 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 at the end of the financial year and of the profit of the Company for that period;

iii. 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;

iv. they have prepared the annual accounts on a going concern basis.

Acknowledgements

The Directors place on record their sincere thanks for the help and support received from the Govt, of Goa and the Govt, and semi-Govt. agencies. The Directors also place on record the excellent co-operation received from the promoters, customers, vendors and the employees of the Company.

On behalf of the Board of Directors S V Salgaocar Chairman Place : Vasco-da-Gama, Goa. Date : 1st July, 2010

 
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