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Directors Report of India Gelatine & Chemicals Ltd.

Mar 31, 2014

Dear Members,

The Directors of your Company have pleasure to present 42nd Annual Report with the Audited Statements of Accounts for the year ended 31* March. 2014.

2013-14 2012-13 Rs. lacs Rs. lacs FINANCIAL RESULTS Total Revenue 12,353.31 12,010.91, Profit for the year after deducting all the expenses but before interest, depreciation and taxation (EBIDTA) 1,786.16 2,194.85 FROM WHICH ARE DEDUCTED Interest & Financial Charges 0.86 5.46 Depreciation 540.06 487.77 Provision for Taxation Current 425.00 477-86 Deferred (31.81) 83.57 Short provision for earlier years 46.48 — 980.59 1,054.66''

NET PROFIT FOR THE YEAR TO WHICH IS ADDED: 805.57 1,140-19 Surplus Brought Foward 665.31 355.05 BALANCE AVAILABLE FOR APPROPRIATION 1,470.88 1,49524

APPROPRIATION FOR Proposed Dividend 169.20 282,00 Corporate Dividend Tax 28.76 47,93 General Reserve 100.00 5O0.00 Surplus Canned to next year''s account 1,172.92 665 31 1,470.88 1,495.24

Operations:

The turnover of the company has increased by about 3.7% over the previous year.

Gelatine sales were higher in volume by 6.0% as compared to the previous year, as well as higher realisations both in the overseas and domestic markets. The contribution of Ossein sales and volume have increased by 33% and 13% respectively.

The demand for Gelatine in both the international and domestic market is on the rise and the company continues to make inroads into newer areas of operation. However, DCP sales have slowed down during the latter part of the year and are likely to remain sluggish for the year 2014-15. Sales were lower by almost 17% and whereas the volumes were lower by 14% on a year-on-year comparison.

The company''s project for increase in capacity has been completed during the year, however, the entire Vapi Industrial Area has been classified by the CPCB (Central Pollution Control Board) to be a CPA (Critically Polluted Area). Due to this classification, the application for utilization of the expanded capacity is still awaiting approval at the GPCB (Gujarat Pollution Control Board).

During the year, the company has implemented several measures by employing newer technologies for energy conservation as well as maintaining quality standards of the company''s products, which have resulted in reducing the overall energy consumed. Although the cost of energy has increased by 21% on a periodic basis during the year, the units of Natural Gas consumed are lower due to the implementation of various efforts undertaken for conservation of energy. Since environmental regulations are always a matter of concern, the company has been upgrading the facilities on an ongoing basis in order to meet with the stricter norms being imposed by the pollution department.

The major challenges faced during the year were related to the availability and quality of the main raw material, i.e. crushed bones. The trend of quality deterioration is more disturbing as it impacts both, the quality of the final products as well as lower yield. These factors will have a negative effect on the company''s performance in the future in case the trend of raw material quality deterioration continues further.

Overall, efforts are being made to organize ways and means of the import of betterquality raw materials from overseas. Our company strives to overcome the obstacles it currently faces and achieve the goals that have been set for the coming year. We acknowledge the challenges at hand and hope that the necessary steps taken by us alleviate them.

Dividend:

Your directors recommend dividend @ 18% i.e. Rs. 1.80/- per share (previous year 30% i.e. Rs. 3.00 per share) on Equity Shares ofRs. 10/- each of the company for the year ended 31* March, 2014. The proposed dividend (including Corporate Dividend Tax) will absorb Rs. 197.96 Lacs (previous year Rs. 329.93 Lacs)

Taxation:

The Company has made a provision of Rs. 425.00 Lacs towards current year''s Income Tax.

Finance:

The Company continues to get requisite assistance and co-operation from its bankers as and when needed.

Industrial Relations:

Industrial relations continued to remain cordial and satisfactory. Directors:

Mr M D. Vora, Director of the Company since 22"" January, 1975, expired on 25* December, 2013. On his death the company has lost its friend, philosopher and guide. The Company and the Board offertheir heartfelt condolences to the departed soul of the late Mr. M. D. Vora.

Mr. M. D. Vora, consequently, would cease to be a member on the Audit Committee and Remuneration Committee.

Mr. K. C. Dalai, Director of the Company since 31 * March 2001 has tendered his resignation on 28* June, 2014.

Mr K C Dalai has served as Chairman of the Board and Audit Committee. The Board has placed on record its sincere appreciation and gratitude for the very valuable and outstanding contribution made by Mr. K. C. Dalai dunng his association with the Company as a Director.

Mr J M Tiwari on 7* July, 2014 was appointed as a Non-Executive Independent Director to fill the casual vacancy of Mr. K. C. Dalai and hence would be retiring by rotation at the ensuring Annual General Meeting and being eligible offers himself for re-appointment.

Mr. V. C. Mirani retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Directors'' Responsibility Statement:

As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors adhere to the "Directors'' Responsibility Statement" and confirm as under:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) that the directors have selected such accounting policies and applied them consistently and made judgements 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 the year;

iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the directors have prepared the annual accounts on a going concern basis. Statutory Auditors:

Messrs Mahendra N. Shah & Co., Firm Registration No: 105775W, Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

They have furnished a certificate to the effect that the re-appointment, if made, will be in accordance with Section 141 (3)(g) of the Companies Act, 2013.

Cost Auditors:

Messrs B. F. Modi & Associates, Membership No: 6955, Cost Accountants, the CostAuditors of the Company, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

They have furnished a certificate to the effect that the re-appointment, if made, will be in accordance with Section 148(5) read with Section 139 of the Companies Act, 2013.

Insurance:

All the properties of the Company including building, plant and machinery and stocks have been adequately covered underinsurance.

Particulars of Employees:

The information under Section 217(2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors'' Report for the year ended 31" March, 2014 is annexed hereto.

Management Discussion and Analysis Report:

Report on Management Discussion and Analysis is annexed herewith.

Corporate Governance:

A report on Corporate Governance along with the certificate from the auditors is annexed herewith.

Particulars of Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo:

The information required under Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, forming part of the Directors''Report is annexed hereto.

Cost Compliance Report:

The Company had appointed M/s. B. F. Modi & Associates, Cost Accountants, to certify the Cost Compliance Report and Annexures thereto of the company for the financial year ending 31* March, 2013. The Cost Compliance Report was filed with the Ministry of Corporate Affairs on 20.09.2013.

Further, the Cost Audit of the Company is already in progress and the Cost Audit Report would be filed with the Ministry of Corporate Affairs on or before the due date of 30.09.2014.

Acknowledgement:

The Board of Directors appreciate the devoted services of the workers, staff and executives who have contributed to the efficient management of the affairs of the Company.

Your directors place on record their gratitude to the State and Central Government, the company''s Bankers, Customers, Suppliers and Shareholders for their continued co-operation and support.

For and on behalf of the Board of Directors

Place : Mumbai Viren C. Mirani Date : 07.07.2014 Chairman & Managing Director


Mar 31, 2013

The Directors of your Company have pleasure to present 41st Annual Report with the Audited Statements of Accounts for the year ended 31st March, 2013.

2012-13 2011-12 Rs. lacs Rs. lacs

FINANCIAL RESULTS

Total Revenue 12,010.91 10,689.58

Profit for the year after deducting all the charges and expenses but before interest, depreciation and taxation (EBIDTA) 2,216.56 1,433.41

FROM WHICH ARE DEDUCTED

Interest & Financial Charges 25.03 18.77

Depreciation 487.77 447.04

Provision for Taxation

Current 480.00 249.00

Deferred 83.57 11.38

1,076.37 726.19

NET PROFIT FOR THE YEAR 1,140.19 707.22 TO WHICH IS ADDED :

Surplus Brought Forward 355.05 320.95

BALANCE AVAILABLE FOR APPROPRIATION 1,495.24 1,028.17

APPROPRIATION FOR

Proposed Dividend 282.00 235.00

Corporate Dividend Tax 47.93 38.12

General Reserve 500.00 400.00

Surplus Carried to next year''s account 665.31 355.05

1,495.24 1,028.17

Operations:

Your company continues to strengthen the sale of its products in markets as well as applications which have a greater potential of growth and better realizations. It also greatly focuses on control of raw material cost which has resulted in the better performance of your company during the year. The turnover of the company increased by about 13.12% over the previous year.

Gelatine sales were marginally lower in volume by 14% as compared to the previous year, however, due to higher realizations in the export and domestic markets your company achieved higherturnoveron Gelatine sales to the extent of about 5%. Ossein sales have increased by 19% due to increased demand from customers.

Overall demand for Gelatine in the domestic market has increased and your company strives further to expand its customer base. DCP sales remain strong as sales of poultry products increased at a consistent growth of 15-20% annually.

With the pollution control laws becoming stringent overtime, your company has had to invest into newer technologies as well as systems to overcome the challenges of waste water and solids disposal. Steps towards making our Effluent Treatment Plant as a revenue source remain successful and your company is also looking at bettering the systems and improving the efficiency of this process.

Energy costs are a large cost component for our company''s products and with the Natural Gas prices moving up by almost 43% over the previous year, our company continues to identify & implement alternate mechanisms which are likely to lowerthe cost of production of our company''s products.

Our company is making all round efforts for improving the quality of raw material, at the same time implementing processes & solutions for a superior quality finished product which will allow a healthy growth forthe company.

Dividend:

Your directors recommend dividend @ 30% i.e. Rs. 3.00 per share (previous year 25% i.e. Rs. 2.50 per share) on Equity Shares ofRs. 10/-each of the company forthe year ended 31st March, 2013. The proposed dividend (including Corporate Dividend Tax) will absorb Rs. 329.93 lacs.

Taxation :

The Company has made a provision ofRs. 480 lacs towards current year''s Income Tax & Wealth Tax.

Finance:

The Company continues to get requisite assistance and co-operation from its bankers as and when needed.

Industrial Relations:

Industrial relations continued to remain cordial and satisfactory.

Directors:

Mr. N. C. Mirani and Mr. P. P. Madhavji retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Directors'' Responsibility Statement:

As stipulated in Section 217(2AA) ofthe Companies Act, 1956, your Directors adhere to the "Directors'' Responsibility Statement" and confirm as under:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) that the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view ofthe state of affairs ofthe Company at the end ofthe financial year and ofthe profit ofthe Company forthe year;

iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;

iv) that the directors have prepared the Annual Accounts on a going concern basis.

Auditors:

Messrs Mahendra N. Shah & Co., Firm Registration No: 105775W, Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

They have furnished a certificate to the effect that the re-appointment if made will be in accordance with Section 224 (1B) ofthe Companies Act, 1956.

Insurance:

All the properties of the Company including building, plant and machinery and stocks have been adequately covered underinsurance.

Particulars of Employees:

The information under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part ofthe Directors'' Report for the year ended 31st March, 2013 is annexed hereto.

Management Discussion and Analysis Report:

Report on Management Discussion and Analysis is annexed herewith.

Corporate Governance:

A report on Corporate Governance along with the certificate from the auditors is annexed.

Particulars of Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo:

The information required under Section 217(1 )(e) ofthe Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report ofthe Board of Directors) Rules, 1988, forming part ofthe Directors'' Report is annexed hereto.

Cost Compliance Report:

The Company had appointed M/s. B. F. Modi & Associates, Cost Accountants, to certify the Cost Compliance Report and Annexures thereto ofthe company forthe financial year ending 31s! March, 2012. The due date for filing the Cost Compliance Report with the Ministry of Corporate Affairs was 31.01.2013. The Cost Compliance Report was filed with the Ministry of Corporate Affairs on 28.12.2012.

Acknowledgement:

The Board of Directors appreciate the devoted services of the workers, staff and executives who have contributed to the efficient management of the affairs of the Company.

Your directors place on record their gratitude to the State and Central Government, the company''s Bankers, Customers, Suppliers and Shareholders for their continued co-operation and support.

For and on behalf of the Board of Directors

Place : Mumbai Viren C. Mirani

Date : 30.05.2013 Managing Director


Mar 31, 2010

The Directors of your Company have pleasure to present their 38th Annual Report with the Audited Statements of Accounts for the year ended 31 st March, 2010.

2009-2010 2008-2009 Rs. Rs.

FINANCIAL RESULTS

Profit for the year after deducting all the charges and expenses but before Interest, depreciation and taxation (EBIDTA) 14,01,84,104 17,27,59,496

FROM WHICH ARE DEDUCTED

Interest & Financial Charges 24,83,675 40,10,861

Depreciation 4,14,61,030 4,09,44,453

Taxation

Current 3,20,00,000 4,85,00,000

Deferred (31,49,792) (67,55,731)

Fringe Benefit Tax - 15,30,000

7,27,94,913 8,82,29,583

NET PROFIT FOR THE YEAR 6,73,89,191 8,45,29,913

TO WHICH IS ADDED:

Surplus Brought Forward 3,57,60,533 1,32,25,680

BALANCE AVAILABLE FOR APPROPRIATION 10,31,49,724 9,77^5,593

APPROPRIATION FOR 1,88,00,000 1,88,00,000

Proposed Dividend 31,22,445 31,95,060

Corporate Dividend Tax 4,50,00,000 4,00,00,000

General Reserve 3,62,27,279 3,57,60,533

Surplus Carried to next years account 10,31,49,724 9,77,55,593

Operations:

The Sales of the company were maintained on similar levels of the previous year against all odds given the pressures of the Global Financial Crisis affecting the overseas markets.

Gelatine production & sales (23%) & (29%) were respectively higher as compared to the previous year, however, the production & sales of DCP were lower owing to the reduced off take of Ossein. Due to the closing down of operations of some of the companys customers this is likely to affect the sales of the company for the coming years.

Gelatine demand in the domestic market has began to show some increase & hence, your company is making inroads slowly for catering to this new demand. DCP sales realization during the year were higher than the previous year and is also likely to remain strong in the coming years with the poultry feed market continuing on its growth path.

Pollution control authorities are getting more and more stringent. In order to keep up with the environmental standards there has been tremendous pressure on the companys finances. The company is trying to find more efficient/economical methods to reduce the financial burden due to pollution control measures.

On the raw material side the crushed bones prices moved up by about 14% and there are severe constraints expected for the availability of crushed bones in the near future. An alarming trend is being witnessed in the prices of crushed bones coupled with deterioration in the quality of the crushed bones too. Thereby resulting in reduced yields & compromised financial performance of the company.

Since the financial year 2007-2008 the company had embarked on the usage of Natural Gas as its energy source. During the current financial year there has been an upward revision (11.15% ) of Natural Gas prices by the suppliers & this has impacted the energy bill of the company. It is expected that in the coming years the prices of Natural Gas will further increase. Alternatives available are being studied in order to bring the cost of power & fuel lower.

Amidst all the challenges lying ahead the management hopes to cope up in the most prudent manner to maintain the healthy performance of the company.

Dividends:

Your directors recommend, dividend @ 20% i.e Rs. 2.00 per share (previous year @ 20% i.e Rs. 2.00 per share) on equity shares of Rs. 10/- each of the company for the year ended 31st March, 2010. The proposed dividend (including Corporate Dividend Tax) will absorb Rs 219.22 lacs. Taxation:

The Company has made a provision of Rs.320 lacs towards current years Income Tax & Wealth Tax.

Finance:

The Company continues to get requisite assistance and co-operation from its bankers as & when needed.

Industrial Relations:

Industrial relations continued to remain cordial and satisfactory.

Directors:

Mr. Nalin K. Vissanji and Mr. Nayan C. Mirani retire by rotation at the ensuing Annual General Meeting and are being eligible offer themselves for re-appointment.

Directors Responsibility Statement:

As stipulated in section 217(2AA) of the Companies Act, 1956, your Directors adhere to the "Directors Responsibility Statement" and confirm as under:

I) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) that the directors have selected such accounting policies and applied them consistently and made judgements 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) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the directors have prepared the annual accounts on a going concern basis.

Auditors:

Messrs Mahendra N. Shah & Co., Firm Registration No. 105775W, Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

They have furnished a certificate to the effect that the reappointment if made will be in accordance with sec.224 (1B) of the Companies Act, 1956.

Insurance:

All the properties of the Company including building, plant and machinery and stocks have been adequately covered under insurance.

Particulars of Employees:

The information u/s 217(2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules 1975 and forming part of the Directors Report for the year ended 31s March 2010 is annexed hereto.

Management Discussion and Analysis Report:

Report on Management Discussion and Analysis is annexed herewith.

Corporate Governance:

A report on Corporate Governance alongwith certificate from the auditors are annexed.

Particulars of Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo:

The information required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, and forming part of the Directors Report is annexed hereto.

Acknowledgment:

The Board of Directors appreciate the devoted services of the workers, staff and executives who have contributed to the efficient management of the affairs of the Company.

Your directors place on record their gratitude to the State and Central Government, Sojitz Corporation, the companys Bankers, Customers, Suppliers and Shareholders for their continued co-operation and support.

For and on behalf of the Board of Directors

Place: Mumbai

Date : 11-08-2010 Nalin K. Vissanji

Chairman

 
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