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Directors Report of Khaitan Chemicals & Fertilizers Ltd.

Mar 31, 2015

To the Members,

The Directors are pleased to present the 33rd annual report of the Company and audited statement of accounts for the year ended 31 st March, 2015.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31 st March, 2015 is summarised below: (Rs. in lacs)

Particulars 2014-15 2013-14

Sales (Gross) 33388.06 39330.73

Net Sales 33203.41 39684.35

Surplus before interest, depreciation, exceptional items and Tax 3728.09 2644.61

Less: Financial Cost 3006.60 2497.39

Cash Profit before tax 721.49 147.22

Less: Depreciation 889.11 764.44

Exceptional Items . .

Profit/(Loss) before taxation (167.62) (617.22)

Provision for current tax . .

Deferred tax 521.51 446.32

Income Tax of earlier year 3.47 (8.51)

Profit/(Loss) after taxation 350.42 (162.39)

Transfer to General Reserve . .

Proposed Dividend @ 5% 48.49 48.49

Tax on Proposed Dividend 9.87 8.24

Earning Per Share (face value of Re. 1/-each) 0.36 (0.17)

REVIEW OF OPERATIONS FERTILIZER & CHEMICALS DIVISION:

During the year, the Company has earned Rs.350.42 Lacs of PAT (previous year: loss of Rs 162.39 Lacs) even after a decrease in total income. The performance of the Company has marginally improved, mainly on account of better management of current assets, forex exposure and due to reduction in the raw material prices and other manufacturing cost.

The year 2014-15 continued to be a challenging period with weak economic environment, depreciating currency, inconsistent and unevenly distributed monsoons leading to financial deterioration of the farmers economic condition.

The Company is continuing its efforts for optimizing its current assets, however the statutory requirement of compulsory minimum production hinders the process. The Government of India is reviewing its stipulations for minimum production requirement.

The performance of the Company did not meet expectations in sales volume, mainly due to low margins and conditions ofoversupplyinthe market. The increased supply situation in the market was further compounded due to compulsory minimum production stipulated by the GOI. The performance of the Company in last three years was also affected by losses on Inventories with a continuing downward trend in prices of raw material.

The Company has produced 347238 MT (previous year 392448 MT) Single Super Phosphate and sold 322071 MT (previous year 372984 MT).

The Industry is awaiting a long term policy from the Government of India, to strengthen and stabilize the NBS Policy across all fertilizers to encourage balanced & rational use of fertilizers.

Raw material prices now seem to have stabilized and therefore with the expected long term policy of the Government of India along with the declared road-map for direct subsidy to farmers shall help the growth of

SSP Industry in a free but competitive environment.

The Company is determined to perform better in the current year and achieve higher capacity utilization.

SOYA DIVISION

The Soya Industry is passing through a tough patch with large activities of speculation with exemption and evasion of taxto/by Industry.

The Company has reduced its activities in this segment to large extent alongwith total control on fixed expenses.

DIVIDEND

The Board of Directors is pleased to recommend final dividend of Re.

0.05 per equity share (face value of Re. 1/- per share) for the financial year 2014-2015, previous year Re.0.05 per equity share.

PROJECTS & FINANCE

The Dahej plant has started production after getting all clearances.

The Company has availed corporate loan from IDBI Bank Limited and State Bank of India has also sanctioned corporate loan, to supplement the working capital requirements in current year.

FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year under review, pursuant to the provisions of Section 73 of the Companies Act, 2013 & the Deposit Rules.

CONSERVATION OF ENERGYAND TECHNOLOGYABSORPTION

Information required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed in Form-A and forms part of the report.

Your Directors are of the opinion that the Company has already opted for latest technology for producing Single Super Phosphate, Sulphuric Acid and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B is not applicable.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with clause 49 of the listing agreement with Stock Exchange, the Management Discussion and Analysis Report forms part of this Report (Annexure - B)

FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. NIL lacs on export of goods (Previous year Rs. NIL) and incurred Rs. 9047.66 lacs (Previous year Rs. 7449.67 lacs) on import of Raw Materials, Capital Goods, Fees & Subscription and Interest on Foreign Currency Loan.

DIRECTORS

In accordance with the provisions of Section 152 (6)(c) of the Companies Act, 2013 and the Articles of Association of the Company, Shri Utsav Khaitan, Whole Time Director of the Company is due to retire at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Directors recommend his reappointment. The Board at its meeting held on 14.11.2014 has appointed Shri Jagdish Lai Jajoo, as a Whole Time Director subject to the approval of shareholders of the Company in ensuing Annual General Meeting for a period of five years w.e.f. 15.11.2014.

Shri Jagdish Lai Jajoo, Chartered Accountant, was earlier associated with this Company since beginning to 1995 as Vice President/ President & Executive Director and from 22.02.1996 to 31.10.2011, he had held the position as an Independent Director and thereafter remain on the Board as Whole Time Director till 01.09.2014.

Particulars of the directors seeking appointment/re-appointment are provided in the notes forming part of the notice for the ensuing Annual General Meeting, as required under Clause 49 of the listing agreement with the stock exchange.

The Company has received disclosures from all the directors (including Shri Jagdish Lai Jajoo) and none of the directors has been disqualified as stipulated under Section 164 of the Companies Act, 2013 and rules made thereunder.

During the year, the Board of Directors met 4 (Four) times. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report (Annexure - C).

KEY MANAGERIAL PERSONNEL

The following employees were designated as whole-time key managerial personnel by the Board of Directors during the year under review:

(a) Shri Shailesh Khaitan, Chairman & Managing Director;

(b) Shri R. S. Vijayvargiya, President & Chief Financial Officer;

(c) Shri Kamlesh Joshi, Company Secretary.

CORPORATE GOVERNANCE

Your Company has always strived to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under clause 49 of the listing agreement forms part of this Report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated underthe said clause is attached to this report. (Annexure -C). VIGIL MECHANISM / WHISTLE BLOWER POLICY As per the requirement of Section 177 (9) of the Companies Act, 2013, and Clause 49 of Listing Agreement, the Company has established a Vigil Mechanism called the 'Whistle Blower Policy' for Directors and Employees to report concern of unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy and the details of the Whistle Blower Policy has been uploaded on the Company's website, Web-link: http://khaitanchemfert.com/whistle-blower-policy/

NOMINATION & REMUNERATION POLICY

Pursuant to Section 178 of the Companies Act, 2013, the rules made thereunder and Clause 49 of Listing Agreement, the Board has constituted the Nomination & Remuneration Committee comprising Shri Balmukund Dakhera, Chairman and Dr. Prakash Goyal & Shri Vijay Gupta as its members.

The Nomination & Remuneration Committee framed a policy for selection and appointment, re-appointment, removal, appraisals of Directors and Senior Management and the same is stated in the Corporate Governance Report (Annexure-C).

AUDITORS & AUDIT REPORT

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company retire at the conclusion of ensuing annual general meeting and being eligible, offer themselves for re- appointment. The Company has received a certificate from them to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limit prescribed u/s 139 of the Companies Act, 2013 & also received peer review certificate issued by the ICAI 'Peer Review Board', as required under Clause 49 of listing agreement. The notes on accounts referred to and the Auditors' Report are self- explanatory and therefore do not call for any explanatory note.

COST AUDIT

The Board of Directors, in pursuance of an order under section 148 of the Companies Act, 2013, issued by the Central Government, has appointed M/s. M. P. Turakhia & Associates, Cost Accountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer, Sulphuric Acid and Soya products for the financial year 2015-2016.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Ritesh Gupta & Co., Company Secretary in Practice, Indore, to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report is self-explanatory and therefore do not call for any explanatory note and the same is annexed herewith as (Annexure-D).

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Pursuant to Section 135 of Companies Act, 2013 and the relevant rules, the Board has constituted the Corporate Social Responsibility Committee comprising Shri Jagdish Lai Jajoo as the Chairman and Shri Balmukund Dakhera, Dr. Prakash Goyal, Shri Vijay Gupta and Shri Utsav Khaitan as its members. The detail CSR Policy has been uploaded on Company's Website, Web-link: http://khaitanchemfert.com/corporate-social-responsibility/ During the year the Company has decided to spend the amount for CSR by contributing to Prime Minister's National Relief Fund. The details on CSR activities are annexed (Annexure - E).

ANNUAL EVALUATION OF BOARD

Pursuant to the provisions of section 134 (3)(p) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

EXTRACT OF ANNUAL RETURN

The details farming part af the extract of the Annual Return far the year ended on 31.03.2015 in farm MGT 9 is annexed (Annexure - F). DIRECTORS'RESPONSIBILITY STATEMENT

In terms of Section 134(5) af the Companies Act, 2013, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to 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 at 31* March, 2015 and of the profit & loss of the Campanyfarthat period;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956/2013 far safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

5. they have laid down internal financial controls ta be followed by the Company and such internal financial controls are adequate and were operating effectively.

6. they have devised proper systems ta ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

As per the requirement of Clause 49 (VII) (C) of the Listing Agreement, the Company has formulated Related Party Transaction Policy, on materiality and treatment of related party transactions. All such transactions that were entered into during the financial year were on an arm's length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee and the same has been approved by the Board. Prior omnibus approval of the Audit Committee is obtained an a quarterly basis far the transactions which are of a foreseen and repetitive nature. The Policy as approved by the Board is placed on the Company's website, Weblink:

http://khaitanchemfert.com/related-party-transaction-policy/

None af the Directors has any pecuniary relationships ar transactions vis-a-vis the Company. The details af the transactions with Related Party are provided in the accompanying financial statements.

LISTING OF SHARES

Shares af the Company are listed on The Bombay Stock Exchange Limited (BSE), Mumbai, which provides a wider access to the investors nationwide.

The Company has made all the compliances of Listing Agreement including payment of annual listing fees up to 31" March, 2016 ta the BSE.

RISK MANAGEMENT

Risk Management Policy is formulated in compliance with Clause 49 of the Listing Agreement and Section 134(3)(n) of the Companies Act, 2013, which requires the Company to lay down procedure for risk assessment and risk minimization. The Board of Directors, Audit committee and the Senior Management of the Company should periodically review the policy and monitor its implementation ta ensure the optimization of business performance, ta promote confidence amongst stake holders in the business processes, plan and meet strategic objectives and evaluate, tackle and resolve various risks associated with the Company. The business af the Company is exposed to various risks, arising out of internal and external factors i.e. Industry, Competition, Input, Geography, Financial, Regulatory, Other Operational, Information Technology related other risks. Implementation of the Scheme:

The functional managers at all locations will be responsible far identifying and assessing the risks within their areas of responsibilities and actions agreed beforehand to resolve such risks. They will report for any new risk ar changes in the existing risk ta the President/Managing Director. The Board and the senior executives af the Company will oversee the implementation af the policy and review the same periodically; the Board will be updated on key risks faced by the Company and the mitigating actions taken ta resolve them.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL1ACT. 2013.

"The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up ta redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The fallowing is a summary af sexual harassment complaints received and disposed off during the year 2014-15:

No of complaints received: ¦ NIL

Na af complaints disposed off: NatApplicable"-

PARTICULARS OF EMPLOYEES

The particulars af employees required to be furnished under Section 217(2A) of the Companies Act, 1956 ("the aid Act") & corresponding Section 197 of the Companies Act, 2013 ("the new Act") and the rules thereunder read with the Companies (Particulars of Employees) Rules,

1975 as amended forms part of this report (Annexure-A).

Ratio of remuneration of each director to the medien remuneration of the employees of the Company for the Financial Year:

The information required pursuant to Section 197 read with Rule 5 (1) (i) af The Companies (Appointment and Remuneration) Rules, 2014 in respect af ratio of remuneration af each director to the median remuneration of the employees of the Company for the Financial Year, will be made available for inspection at its registered office of the Company during the working hours far a period of twenty one days before the date af annual general meeting af the company pursuant to Section 136 of the Companies Act, 2013 and members, if any interested in obtaining the details thereof, shall make specific request to the Company Secretary and Compliance officer of the Company in this regard.

ACKNOWLEDGEMENT

The Board af Directors, wish ta place on record its sincere appreciation far the support and co-operation received from all its stakeholders including customers, promoters, shareholders, bankers, suppliers, auditors, various departments/ agencies af Central/State Government and other business associates of the Company.

Yaur Board recognizes and appreciates the contributions made by all employees at all level that ensure sustained performance in a challenging environment.

for and on behalf of the Board

Place: Gurgaon SHAILESH KHAITAN Date: 16.05.2015 (CHAIRMAN & MANAGING DIRECTOR)




Mar 31, 2014

The Directors are pleased to present the 32nd annual report of the Company and audited statement of accounts for the year ended 31" March, 2014.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March, 2014 is summarised below:

(Rs. in lacs)

Particulars 2013-14 2012-13

Sales (Gross) 39330.72 45,971.89

Net Sales 39684.35 45,875.77

Surplus before interest, depreciation, exceptional items and Tax 2644.61 3,077.10

Less: Financial Cost 2497.39 2,555.60

Cash Profit before tax 147.22 521 50

Less: Depreciation 764.44 732.14

Exceptional Items . - (409.78)

Profit/(Loss) before taxation (617.22) 199.14

Provision for current tax . - 39.84

MAT Credit Entitlement . - (34.81)

Deferred tax (446.32) (5.77)

Income Tax of earlier year (8.51) (13.15)

Profit/(Loss) after taxation (162.39) 213.03

Transfer to General Reserve . - 25.00

Proposed Dividend @ 5% 48.49 48.49

Tax on Proposed Dividend 8.24 8.24

Earning Per Share (face value of Re. 1/-each) (0.17) 0.22

REVIEWOF OPERATIONS Fertilizer & Chemicals Division:

The Nutrient Base Subsidy (NBS) with free market mechanism is encouraging more interaction between producers and farmers for efficient use of fertilizers, for better agricultural output and which is a long term positive for Fertilizer Industry as a whole. The Financial year 2013-14 was again a challenging year with weak economic environment having high inflation, high interest rates, a volatile/weakening currency and a very late withdrawal and extended monsoon rains resulting into sluggish demand for SSP fertilizer. During the year, the Company reduced its current assets level which was very high in the previous year. However, the sales during the year were sluggish due to high pipe line inventory of other Phosphatic Fertilizers as well as extended rains.

The performance of the Company was hit by higher financial cost including foreign exchange loss and pressure on margin due to over- supply conditions in the Industry, compounded with low capacity utilization.

The Company produced 392448 MT (previous year 389052 MT) Single Super Phosphate and sold 372984 MT (previous year402861 MT). We are, however, confident that in a rational subsidy scheme, the SSP industry shall grow considerably resulting in higher availability of this ''generic customized fertilizer'' for Indian farmers at competitive prices. The growth of the Industry and the Government''s commitment to encourage this fertilizer through greater extension services, shall also reduce the Country''s dependence on imported phosphaticfertilizer. The Govt, is yet to take final decision on subsidy mopped up on Finished Goods/Work in Process on Stocks lying as on 31.03.2011 and is yet to declare its mopping up policy.

The Company expects stabilization in raw material prices as well as Government''s policy towards NBS (timely declaration & mopping up) which shall benefit the whole Fertilizer Industry, including the SSP Industry.

Soya Division:

In view of increasing speculative behavior in the market, which is not at all aligned with either International market or with forward market or spot prices of finished goods, the Company has reduced its activities in this segment to a large extent.

The Company is trying to limit its fixed expenses in view of reduced activities.

DIVIDEND

In view of net loss during the year, your Directors would like to recommend a nominal dividend of Re. 0.05 per equity share (face value of Re. 1/- per share) for the financial year 2013-2014, previous year Re.0.05 per equity share.

PROJECTS & FINANCE

Dahej Project (Gujarat): The production has started in March, 2014 for manufacturing of 200000 TPAof SSP and Phospho Gypsum. The Company is in the process of obtaining further clearances from Environmental Authorities Department of Fertilizer, Health and Safety etc. to start production in full swing.

Forex Fluctuation:

During the year, the Company has incurred loss (including MTM) of Rs. 1808.78 lacs on account of Foreign Exchange Fluctuation (previous year loss Rs. 860.35 lacs) and has been grouped in ''other expenses''.

FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year under review, pursuant to the provisions of Section 58A of the Companies Act, 1956 & the Deposit Rules and also read with applicable provisions of CompaniesAct, 2013.

AUDITORS & AUDIT REPORT

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company retire at the conclusion of ensuing annual general meeting and being eligible, offer themselves for re- appointment. The Company has received a certificate from them to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limit prescribed u/s 224 (1) of the Companies Act, 1956 and also read with applicable provisions of Companies Act, 2013 & also received peer review certificate issued by the ICAI ''Peer Review Board'', as required under Clause 49 of listing agreement. Regarding Emphasis of Matter under point No. 5 of the Auditors''Report, the Management is of the view that this would not result into a liability and therefore the Company has not provided for mopping of subsidy on raw materials of fertilizer as on 31.03.2011 in terms of Office Memorandum No. 23011/1/2010-MPR dated 11-07-2011 issued by the Ministry of Chemicals & Fertilizers, Govt, of India, being reconsidered vide their letter No. 23011/1/2010-MPR (Pt) dated 22.08.2012, wherein the GOI has decided not to effect recovery till a policy in this regard is formulated. This has strengthened the management''s view for not providing the above liability.

All other notes on accounts referred to and the Auditors'' Report are self- explanatory and therefore do not call for any explanatory note. COSTAUDIT

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956 and also read with applicable provisions of the Companies Act, 2013, issued by the Central Government, has appointed M/s. M. P. Turakhia & Associates, Cost Accountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer, Sulphuric Acid and Soya products for the financial year 2014-2015.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Information 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 and also read with applicable provisions of the Companies Act, 2013 is annexed in Form-A and forms part of the report.

Your Directors are of the opinion that the Company has already opted for latest technology for producing Single Super Phosphate, Sulphuric Acid, and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B is not applicable. FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. nil lacs on export of goods (Previous year Rs. nil) and incurred Rs. 7449.67 lacs (Previous year Rs. 18430.90) on import of Raw Materials, Capital Goods, Fees & Subscription and Interest on Foreign Currency Loan. DIRECTORS

The Board has appointed Shri Utsav Khaitan as a Whole Time Director of the Company for a period of five years w.e.f 20"'' May, 2014 subject to the approval of the members in ensuing Annual General Meeting. Shri Utsav Khaitan is son of Shri Shailesh Khaitan, Promoter, Chairman and Managing Director of the Company and to take him on the Board for larger long term interest of the Company. Directors recommend his appointment.

The Board has also re-appointed Shri Shailesh Khaitan, as Chairman & Managing Director. The present terms of appointment of Shri Shailesh Khaitan is expiring on 31.03.2015 and in view of introduction of the Companies Act, 2013, it would be appropriate to appoint him afresh for a term of five years w.e.f. April 1, 2014. Directors recommend his re- appointment.

The Board has also re-appointed Shri Jagdish Lai Jajoo, as a Whole Time Director. The present terms of appointment of Shri Jagdish Lai Jajoo is expiring on 31.10.2014 and in view of introduction of the Companies Act, 2013, it would be appropriate to appoint him afresh for a term of five years w.e.f. April 1, 2014. Directors recommend his re- appointment.

Shri Balmukund Dakhera, Dr. Prakash Goyal and Shri Vijay Gupta, was appointed as Directors of the Company, liable to retire by rotation (under the erstwhile applicable provisions of the Companies Act, 1956) and in view of introduction of the Companies Act, 2013 and Clause 49 of the

Listing Agreement, the Company has re-appointed the above-named Directors as an ''Independent Director'' of the Company to hold office fora term of five years for the period of 01.04.2014 to 31.03.2019 and they shall not be liable to retire by rotation."

Particulars of the directors seeking appointment/re-appointment are provided in the notes forming part of the notice for the ensuing Annual General Meeting, as required under Clause 49 of the listing agreement with the stock exchange.

None of the Directors is disqualified from being appointed as or holding office as Directors, as stipulated under Section 164 of the Companies Act, 2013 and rules made thereunder.

DIRECTORS''RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to 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 at 31" March, 2014 and of the profit & loss of the Company for that period;

3. they have taken proper and sufficient care 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 annual accounts on a going concern basis. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with clause 49 of the listing agreement with Stock Exchange, the Management Discussion and Analysis Report forms part of this Report (Annexure - B)

CORPORATE GOVERNANCE

Your Company has always strived to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under clause 49 of the listing agreement forms part of this Report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the said clause is attached to this report (Annexure - C).

LISTING OF SHARES

Shares of the Company are listed on The Bombay Stock Exchange Ltd. (BSE), which provides wider access to the investors nationwide.

The Company has made all the compliances of Listing Agreement including payment of annual listing fees up to 31st March, 2014 to the BSE.

PARTICULARS OF EMPLOYEES

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956 & read with the Companies (Particulars of Employees) Rules, 1975 as amended and also read with applicable provisions of the Companies Act, 2013, forms part of this report(Annexure-A.)

ACKNOWLEDGEMENT

The Board of Directors, would like to record their sincere appreciation for the support and co-operation that your Company received from the State Bank of India, IDBI Bank Limited, Corporation Bank, HDFC Bank Limited and Axis Bank Ltd., various departments/ agencies of Central/State Govt., Members, Customers, Suppliers, Employees and other business associates of the Company.

for and on behalf of the Board

Place: New Delhi (SHAILESH KHAITAN)

Date: 20.05.2014 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2013

To the Members,

The Directors are pleased to present the 31st annual report of the Company and audited statement of accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March, 2013 is summarised below:

FINANCIAL RESULTS (Rs. in lacs)

Particulars 2012-13 2011-12

Sales (Gross) 45,971,89 64,858.54

Net Sales 875,77 64,787.35

Surplus before interest, depreciation, exceptional items and Tax 3,077.10 6,487.83

Less: Financial Cost 2,555.60 2,609.26

Cash Profit before tax 521.50 3,878.57

Less: Depreciation 732.14 731.62

Exceptional Items (409.78) 95.06

Profit /(Loss) before taxation 199.14 3,051.89

Provision for current tax 39.84 969.61 MAT Credits

Entitlement (34.81)

Deferred tax (5.77) (86.43)

Income Tax of earlier year (13.15) 5.491

Profit /(Loss) after taxation 213.03 2.174.20

Transfer to General Reserve 25.00 1000.00

Proposed Dividend @ 5% 48.49 232.77

Tax on Proposed Dividend 8.24 37.76

Earning Per Share (face value of Re. 1/- each) 0.22 2.24



REVIEW OF OPERATIONS

Fertilizer & Chemicals Division:

The Company welcomes the Government''s initiative to directly transfer the subsidy to farmers which shall give the farmers unrestricted choice as well as make them understand the real worth of fertilizers used by them. The Nutrient 8ase Subsidy (NBS) with free market mechanism is encouraging more interaction between producers and farmers for efficient use of fertilizer for better agricultural output and is a long term positive for Fertilizer Industry.

The Financial year 2012-13 was beset with challenges. A weak economic environment, persistently high inflation, high interest rates, a weakening currency and prolonged policies & regulatory uncertainty resulted into sluggish demand.

During the year, lower NBS subsidy & significant increase in higher maximum retail prices (MRP) to the farmers also affected the consumption of phosphatic fertilisers, besides the draught in some parts of India. The Company produced 389052 MT (previous year 522358 MT) Single Super Phosphate andsold402861 MT (previous year 538250 MT). It is ironic that on top of the above situation, the Government of India has delayed the release of huge subsidy since October'' 2012 and further has declared N8S Rate for the FY 2013-14, as late as 3" May, 2013, creating uncertainty in the market.

We are confident that in a rational subsidy scheme, the SSP industry shall grow considerably resulting in higher availability of this ''Generic Customized Fertilizer'' for Indian farmers at competitive prices with no extra cost to exchequer. With the growth of the Industry and the Government''s commitment to encourage this fertilizer through greater extension services, it shall also reduce the country''s dependence on imported phosphatic fertilizer. The Govt, is yet to take final decision on subsidy mopped up on Finished

Goods/Work in Process on Stocks lying as on 31.03.2011 and is yet to declare its mopping up policy

The Company expects stabilization in Raw Material prices as well as Government''s policy towards NBS (timely declaration & mopping up) which shall benefit the whole Fertilizer Industry, including the SSP Industry.

The Company is in the process of increasing its granulation capacity after getting necessary Government clearances for its various locations. Soya Division:

In view of increasing speculative behavior in the market, which is not at all aligned with either International market or with forward market, the Company has virtually reduced its activities in this segment to a large extent.

The Company is trying to limit its fixed expenses in view of reduced activities.

DIVIDEND:

The 8oard of Directors is pleased to recommend final dividend of Re. 0.05 per equity share (face value of Re. 1/- per share) for the year 2012-2013, previous year Re.0.24 per equity share.

PROJECTS* FINANCE:

The project for manufacturing of 2,00,000 TPA of SSP and Phospho Gypsum at Dahej, Gujarat, is going on in full swing and it is expected to commence production in financial year 2013-14.

During the year, the Company has incurred loss (including MTM) of Rs. 860.35 lacs on account of Foreign Exchange Fluctuation (previous year loss Rs. 910.94 lacs) and grouped in ''other expenses''.

FIXED DEPOSITS:

The Company has not accepted any deposits from the public during the year under review, pursuant to the provisions of Section 58A of the Companies Act, 1956 and the Deposit Rules.

AUDITORS & AUDIT REPORT:

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company retire at the conclusion of ensuing annual general meeting and being eligible, offer themselves for re- appointment. The Company has received a certificate from them to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limit prescribed u/s 224 (1) of the Companies Act, 1956 and also received peer review certificate issued by the 1CA1 ''Peer Review Board'', as required under Clause 49 of listing agreement.

Regarding Emphasis of Matter under point No. 5 of the Auditors'' Report, the Management is of the view that this would not result into a liability and therefore the Company has not provided for mopping of subsidy on raw materials of fertilizer as on 31.03.2011 in terms of Office Memorandum No. 23011/1/2010-MPR dated 11-07-2011 issued by the Ministry of Chemicals & Fertilizers, Govt, of India, being reconsidered vide their letter No. 23011/1/2010-MPR (Pt) dated 22.08.2012, wherein the GOI has decided not to effect recovery till a policy in this regard is formulated. This has strengthened the management''s view for not providing the above liability.

All other notes on accounts referred to and the Auditors'' Report are self- explanatory and therefore do not call for any explanatory note. COST AUDIT:

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956, issued by the Central Government, has appointed M/s. M. P. Turakhia & Associates, Cost Accountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer, Sulphuric Acid and Soya products for the financial year2013-2014.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION: Information required under section 217(l)(e) of the Companies Act, 195fi read with the Companies (Disclosure of Particulars in the Report of Board of Directors] Rules, 19BB is annexed in Form-A and forms part of the report.

Your Directors are of the opinion that the Company has already opted for latest technology for producing Single Super Phosphate, Sulphuric Acid, and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B is not applicable. FOREIGN EXCHANGE EARNING AND OUTGO: The Company has earned Rs. NIL lacs on export of goods (Previous year Rs. NIL) and incurred Rs. 18430.90 lacs (Previous year Rs. 17087.32 lacs) on import of Raw Materials, Capital Goods, Fees & Subscription and Interest on Foreign Currency Loan. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Vijay Gupta, the director of the Company is due to retire at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Directors recommend his reappointment.

Particulars of the directors seeking appointment/re-appointment are provided in the notes forming part of the notice for the ensuing Annual General Meeting, as required under Clause 49 of the listing agreement with the stock exchange.

DIRECTORS''RESPONSIBILITY STATEMENT:

In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to 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 at 31" March, 2013 and of the Profit of the Company for that period;

3. they have taken proper and sufficient care 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 annual accounts on a going concern basis. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

In accordance with Clause 49 of the listing agreements with Stock Exchange, the Management Discussion and Analysis Report forms part of this Report (Annexure - B)

CORPORATE GOVERNANCE: Your Company has always strived to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under clause 49 of the listing agreements forms part of this Report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the said clause is attached to this report. Annexure - C.

LISTING OF SHARES:

Shares of the Company are listed on the Bombay Stock Exchange (BSE), which provides wider access to the investor nationwide. The Company has made all the compliances of Listing Agreement including payment of annual listing fees up to 31st March, 2013 to the BSE.

PARTICULARS OF EMPLOYEES:

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report

(Annexure-A.)

ACKNOWLEDGEMENT:

The Board of Directors, would like to record their sincere appreciation for the support and co-operation that your Company received from the State Bank of India, IDBI Bank Limited, Corporation Bank, HDFC Bank Limited and Axis Bank Ltd., various departments/ agencies of Central/State Govt., Members, Customers, Suppliers, Employees and other business associates of the Company.

for and on behalf of the Board

Place: Dahej (SHAILESH KHA1TAN)

Date: 14.05.2013 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2012

The Directors are pleased to present the 30th annual report of the Company and audited statement of accounts for the year ended 31 March, 2012.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31 March, 2012 is summarized below:

(Rs. in lacs)

2011-2012 20010-2011

Sales (Gross) 64,858.54 46,033.42

Net Sales 64,787.35 46,025.66

Surplus before interest, depreciation, exceptional items and Tax 6,487.83 7,254.14

Less: Interest & Financial Expenses 2,609.26 1,770.23

Cash Profit before tax 3,878.57 5,483.91

Less: Depreciation 731.62 666.16

Exceptional Items 95.06 168.06

Profit/(Loss) before taxation 3,051.89 4,649.69

Provision for current tax 969.61 1,570.40

Deferred tax (86.43) (70.54)

Income Tax of earlier year (5.49) 7.00

Profit/(Loss) after taxation 2,174.20 3,142.83

Proposed Dividend @ 24% 232.77 232.77

Earning Per Share (face value of Re. 1/-each) 2.24 3.24

REVIEW OF OPERATIONS Fertilizer & Chemicals Division:

The Nutrient Base Subsidy (NBS) with free market mechanism encouraging more interaction between producers and farmers for efficient use of fertilizer for better agricultural output, is a long term positive for Fertilizer Industry.

We are confident that in a rational subsidy scheme, the SSP industry shall grow considerably resulting in higher availability of this 'generic customized fertilizer' for Indian farmers at competitive prices with no extra cost to exchequer. With the growth of the Industry and the Government's commitment to encourage this fertilizer through greater extension services, it shall also reduce country's dependence on imported phosphate fertilizer.

During the current year, the Government has mopped up Rs.863/- PMT on account of stock lying as on 31.03.2011 and also stopped reimbursement of freight subsidy of Rs.200 PMT. Both of the above works out to Rs. 1981.96 lacs for the year. The Govt, also intends to mop up subsidy on account of stock of raw material, however, so far they have networked out such mop up on raw material.

These arbitrary, adhoc, retrospective irrational and above all against the basic theme of NBS, decisions of Government make the Industry apprehensive and the future of the business uncertain.

The year 2011-12 commenced with an increasing trend in prices of raw material & finished goods which have adversely affected the profitability during the year. However, again while phosphoric products like DAP have come down in the International market below the level of March 2011, the prices of main raw materials i.e., Rock phosphate has increased by at least 50% since March 2011. This clubbed with lower NBS subsidy for the year 2012-13 shall hit the Industry at least during the current Kharif season.

During the year 2011-12, the Company produced 522358 MT (previous year 433393 MT) Single Super Phosphate and sold 538250 MT (previous year451067 MT) which was highest ever production and sales by the Company.

The Company welcomes the Government's initiative to directly transfer the subsidy to farmers which shall give the farmers unrestricted choice as well as make them understand the real worth of fertilizer used by them.

Soya Division:

In view of total speculative behavior in the market, leading to lack of upfront crushing margin during the year, the Company has restricted the business activities in the current year. The Company is adequately leveraging its position by hedging its inventories to counter the high volatility.

The performance of the Company is satisfactory pursuant to the cautious approach followed by the Company. During the year, the Company has crushed 47829 MT (previous year 42541 MT) Soybean seed including NIL (previous year 10551) through Job work basis.

DIVIDEND

The Board of Directors is pleased to recommend final dividend of Re. 0.24 per equity share (face value of Re. 1/-per share) for the year 2011- 2012, which is equal to previous year.

PROJECTS & FINANCE

The project for manufacturing of 200000 TPA of SSP and Phosphor Gypsum at Dahej, Gujarat has received all the necessary NOCs from concerned Authorities. The Company expects to start civil work shortly. The State Bank of India has sanctioned the term loan of Rs. 21.50 Crores for the project.

The Company has acquired land for putting up fertilizer project near Née much (Madhya Pradesh). The Company has also applied for environment clearance for expansion of fertilizer capacity at our existing locations.

During the year, the Company has incurred loss (including MTM) of Rs. 910.94 lacs on account of Foreign Exchange Fluctuation (previous year loss Rs.64.99 lacs) and grouped in 'other expenses'. Axis Bank Limited has become part of our banking consortium.

FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year under review, pursuant to the provisions of Section 58A of the Companies Act, 1956 and the Deposit Rules.

AUDITORS & AUDIT REPORT

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company retires at the conclusion of ensuing annual general meeting and being eligible, offer themselves for re- appointment. The Company has received a certificate from them to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limit prescribed u/s 224 (1) of the Companies Act, 1956 and also received peer review certificate issued by the ICAI 'Peer Review Board', as required under Clause 49 of listing agreement.

Regarding qualification remark under point 4 of the Auditors' Report, the Management is of the view that there is no liability and therefore the Company has not provided for Moping of subsidy on raw materials of fertilizer as on 31.03.2011 in terms of Office Memorandum No. 23011/1 /2010-MPR dated 11-07-2011 issued by the Ministry of Chemicals & Fertilizers, Govt, of India, being unreasonable and un- justified, which is neither ascertainable nor deducted/withheld by Govt, of India as on date and being protested by the Industry.

All other notes on accounts referred to and the Auditors' Report are self-explanatory and therefore do not call for any explanatory note.

COST AUDIT

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956, issued by the Central Government, has appointed M/s. M. P. Turakhia &Associates, Cost Accountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer, Sulphuric Acid and Soya products for the financial year 2012-2013.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Information 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 is annexed in Form-A and forms part of the report.

Your Directors are of the opinion that the Company has already opted for latest technology for producing Single Super Phosphate, Sulphuric Acid, and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B is not applicable.

FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. NIL lacs on export of goods (Previous year Rs. 85.34) and incurred Rs. 17087.32 lacs (Previous year Rs.9481.97 lacs) on import of Raw Materials, Capital Goods, Fees & Subscription and Interest on Foreign Currency Loan.

DIRECTORS

During the year under review, Shri O.P. Bagla, Director of your Company, resigned w.e.f. 31st July, 2011. The Board placed on record its sincere appreciation for valuable services rendered and contribution made by him.

The Board at its meeting held on 31st October, 2011 has appointed Shri J.L. Jajoo, as Whole Time Director of the Company subject to the approval of shareholders of the Company in ensuing annual general meeting for a period of three years w.e.f. 01.11.2011.

Shri J.L. Jajoo, Chartered Accountant, is associated with your Company since beginning to 1995 as Vice President/ President/ Executive Director, and thereafter remained on the Board as Independent Director.

Shri Balmukund Dakhera, Chartered Accountant, is appointed as an Additional Director of the Company w.e.f. 31st October, 2011 and will hold office up to the date of the forthcoming Annual General Meeting and being eligible offers himself for re-election. Directors recommend his reappointment.

Shri Shailesh Khaitan is re-appointed as Managing Director of the Company for a period of three years w.e.f. 01.04.2012 . His term of appointment expired on 31.03.2012.

In accordance with the provisions of the Companies Act, 1 d56 and the Articles of Association of the Company, Dr. P. Goyal, the director of the Company is due to retire at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Directors recommend his reappointment.

Particulars of the directors seeking appointment/re-appointment are provided in the notes forming part of the notice for the ensuing Annual General Meeting, as required under Clause 49 of the listing agreement with the stock exchange.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to 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 the 31st March, 2012 and of the Profit of the Company for that period;

3. they have taken proper and sufficient care 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 annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Clause 49 of the listing agreements with Stock Exchange, the Management Discussion and Analysis Report forms part of this Report (Annexure - B)

CORPORATE GOVERNANCE

Your Company has always strived to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under clause 49 of the listing agreements forms part of this Report. The requisite certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the said clause is attached to this report. Annexure -

C. LISTING OF SHARES

Shares of the Company are listed on Bombay Stock Exchange (BSE), which provides wider access to the investor nationwide.

The Company has made all the compliances of Listing Agreement including payment of annual listing fees up to 31st March, 2012 to the BSE. '

PARTICULARS OF EMPLOYEES

The particulars of employees required to be furnished under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report(Annexure-A.)

ACKNOWLEDGEMENT

The Board of Directors, would like to record their sincere appreciation for the support and co-operation that your Company received from the State Bank of India, IDBI Bank Limited, Corporation Bank, HDFC Bank Limited and Axis Bank Ltd., various departments/ agencies of Central/State Govt., Members, Customers, Suppliers, Employees and other business associates of the Company.

for and on behalf of the Board

Place: New Delhi (Shailesh Khaitan)

Date: May 29, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors are pleased to present the 29th annual report of the Company and audited statement of accounts for the year ended 31st March,2011.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31stMarch, 2011 is summarised below:

(Rs. in lacs)

2010-2011 2009-2010

Profit before interest and depreciation 7141.41 876.88 Less: Interest &financial expenses 1635.00 101.63 Cash profit before tax 5506.41 775.25 Less: Depreciation 666.16 702.86 Misc. expenses written off - 0.56 Prior period adjustments 190.57 35.02

Profit before taxation 4649.68 36.81 Less: Provision for taxation (incl. deferred tax) 1499.86 (61.19) Short provision for taxation-earlier years 7.00 17.32

Prof it after taxation 3142.82 80.68 Add: Transfer from Capital Subsidy 2.83 2.83 Net Profit 3145.65 83.51 Add: Profit brought forward from previous year 2156.61 2309.27 Amount available for appropriations 5302.26 2392.78 Less: Transfer to- General reserve 1000.00 100.00 Proposed dividend 232.77 116.39 Corporate tax on dividend 37.76 19.78

Balance carried forward to Balance Sheet 4031.73 2156.61

REVIEW OF OPERATIONS Fertilizer & Chemicals Division:

The introduction of the Nutrient-Based Subsidy (NBS) policy of the Government of India w.e.f. 1st May, 2011 is a welcome step. Pursuant to the NBS Policy, Company expects healthy growth in the demand for fertilizers, especially SSP, complex fertilizers & customized fertilizers, on the back of promotion of a more balanced nutrient consumption. The Single Super Phosphate fertilizer is a generic customized fertilizer containing sulphur, calcium & other micro nutrients besides phosphate.

The Nutrient Base Subsidy (NBS) is a long term positive for Fertilizer Industry with free market mechanism encouraging more interaction between producers and farmers for efficient use of fertilizer for better agricultural output.

We are confident that in a rational subsidy scheme, the SSP industry shall benefit the most resulting in higher availability of this generic customized fertilizer for Indian farmers at competitive prices with no extra cost to exchequer.

During the year 2010-11, the Company produced 433393 MT (previous year 332543 MT) Single Super Phosphate and sold 451067 MT (previous year 244520 MT) which was highest ever production and sales by the Company.

The Companys net profit (after tax) for the year is Rs. 3145.65 Lacs, which is not only highest but also exceeds the total of last 4 years, despite not so good performance of the Soya Division.

The Company is determined to perform better in the current year and achieve a higher capacity utilization. Soya Division:

The Company is continuing with its cautious approach while considering speculative fluctuations in the market and negligible upfront crushing margin. The Company is adequately leveraging its position by hedging its inventories to counter the high volatility. During the year, the Company has crushed 42541 MT (previous year 12135 MT) Soybean seed including 10551 MT (previous year NIL) through Job work basis

DIVIDEND

The Board of Directors is pleased to recommend final dividend of Rs.2.40 per equity share for the year 2010-2011 as compared to Rs. 1.20 per equity share paid in the previous year. CAPITAL RESTRUCTURING The Board subject to necessary approval and amendment to Memorandum and Article of Association of the Company recommend split of its shares from Rs. 10/- ((Rupees Ten) per share to Rs. 1/- (Rupee one) per share. This will increase the liquidity of the shares in the market.

PROJECTS & FINANCE

The Company has acquired manufacturing facilities of SSP and Sulphuric Acid from M/s Jairam Phosphates Ltd., at Rajnandgaon (Chhattisgarh) during the year for production of upto 66,000 I PA of SSP Fertiliser and 49,500 TPAof Sulphuric Acid. The operations of the plant commenced in March, 2011. The acquisition was funded by a term loan of Rs. 1000 lacs and with internal accruals.

Further, the SSP Project for 2,00,000 TPA at Dahej (Gujarat) has received the much awaited statutory environmental clearance and civil work is being started shortly. The Company expects to start production in the current financial year. The project cost of Rs. 3000-3500 lacs shall be financed through internal accruals and term loans. The Company had completed erection of LABSA (Linear Alkylbenzene Sulfonic Acid) plant at Nimrani which shall be commissioned shortly. This shall enable utilization of the waste products of the acid plant. HDFC Bank Limited & Corporation Bank have become part of our banking consortium after merging of State Bank of Indore with State Bankoflndia. FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year under review, pursuant to the provisions of Section 58A of the Companies Act, 1956 and the Deposit Rules.

AUDITORS & AUDIT REPORT

S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company retire at the conclusion of ensuing annual general meeting and being eligible, offer themselves for re- appointment. The Company has received a certificate from them to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limit prescribed u/s 224 (1) of the Companies Act, 1956 and also received peer review certificate issued by the ICAI Peer Review Board, as required under Clause 49 of listing agreement.

All notes on accounts referred to and the Auditors Report are self- explanatory and therefore do not call for any explanatory note. COST AUDIT

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956, issued by the Central Government, has appointed M/s. M. P. Turakhia & Associates, Cost Accountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer and Sulphuric Acid products for the financial year 2011-2012.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Information 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 is annexed in Form-A and forms part of the report.

Your Directors are of the opinion that the Company has already opted for latest technology for producing Single Super Phosphate, Sulphuric Acid, and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B is not applicable. FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. 85.34 lacs on export of goods (Previous year Rs. NIL) and incurred Rs. 9481.97 lacs (Previous year Rs. 10151.76 lacs) on import of Raw Materials, Capital Goods, Fees & Subscription and Interest on Foreign Currency Loan. DIRECTORS

Shri Shailesh Khaitan, Chairman & Managing Director has been re- elected on the Board of Fertilizer Association of India and is Chairman of SSP Advisory Committee. The Board appreciates his efforts and valuable contribution to SSP industry which has brought SSP industry at par with other Fertilizers.

Shri Vijay Gupta was appointed as an additional director of the Company w.e.f 18th May, 2011 and will hold office up to the date of the ensuing Annual General Meeting and being eligible offers himself for re-election. Board greeted the new director. In accordance with the provisions of the Companies Act, 1956 and the

Articles of Association of the Company, Shri J.L. Jajoo, the director of the Company is due to retire at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Particulars of the directors seeking re-appointment are provided in the notes forming part of the notice for the ensuing Annual General Meeting, as required under Clause 49 of the listing agreement with the stock exchange.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to 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 the 31* March, 2011 and of the Profit of the Company for that period;

3. they have taken proper and sufficient care 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 annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report forming part of Directors Report for the year under review, in accordance with Clause 49 of the listing agreement with stock exchanges, is given in

Annexure-B.

CORPORATE GOVERNANCE

The Company attaches considerable significance to good Corporate Governance as an important step towards building investors confidence, improve investors protection and maximizing long-term

shareholders value. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a Compliance Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance is given in Annexure - C.

LISTING OF SHARES Shares of the Company are listed on The Bombay Stock Exchange (BSE), which provides wider access to the investor nationwide.

The Company has made all the compliances of Listing Agreement including payment of annual listing fees up to 31st March, 2011 to the BSE.

PARTICULARS OF EMPLOYEES

Information as per the requirement of Section 217(2A) of the Companies Act, 1956 is given in Annexure-A.

ACKNOWLEDGEMENT

The Board of Directors, would like to record their sincere appreciation for the support and co-operation that your Company received from the State Bank of India, IDBI Bank Limited, Corporation Bank and HDFC Bank Limited, various departments/ agencies of Central/State Govt., Members, Customers, Suppliers, Employees and other business associates of the Company.

for and on behalf of the Board

(SHAILESH KHAITAN)

CHAIRMAN & MANAGING DIRECTOR Place: New Delhi Date: 18.05.2011


Mar 31, 2010

The Directors are pleased to present the 28th annual report of the Company and audited statement of accounts for the year ended 31st March, 2010,

FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2010 is summarised below,

(Rs. in lacs)

2009-2010 2008-2009

Profit before interest and depreciation 876.88 4481 66

Less Interest & financial expenses 101.63 1963.59

Cash profit before tax 775.25 2518.07

Less Depreciation 702.86 683.77

Misc expenses written off 0.56 1.35

Prior period adjustments 35.02 202 94

Profit before taxation 36,81 1630 01

Less Provision for taxation (incl. F8T and deferred tax) (61.19) 561.04

Short provision for taxation - earlier years 17.32 42.26

Profit after taxation 80.68 1026 71

Add Transfer from Capital Subsidy 2.83 2.09

Net Profit 83.51 1028.80

Add Profit brought forward from previous year 2309.27 1584 72

Amount available for appropriations 2392.78 2613 52

Less: Transfer to

General reserve 100.00 100.00

Proposed dividend 116.39 174.58

Corporate tax on dividend 19.78 29 67

Balance carried forward to Balance Sheet 2156.61 2309 27



REVIEW OF OPERATIONS

Fertilizer & Chemicals Division:

The year 2009 began with falling prices of Rock Phosphate, which resulted in low subsidy on inventory Clubbed with under recoveries, the falling prices caused operating losses in the first half

From 1st October, 2009, the subsidy policy was changed and an adhoc fixed subsidy aiongwith free MRP were made applicable only for SSP fertilizer. This made SSP costlier in relation to other phosphatic fertilizers. However, finally and thankfully, the Government of India has now implemented the Nutrient Based Subsidy Policy (NBS) for V & K Fertilizer we f 01 04 2010. Even though the NBS policy was announced in February, 2010, and made effective for all the Fertilizers excepting SSP on 403.2010, it was made applicable on Single Super Phosphate only from 01.05 2010 after a considerable delay. This has resulted in low sales volume during last quarter of the year Further, in the implementation of NBS policy, increased MRP has been allowed to all the other fertilizers, while in case of SSP, MRP has come down by 20-25%.

During the year 2009-10, the Company has produced 3,32,543 MT (previous year: 2,26,000 MT) Single Super Phosphate and sold 2.44,520 MT (previous year: 2,20.259 MT) With the strengthening of Indian Rupee, the Company has gained Rs.774.21 lacs on account of foreign exchange fluctuations as compared to loss of Rs 794 79 lacs in the previous year 2008-09. The NBS policy has offered the SSP Industry a near level playing field, but challenges remain with undue favour to other Phosphatic fertilizers, however the Company is determined to perform better in the following year

Soya Division:

In view of total speculative behavior in the market leading to lack of upfront crushing margin during the year and virtually no significant business activities have taken place The situation was unprecedented in the history which resulted in piling up of inventory of Oilseeds (Rapeseed/Muster Seed/ Soybean) with farmers/traders The price of Soybean had steeply reduced to Rs 20390/- per ton on 31 03 2010 from Rs 24260/- per ton on 02.12.2009.

The cautious approach opted by the Management, had proved to be a right decision

DIVIDEND

The Board of Directors is pleased to recommend dividend of Rs 1.20 per share as compared to Rs.1.80 per share paid in the previous year.

PROJECT & FINANCE

The Company has taken manufacturing facilities of Single Super Phosph -ate on toll basis, in Rajasthan, for 5 years commencing from 2010-11. The same is being financed with internal accruals.

The project for manufacturing of Single Super Phosphate at Dahej, Gujarat is awaiting statutory environmental clearance to start further.

FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year under review, pursuant to the provisions of Section 58A of the Companies Act, 1956 and the Deposit Rules.

AUDITORS & AUDIT REPORT

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company retires at the conclusion of ensuing annual general meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment as Statutory Auditors of the Company, if made, would be within the limit prescribed u/s 224 (1) of the Companies Act, 1956 and also received peer review certificate issued by the ICAI Peer Review Board, as required under Clause 49 of listing agreement. Regarding qualification remark under para vi of the Auditors Report, the Management is of the view that there is no material liability in case of gratuity & leave encashment. All other notes on accounts referred to and the Auditors Report are self- explanatory and therefore do not call for any explanatory note.

COST AUDIT

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956, issued by the Central Government, has appointed M/s. M. P. Turakhia & Associates. Cost Accountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer and Sulphuric Acid products for the financial year 2010-2011.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Information 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 is annexed in Form-A and forms part of the report. Your Directors are of the opinion that the Company has already opted for latest technology for producing Single Super Phosphate, Sulphuric Acid, and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B is not applicable.

FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. NIL on export of goods (Previous year Rs. NIL) and incurred Rs. 10151.76 lacs (Previous year Rs. 3760.52 lacs) on import of Raw Materials, Fees & Subscription and Interest on Foreign Currency Loan. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the articles of association of the Company, Dr. P. Goyal, the director of the Company is due to retire at forthcoming annual general meeting, and being eligible, has offered himself for re-appointment.

Particulars of the director seeking re-appointment are provided in the notes forming part of the notice for the ensuing Annual General Meeting, as required under Clause 49 of the listing agreement with the stock exchange.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to 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 the 31st March,2010 and of the Profit of the Company for that period;

3. they have taken proper and sufficient care 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 annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report forming part of Direc -tors Report for the year under review, in accordance with Clause 49 of the listing agreement with stock exchanges, is given in Annexure - B.

CORPORATE GOVERNANCE

The Company attaches considerable significance to good Corporate Governance as an important step towards building investors confidence, improve investors protection and maximizing long-term shareholders value. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a Compliance Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance is given in Annexure - C.

LISTING OF SHARES

Shares of the Company are listed on Bombay Stock Exchange (BSE), which provides wider access to the investor nationwide. The Company has made all the compliances of Listing Agreement including payment of annual listing fees up to 31st March, 2010 to the BSE.

PARTICULARS OF EMPLOYEES

Information as per the requirement of Section 217(2A) of the Compa -nies Act, 1956 is given in Annexure-A.

ACKNOWLEDGEMENT

The Board of Directors, would like to record their sincere apprecia -tion for the support and co-operation that your Company received by the State Bank of India, State Bank of Indore, IDBI Bank Ltd., various departments/ agencies of Central/State Govt., members, customers, suppliers, employees and other business associates of the Company

For and on behalf of the Board

Place New Delhi (SHAILESH KHAITAN)

Dated: 14.05.2010 CHAIRMAN & MANAGING DIRECTOR

 
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