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Directors Report of Rama Phosphates Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 30th Annual Report together with the audited financial statements for the financial year ended March 31, 2015.

FINANCIAL HIGHLIGHTS

During the year under review, performance of your company is as under:

Rs. in Lacs

FINANCIAL RESULTS YEAR ENDED YEAR ENDED 31/03/2015 31/03/2014

Sales & Other Income 40030.94 54105.69

Profit Before Financial Charges & Depreciation 35.05 1046.67

Less: Financial Charges 1024.65 962.85

Profit Before Depreciation (986.60) 83.82

Less : Depreciation 372.85 410.54

Net Profit Before Tax (1362.45) (326.72)

Tax Expenses

Current Tax - -

Deferred Tax (409.28) (132.84)

Tax For Earlier Years 23.70 17.07

Net Profit Before Adjustments (976.87) (210.95)

Profit/(Loss) After Adjustments (976.87) (210.95)

Profit/(Loss) For The Year (976.87) (210.95)

Dividend On Equity Shares NIL 88.47

Tax On Proposed Dividend NA 15.03

Profit &(Loss) Balance Brought Forward from the Previous Year 3579.02 3893.47

Balance Carried To Balance Sheet 2436.28 3579.02

DIVIDEND

In view of current year's losses, your Directors regret their inability to recommend any dividend for the year under review.

REVIEW OF OPERATIONS

Your Company produces Single Super Phosphate (SSP) fertilizer along with Mixed NPK fertilizer under the brands of "Girnar" and Suryaphool" from Indore, Udaipur and Pune units. The company recently launched value-added fertilizer, Boronated Single Super Phosphate from Udaipur unit in the month of January, 2015 and produced about 4000 MT within three months period. The company's another division Soya seed crushing and refining unit is operated from Indore. The Chemicals division of the company involved in manufacture of Sulphuric Acid and Oleum is based at Indore and Pune.

Fertilizer Division

The overall production of SSP increased in the country significantly after changes in SSP policy during 2008-09 and implementation of NBS policy from 2010-11. During 2009-10, 2010-11 and 2011-12 the production of SSP recorded high growth rate of 22%, 20%, 17%, respectively over the previous years. Subsequently, the momentum of growth in production slowed down in 2012-13 at 2.60% and turned negative in 2013-14 and 2014-15. The industry average capacity utilization during the current year stands @ 45.20% and produced 42.00 lac MT as against 48.5% with production of 41.74 lac MT achieved during the last year. Whilst there is no change in subsidy amount payable to SSP industry during the year, at the same time the industry witnessed capacity expansion by 7.29 Lac MT to reach 102.52 Lac MT of installed capacity. Hence, all out efforts should be made by the Govt., for promoting SSP consumption in the country in line with "Make in India" campaign and also reduce outflow of foreign currency. As per the ICRA report, aggregate revenue growth of 11 listed fertilizer companies slowed from an average of 22% in six years 2011-12 to 2-4% in the last three fiscal years. Unless the weather situation worsens, sales will likely to grow in low single digits in the current fiscal year too.

In spite of such grim situation, your company achieved an overall 70% capacity utilization and produced 3,35,081 MT during the current year under review as against 80% (3,80,328 MT production) achieved during the previous year. As per the FAI Annual Report, only 2 plants in the country including your Pune unit have achieved more than 90% capacity utilization out of 85 operating industries during this year. The excess availability of material in the channel subsequent to drought-like situation in Western Maharashtra and other major parts of Madhya Pradesh due to paucity of rain restricted the Management to optimize its production capacities.

Company could marginally improve its Mixed fertilizer NPK capacity utilization to 22% during the current year against 17% in the previous year. During the year, the Chemicals division of Sulphuric Acid & Oleum at Pune was operated at full capacity due to better market demand.

Your company achieved market share of 8.43% against all-India sale of 42.27 lacs MT during the current year against 11.46% on 39.70 lac MT in the previous year. The Fertilizer division reported improved turnover by Rs. 236.73 lacs at Rs. 35,013.10 lacs in 2014-15 as against Rs. 34,776.37 lacs achieved in 2013-14. This could be made possible due to increase in sales quantity by keeping a strict monitoring on selling and distribution expenses and also selling in economic zone coupled with reduction in outward freight.

Oil division : There was steep drastic reduction in crushing activity at our Indore unit and that we could crush 12686 MT of Soya seed during this year against 47219 MT crushed in the previous year. There was huge disparity in seed prices and thus Management took conscientious decision to restrict seed crush and reduce subsequent losses.

Overall Financial Performance :

EBITDA of the company has been reduced to Rs. 35.05 lacs during the year as against Rs. 1,046.67 achieved in the previous year. Due to this, net loss has also been increased to Rs. 976.87 lacs during this year. This is due to lesser capacity utilization in fertilizer division at 70% coupled with reduction in sales realization due to availability of huge quantity of unsold stock in the channel. Besides, there was huge disparity in oil division and thus, company operated the plant without disturbing the economics further. Moreover, Working capital limit has not been disbursed in spite of in-principle approval by Working Capital lenders. The financial cost has been increased from Rs. 962.85 to Rs. 1,024.65 lacs marginally subsequent to availing more of non-fund based limit in oil division. Employee cost has been increased marginally from Rs. 1,579.21 lacs to Rs. 1,636.48 lacs - overall by 3.62% which is due to normal annual increment. Selling and distribution expenses have been reduced to Rs. 4,018.52 lacs in the current year as against Rs. 4,198.22 lacs incurred in the previous year. The term loan liability has been reduced from Rs. 430.07 lacs to Rs. 167.84 lacs due to repayment of Term Loan of Bank of India and others. However, trade payable has been increased from Rs. 7,852.01 lacs to Rs. 8,531.44 lacs due to increase in market credit. Subsidy receivable has been increased from Rs. 5,033.40 lacs to Rs. 7,537.81 lacs due to delay in release of subsidy.

The Company has considered deferred tax income of Rs. 409.28 lacs in accounts due to set-off of losses of current year in line with reasonability of expectant achievement of Profit in further period.

Since the overall fertilizer business environment is quite competitive, your Directors are quite hopeful to improve performance and take suitable measures to achieve the desired goals in the long run by capacity utilization of fertilizer division and foraying into addition of value-added products viz., Sulphur Dust, Magnesium Sulphate to de-risk the company and also keep a close watch on fixed expenses and other possible ways and means. It is also reported that monsoon is well-set allying fears of drought like situation in continuity and that company forecasts (good Kharif season) to liquidate its entire production. In view of increased acreage of oil seeds cultivation in the country especially in Madhya Pradesh, company intends to run Soya Oil division at optimum capacity and also produce value-added product Lecithin.

ISO Accreditation:

The Oil Division of your company has conformed with the requirements under ISO 14001 : 2004 accreditation for the Environmental Management System and the certificate issued in the year June-2007 is periodically renewed.

In pursuit of achieving Quality Standards, our Oil Division has fulflled requisite conditions and received accreditation with ISO 9001: 2008 during this year.

Similarly, our Fertilizer Division has also obtained accreditation for ISO 9001: 2008 in 2014.

This is an additional feather in our cap which will ensure Quality Management System.

EXPANSION ACTIVITY

Udaipur unit: The Environmental Clearance for the proposed expansion of Single Super Phosphate (1,81,000 to 3,15,000 TPA) and NPK (60,000 TPA), and Boronated SSP (25,000TPA), and LABSA (20,000 TPA) has been received and that company would initiate necessary formalities to obtain CTO from the respective authorities.

Indore unit: Similarly, Environment Clearance for expansion of SSP capacity from 1.65 lac MT to 2.50 lac MT has been received.

TRANSFER OF AMOUNT TO RESERVES

The Company does not propose to transfer any amount to the general reserve for the Financial Year ended March 31, 2015.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business of the Company.

SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2015 stood at Rs. 1767.43 Lacs. During the year under review, the Company has neither issued any shares with differential voting rights nor had granted any stock options or sweat equity.

CORPORATE GOVERNANCE

A separate report on Corporate Governance and Management Discussion and Analysis is annexed as part of the Annual Report along with the Auditor's Certifcate on its compliance.

Your Directors refer to the observations made by the Auditors in their Report on compliance with conditions of Corporate Governance and wish to state that due to appointment of non-independent woman director, the requirement of minimum number of Independent Directors was not complied. However, Company is taking steps to comply with the requirement of minimum number of Independent Directors.

EXTRACT OF ANNUAL RETURN

The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - A to this Report.

DIRECTORS

Mr. H.D. Ramsinghani, Director of the Company retires by rotation and being eligible, offer himself for re-appointment. The Board of Directors has appointed Mrs. N.H. Ramsinghani as an Additional Director on the Board w.e.f March 31, 2015.

KEY MANAGERIAL PERSONNEL

During the year under review, the Company has appointed Mr. Kiran P. Jain as Company Secretary w.e.f. February 13, 2015 and Mr. J. K Parakh as Chief Financial Officer w.e.f. February 13, 2015.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year ended March 31, 2015, four Board Meetings were held. The dates on which the Board meetings were held are May 27, 2014, August 12, 2014, November 14, 2014 and February 13, 2015.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS BY COMPANY

Details of Loan, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy. A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases.

The whistle Blower Policy has been uploaded on the website of the company (www.ramaphosphates.com).

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee consists of the following Directors namely Mr. K. Raghuraman - Chairman, Mr. D.N. Singh and Mr. M. Shanmugam

RISK MANAGEMENT COMMITTEE

Risk Management Committee consists of the following persons namely Mr. D.N. Singh - Chairman, Mr. H.D. Ramsinghani and Mr. K. Raghuraman.

The Committee had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk management procedure will be reviewed by the Audit Committee and Board of Directors on a Quarterly basis at the time of review of Quarterly Financial Results of the Company.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Corporate Social Responsibility (CSR) is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and Society.

The Board of Directors of the Company have constituted Corporate Social Responsibility Committee consisting of following persons namely Mr. D.N. Singh - Chairman, Mr. H.D. Ramsinghani and Mr. K. Raghuraman and adopted policy for Corporate Social Responsibility. Corporate Social Responsibility policy was adopted by the Board of Directors on the recommendation of Corporate Social Responsibility Committee. Report on Corporate Social Responsibility as Per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is prepared and the same is uploaded on website of the Company (www.ramaphosphates.com).

The calculation of CSR expenditure is tabulated below:

(Rs. in Lacs)

Particulars F.Y. 2011-12 F.Y. 2012-13 F.Y. 2013-14 Total

Total Profit/Loss for the year as per Section 198 4,930.95 3,057.57 (978.01) 7,010.51

Average Profit 2,336.84

2 % of average Profit (CSR Expenditure) 46.74

During the financial year under review, the Management could not spend the stipulated amount towards CSR as company is facing losses.

Our proposal for enhanced working capital is still under process and also huge funds of realization of subsidy amount got stuck under government formalities. These factors posed a great challenge to the company in executing various CSR activities.

Moreover, due to severe drought like condition, there was huge pile up of stock and the sale of entire produce could not be materialized. This has resulted in delay in realization of funds from the market.

In spite of our willingness, we could not spend adequately under CSR due to aforesaid reasons and reduced cash flow in the system during the year. However, we shall ensure that due care will be taken in the subsequent years.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm's length basis and in ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained for transactions which are of repetitive nature.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the company (www.ramaphosphates.com).

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no Significant and Material Orders passed by the regulators or Courts that would impact the going concern status of the Company and its future operations.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

Pursuant to the requirement under section 134 (3)(c) of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirms that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had 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 31st March, 2015 and of the Profit /loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149

The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6).

STATUTORY AUDITORS

M/s. Dayal & Lohia, Chartered Accountants, (Firm Registration no:102200W) who are statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts for the financial year 2015-16. As required under the provision of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Dayal & Lohia that their appointment, if made, would be in conformity with the limits specified in the said section.

AUDITORS REPORT

M/s. Dayal & Lohia, Chartered Accountants, (Firm Registration no:102200W) have issued Auditors Report for the Financial Year ended March 31,2015 and there are no qualifications in Auditors Report.

COST AUDIT

The Board of Directors on recommendation of Audit Committee, has appointed Mr. R.S. Raghavan as the Cost Auditor for carrying out the Audit of Cost Accounting Records relating to the product "Sulphuric Acid" at the Indore and Pune Unit, the product "Oil" at the Indore Unit and the product "Fertilizers" at Pune, Indore and Udaipur Unit of the Company for the Financial Year 2015-16 on remuneration of Rs. 2,00,000/- (Rupees Two Lacs) per annum plus reimbursement of out of pocket expenses.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in AGM for their Ratification. Accordingly, a resolution for seeking Members Ratification in included at item no. 4 of the notice convening the AGM.

The Cost Audit Report for the financial year 2013-14 was fled with the Ministry of Corporate Affairs on September 17, 2014. The Cost Audit Report for the financial year ended 31st March, 2015 will be filed within stipulated time.

SECRETARIAL AUDITOR REPORT

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed Mr. Sanjay Dholakia, Practicing Company Secretary (C.P.No: 1798) as Secretarial Auditor to conduct Secretarial audit of the company for the Financial year ended on March 31, 2015. Secretarial Audit Report issued by Mr. Sanjay Dholakia, Practicing Company Secretary in form MR-3 is enclosed as Annexure - B to this Annual Report.

Your Directors refer to the observations made by the Secretarial Auditor in the Secretarial Audit Report and wish to state that due to appointment of non-independent woman director, the requirement of minimum number of Independent Directors was not complied . However, Company is taking steps to comply with the requirement of minimum number of Independent Directors.

INTERNAL AUDITORS

The Board of Directors of the Company have appointed M/s. Mhalgi Kulkarni & Associates, Chartered Accountants, M/s. Khandelwal Pahadia Agrawal & Co., Chartered Accountants, M/s. K.L. Vyas & Co., Chartered Accountants to conduct Internal Audit of the Company.

AUDIT COMMITTEE

In accordance with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has constituted an Audit Committee comprising of the following Directors viz. Mr. K. Raghuraman (Chairman), Mr. D. N. Singh, Mr. A.K Thakur and Mr. H. D. Ramsinghani. Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.

DEPOSITS

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments in the business operations of the Company from the Financial year ended March 31, 2015 to the date of signing of the Directors Report.

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

Information required under section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is enclosed as Annexure - C and forms part of the report.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has appointed Internal Auditors to observe the Internal Controls, whether the work flows of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observations;

The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Risk Management Policy and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule, 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is enclosed as Annexure - D and forms part of the report.

In terms of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company. If any Member is interested in inspecting the same, such member may write to the Company Secretary in advance.

ACKNOWLEDGEMENT

Your Directors sincerely record their appreciation with gratitude for the continued support and assistance extended to the Company by the Financial Institutions, Banks and various Government Departments and Agencies and Creditors. The Directors place on record their appreciation for continued support of shareholders of the company. The Directors also wish to place on record the appreciation to the team of executives, staff and workers, who have shown devotion and efficiency in performing their jobs. For and on behalf of the Board

D. J. RAMSINGHANI

Place: Mumbai (CHAIRMAN & MANAGING DIRECTOR)

Date: July 24, 2015 DIN: 00013633


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Ninth Annual Report together with Audited Statement of Accounts for the year ended March 31, 2014.

(Rs. in lacs)

FINANCIAL RESULTS YEAR ENDED YEAR ENDED 31/03/2014 31/03/2013

Sales & Other Income 54105.69 62035.43

Profit Before Financial Charges & 1046.67 5050.85 Depreciation

Less: Financial Charges 962.85 1112.42

Profit Before Depreciation 83.82 3938.43

Less : Depreciation 410.54 429.93

Net Profit Before Tax (326.72) 3508.50

Tax Expenses

Current Tax - 480.57

Deferred Tax (132.84) 464.92 Tax for earlier years 17.07

Net Profit Before Adjustment (210.95) 2563.01

Profit/(Loss) After Adjustments (210.95) 2563.01

Profit /(Loss) for the year (210.95) 2563.01

- Dividend on Equity Shares 88.47 141.55

- Tax on Proposed Dividend 15.03 22.96

Profit &(Loss) balance brought forward 3893.47 1494.97 from the previous year

Balance carried to Balance Sheet 3579.02 3893.47

1. DIVIDEND

Your Directors are pleased to maintain dividend track record initiated by the company and that in spite of net loss incurred during the year, glad to recommend a dividend of Rs. 0.50 per Equity Share on 17693213 Equity Shares of Rs. 10/- each for the financial year ended 31st March, 2014. This nominal dividend is paid as against Rs. 0.80 paid in the previous year. The total outgo on account of Dividend shall be Rs. 103.50 Lacs including Corporate Dividend Tax.

2. REVIEW OF OPERATIONS

Your company operates in two divisions, i.e. Fertilizer division and Oil division. Our Phosphatic fertilizer, Single Super Phosphate (Powder & Granulated) brands of "Girnar" and "Suryaphool" are well-entrenched and well-accepted in the market. Apart from SSP, company manufactures mixed fertilizer NPK along with industrial chemicals like Sulphuric Acid and Oleum whilst soya seed crushing activity is undertaken at our Indore unit.

The nutrient based subsidy (NBS) policy implemented for phosphatic and potassic fertilizers w.e.f. 1st May, 2010 was well-intended one which resulted in proposals from major players for addition of capacity. But the price differentiation between Urea and other phosphatic fertilizers resulted in huge imbalance in nutrient consumption.

The average capacity utilization of SSP industry for financial year 2013-14 was reduced to 49.20% from 58.30% during 2012-13 whilst during the year your company has achieved 80% of average capacity utilization of SSP as against 91% reported during the previous financial year, which is considered to be highest in the industry of our size and operations. It is pertinent to note that your company could achieve this feat with active support from consortium member banks and better management of working capital at its disposal and timely availability of raw material.

Company continued to focus on its core business of SSP though thrust was given for NPK also. There was tremendous growth in NPK production since past three years, i.e. with meager quantity of 2915 MT in 2011-12 to 20700 MT in the year 2013-14. Company''s fertilizer division has achieved 80% capacity utilization and produced 380328 MT as against 91% achieved in corresponding year 2012-13 with production of 435846 MT. Though industry average as per FAI data stands at 49.20% in the F.Y. 2013-14 against 58.40% in the F.Y.2012-13 only 20 units were operated at above 60% capacity. The company at present maintains overall market share of 9.05% against 40.70 lac MT despatches reported in the country during the year 2013-14. Moreover, for want of higher working capital, this year also your company could not concentrate more on soya oil. Company introduced value-added product "Soil Conditioner" at Udaipur plant. However, during the current year the Company intends to increase production of NPK, Sulphuric acid, Oleum and Soya oil with the sanction and release of additional working capital.

Your company achieved sales turnover of Rs. 53,176.82 Lacs. Whilst share of fertilizer and chemicals division is Rs. 34,778.37 Lacs and soya division is Rs. 18,398.45 lacs, Company incurred net loss of Rs. 210.95 lacs. The reasons beyond the control of Management viz., reduction in subsidy and MRP by Govt. of India, excess availability of phosphatic fertilizer in the channel inspite of stagnant in demand and slide in sales and also over capacity due to entry of new players posing intense competition coupled with foreign exchange loss have affected the overall performance of the company.

It would not be out of place to mention here that business environment has become intensely competitive and in order to sustain and survive through this difficult phase, the Company has taken all possible extraordinary measures. Thus ensuring in efficient management of all resources, innovative approach to cost reduction and achieving operation efficiency at optimum levels.

However, had there been timely support by Working Capital lenders, seed crushing at our Indore oil division would have operated at optimum capacity and brought in additional revenue though during the year under review, the company has crushed a little higher quantity of 47219 MT of soya seed as against 46656 MT crushed during 2012-13. Thus the soya facilities were under-utilised.

Your Directors are hopeful that with the continuance of NBS Policy with additional contribution envisaged from the proposed capacity expansion of SSP plants and also optimum capacity utilization of soya division coupled with introduction value-added product of "Soil Conditioner"and with the unstinted support from working capital bankers, the performance of the company would further improve in the current year.

Industry Award for Best Performance:

This award is instituted by the Apex industry body, The Fertilizer Association of India (FAI) New Delhi. Your directors are glad to inform that for the third year in a row, your company was bestowed with "Best Performance Award" in the entire SSP industry for overall performance in the year 2013. The details of award are given here below :

For the year 2011 : Indore Unit For the year 2012 : Pune Unit For the year 2013 : Indore Unit Thus we have achieved hat trick.

ISO Accreditation :

The Oil Division of your company has conformed with the requirements under ISO 14001 : 2004 accreditation for the Environmental Management System and the certificate issued in the year June-2007 is periodically renewed.

In pursuit of achieving Quality Standards, our Oil Division has fulfilled requisite conditions and received accreditation with ISO 9001 : 2008 during this year.

Similarly, our Fertilizer Division has also obtained accreditation for ISO 9001 : 2008 during this year.

This is an additional feather in our cap which will ensure Quality Management System.

3. EXPANSION ACTIVITY

Udaipur unit : Company has Proposed Expansion Project of Single Super Phosphate (1,81,000 to 3,15,000 TPA) and NPK (60,000 TPA), and Boronated SSP (25,000 TPA), and LABSA (20,000 TPA). The said proposal was considered by the 19th Reconstituted Appraisal Committee of MOEF during the meeting held on 28th and 30th May 2014. The formal Environmental Clearance is awaited by the company.

Indore unit : Our proposal for expansion of SSP capacity from 1.65 lac to 2.50 lac MT is approved by 10th Reconstituted Appraisal Committee of MOEF during the meeting held on 29th and 31st July 2013. However, company awaits the Environmental Clearance shortly.

4. DIRECTORS

During the year under review, Bank of India has withdrawn the nomination of Mr. Mohan Lal Goyal and nominated Mr. M. Shanmugam as its Nominee Director in his place. The Board places on record its sincere appreciation of the valuable contribution made by Mr. Mohan Lal Goyal during his association with the Company.

Mr. H. D. Ramsinghani who retires by rotation at the forthcoming Annual General Meeting and is eligible for re-appointment.

In accordance with the Provisions of the Sections 149 and 152 of the Companies Act, 2013 and the rules made there under, it is proposed to appoint Mr. Deonath Singh, Mr. K. Raghuraman and Mr. A. K. Thakur as non-executive Independent Directors for a period of five years from the date of the forthcoming Annual General Meeting.

5. CORPORATE GOVERNANCE

A Report on Corporate Governance along with the Auditor''s Certificate regarding Compliance of the conditions of Corporate Governance as also a Management Discussion and Analysis Report pursuant to clause 49 of the Listing Agreement are annexed hereto.

6. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 the 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. Appropriate policies have been selected and applied consistently and have 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 as at March 31,2014 and Statement of Profit & Loss of the Company for that period;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. The financial accounts have been prepared on a going concern basis.

7. AUDIT COMMITTEE

In accordance with the provisions of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement, the Company has constituted an Audit Committee comprising of the following Directors viz. Mr. K. Raghuraman (Chairman), Mr. Deonath Singh and Mr. H. D. Ramsinghani. Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

OTHER COMMITTEES

The Company has constituted the Stakeholders Relationship Committee comprising of following Directors viz. of Mr. Deonath Singh (Chairman), Mr. H. D. Ramsinghani and Mr. D. J. Ramsinghani.

The Company has constituted Corporate Social Responsibility Committee (CSR) comprising of following Directors viz. Mr. Deonath Singh (Chairman), Mr. H. D. Ramsinghani and Mr. K. Raghuraman.

The Company has also constituted the Risk Management Committee comprising of following Directors viz. Mr. Deonath Singh (Chairman), Mr. H. D. Ramsinghani and Mr. K. Raghuraman.

8. CONSERVATION OF ENERGY AND TECHNICAL 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.

9. DISCLOSURE OF PARTICULARS

Information as required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 relating to the conservation of energy, technology absorption, foreign exchange earning and outgo is annexed hereto and forms a part of this Report.

10. PERSONNEL

There were no employees who were employed during the period under review or part thereof and who were in receipt of remuneration in excess of the limits specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended to date.

11. AUDITORS REPORT

Your Directors refer to the observations made by the Auditors in their Report and wish to state as follows :

The Company has given interest free loans to sick company and its subsidiary in the earlier years and has made provision for entire amount in the books of accounts and at the same time Company is making full efforts for recovery of these dues.

12. AUDITORS

M/s. Dayal & Lohia, Chartered Accountants (Firm Registration No. 102200W) the Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting and being eligible to offer themselves for reappointment. The Company has received a certificate from them certifying that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Companies Act, 2013.

13. COST AUDIT

The Cost Account Records maintained by the Company for "Fertilizers", "Sulphuric Acid" and "Soya" are subject to yearly audit by qualified Cost Auditors. The Company has reappointed Mr. R. S. Raghavan, a qualified Cost Auditor for conducting the Cost Audit of such records for the financial year 2014-15. The Company has received a Certificate from Cost Auditor certifying his independence and arm''s length relationship with the Company.

The Cost Audit Report for the financial year ended 31st March, 2013 was filed on 30th September, 2013 with Ministry of Corporate Affairs, New Delhi. The Cost Audit Report for the financial year ended 31st March, 2014 will be filed within the stipulated time.

14. FIXED DEPOSITS

The Company has not accepted any Public Deposits and as such no amount principle or interest on public deposits was outstanding as on the date of the Balance Sheet.

15. INDUSTRIAL RELATIONS

The Industrial Relations remained cordial at all the units of the Company during the year under review.

16. ACKNOWLEDGEMENT

Your Directors sincerely record their appreciation with gratitude for the continued support and assistance extended to the Company by the Financial Institutions, Banks and various Government Departments and Agencies and Creditors. The Directors place on record their appreciation for continued support of shareholders of the company. The Directors also wish to place on record the appreciation to the team of executives, staff and workers, who have shown devotion and efficiency in performing their jobs.

For and on behalf of the Board

Place : Mumbai D. J. RAMSINGHANI Dated : August 12, 2014 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2012

The Directors present the Twenty Seventh Annual Report together with Audited Accounts for the year ended March 31, 2012.

(Rs. in lacs)

FINANCIAL RESULTS YEAR YEAR ENDED ENDED 31/03/2012 31/03/2011

Sales & Other Income 55476.52 35638.61

Profit before financial charges & Depreciation 6227.60 4521.16

Less: Financial Charges 825.95 594.44

Profit before Depreciation 5401.65 3926.72

Less : Depreciation 391.15 441.65

Net Profit before tax 5010.50 3485.07

Tax Expenses

Current tax 1570.00 -

Deferred Tax 80.70 490.37

Net Profit Before Adjustment 3359.80 2994.70

Capital Surplus on waiver of principal liabilities by Term Lender - 351.00

Profit/(Loss) after adjustments 3359.80 3345.70

Transfer to capital reserve - (351.00)

Profit /(Loss) for the year 3359.80 2994.70

Profit & (Loss) balance brought forward from the previous year (1864.83) (4859.53)

Balance carried to Balance Sheet 1494.97 (1864.83)

1. RESERVE AND DIVIDEND

In order to conserve funds for working capital and Capex and also being the first year after wiping out of accumulated losses, your Directors regret their inability to recommend any dividend for the year under review.

2. REVIEW OF OPERATIONS

The company manufactures phosphatic fertilizer (SSP) viz. Single Super Phosphates (Powder & Granulated) along with various grades of mixed fertilizer NPK and industrial chemicals Sulphuric Acid and Oleum and also Soya oil.

The announcement of nutrient based subsidy (NBS) policy was one of the major positive decisions implemented by the Government. On one hand it helped in conserving outgo on subsidy amount payable by the Government and on the other side, it removed price capping on fertilizer prices. Moreover, the main objective of shifting from product-based subsidy (PBS) to nutrient-based subsidy (NBS) regime was to restore soil health by addressing the nutrient imbalances since sulphur has also been considered as one of the nutrients, which was neglected till now. It is further expected that the urea subsidy regime could be moved to nutrient-based subsidy (NBS). This will bring in a uniform subsidy regime for all fertilizers to ensure that there is a balanced use of all major nutrients. Current policy of differential subsidy for "N" fertilizers may lead to imbalanced use of fertilizers.

The average capacity utilization of SSP industry for financial year ended March 2012 has increased to 60.20%. During the year your company has achieved 88% of average capacity utilization of SSP as against 79.61% reported during the previous financial year, which is considered to be highest in the industry of our size and operations. It is pertinent to note that that your company could achieve this feat with active support from consortium member banks and better management of working capital at its disposal and timely availability of raw material.

Your company was awarded "Best Performance Award" in the SSP industry for overall performance in the year 2011 by Fertilizer Association of India, (FAI) New Delhi, apex body of the industry.

Subsequent to the announcement of free-pricing in the NBS policy, your company focused its attention mainly on SSP segment which is its core competence. Hence the company made little focus on other products like mixed fertilizers - NPK, which require higher working capital and soya oil. However, during the current year the Company intends to concentrate on - NPK, Sulphuric acid, Oleum and Soya oil with the sanction of additional working capital.

Due to this, during the year ended March 31, 2012 your company has achieved production of 4,24,164 MT of SSP against the previous best production of 3,67,823 MT in the year 2010-11.Thus, your company achieved highest sales turnover of Rs. 55,397.01 Lacs whilst fertilizer and chemicals division contributed Rs. 45,346.30 Lacs and soya division contributed Rs. 10,050.71 lacs. EBIDTA of the company stood at Rs. 5,401.65 Lacs.Thus, we have surpassed the previous best (EBIDTA of Rs. 3,926.72 lacs in 2010-11) and now the current achievement is unparallel in the entire operation since inception of the company.

During the year under review, the company has decided to utilize soya facilities depending on economic viability. Moreover, throughout the year, there was no parity in soya oil business which compelled the company to go slow in this regard to avoid losses.

The Oil Division of your company has conformed with the requirements under ISO 14001 : 2004 accreditation for the Environmental Management System and the certificate issued in the year June-2007 is periodically renewed and the same is now renewed upto June-2013.

Your Directors are hopeful that with the continuance of NBS Policy with additional contribution from soya division and with the unstinted support from working capital bankers, the performance of the company would improve in the current year.

3. EXPANSION ACTIVITY

At Udaipur, the production of SSP increased from 1.32 lac MT to 1.81 lac MT in the current year. At the same time, company has increased capacity of GSSP from 0.66 lac MT to 1.66 lac MT. The trial run has already started.

At Indore, company has already applied for environmental clearances for expansion of SSP capacity from 1.65 lac to 2.50 lac MT . The public hearing has already taken place and the company is expecting to receive permission very soon.

Moreover, at Pune unit, with the de-bottlenecking, capacity would further increase by 12,000 MT.

At Soya oil division, company has started erection of Lecithin plant which will generate value-added product and thus improve realization.

4. CORPORATE GOVERNANCE

A Report on Corporate Governance along with the Auditor's Certificate regarding Compliance of the conditions of Corporate Governance as also a Management Discussion and Analysis Report pursuant to clause 49 of the Listing Agreement are annexed hereto.

5. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed;

2. Appropriate policies have been selected and applied consistently and have 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 as at March 31, 2012 and of the Profit of the Company for the year ended March 31, 2012;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

4. The financial accounts have been prepared on a going concern basis.

6. AUDIT COMMITTEE

In accordance with the provisions of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement, the Company has constituted an Audit Committee comprising of the following Directors viz. Mr. C. R. Malaviya (Chairman), Mr. Deonath Singh and Mr. H. D. Ramsinghani. Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

7. SAFETY, ENVIRONMENTAL CONTROL & PROTECTION

The Company has taken all the necessary steps for safety and environmental control & protection at its plants at Indore, Udaipur and Pune.

8. DISCLOSURE OF PARTICULARS

Information as required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 relating to the conservation of energy, technology absorption, foreign exchange earning and outgo is annexed hereto and forms a part of this Report.

9. PERSONNEL

There were no employees who were employed during the period under review or part thereof and who were in receipt of remuneration in excess of the limits specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended to date.

10. DIRECTORS

Mr. C. R. Malaviya retires from the Board of Directors by rotation and is eligible for reappointment.

11. AUDITORS REPORT

Your Directors refer to the observations made by the Auditors in their Report and wish to state as follows:

In order to ascertain dues with micro, small and medium enterprises, the Company is revising procedure for purchase so that relevant information can be easily made available.As regards interest free loan given to sick company and its subsidiary in earlier years, the Company has made provision in the books of accounts and at the same time the Company is making full efforts for recovery of these dues.

12. AUDITORS

M/s. Dayal & Lohia, the Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting and being eligible to offer themselves for reappointment. The Company has received a certificate from them certifying that their appointment, if made, would be within the limits specified under Section 224(1-B) of the Companies Act, 1956.

13. COST AUDIT

The Cost Account Records maintained by the Company for "Fertilizers","Sulphuric Acid" and "Soya" are subject to yearly audit by qualified Cost Auditors. The Company has appointed Mr R S Raghavan, a qualified Cost Auditor for conducting the Cost Audit of such records for the financial year 2012-13.

The Company has received a Certificate from Cost Auditor certifying his independence and arm's length relationship with the company. In accordance with Cost Audit Rules, the due date for filing the Cost Audit Report for the financial year ended 31st March, 2011 was 30th September, 2011 and the same was filed on 30th September, 2011 with Ministry of Corporate Affairs, New Delhi. The Cost Audit Report for the financial year ended 31st March, 2012 will be filed on or before December 31, 2012.

14. INDUSTRIAL RELATIONS

The Industrial Relations remained cordial at all the units of the Company during the year under review.

15. ACKNOWLEDGEMENT

Your Directors sincerely record their appreciation with gratitude for the continued support and assistance extended to the Company by the Financial Institutions, Banks and various Government Departments and Agencies and Creditors. The Directors place on record their appreciation for continued support of shareholders of the company. The Directors also wish to place on record the appreciation to the team of executives, staff and workers, who have shown devotion and efficiency in performing their duties.

For and on behalf of the Board,

Place : Mumbai D. J. RAMSINGHANI

Dated : August 13, 2012 CHAIRMAN & MANAGING DIRECTOR

 
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