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Directors Report of Raj Agro Mills Ltd.

Mar 31, 2010

The Directors have pleasure in presenting the 20th Annual Report for the financial year ended 31st March, 2010.

FINANCIAL RESULTS (Rs In Lacs) 2009-2010 2008-2009

Sales & other Income 9912.79 13130.72

Profit/(Loss) before Interest, Depreciation (894.20) (255.78) & Tax (PBIDT)

Less : Interest & Financial Charges 273.08 231.03

Cash Profit(Loss) (1167.28) (486.81)

Depreciation 78.64 70.12

Profit/(Loss) before Tax (PBT) (1245.92) (556.93)

Provision for Fringe Benefit Tax 0.00 1.16

Provision for Current Tax 0.00 0.00

Provisions for Deferred Tax Liability (+)/Assets(-) 246.45 -137.95

Provision for Income Tax (Earlier Years) 0.00 -0.88

Profit/(Loss) after Tax (PAT) (1492.37) (419.26)


As the un-stability of global market has badly hit the oil industry across the nation and your company is also one of the victims of said un-stabi!ity. Due to adverse local market conditions and volatility in global market, the year under review was of poor performance for the Company as the turnover of company declined to Rs.99.12 Crores as compared to Rs 131 30 Crores in the last year and the losses mount up to Rs 14.92 crores during the year as compared to Rs.4 .19 crores during the last year.


Your Directors are exploring avenues to over come the present situation and are instrumental in arranging some sort of amalgamation, joint venture or collaboration to bring the company on track. One of the biggest problems for the oil refinery unit like us is lesser ability to compete with the units operating at the port areas where due to no or lesser transportation cost, the total cost of refining is the lower and these units enjoy an edge in refining at low gost and selling the material at more competitive rates. However, after some arrangement and with the operational of plant at full capacity, your company would certainly be able to get rid of this situation.

The company had recently added the capacities of refining and now it is having total capacities Of 750 MT per day, but it is short of funds and working capital. Once these capacities will be fully utilized the economies of scale will happen which will put the company at par with other competing units Besides, if your company is able to bring the material through Railway in one go then it wouldbe having an edge over the port based units.


Keeping in view the present constraints, Your Directors express their inability to recommend any dividend for the year under review.


During the year under review, the Company has accepted the deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made .there-under and complied with the provisions of section 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.


Sh Jatinder Singh and Sh Varinder Kumar, Director (Works) are retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.


The Directors would like to assure the Members that the financial statements for the year under review, confirm in their entirety to the requirements of the Companies Act, 1956. Hence pursuant to the requirement under Section 217{2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmee:

a. That in the preparation of accounts for the financial year ended 31st March,2010, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. That the Directors 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 at the end of the financial year and of the loss for that period.

c. That the Directors had 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.

d. That the Directors have prepared the annual accounts for the financial year ended on 31st March, 2010 on a going concern basis.


The Equity Shares of the Company are listed at the following Stock Exchanges.

1. The Delhi Stock Exchange Limited, New Delhi

2. The Bombay Stock Exchange Limited, Mumbai

3. The Ludhiana Stock Exchange Limited, Ludhiana

The Company has paid the listing fees to above Stock Exchange(s) for the financial year 2010-11.


Your Company had connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and/or Central Depository Services Limited (CDSL) to facilitate the holding and trading of securities in electronic form. As on 31s1 March, 2010, 85.07% of the equity share capital of the company has been demateriaiized. The Company had already paid the Annual Custodian Fees to the NSDL and CDSL. Further as per SEBI circular NO. D & CC/FITTC/CIR- 15/ 2002 dated 27.12.2002, the Company had its Registrar namely M/s Link Intime India Private Limited formerly known as Intime Spectrum Registry Limited, A-40, 2nd Floor, Naraiana Industrial Area, Phase-ll, New Batra Banquet Hall, New Delhi-110 028 for Share Transfer and Electronic Connectivity. Accordingly, all the Shareholders, Investors, Member of the Stock Exchanges, Depository Participants and all other concerned are requested to send all communications in respect of Share Transfer, Demat/ Remat etc. to our said Registrar. In case, any query/complaint remains unresolved with our Registrar, please write to the Company Secretary of the Company at the Registered Office/Corporate Office & Works of the Company.


The Company has a proper and adequate system of internal control, to ensure that all assets are safeguarded, properly utilized and protected against loss from un-authorized use or disposition and that transactions are authorized & recorded by the Accounts Department properly and reported to the Audit Committee/Board correctly.


The constituent members of the Audit Committee are Sh. R. C. Singal, Sh. Jatinder Singh and Sh. Sahil Bansal. On the resignation of Sh. Neeraj Uppal from the services of company, CA Sh. Sumit Goel Manager (Accounts) has been charged by the Board for complying with Section 209 to 212 of the Companies Act, 1956 in relation to preparation and finalization of Accounts of the Company. Sh. R.G. Singal is the Chairman of the said Committee. During the year under review the Committee had its five meetings.


The Committee looks into transfer, transmission, split, duplicate, re-mat and consolidation of shares and also monitor the re-dressa! of shareholders complaints. However, all-the matters pertaining to the share transfer and related activities are handled by our Registrar and Share Transfer Agent M/s Link Intime India Private Limited formerly known as Intime Spectrum Registry Limited, New Delhi. The share transfer requests are processed by them and a transfer register is sent to the company for approval once in fortnight.


The present Committee comprises of Sh R.C. Singal as its Chairman and Dr. S.K.Suri and Sh. Jatinder Singh as Members. The Broad terms of reference of the remuneration committee are to approve/recommend to the Board the remuneration including perquisites, allowances to be paid to companys whole time directors. The committee consists of only non-executive independent directors.


M/s P.C Goyal & Co., Chartered Accountants, are liable to retire as statutory auditors of the Company at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment and they have furnished a certificate as required under Section 224(1-B) of the Companies Act, 1956.


The Auditors Report on the Accounts of the Company is self-explanatory and do not require any comments.


The Cost Accounts for the Financial Year 2009-2010 have been audited by M/s Pawan & Associates, Cost Accountants, EE 255, Panj Peer, Bagh Karam Baksh, Jalandhar City (Pb). The Cost Audit Report will be submitted to the Central Govt, within the stipulated time.

Further, the Board, subject to the approval of the Central Government, has re-appointed M/s J. Verma & Associates, Cost Accountants, 2nd Floor, Bajaj Building, Up-stairs Dr Bowry Clinic, Bazar Panj Peer, Near Bhagat Singh Chowk, Jalandhar City (Pb) as the Cost Auditor for auditing of the costing accounts of the company for the Financial Year 2010-11 on receiving of requisite certificate under section 224 (1-B) of the Companies Act, 1956.


Pursuant to clause 49 of the listing agreement, a Report on Corporate Governance and a Management Discussion and Analysis Report are included in the Annual Report along-with CEO & CFO Certificates. A certificate from the auditors of the company is annexed to this report.


The detailed information as required under Section 217(1)(e) of the Companies Act,1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is appended hereto and form part of this Report.


The Company is always following the policy of creating a healthy environment and work culture resulting into harmonious inter-personnel relations. Industrial Relations and work atmosphere remained very cordial throughout the year


Particulars of employees in accordance with provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, as amended, are not given as none of employees qualify for such disclosure.


The Board of Directors of the Company wish to place on record their sincere thanks and appreciation to the team of Executives, Staff Members and Workers at all levels for their cooperation and contribution to the . operations of the company. Your directors also acknowledge with gratitude the co-operation, and support received from the Bankers, Central and State Government Authorities, Business Constituents and also place on record their sincere thank to the shareholders of the Company for their continued support, cooperation and confidence in the Management of the Company.