Ar 2005

BOARD OF DIRECTORS BOARD OF DIRECTORS
SHRI RAJ AN R. HARIVALLABHDAS SHRI RAJ AN R. HARIVALLABHDAS

Chairman & Managing Director
SHRI SHYAM B. GHIA SHRI SHYAM B. GHIA
SHRI CHINUBHAI R. SHAH SHRI CHINUBHAI R. SHAH
SHRI NAHOOSH J . J ARIWALA SHRI NAHOOSH J . J ARIWALA
Executive Director
SHRI PRAFULL ANUBHAI SHRI PRAFULL ANUBHAI
SHRI J ANAK G. NANAVATY SHRI J ANAK G. NANAVATY
SHRI VISHNU VARSHNEY SHRI VISHNU VARSHNEY
(Nominee of GVFL Ltd.)
(upto December 17, 2004)
DR. HIMANSHU C. PATEL DR. HIMANSHU C. PATEL
AUDITORS AUDITORS :
M/S. C. C. CHOKSHI & CO., M/S. C. C. CHOKSHI & CO.,
Chartered Accountants,
Ahmedabad.
BANKERS : BANKERS :
State Bank of India
General Manager (Finance)
& Company Secretary :
RAJ EN N. J HAVERI RAJ EN N. J HAVERI
SHARE REGISTRARS : SHARE REGISTRARS :
Pinnacle Shares Registry Pvt. Ltd.
Near Ashoka Mills,
Naroda Road,
Ahmedabad - 380 025.
ANNUAL REPORT 2004-2005 ANNUAL REPORT 2004-2005
REGISTERED OFFICE REGISTERED OFFICE :
201, Aniket, C. G. Road,
Navrangpura,
AHMEDABAD - 380 009.
Phone : (079) 2646 8752, 2640 2429
Fax : (079) 2646 0910
Website : www.hkfinechem.com
WORKS WORKS :
253/P, Chekhala,
Sanand-Kadi Highway,
Ta. Sanand,
Dist. AHMEDABAD - 382 145.
Phone : (02717) 222617-18-19
Fax : (02717) 222616
H. K. FINECHEM LIMITED H. K. FINECHEM LIMITED
N O T I C E N O T I C E
NOTICE is hereby given that the Twentieth Annual General Meeting of the Members of
H. K. FINECHEM LIMITED H. K. FINECHEM LIMITED will be held at Ahmedabad Textile Mills Associations Hall, Ashram Road,
Navrangpura, Ahmedabad - 380 009 on Thursday, September 15, 2005 at 4.00 p.m. to transact the
following business:
Ordinary Business : Ordinary Business :
1. To receive, consider and adopt the Profit & Loss account for the year ended 31st March, 2005,
the Balance Sheet as at that date and the Reports of the Board of Directors and the Auditors
thereon.
2. To note the payment of interim dividend on Cumulative Redeemable Preference Shares
on pro-rata basis.
3. To declare dividend on Equity Shares.
4. To appoint a Director in place of Shri Chinubhai R. Shah who retires by rotation and being
eligible, offers himself for re-appointment.
5. To appoint a Director in place of Shri Prafull Anubhai who retires by rotation and being eligible,
offers himself for re-appointment.
6. To appoint Auditors of the Company for the period commencing from the conclusion of this
Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their
remuneration.
Special Business Special Business
7. To consider and if thought fit, to pass with or without modification(s), the following resolution as
an Ordinary Resolution :
RESOLVED THAT in partial modification of Resolution No. 6 passed at the 18th Annual General
Meeting of the Members of the Company held on 19th September, 2003 for the re-appointment
and terms of remuneration of Shri Rajan R. Harivallabhdas, Managing Director of the Company
and in accordance with the provisions of Sections 198, 269, 309, 311, Schedule XIII and other
applicable provisions of the Companies Act, 1956 (including any statutory modification or
re-enactment thereof for the time being in force and / or any notification which the Central
Government may issue from time to time), consent of the Company be and is hereby accorded
for increase in the monthly salary payable to Shri Rajan R. Harivallabhdas, Managing Director
of the Company, with effect from 1st April, 2005 for the remainder of the tenure of his term of
the office of the Managing Director from Rs. 46,000/- p.m. to Rs. 60,000/- p.m., with proportionate
increase in those items of perquisites which are related to the quantum of salary as set out in the
Draft Supplemental Agreement to be entered into between the Company and Shri
Rajan R. Harivallabhdas as submitted to this Meeting and initialled by a Director for the purpose
of identification which Supplemental Agreement is hereby specifically sanctioned.
8. To consider and if thought fit, to pass with or without modification(s), the following resolution as
an Ordinary Resolution :
RESOLVED THAT in partial modification of Resolution No. 7 passed at the 18th Annual General
Meeting of the Members of the Company held on 19th September, 2003 for the re-appointment
and terms of remuneration of Shri Nahoosh J . J ariwala, Executive Director of the Company and
in accordance with the provisions of Sections 198, 269, 309, 311, Schedule XIII and other
applicable provisions of the Companies Act, 1956 (including any statutory modification or
re-enactment thereof for the time being in force and / or any notification which the Central
Government may issue from time to time), consent of the Company be and is hereby accorded
for increase in the monthly salary payable to Shri Nahoosh J . J ariwala, Executive Director of the
Company, with effect from 1st April, 2005 for the remainder of the tenure of his term of the
office of the Executive Director fromRs. 32,000/- p.m. to Rs. 40,000/- p.m., withproportionate
increase in those items of perquisites which are related to the quantum of salary as set out in
the Draft Supplemental Agreement to be entered into between the Company and Shri Nahoosh
J . J ariwala as submitted to this Meeting and initialled by a Director for the purpose of identification
which Supplemental Agreement is hereby specifically sanctioned.
1
2
NOTES : NOTES :
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT
A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A
MEMBER OF THE COMPANY.
2. The Register of Members and Share Transfer Books of the Company will remain closed from
Monday, the 1st August, 2005 to Monday, 8th August, 2005, both days inclusive.
3. The document / paper referred to in the accompanying Notice are open for inspection at the
Registered Office of the Company on all working days between 11.00 a.m. and 1.00 p.m.
upto the date of the Annual General Meeting.
ANNEXURE TO THE NOTICE ANNEXURE TO THE NOTICE
(Explanatory Statement pursuant to Section 173 of the Companies Act, 1956).
ITEM Nos. 7 & 8 : ITEM Nos. 7 & 8 :
At the 18th Annual General Meeting of the Members of the Company held on 19th September, 2003,
Shri Rajan R. Harivallabhdas and Shri Nahoosh J . J ariwala were re-appointed respectively as Managing
Director and Executive Director for a further period of 3 years from August 27, 2003 on the terms and
conditions as per the draft Agreements according to which Managing Director was entitled to a
monthly salary in the scale of Rs. 42,000 and Rs. 50,000 (with annual increment of Rs. 4,000 p.m.)
and other benefits and Executive Director was entitled to a monthly salary in the scale of Rs. 31,000
and Rs. 33,000 (with annual increment of Rs. 1,000 p.m.) and other benefits. The performance of
the Company during the last two financial years has substantially improved due to sustained efforts
on the part of both of them. Therefore, the Board of Directors at its Meeting held on 4th J une, 2005
have revised the monthly salaries of Shri Rajan R. Harivallabhdas, Managing Director and
Shri Nahoosh J . J ariwala, Executive Director (with proportionate increases in the values of
the perquisites related to salary) for the remainder of the tenure of their terms.
All other terms and conditions of appointment of Shri Rajan R. Harivallabhdas and Shri Nahoosh J .
J ariwala, as approved by the Members, will remain unchanged. The Board commends both the
resolutions for your approval.
Shri Rajan R. Harivallabhdas is concerned or interested in the Resolution set out at item No. 7 as
it pertains to increase in his salary and perquisites. Shri Nahoosh J . J ariwala is concerned or
interested in the Resolution set out at item No. 8 as it pertains to increase in his salary and perquisites.
None of the other Directors of the Company is, in any way, concerned or interested in the
said resolutions.
This may also be treated as an abstract of the variations of the terms of appointment of Shri Rajan R.
Harivallabhdas, Managing Director and Shri Nahoosh J . J ariwala, Executive Director of the Company
pursuant to Section 302 of the Companies Act, 1956.
Ahmedabad
J une 04, 2005
Registered Office Registered Office :
201, Aniket, C. G. Road,
Navrangpura,
By Order of the Board
Rajen N. J haveri Rajen N. J haveri
& Company Secretary
3
DIRECTORS REPORT DIRECTORS REPORT
To,
The Members,
Your Directors present the Twentieth Annual Report together with the audited accounts for the
year ended March 31, 2005.
FINANCIAL RESULTS : FINANCIAL RESULTS :
(Rupees in Lakhs) (Rupees in Lakhs)
Year ended on Year ended on Year ended on
31-03-2005 31-03-2005 31-03-2004
Income 2258.38 2258.38 1974.55
Profit before Interest, Depreciation & Taxation 479.65 479.65 372.60
Less : Interest 66.30 66.30 75.69
Profit before Depreciation & Taxation 413.35 413.35 296.91
Less : Depreciation 116.24 116.24 112.31
Profit before tax 297.11 297.11 184.60
Less : Provision for taxation
- Current Tax 124.00 14.50
- Deferred Tax 159.80 65.63
183.80 183.80 80.13
Net Profit after Tax 113.31 113.31 104.47
DIVIDEND : DIVIDEND :
Your Directors are pleased to recommend, for your approval, first ever Equity dividend @ 8.00%
on 95,00,000 Equity Shares of Rs. 10 each.
OPERATIONS : OPERATIONS :
(A) Sales and Profit :
The sales and other income of the Company during 2004-05 were higher at Rs. 2258.38 lacs
compared to Rs. 1974.55 lacs of previous year. This was mainly due to increase in the quantity
of sales.
Better utilisation of plant coupled with relatively soft raw material prices helped the Company
improve its top and bottom lines.
(B) Technical Achievement :
During the year, the Company enhanced its annual raw material throughput capacity to 6,000
M.Tons. It continued its research and development efforts to establish processing know-how
to further concentrate Tocopherols and Sterols.
(C) Raw Material :
Both the raw materials are now available in adequate quantities from within India only.
(D) Export :
The Company has now 2 export streams viz. Tocopherol sand Sterols which it exports to
J apan and U.S. based Companies.
4
DIRECTORS : DIRECTORS :
Shri Chinubhai R. Shah and Shri Prafull Anubhai retire by rotation and being eligible offer
themselves for re-appointment. The relevant resolutions relating to these appointments
forming part of the Notice of the Annual General Meeting are placed for your approval.
During the year, Shri Vishnu Varshney ceased to be a Director of the Company. The Board takes
this opportunity to place on record that the Company has benefitted by the presence of Shri
Vishnu Varshney on the Board/Committees of the Company.
PERSONNEL : PERSONNEL :
All the employees have worked with zeal and enthusiasm and your Directors wish to express their
sincere appreciation to all the employees for their support, co-operation and dedicated services.
PARTICULARS OF EMPLOYEES : PARTICULARS OF EMPLOYEES :
There was no employee drawing an annual salary of Rs. 24.00 lacs or more where employed for
full year or monthly salary of Rs. 2,00,000/- or more where employed for part of the year and
therefore, no information pursuant to the provisions of sub-section (2A) of Section 217 of The
Companies Act, 1956 read with The Companies (Particulars of Employees) Rules, 1975 is required
to be given.
Information as per Section 217(1)(e) read with Companies (Disclosure of particulars in the Information as per Section 217(1)(e) read with Companies (Disclosure of particulars in the
report of the Board of Directors) Rules, 1988 : report of the Board of Directors) Rules, 1988 :
A. A. Conservation of Energy Conservation of Energy
(a) Energy Conservation measures taken :
During the year, the Company switched over to Lignite fired Thermic Fluid Heating
system from Furnace Oil fired system.
(b) Additional investments and proposals, if any, being implemented for reduction
of consumption of Energy :
The Company is looking for various alternatives to conserve its energy costs.
(c) Impact of measures listed in (a) and (b) for reduction of energy consumption
andconsequent impact on the cost of production of goods :
The measures mentioned in (a) and (b) above would result in the savings in
the consumption of fuel and power.
(d) Total energy consumption per unit of production as per prescribed Form A :
As per annexure attached.
B. B. Technology Absorption Technology Absorption
The Company continued to experiment with process route and resultant finished products
for use in hitherto untapped market and overall maximisation of profit.
C. C. Foreign Exchange Earnings and Outgo Foreign Exchange Earnings and Outgo
Foreign Exchange Earnings Rs. 8,50,01,160/-
Foreign exchange utilised Rs. 3,39,65,133/-
5
DIRECTORS RESPONSIBILITY STATEMENT : DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to the requirement of Section 217 (2AA) of the Companies Act with respect to Directors
Responsibility Statement, the Directors hereby confirm :
(i) that in the preparation of the annual accounts, the applicable accounting standards
have been followed alongwith proper explanation relating to material departures;
(ii) that the Directors have selected such accounting policies and applied themconsistently
and made judgements and estimates that are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company at the end of the financial
year viz. March 31, 2005 and of the profit of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud
and other irregularities;
(iv) that the Directors have prepared the annual accounts on a going concern basis.
AUDIT COMMITTEE : AUDIT COMMITTEE :
The Audit Committee constituted by the Board of Directors pursuant to the requirement under
section 292A of the Companies Act, 1956 consists of following three independent Directors.
During the year, Shri Vishnu Varshney ceased to be Member of the Audit Committee and in his
place, Shri J anak G. Nanavaty was appointed as the Member of the Audit Committee.
(1) Shri Prafull Anubhai Chairman
(2) Shri Chinubhai R. Shah Member
(3) Shri J anak G. Nanavaty Member
CORPORATE GOVERNANCE : CORPORATE GOVERNANCE :
A Report on the Corporate Governance Code alongwith a certificate from the Auditors of the
Company regarding the compliance of conditions of Corporate Governance as stipulated under
Clause 49 of the Listing Agreements as also the Management Discussion and Analysis Report
are annexed to this Report.
FIXED DEPOSITS : FIXED DEPOSITS :
The Company continued to accept the deposits. As on March 31, 2005, public deposits stood at
Rs. 93.09 lacs. There were no overdue or unclaimed deposits as at March 31, 2005.
AUDITORS : AUDITORS :
The term of M/s. C. C. Chokshi & Co., Chartered Accountants, Ahmedabad as Auditors, expires
at the conclusion of this Annual General Meeting and they are eligible for re- appointment.
The Auditors have given a certificate to the effect that the re-appointment, if made, will be within
the prescribed limits specified under Section 224 (1-B) of the Companies Act, 1956.
ACKNOWLEDGMENTS : ACKNOWLEDGMENTS :
The Directors place on record their sincere appreciation for the co-operation and assistance
received from State Bank of India.
Ahmedabad
J une 04, 2005
For and on behalf of the Board,
Rajan R. Harivallabhdas Rajan R. Harivallabhdas
ANNEXURE ANNEXURE
Disclosure of Particulars with respect to Conservation of Energy.
A. A. Power & Fuel Consumption : Power & Fuel Consumption : 2004-05 2004-05 Previous
Year
1. 1. ELECTRICITY ELECTRICITY
A. A. Purchased : Purchased :
Units 28,64,556 28,64,556 25,40,418
Total Amount (Rs.) 1,30,14,629 1,30,14,629 1,12,62,294
Rate / Unit (Rs.) 4.54 4.54 4.43
B. B. Own Generation : Own Generation :
Units 2,50,583 2,50,583 3,19,064
Unit per Ltr. of Diesel 3.20 3.20 3.31
Average Cost / Unit (Rs.) 8.42 8.42 7.11
2. 2. FURNACE OIL FURNACE OIL
Quantity (in KL) 839.365 839.365 867.902
Total Cost (Rs.) 94,85,983 94,85,983 94,86,168
Average Rate per Litre (Rs.) 11.30 11.30 10.93
3. 3. LIGNITE / COAL LIGNITE / COAL
Quantity (in MT) 6,086.793 6,086.793 4,649.126
Total Cost (Rs.) 91,32,200 91,32,200 57,18,421
Average Rate per Kg. (Rs.) 1.50 1.50 1.23
4. 4. OTHERS (IF ANY) OTHERS (IF ANY) ----- -----
B. B. Consumption per unit of Production : Consumption per unit of Production : Production Production Standards Standards Per M. Ton Per M. Ton
(M. Tons) (M. Tons) if any if any
1. 1. ELECTRICITY ELECTRICITY KWH KWH
Deodorizer Distillate (Mixed Tocopherols) 420.025 420.025 ------------- 1218.49 1218.49
(300.000) ------------- (1205.27)
Linoleic Acid / Oleic Acid 902.778 902.778 ------------- 919.09 919.09
(1158.033) ------------- (828.00)
Dimer Acid 633.703 633.703 ------------- 583.57 583.57
(543.226) ------------- (539.91)
2. 2. FURNACE OIL FURNACE OIL LTRS. LTRS.
(300.000) ------------- (237.39)
(1158.033) ------------- (239.15)
Dimer Acid 633.703 633.703 ------------- 214.74 214.74
(543.226) ------------- (227.22)
3. 3. LIGNITE / COAL LIGNITE / COAL KGS. KGS.
(300.000) ------------- (1308.92)
(1158.033) ------------- (1320.13)
Dimer Acid 633.703 633.703 ------------- 1588.78 1588.78
(543.226) ------------- (1237.39)
Note : Figures in brackets are in respect of previous year.
6
Shri Rajan R. Harivallabhdas
(Chairman & M.D.)
Shri Shyam B. Ghia
Shri Chinubhai R. Shah
Shri Nahoosh J . J ariwala
(Executive Director)
Shri Prafull Anubhai
Shri J anak G. Nanavaty
Shri Vishnu Varshney#
Dr. Himanshu C. Patel
Promoter,
Executive
Independent,
Non-Executive
Independent,
Non-Executive
Promoter,
Executive
Independent,
Non-Executive
Independent,
Non-Executive
Independent,
Non-Executive
Independent,
Non-Executive
6
1
5
6
6
5
3
4
Yes
No
No
Yes
Yes
No
No
No
-
7
8
-
5
2
8
3
-
5
4
-
5
2
4
-
-
5
4
-
2
1
4
-
Directors Category
Board
Meetings
Last
AGM
Member Chairman
Attendance
Particulars
Committee
Memberships**
** Includes only Audit, Shareholders / Investors Grievance and Remuneration Committee in
other Public Limited Companies.
# Nominee Director of GVFL Limited, vacated office on December 17, 2004.
During the year, there have been no materially significant related party transactions, pecuniary
relationships or transactions between the company and its non-executive Directors that may have
potential conflict with the interests of the Company at large.
7
Annexure to the Directors' Report Annexure to the Directors' Report
Report on Corporate Governance Report on Corporate Governance
(Pursuant to Clause 49 of the Listing Agreements entered into with the Stock Exchanges)
1. 1. Companys Philosophy on the Code of Governance Companys Philosophy on the Code of Governance
The principles of Corporate Governance are being followed by the Company. Corporate
Governance as a whole entails the conduct and the manner in which the Company deals
with its stakeholders i.e employees, shareholders, consumers and society and is guided by
a strong emphasis on transparency, accountability and integrity.
2. 2. Board of Directors Board of Directors
l Composition of the Board of Directors (Board)
The Company has an optimum mix of Executive and Non-executive Directors to
bring independent judgement in the Boards deliberations and decisions. At present, the
Board consists of seven Directors, two of whom are Executive Directors and five
are Non-executive Independent Directors.
Attendance of each Director at the Board Meetings and last Annual General Meeting (AGM)
and the number of companies and committees where he is Chairman / Member :
Directorships
in other
Public Ltd.
Companies
Incorporated
in india
Date of
Meeting
May 5, 2004
J une 26, 2004
J uly 29, 2004
No. of Directors
Present
6
8
7
Date of
Meeting
September 25, 2004
October 29, 2004
J anuary 31, 2005
No. of Directors
Present
3
6
6
l Board meetings and attendance
Six Board meetings were held in the year 2004-05 and the gap between two Boardmeetings
has not exceeded four months.
The dates on which meetings were held are as follows :
Chairman or Member Chairman or Member
in Committees in Committees
Name of Name of
the the
Director Director
Brief Brief
Particulars Particulars
Details of Directorships in Details of Directorships in
Public Ltd. Companies in Public Ltd. Companies in
India India
Chairman of Audit Committee
& Shareholders' / Investors'
Grievance Committee
Chairman of Shareholders' /
Investors' Grievance
Committee & Member of
Audit Committee
-
Member of Audit Committee
-
& Shareholders'/Investors'
Grievance Committee
Shri
Chinubhai
R. Shah
He holds Masters
Degree in Arts and
Law besides holding
qualifications of DTP &
DLP. He is also a
practising Company
Secretary. He had
been Managing
Director of GITCO and
Ahmedabad Electricity
Company Limited
(now known as Torrent
Power AEC Ltd.) and
Director in Torrent
Group of Companies.
Currently, he is
advising many
companies on
management &
corporate affairs.
(1) Adani Exports Limited
(2) Arman Lease & Finance Ltd.
(3) Cadila Pharmaceuticals Ltd.
(4) Gujarat NRE Coke Ltd.
(5) H. K. Finechem Ltd.
(6) Meghmani Organics Ltd.
(7) Nirma Ltd.
(8) Tinplate Co. of India Ltd.
l Details of Directors proposed to be appointed / re-appointed at the next Annual General Meeting :
Grievance Committee
-
& Remuneration Committee
Grievance Committee
& Member of Remuneration
Committee
Shri
Prafull
Anubhai
He is a graduate from
The School of
Economics, London,
U.K. He is a
well-known person
among the business
community and is
having very rich
experience of
managing an industrial
undertaking. He is a
visiting faculty at the
IIM-Ahmedabad.
(1) Gruh Finance Ltd.
(2) Mahavir Spinning Mills Ltd.
(3) H. K. Finechem Ltd.
(4) Soma Textile & Industries Ltd.
(5) Torrent Cables Ltd.
(6) Unichem Laboratories Ltd.
8
9
Name Name
Shri Prafull Anubhai (Chairman)
Designation Designation
Non Executive - Independent
3. 3. Audit Committee Audit Committee
l Composition
The Audit Committee comprises of 3 Directors, all being Non-Executive Independent Directors,
Shri J anak G. Nanavaty was appointed as member of the Committee w.e.f. December 18,
2004 in place of Shri Vishnu Varshney who resigned as Director of the Company w.e.f. close
of business hours of December 17, 2004. All the members of the Committee are financially
literate and have adequate accounting knowledge. At present the Committee comprises of
following members:
Terms of Reference :
1. Oversight of the Companys financial reporting process and the disclosure of its
financial information.
2. Recommending the appointment and removal of external auditors, fixation of audit fee and also
approval for payment for any other services.
3. Reviewing with management the annual financial statements before submission to the Board,
focusing primarily on (i) any changes in accounting policies and practices (ii) major accounting
entries based on exercise of judgment by management (iii) qualifications in draft audit report (iv)
significant adjustments arising out of audit (v) the going concern assumption (vi) compliance
with accounting standards (vii) compliance with stock exchange and legal requirements concerning
financial statements and (viii) any related party transactions i.e. transactions of the Company of
material nature, with promoters or the management, their subsidiaries or relatives etc., that may
have potential conflict with the interests of the company at large.
4. Reviewing with management, external and internal auditors, the adequacy of internal control
systems.
5. Reviewing the adequacy of Internal Audit functions.
6. Discussion with internal auditors, any significant findings and follow-up thereon.
7. Reviewing the findings of any internal investigations by the internal auditors into matters where
there is suspected fraud or irregularity or a failure of internal control systems of a material nature
and reporting the matter to the Board.
8. Discussion with external auditors before the audit commences, nature and scope of audit as well
as post-audit discussion to ascertain any area of concern.
9. Reviewing the Companys various financial and risk management policies.
10. To look into the reasons for substantial defaults in the payment to the depositors, debenture
holders, shareholders (in case of non-payment of declared dividends) and creditors.
Meetings and the attendance during the year
The Audit Committee met on J une 26, 2004, J uly 29, 2004, October 29, 2004 & J anuary 31, 2005
during the financial year 2004-05 :
Name
Shri Prafull Anubhai (Chairman)
Shri Vishnu Varshney (upto December 17, 2004)
Shri J anak G. Nanavaty (from December 18, 2004)
No. of Meetings held
during the year
4
4
4
4
Attendance
4
4
3
1
The Committee Meetings were also attended by Chairman & Managing Director, Internal
Auditors, Statutory Auditors and General Manager - Finance & Company Secretary, who
also acted as Secretary of the Committee.
4. 4. Remuneration to Directors Remuneration to Directors
The Board has formed the Remuneration Committee comprising of three independent,
Non-Executive Directors. Present members of the Committee comprises of Shri Prafull
Anubhai, Shri J anak G. Nanavaty and Dr. Himanshu C. Patel.
Shri Vishnu Varshney vacated office as Director of the Company on December 17, 2004 and
Dr. Himanshu C. Patel was appointed as member of the Committee to fill the vacancy. During
the year 2004-05, no meeting of the Remuneration Committee was held.
Broad terms of reference of the Remuneration Committee are to recommend/review the
remuneration package of Executive Director and Managing Director, based on performance
and defined criteria. The remuneration policy is directed towards rewarding performance,
based on review of achievements on a periodical basis. The remuneration policy is
inconsonance with the existing Industry practice.
Details of remuneration paid / payable to Directors during the financial year 2004-05.
10
Shri Shyam B. Ghia
Shri Prafull Anubhai
Shri Vishnu Varshney
Dr. Himanshu C. Patel
Directors Directors Salaries Salaries Perquisites Perquisites Commission Commission
Sitting Sitting
Fees Fees
Total Total
5,32,645
-
-
3,79,161
-
-
-
-
5,91,970
-
-
2,96,648
-
-
-
-
3,00,000
-
-
1,50,000
-
-
-
-
-
750
6,750
-
7,500
4,500
4,500
3,000
14,24,615
750
6,750
8,25,809
7,500
4,500
4,500
3,000
Remuneration package comprises of salary, perquisites and allowances (a fixedcomponent)
and commission (a variable component). Shri Rajan R. Harivallabhdas, Managing Director
and Shri Nahoosh J . J ariwala, Executive Director were re-appointed on August 27, 2003 for
a period of 3 years without any notice period. No severance fee is payable as per the terms
of re-appointment. The Company has not granted any stock options to its Directors.
5. 5. Shareholders/Investors Grievance Committee Shareholders/Investors Grievance Committee
The committee functions under the Chairmanship of Shri J anak G. Nanavaty, anIndependent
Director. The other Members of the Committee are Shri Rajan R. Harivallabhdas, Managing
Director of the Company and Shri Nahoosh J . J ariwala, Executive Director of the Company.
Shri Rajen N. J haveri is the Company Secretary & Compliance Officer of the Company.
During the year the Shareholders/Investors Grievance committee met as and when required
and all the members attended the meetings.
The Shareholders/Investors Grievance committee looks into the redressal of Shareholders
/ Investors Grievances, if any, like Transfer / Transmission / Demat of Shares; Loss of Share
Certificates; Non-receipt of Annual Report; Non-receipt of payment of principal and/or interest
on Fixed Deposits, Non-receipt of declared dividend etc.
During the year, 6 complaints were received from the Shareholders, all of which have been
resolved to the satisfaction of respective investors. The Company had no transfers pending
at the close of the financial year.
(Amount in Rs.)
6. 6. Disclosures Disclosures
(a) The Company has no materially significant related party transactions i.e. transactions of
the Company of material nature with its promoters, the Directors or the management,
their subsidiaries or relatives etc., that may have potential conflicts with the interests of
the Company at large.
Details of related party transactions are elaborated in the point No. 12(b) of Notes
onAccounts.
(b) There were no instances of non-compliance by the Company or Penalties imposed on
the Company by the Stock Exchange(s) or SEBI or any statutory authority, on any matter
related to Capital Markets, during the last three years.
7. 7. Means of Communication Means of Communication
l During the year, quarterly unaudited financial results and audited annual financial results
of the Company were submitted to the stock exchanges soon after its approval by the
Board of Directors at their Meeting and were also published in English and vernacular
newspapers.
l As per the requirements of Clause 51 of the Listing Agreement, all the data related
to quarterly financial results, shareholding pattern etc. is provided to the special website
www.sebiedifar.nic.in within the timeframe prescribed in this regard.
l The report on Management Discussion and Analysis is annexed and forms part of the
annual report.
8. 8. Details of General Meetings Details of General Meetings
Location, date and time of General Meetings held during the last 3 years:
Meeting Meeting Year Year
Venue of Venue of
General Meeting General Meeting
Date & Time Date & Time
No. of No. of
Special Special
Resolutions Resolutions
EGM 2001-2002
Ahmedabad Textile Mills'
Association's Hall,
Ashram Road,
4
th
December, 2001
at 4:00 p.m.
2
17
th
AGM 2001-2002 As above 18
th
September, 2002
at 5:00 p.m.
-
18
th
th
September, 2003
at 4:00 p.m.
-
19
th
th
September, 2004
at 4:00 p.m.
-
General Shareholder Information General Shareholder Information
Date, time and venue of 20 Date, time and venue of 20
th th
Annual Annual Thursday, 15th September, 2005 at 4.00 p.m.
General Meeting General Meeting at Ahmedabad Textiles Mills' Association's Hall,
Ashram Road, Ahmedabad - 380 009.
Book Closure Date Book Closure Date Monday, 1st August, 2005 to Monday, 8th August,
2005 (both days inclusive).
Dividend Payment Date Dividend Payment Date The proposed dividend, if approved at the AGM,
will be distributed within the stipulated period.
11
Financial Calendar (Tentative) Financial Calendar (Tentative)
Financial reporting for the quarter ending J une 30, 2005 End of J uly, 2005
Financial reporting for the quarter/half year ending
September 30, 2005 End of October, 2005
Financial reporting for the quarter ending December 31, 2005 End of J anuary, 2006
Financial reporting for the year ending March 31, 2006 End of May, 2006
Annual General Meeting for the year ending March 31, 2006 September, 2006
High/Low of monthly Market Price of the Companys Equity Shares traded on the Mumbai Stock High/Low of monthly Market Price of the Companys Equity Shares traded on the Mumbai Stock
Exchange during the financial year 2004-05 is furnished below : Exchange during the financial year 2004-05 is furnished below :
Month Month
High High
(Rs.) (Rs.)
Low Low
(Rs.) (Rs.)
Volume Volume
(Nos.) (Nos.) (High) (High) (Low) (Low)
BSE Sensex BSE Sensex
April, 2004
May, 2004
J une, 2004
J uly, 2004
August, 2004
September, 2004
October, 2004
November, 2004
December, 2004
J anuary, 2005
February, 2005
March, 2005
13.25
13.15
10.93
10.00
11.40
14.00
16.00
16.90
26.85
26.20
32.55
29.00
11.00
9.15
8.00
7.52
9.00
10.05
12.10
12.50
13.65
21.00
23.15
21.00
54017
12990
16060
25306
20028
903325
524833
423985
915263
332979
553773
294605
5979.25
5772.64
5012.52
5200.85
5269.22
5638.79
5803.82
6248.43
6617.15
6696.31
6721.08
6954.86
5599.12
4227.50
4613.94
4723.04
5022.29
5178.57
5558.14
5649.03
6176.09
6069.33
6508.33
6321.31
Share Transfer System Share Transfer System
M/s. Pinnacle Shares Registry Pvt. Limited situated at Near Ashoka Mills, Naroda Road,
Ahmedabad - 380 025 was appointed as its Registrar and Transfer Agent (RTA) during the
year 2002-03. Valid Share transfers in physical form and complete in all respects
were approved, registered and dispatched within stipulated period.
Dematerialisation of Shares and Liquidity Dematerialisation of Shares and Liquidity
64.60 % shares of the Company are held in the electronic form by shareholders as on March
31, 2005. The shares are traded on Ahmedabad and Mumbai Stock Exchanges.
Distribution of Shareholding as on March 31, 2005. Distribution of Shareholding as on March 31, 2005.
Category (Shares) Category (Shares)
No. of No. of
Shareholders Shareholders
Percentage Percentage No. of Shares No. of Shares Percentage Percentage
1-500
501-1000
1001-2000
2001-3000
3001-4000
4001-5000
5001-10000
Above 10000
TOTAL TOTAL
2,641
241
113
53
20
46
47
61
3,222 3,222
81.97
7.48
3.51
1.64
0.62
1.43
1.46
1.89
100.00 100.00
4,45,335
2,20,531
1,82,871
1,40,916
73,904
2,21,336
3,42,788
78,72,319
95,00,000 95,00,000
4.69
2.32
1.92
1.48
0.78
2.33
3.61
82.87
100.00 100.00
12
Category Category
No. of Shares No. of Shares
held held
Percentage to Percentage to
total shares total shares
Individual
Promoters
- Indian Promoters
- Foreign Promoter
Other Corporate Bodies
Financial Institutions / Mutual Funds / Banks
Director & their relatives
Foreign Institutional Investors /
Overseas Corporate Bodies
Non-Resident Indians
TOTAL TOTAL
31,09,937
30,08,725
29,50,000
3,95,708
-
400
15,000
20,230
95,00,000 95,00,000
32.74
31.67
31.05
4.17
-
0.00
0.16
0.21
100.00 100.00
Listing on Stock Exchanges at : Listing on Stock Exchanges at :
The Ahmedabad Stock Exchange The Ahmedabad Stock Exchange
Kamdhenu Complex, Panjrapole,
Opp. Sahjanand College,
The Stock Exchange - Mumbai The Stock Exchange - Mumbai
Phiroze J eejeebhoy Towers,
Dalal Street,
Mumbai - 400 023.
Listing fees for the year 2005-06 have been paid to both the Stock Exchanges.
Stock Codes Stock Codes Ahmedabad Stock Exchange .... 24855
Mumbai Stock Exchange .... 530117
Demat ISIN No. in NSDL & CDSL for Equity Shares .... INE959A01019
Registered Office and Registered Office and
Correspondence address Correspondence address
201, Aniket,
C. G. Road,
Navrangpura,
Tele Nos. (079) 2646 8752 / 2640 2429
Fax No. (079) 2646 0910
Category-wise Shareholding as on March 31, 2005 Category-wise Shareholding as on March 31, 2005
Unclaimed Dividends Unclaimed Dividends None
Plant Location Plant Location 253/P, Chekhala,
Sanand-Kadi Highway,
Ta. Sanand
Dist. Ahmedabad - 382 145.
13
CERTIFICATE CERTIFICATE
To The Members of H. K. Finechem Limited H. K. Finechem Limited
We have examined the compliance of the conditions of Corporate Governance by
H. K. Finechem Limited for the year ended 31st March, 2005 as stipulated in clause 49 of the
Listing Agreement of the said Company with Stock Exchange in India.
The compliance of conditions of Corporate Governance is the responsibility of the management.
Our examination has been in the manner described in the Guidance Note on Certification of
Corporate Governance issued by the Institute of Chartered Accountants of India and has been
limited to the procedures and implementation thereof, adopted by the Company for ensuring the
compliance with the conditions of Corporate Governance. It is neither an audit nor an expression
of the opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to explanations given to us and
the representation made by the Management, we certify that Company has complied with the
conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement.
As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we
have to state that as per records maintained by the Shareholders'/Investors' GrievanceCommittee
and as certified by the Registrar of the Company as on 31st March, 2005, no investor grievances
were remaining unattended/pending for more than thirty days.
We further state that such compliance is neither an assurance as to the future viability of the
Company nor the efficiency or effectiveness with which the management has conducted the
affairs of the Company.
For C. C. CHOKSHI & CO.,
Chartered Accountants
H. P. SHAH H. P. SHAH
P A R T N E R
AHMEDABAD
DATED : J UNE 04, 2005
14
MANAGEMENT DISCUSSION AND ANALYSIS REPORT MANAGEMENT DISCUSSION AND ANALYSIS REPORT
(1) INDUSTRY STRUCTURE :
The Companys main products were Mixed Tocopherols, Sterols, Dimer Acid, Linoleic Acid
and Monobasic Acid.
(A) Mixed Tocopherol Concentrate :
The Company continues to enjoy the advantage of First Mover for this product in India.
Its product is well accepted by U.S. and J apan based Natural Vitamin E manufacturing
Companies.
(B) Sterols :
Ours is the only Indian Company making exportable quality of sterols. During the year
2004-2005, the export of this product in terms of value was higher by about 50 %. The
demand for sterols, particularly in U.S.A. is good.
(C) Linoleic Acid :
HKFLs Linoleic Acid has become a benchmark for quality standard in India. However,
as of now market for such Linoleic Acid is limited.
(D) Dimer Acid :
In the 3 years of Companys entry which again was the first of its kind, in this Import
Substitute product, Company has been able to achieve about one third share of Indian
demand. Due to our strategy of pricing the product near that of final cost of imported
Dimer to the user, we do not anticipate any difficulty in marketing and can increase our
share when required.
(E) Monobasic Acid :
Monobasic Acid is a by-product of Dimer Acid production. The market for this acid is
limited and growing at slower pace. However, we are able to sell the quantity produced
by us.
(2) OPPORTUNITIES AND THREATS :
Govt. of Gujarats policy of excise sops in Kutch region had attracted many vegetable oil
refineries. This has resulted in easy availability of required raw materials. The location of our
plant has thus become an ideal one.
Our raw materials are by-products of Soya Oil refinery. As India is substantially short in
edible oil supply, more and more multinationals, particularly from U.S.A. are setting up their
shops here and have adopted joint venture and acquisition route to increase their presence
in edible oil market. Their entry into our business segment may result inadditional competition
for us.
(3) SEGMENT WISE AND PRODUCT WISE :
The Company has only one segment. As far as products are concerned, the Company now
processes both the by-product streams of vegetable oil refineries viz. Vegetable Oil based
Fatty Acid Distillate and Acid Oil.
15
(4) OUTLOOK :
Outlook appears better. The fatty acids of the Company are considered to be of the best
quality among the resin / paint manufacturing Companies in India. The products meant for
export viz. Mixed Tocopherol Concentrate and Sterols are also looking up. With rawmaterial
prices stabilising at its normal levels with their increased availability, the Company is well
placed to derive the benefit by going for controlled expansion.
(5) RISKS AND CONCERNS :
The major threat for the Company is dumping of fatty acids at cheaper prices by Asian
Countries, particularly Korea and China. With peak custom duty rate for the raw materials
likely to be 10 % next year, the Company will have to match the price of its fatty acids with
that of imported fatty acids.
(6) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY :
The Company has an effective internal control system for all its departments. All
the transactions of financial nature are well documented and authorised by concerned
departmental head and finally approved by one of the two wholetime Directors.
(7) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
PERFORMANCE :
The financial performance of the Company, since last 3 years has been continuously
improving and the Company hopes to continue this trend during the year 2005-2006.
This improved performance and its future sustainability has helped the Company to change
its bankers from Bank of Baroda to State Bank of India who offered term loans at most
competitive rate. This enabled the Company to swap its Foreign Currency Debt into Indian
Rupee term loans. The Company is now insulated from future adverse foreign exchange
rate as far as its borrowings are concerned.
The Companys debt-equity ratio at 0.38 : 1 will enable it to avail fresh borrowings if and
when required at competitive rate.
The Company is having adequate working capital limits with State Bank of India.
The Companys Share Capital stands at Rs. 9.50 crores. The book value of the Companys
equity share stands at Rs. 14.11 as on March 31, 2005.
(8) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT,
INCLUDING NUMBER OF PEOPLE EMPLOYED :
The relations between management and the personnel of the Company have continued to
be cordial. The staff turnover ratio is very nominal. The average number of people employed
by the Company during the year were 125.
16
Auditors Report Auditors Report
TO THE MEMBERS OF H. K. FINECHEM LIMITED TO THE MEMBERS OF H. K. FINECHEM LIMITED
We have audited the attached Balance Sheet of H. K. FINECHEM LIMITED as at 31st March,
2005, the Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on our audit.
1. We conducted our audit in accordance with Auditing Standards generally accepted in India.
Those Standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 as amended by theCompanies
(Auditor's Report) (Amendment) Order, 2004 (together the "Order") issued by the
Central Government of India in terms of sub-section (4A) of Section 227 of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters specified in Paragraphs 4
& 5 of the said Order.
3. Further to our comments in the Annexure referred to above, we report that :
(i) We have obtained all the information and explanations which to the best of ourknowledge
and belief were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the
company so far as appears from our examinations of those books;
(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report comply with the Accounting Standards referred to in sub-
section (3C) of Section 211 of the Companies Act, 1956;
(v) On the basis of written representations received from the Directors as on 31st March,
2005 and taken on record by the Board of Directors, we report that none of the Directors
is disqualified as on 31st March, 2005 from being appointed as a Director in terms of
clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
In our opinion and to the best of our information and according to the explanations given to
us, the said accounts read with notes thereon give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of the affairs of the Company as at
31st March, 2005;
b) in the case of the Profit and Loss Account, of the profit for the year ended on that
date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that
date.
AHMEDABAD
17
For C.C.CHOKSHI & CO.
Partner
Membership No. 33331
ANNEXURE TO THE AUDITORS REPORT ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
i. The nature of Companys activities during the year have been such that clauses (xiii) and
(xiv) of paragraph 4 of the Companies (Auditors Report) Order, 2003 as amended by
Companies (Auditor's Report) (Amendment) Order, 2004 are not applicable to the Company
for the year.
ii. (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) The Management has designed a phased program of verification of fixed assets to cover
all the items over a period of three years which in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. Pursuant to the program,
some part of fixed assets was physically verified by the management during the
year. According to information and explanations given to us, no material discrepancies
were noticed by the management on such verification.
(c) The Company has not disposed off a substantial part of fixed assets during the year.
iii. (a) Physical verification of inventory has been conducted during the year by the management
at reasonable intervals.
(b) The procedures of physical verification of inventory followed by the management are
reasonable and adequate in relation to the size of the Company and nature of its business.
(c) The Company is maintaining proper records of inventory. Discrepancies noticed on
physical verification have been properly dealt with in the books of account.
iv. (a) The Company has not granted any loans to companies, firms or other parties listed in
the Register maintained under section 301 of the Companies Act, 1956.
(b) The company has taken loans from six companies covered in the Register maintained
under section 301 of the Companies Act, 1956. The maximum amount involved during
the year and the year-end balance of such loans aggregates to Rs. 106 lacs and
Rs. 56 lacs respectively.
(c) In our opinion, the rate of interest and other terms and conditions on which such loans
have been taken are not, prima facie, prejudical, to the interest of the company.
(d) The company is regular in payment of the principal amount and interest thereon.
v. In our opinion and according to the information and explanations given to us, there are
adequate internal control procedures commensurate with the size of the Company and the
nature of its business for the purchase of inventory, fixed assets and for the sale of goods &
services. During the course of audit, we have not observed any continuing failure to correct
major weaknesses in internal control system.
vi. (a) In our opinion and according to the information and explanations given to
us, the particulars of contracts or arrangements referred to in section 301 of
the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations given to us,
the transactions made in pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 in respect of any party during
the year have been made at prices which are reasonable having regard to prevailing
market prices at the relevant time.
vii. In our opinion and according to the information and explanations given to us, the company
has complied with the provisions of Sections 58A and 58AA or any other relevant provisions
18
of the Companies Act, 1956 and the rules framed thereunder with regard to the deposits
accepted from the Public.
viii. Internal Audit is carried out by a firm of Chartered Accountants. On the basis of the reports
made by them to the management, in our opinion, the Internal Audit System is commensurate
with the size and nature of its business.
ix. The Company is not required to maintain Cost Records under section 209 (1) (d) of the
Companies Act, 1956 and therefore clause (viii) relating to its maintenance is not applicable.
x. According to the information and explanations given to us in respect of statutory and other
dues:
(a) The Company has been regular in depositing with appropriate authorities undisputed
statutory dues includingProvident Fund, Investor Education and Protection Fund, Sales
Tax, Customs Duty, Excise Duty, Income Tax, Wealth Tax, Service Tax, Cess and any
other statutory dues with the appropriate authorities during the year.
(b) There are no dues of Income-Tax, Sales-Tax, Customs Duty, Wealth Tax, Service Tax,
Cess which have not been deposited on account of any dispute. The Company has not
deposited excise duty of Rs. 19,31,041/- on non-reversal of duty on clearance of exempted
goods for the period from March 2000 to J uly 2004 which is disputed and pendingbefore
Asstt. / J oint Commissioner of Central Excise.
xi. The Company has no accumulated losses at the end of the financial year and it has not
incurred cash losses in the financial year under report and the immediately precedingfinancial
year.
xii. In our opinion and according to the information and explanations given by the management,
the Company has not defaulted in the repayment of dues to financial institutions and banks.
xiii. According to the information and explanations given to us, the Company has not given any
loans and advances on the basis of security by way of pledge of shares, debentures and
other securities.
xiv. According to the information and explanations given to us, the Company has not given any
guarantee for loans taken by others from banks or financial institutions.
xv. According to the information and explanations given to us, term loans availed by the Company
were, prima facie, applied by the Company during the year for the purposes for which they
were raised.
xvi. According to the information and explanations given to us and on an overall examination of
the balance sheet of the Company, we report that funds raised on short term basis have,
prima facie, not been used during the year for long term investment.
xvii. The Company has not made any preferential allotment of shares to parties and companies
covered in the Register maintained under Section 301 of the Companies Act, 1956.
xviii.No debentures have been issued by the Company and hence the question of
creatingsecurities or charges in respect thereof does not arise.
xix. During the year the Company has not raised money by public issue.
xx. According to the information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the financial year.
AHMEDABAD
For C.C.CHOKSHI & CO.
Partner
Membership No. 33331
19
AS PER OUR SEPARATE REPORT OF EVEN DATE
Nahoosh J . J ariwala Nahoosh J . J ariwala
Executive Director
& Company Secretary
AHMEDABAD
DATED : J une 04, 2005
P A R T N E R
AHMEDABAD
BALANCE SHEET AS AT 31ST MARCH, 2005 BALANCE SHEET AS AT 31ST MARCH, 2005
SCHEDULE SCHEDULE As at As at As at
31.03.2005 31.03.2005 31.03.2004
Rs. Rs. Rs. Rs. Rs.
SOURCES OF FUNDS: SOURCES OF FUNDS:
1. 1. Shareholders Funds: Shareholders Funds:
a) Share Capital 1 9,50,00,000 9,50,00,000 10,00,00,000
b) Reserves & Surplus 2 3,93,41,645 3,93,41,645 3,88,98,815
2. 2. Loan Funds: Loan Funds:
Secured Loans 3 6,79,52,084 3,20,91,633
Unsecured Loans 4 1,49,09,000 3,77,91,263
8,28,61,084 8,28,61,084 6,98,82,896
3. 3. DEFERRED TAX LIABILITY (NET) DEFERRED TAX LIABILITY (NET) 1,94,90,513 1,94,90,513 35,10,362
T O T A L T O T A L 23,66,93,242 23,66,93,242 21,22,92,073
APPLICATION OF FUNDS APPLICATION OF FUNDS
1. 1. FIXED ASSETS: FIXED ASSETS: 5
a) Gross Block 25,66,96,868 23,11,91,777
b) Less: Depreciation 8,59,80,638 7,45,13,408
c) Net Block 17,07,16,230 15,66,78,369
d) Add. : Capital Work in progress 31,63,819 32,96,591
17,38,80,049 17,38,80,049 15,99,74,960
2. 2. INVESTMENTS INVESTMENTS 6 ----- 300
3. 3. CURRENT ASSETS, LOANS & ADVANCES CURRENT ASSETS, LOANS & ADVANCES
(a) Inventories 7 4,18,20,090 2,91,46,620
(b) Sundry Debtors 8 3,27,17,197 2,55,56,900
(c) Cash & Bank Balances 9 14,59,253 18,29,128
(d) Loans & Advances 10 88,62,870 59,63,242
8,48,59,410 6,24,95,890
Less: Current Liabilities & Provisions 11 2,23,22,624 1,07,31,882
Net Current Assets 6,25,36,786 6,25,36,786 5,17,64,008
MISCELLANEOUS EXPENDITURE MISCELLANEOUS EXPENDITURE 12 2,76,407 2,76,407 5,52,805
(To the extent not written off)
T O T A L T O T A L 23,66,93,242 23,66,93,242 21,22,92,073
ACCOUNTING POLICIES AND NOTES
ON BALANCE SHEET AND PROFIT &
LOSS ACCOUNT 17
20
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005
SCHEDULE SCHEDULE
Rupees Rupees Rupees
2003-2004
Executive Director
& Company Secretary
AHMEDABAD
P A R T N E R
AHMEDABAD
21
I N C O M E I N C O M E
Sales 24,74,72,737 21,51,01,597
Less : Cenvat duty recovered on sales 2,20,47,210 2,00,41,427
Net Turnover 22,54,25,527 22,54,25,527 19,50,60,170
Other Income 13 4,12,438 4,12,438 23,94,556
Increase / (Decrease) in Stock 14 47,52,550 47,52,550 (7,66,650)
23,05,90,515 23,05,90,515 19,66,88,076
E X P E N D I T U R E E X P E N D I T U R E
Manufacturing Expenses & other expenses 15 18,26,25,314 18,26,25,314 15,94,27,528
Interest 16 66,30,070 66,30,070 75,69,404
Depreciation 1,16,23,658 1,16,23,658 1,12,30,871
20,08,79,042 20,08,79,042 17,82,27,803
Profit before Tax 2,97,11,473 2,97,11,473 1,84,60,273
Provision for Taxation :
Current Tax 24,00,000 14,50,000
Deferred Tax 1,59,80,151 65,62,896
1,83,80,151 1,83,80,151 80,12,896
Profit after tax 1,13,31,322 1,13,31,322 1,04,47,377
Excess / (Short) Provision of Income Tax of earlier years (15,68,136) (15,68,136) 24,219
Balance of Profit brought forward 3,25,12,815 3,25,12,815 2,78,30,907
Amount available for Appropriations 4,22,76,001 4,22,76,001 3,83,02,503
APPROPRIATIONS APPROPRIATIONS
Capital Redemption Reserve ----- 50,00,000
Interim Dividend - Preference Shares 6,41,500 7,00,000
Proposed Dividend - Equity Shares 76,00,000 -------
Tax on Dividend 10,78,856 89,688
93,20,356 93,20,356 7,89,688
Balance carried to Balance Sheet 3,29,55,645 3,29,55,645 3,25,12,815
Basic / Diluted earning per share 0.95 0.95 1.02
(See note No. 13 of Schedule 17)
ACCOUNTING POLICIES AND NOTES
ON BALANCE SHEET AND PROFIT &
LOSS ACCOUNT 17
P A R T I C U L A R S P A R T I C U L A R S 2 0 0 4 - 2 0 0 5 2 0 0 4 - 2 0 0 5 2 0 0 3 - 2 0 0 4
Rupees Rupees Rupees
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2005 CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2005
(A) CASH FLOW FROM OPERATING ACTIVITIES : (A) CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit before tax and extra-ordinary items 2,97,11,473 2,97,11,473 1,84,60,273
Adjustments for:
Depreciation 1,16,23,658 1,12,30,871
Interest Expenses (Net) 66,30,070 75,69,404
Share Issue expenses Written off 2,76,398 2,76,398
Loss on sale of Fixed Assets 67,317 2,09,044
Obsolete fixed assets written off 3,81,000 33,445
Deferred Revenue Expenses Written off ----- 1,11,753
Gain on account of Exchange Rate ----- (22,44,000)
1,89,78,443 1,89,78,443 1,71,86,915
Operating Profit before Working Capital Changes 4,86,89,916 4,86,89,916 3,56,47,188
Adjustments for:
Trade & other Receivables (71,60,297) (50,17,254)
Inventories (1,26,73,470) (10,08,527)
Loans and Advances (5,35,579) (1,89,090)
Trade & Other Payables 7,48,028 (18,91,021)
(1,96,21,318) (1,96,21,318) (81,05,892)
Cash generated from operations 2,90,68,598 2,90,68,598 2,75,41,296
Income Tax (39,32,185) (39,32,185) (13,84,621)
Net cash from operating activities.... (A) 2,51,36,413 2,51,36,413 2,61,56,675
(B) CASH FLOW FROM INVESTING ACTIVITIES (B) CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of Fixed Assets (2,60,76,165) (73,34,357)
Sale of Fixed Assets 99,101 93,518
Sale of Investment 300 -----
Net cash from investing activities.... (B) (2,59,76,764) (2,59,76,764) (72,40,839)
(C) CASH FLOW FROM FINANCING ACTIVITIES (C) CASH FLOW FROM FINANCING ACTIVITIES :
Preference Share Capital redeemed (50,00,000) -----
Proceeds from Long Term Borrowings after
adjustment of Foreign Exchange Fluctuation (18,98,612) (1,46,90,877)
Proceeds from Fixed Deposits 34,64,000 18,76,000
Proceeds from Working Capital Loan 1,19,59,063 11,48,361
Interest Paid (73,26,844) (66,26,906)
Interim dividend on Preference Shares (6,41,500) -----
Tax on Interim dividend (85,631) -----
Net cash from financing activities.... (C) 4,70,476 4,70,476 (1,82,93,422)
Net Increase/(Decrease) in cash &
cash equivalents (A) +(B) +(C) (3,69,875) (3,69,875) 6,22,414
Cash and cash equivalents
(Opening Balance) 18,29,128 18,29,128 12,06,714
Cash and cash equivalents
(Closing Balance) 14,59,253 14,59,253 18,29,128
22
NOTES : NOTES :
(1) Cash and Cash equivalent includes :
(2) The Cash Flow statement has been prepared under the Indirect Method as set out in Accounting
Standard - 3 on Cash Flow Statement issued by The Institute of Chartered Accountants of India.
(3) Purchase of Fixed Assets include payments for items in Capital Work in progress and capital advances.
(4) The previous years figures have been regrouped wherever necessary to make them comparable with
this years figures.
AHMEDABAD
Executive Director
& Company Secretary
AHMEDABAD
P A R T N E R
23
2004-2005 2004-2005 2003-2004
Rs. Rs. Rs. Rs. Rs.
Cash on Hand 1,27,807 1,27,807 1,86,803
Bank Balances with Scheduled Banks in :
Current Accounts 3,08,446 7,94,936
Margin Money Accounts 1,43,000 2,47,389
Fixed Deposit Account 8,80,000 6,00,000
13,31,446 13,31,446 16,42,325
TOTAL 14,59,253 14,59,253 18,29,128
SCHEDULES FORMING PART OF ACCOUNTS SCHEDULES FORMING PART OF ACCOUNTS
As at As at As at
31.03.2005 31.03.2005 31.03.2004
Rs. Rs. Rs.
SCHEDULE - 1 SCHEDULE - 1
SHARE CAPITAL SHARE CAPITAL
Authorised : Authorised :
95,00,000 Equity Shares of Rs.10/- each 9,50,00,000 9,50,00,000 9,50,00,000
50,000 Preference Shares of Rs.100/- each 50,00,000 50,00,000 50,00,000
10,00,00,000 10,00,00,000 10,00,00,000
Issued : Issued :
95,00,000 Equity Shares of Rs.10/- each 9,50,00,000 9,50,00,000 9,50,00,000
50,000 14% Redeemable Cumulative
Preference Shares of Rs. 100/- each 50,00,000 50,00,000 50,00,000
10,00,00,000 10,00,00,000 10,00,00,000
Subscribed & Paid up : Subscribed & Paid up :
95,00,000 Equity Shares of Rs.10/- each fully paid up 9,50,00,000 9,50,00,000 9,50,00,000
50,000 14% Redeemable Cumulative Preference
Shares of Rs. 100/- each fully paid 50,00,000 50,00,000
Less : Redeemed during the year 50,00,000 -----
----- 50,00,000
T O T A L T O T A L 9,50,00,000 9,50,00,000 10,00,00,000
Note : Equity Share Capital includes 31,500 equity shares allotted as fully paid up bonus shares by way of
capitalisation from surplus in Profit & Loss account.
RESERVES & SURPLUS RESERVES & SURPLUS
A) Share Premium Account
Balance as per last Balance Sheet 13,86,000 13,86,000 13,86,000
B) Capital Redemption Reserve
Balance as per last Balance Sheet 50,00,000 50,00,000 50,00,000
B) Profit & Loss Account 3,29,55,645 3,29,55,645 3,25,12,815
T O T A L T O T A L 3,93,41,645 3,93,41,645 3,88,98,815
SECURED LOANS SECURED LOANS
FROM BANKS FROM BANKS
(1) TERM LOANS 3,47,88,318 3,47,88,318 94,90,740
(2) DEMAND LOAN ----- ----- 7,96,190
(3) WORKING CAPITAL LOANS : 3,31,63,766 3,31,63,766 2,18,04,703
T O T A L T O T A L 6,79,52,084 6,79,52,084 3,20,91,633
24
Notes: Notes: 1. All the above loans from Bank are secured by first mortgage on the Company's immovable properties
both present and future and hypothecation of all present and future machinery, other movable assets,
goods and book debts of the Company.
2. The demand loan was secured by way of hypothecation of movable plant and machinery together with
spares, tools and accessories and other movables, both present and future.
3. All the above Loans are further secured by a personal guarantee given by the Managing Director of the
Company.
As at As at As at
31.03.2005 31.03.2005 31.03.2004
Rs. Rs. Rs.
UNSECURED LOANS UNSECURED LOANS
External Commercial Borrowings from Overseas Corporate Body ----- ----- 2,64,00,000
Inter-corporate Deposits (Payable within one year) 56,00,000 56,00,000 50,00,000
Fixed Deposits (Payable within one year) 93,09,000 93,09,000 58,45,000
Interest accrued and due ----- ----- 5,46,263
T O T A L 1,49,09,000 1,49,09,000 3,77,91,263
Sr. ASSETS Gross Block (At Cost) Depreciation Net Block
No.
NOTES : 1. Building includes shares of the face value aggregating to Rs.1,000/-, under bye-laws of the Societies.
2. Capital work in Progress includes Rs. 15,500/- on account of advance against Capital Expenditure.
(Previous Year Rs. 3,04,007/-)
25
FIXED ASSETS FIXED ASSETS
As on Additions Sales/ As on As on Upto For the Sales/ Upto Upto As at As at As at
01.04.2004 Deduction 31.03.2005 31.03.2005 01.04.2004 Year Deduction 31.03.2005 31.03.2005 31.03.2005 31.03.2005 31.03.2004
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
1. Land 16,04,190 47,06,100 63,10,290 63,10,290 63,10,290 63,10,290 16,04,190
2. Building 3,01,08,789 59,33,507 3,60,42,296 3,60,42,296 71,00,601 9,80,497 80,81,098 80,81,098 2,79,61,198 2,79,61,198 2,30,08,188
3. Plant &Machinery 18,14,74,568 1,44,98,319 4,17,155 19,55,55,732 19,55,55,732 6,01,96,563 96,57,887 30,655 6,98,23,795 6,98,23,795 12,57,31,937 12,57,31,937 12,12,78,005
4. Electric Installation 1,13,14,060 6,46,567 1,19,60,627 1,19,60,627 38,34,240 5,43,417 43,77,657 43,77,657 75,82,970 75,82,970 74,79,820
5. Air Conditioners 7,53,570 24,500 7,78,070 7,78,070 2,24,258 36,810 2,61,068 2,61,068 5,17,002 5,17,002 5,29,312
6. Office Equipments 19,53,684 37,400 19,950 19,71,134 19,71,134 10,92,864 1,18,050 3,863 12,07,051 12,07,051 7,64,083 7,64,083 8,60,820
7. Furniture & Fixtures 16,47,288 9,500 16,56,788 16,56,788 11,32,532 65,843 11,98,375 11,98,375 4,58,413 4,58,413 5,14,756
8. Vehicles 23,35,628 3,53,044 2,66,741 24,21,931 24,21,931 9,32,350 2,21,154 1,21,910 10,31,594 10,31,594 13,90,337 13,90,337 14,03,278
23,11,91,777 2,62,08,937 7,03,846 25,66,96,868 25,66,96,868 7,45,13,408 1,16,23,658 1,56,428 8,59,80,638 8,59,80,638 17,07,16,230 17,07,16,230 15,66,78,369
As at 31.03.2004 22,51,57,076 66,04,753 5,70,052 23,11,91,777 23,11,91,777 6,35,16,582 1,12,30,871 2,34,045 7,45,13,408 7,45,13,408 15,66,78,369 15,66,78,369 -----
Capital Work in Progress 31,63,819 31,63,819 32,96,591
As at As at As at
31.03.2005 31.03.2005 31.03.2004
Rs. Rs. Rs.
INVESTMENTS INVESTMENTS
(At Cost - Long Term) UNQUOTED
10 Equity Shares of Bombay Mercantile Co-op.
Bank Ltd. of Rs. 30/- each fully paid ---- ---- 300
T O T A L T O T A L ---- ---- 300
26
As at As at As at
31.03.2005 31.03.2005 31.03.2004
Rs. Rs. Rs.
INVENTORIES INVENTORIES
1. Stores, Fuel & Packing Material 1,09,16,838 1,09,16,838 96,81,543
(Including Goods in Transit Rs. 23,690/-)
(Previous Year Rs. 4,357/-)
2. Stock-in-Trade
a. Raw Materials (including Goods in transit
Rs. 2,09,440/-) (Previous year Rs. 6,03,121/-) 1,22,98,981 56,13,356
b. Semi-finished Goods 1,86,04,271 1,38,51,721
3,09,03,252 3,09,03,252 1,94,65,077
T O T A L T O T A L 4,18,20,090 4,18,20,090 2,91,46,620
SUNDRY DEBTORS: SUNDRY DEBTORS: (Unsecured & Considered Good)
Exceeding six months 7,810 15,909
Others 3,27,09,387 2,55,40,991
3,27,17,197 2,55,56,900
T O T A L T O T A L 3,27,17,197 3,27,17,197 2,55,56,900
CASH & BANK BALANCES CASH & BANK BALANCES
Cash on Hand 1,27,807 1,27,807 1,86,803
Bank Balances with Scheduled Banks in:
Current Accounts 3,08,446 7,94,936
Margin Money Accounts 1,43,000 2,47,389
Fixed Deposit Amount 8,80,000 6,00,000
13,31,446 13,31,446 16,42,325
T O T A L T O T A L 14,59,253 14,59,253 18,29,128
LOANS & ADVANCES (Unsecured - Considered good) LOANS & ADVANCES (Unsecured - Considered good)
Advances recoverable in cash or in
kind or for value to be received 14,51,351 14,51,351 24,18,512
Loans to Staff 3,730 3,730 15,790
Sundry Deposits 12,01,285 12,01,285 8,60,975
Interest receivable 59,429 59,429 2,17,054
Cenvat Receivable 23,61,388 23,61,388 6,68,635
Advance Tax and tax deducted at source 37,85,687 37,85,687 17,82,276
T O T A L T O T A L 88,62,870 88,62,870 59,63,242
As at As at As at
31.03.2005 31.03.2005 31.03.2004
Rs. Rs. Rs.
CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES & PROVISIONS
A. A. Current Liabilities Current Liabilities
Sundry Creditors :
Small Scale Industrial Units 56,479 15,285
(Outstanding for less than 30 days)
Others 24,81,979 19,91,660
Other Liabilities 42,69,356 37,32,706
Interest Accrued but not due 2,45,724 3,96,235
70,53,538 70,53,538 61,35,886
B. B. Provisions Provisions
For Taxation 38,50,000 38,50,000 14,50,000
For Gratuity, Superannuation and Leave encashment 28,25,861 28,25,861 23,56,308
Proposed Equity Share Dividend 76,00,000 76,00,000 -----
Proposed Preference Dividend ----- ----- 7,00,000
For Tax on Dividend 9,93,225 9,93,225 89,688
T O T A L T O T A L 2,23,22,624 2,23,22,624 1,07,31,882
MISCELLANEOUS EXPENDITURE MISCELLANEOUS EXPENDITURE
(To the extent not written off)
SHARE ISSUE EXPENSES:
Balance as per last year 5,52,805 8,29,203
Less : Written off for the year 2,76,398 2,76,398
2,76,407 2,76,407 5,52,805
DEFERRED REVENUE EXPENSES
Upfront Charges for re-schedulement/conversion of Loan
Balance as per last year ----- 1,11,753
Less : Written off for the year ----- 1,11,753
------ ------ -----
T O T A L T O T A L 2,76,407 2,76,407 5,52,805
2003-2004
Rs. Rs. Rs.
OTHER INCOME OTHER INCOME
Miscellaneous Income 4,12,438 4,12,438 5,52,096
Foreign Exchange Gain (Net) ----- ----- 18,42,460
T O T A L T O T A L 4,12,438 4,12,438 23,94,556
INCREASE INCREASE/(DECREASE) /(DECREASE) IN STOCK OF SEMI-FINISHED GOODS IN STOCK OF SEMI-FINISHED GOODS
Stock as on 31st March, 2005 1,86,04,271 1,86,04,271 1,38,51,721
Less : Stock as on 1st April, 2004 1,38,51,721 1,38,51,721 1,46,18,371
T O T A L T O T A L 47,52,550 47,52,550 (7,66,650)
27
2003-2004
Rs. Rs. Rs.
MANUFACTURING MANUFACTURING EXPENSES EXPENSES & OTHER EXPENSES : & OTHER EXPENSES :
1. Raw Materials Consumed 10,61,29,666 10,61,29,666 9,64,14,833
2. Power & Fuel 3,38,07,140 3,38,07,140 2,85,88,344
3. Payments to & Provisions for Employees :
(a) Salary, Wages & Bonus 1,04,42,963 95,09,900
(b) Contribution to Provident Fund 5,76,169 5,68,254
(c) Gratuity & Superannuation 4,64,257 5,11,169
(d) Welfare Expenses 19,36,864 18,49,473
1,34,20,253 1,34,20,253 1,24,38,796
4. Operating Expenses
(a) Consumable Stores 13,18,724 12,15,725
(b) Stores, Spares Consumed 31,50,629 31,19,305
(c) Packing Material Consumed 60,86,134 37,89,915
(d) Repairs
Building 82,407 1,20,158
Machinery 3,55,194 4,07,219
Others 2,82,768 3,54,857
(e) Insurance Premium 11,01,499 11,02,806
(f) Rates & Taxes 6,39,527 1,43,698
(g) Stationery, Printing, Postage
Telephone, & Advertisement expenses 10,47,515 9,37,674
(h) Sales Expenses 44,43,596 44,91,610
(i) Cenvat Duty Expenses (See Note 4 of Schedule 17) 26,20,809 1,504
(j) Sales Tax Expenses 26,091 3,958
(k) Audit Fees 49,590 48,600
(l) Legal & Consultation 13,58,680 5,66,924
(m) Travelling Expenses 10,31,940 7,64,086
(n) Bank Charges & Finance Charges 12,79,804 7,22,531
(o) General Charges 36,26,820 35,41,595
(p) Obsolete fixed assets written off 3,81,000 33,445
(q) Loss on Sale of Fixed Assets 67,317 2,09,044
2,89,50,044 2,89,50,044 2,15,74,654
5. Directors' Sitting Fees 27,000 27,000 22,750
6. Share issue Expenses Written off 2,76,398 2,76,398 2,76,398
7. Deferred Revenue Expenses Written off ----- ----- 1,11,753
8. Foreign Exchange Loss (Net) 14,813 14,813 -----
T O T A L T O T A L 18,26,25,314 18,26,25,314 15,94,27,528
I N T E R E S T I N T E R E S T
On Fixed Loans 11,72,261 11,72,261 21,29,820
On Fixed Deposits 14,71,772 14,71,772 15,42,438
On Working Capital 18,32,005 18,32,005 17,37,525
On External Commercial Borrowing 16,87,857 16,87,857 22,41,335
Others 5,32,168 5,32,168 -----
66,96,063 66,96,063 76,51,118
Less: Interest received/receivable on deposits (Tax deducted
at source Rs. 12,049/-, Previous year Rs. 5,996/-) 65,526 63,173
Other Interest 467 18,541
65,993 65,993 81,714
T O T A L T O T A L 66,30,070 66,30,070 75,69,404
28
A A SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES
1. 1. The Company adopts the accrual concept in the preparation of accounts.
2. 2. Use of Estimates : Use of Estimates :
The presentation of financial statements requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Difference between the actual result and estimates are recognised in the period
in which the results are known / materialised.
3. 3. Fixed Assets: Fixed Assets:
Fixed Assets are recorded at historical cost.
Fixed Assets are reviewed for Impairment losses whenever events or changes in circumstances indicate that
carrying amount may not be recoverable. An impairment loss is then recognised for the amount by which the
carrying amount of assets exceeds its recoverable amount which is the higher of an assets net selling price and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are
separately identifiable cash flows.
4. Depreciation : 4. Depreciation :
Depreciation has been provided on straight line method in accordance with section 205 (2)(b) of the Companies
Act, 1956 at the rates and in the manner specified in Schedule XIV of the said Act.
5. 5. Inventories: Inventories:
Inventories are valued at lower of cost or net realisable value. Cost is arrived at as under :
Stores & Fuel : FIFO basis
Raw Materials : Weighted Average basis
Semi-finished Goods : Absorption Cost basis.
6. 6. Revenue recognition: Revenue recognition:
Revenue is recognised when there is reasonable certainty of its ultimate realisation/collection.
7. 7. Translation of Foreign Currency Items: Translation of Foreign Currency Items:
Transactions in Foreign Currencies are recorded at the original rate of exchange in force on the date of transactions. At
the year end, monetary items denominated in foreign currency are reported using the closing rate of exchange. Exchange
differences arising on realisation / payment of foreign exchange are accounted in the year of realisation / payment.
The value of fixed assets acquired through foreign currency loans are adjusted at the end of the financial year by any
change in the liability arising out of expressing the outstanding foreign currency loan at the closing rates of exchange
prevailing at the date of the Balance Sheet.
8. 8. Investment is stated at cost of acquisition.
9. 9. Employees Benefits : Employees Benefits :
(1) (1) Retirement Benefits : Retirement Benefits :
Provision for Gratuity on actuarial basis and for Superannuation as per the rules of the Company is made.
(2) (2) Leave Encashment : Leave Encashment :
Provision for leave encashment is made on actuarial basis.
10. 10. Sales are inclusive of Cenvat duty.
11. 11. Cenvat Credit : Cenvat Credit :
Cenvat Credit is accounted for on accrual basis on purchase of materials.
12. 12. Miscellaneous Expenditure : Miscellaneous Expenditure :
Share Issue Expenses are amortised over a period of ten years.
13. 13. Earning per Share : Earning per Share :
The Company reports basic / diluted Earning Per Share (EPS) in accordance with Accounting Standard 20 on Earning
Per Share. Basic / diluted EPS is computed by dividing the net profit or loss for the year by the number of equity shares
outstanding during the year. The net profit for the year is after deducting preference dividend and any attributable tax
thereto for the year.
14. 14. Taxes on Income : Taxes on Income :
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the
provisions of Income-tax Act, 1961. Deferred tax is recognised, on timing differences, being the difference between
taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent
periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there
is a virtual certainty that there will be sufficient future taxable income available to realise such losses.
29
15. 15. Borrowing Costs : Borrowing Costs :
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the
cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended
use. All other borrowing costs are charged to revenue.
16. 16. Contingent Liabilities : Contingent Liabilities :
Contingent Liabilities are disclosed by way of note to the Balance Sheet. Provision is made in the accounts in respect
of those liabilities which are likely to materialise after the year end till the finalisation of accounts and have material
effect on the position stated in the Balance Sheet.
B. B. NOTES ON ACCOUNTS NOTES ON ACCOUNTS
Previous Year
Rs. Rs. Rs.
1. Figures of previous year have been re-grouped, wherever necessary.
2. Estimated amount of contracts remaining to be executed on capital account
and not provided for (Net of advances) 3,72,156 3,72,156 26,07,150
3. Contingent Liabilities :
(a) Demand under Excise disputed in appeal 19,31,041 19,31,041 15,79,228
(b) Demand u/s. 156 of Income-tax Act., 1961 disputed in appeal NIL NIL 20,30,485
4. Excise Duty expense includes Rs. 25.99 lacs towards cenvat duty for the
period from J anuary, 2003 to August, 2004 (inclusive of Rs. 4.86 lacs for
5 months of current year.) This has been paid due to change in interpretation
of Tariff Heading of the by-product of the Company.
5. Profit & Loss Account includes
(A) Managing Director's Remuneration
Salary 5,32,645 5,32,645 4,94,323
Gratuity & Superannuation 87,682 87,682 85,944
Perquisites 5,04,288 5,04,288 5,54,898
Commission 3,00,000 3,00,000 -----
14,24,615 14,24,615 11,35,165
(B) Wholetime Director's Remuneration
Salary 3,79,161 3,79,161 3,52,645
Gratuity & Superannuation 34,172 34,172 55,959
Perquisites 2,62,476 2,62,476 2,61,539
Commission 1,50,000 1,50,000 -----
8,25,809 8,25,809 6,70,143
6. Computation of Net Profit as per Section 349 read with section 309 (5) and section 198 of the Companies Act, 1956 :
Amount (Rs.)
Profit before tax as per Profit & Loss A/c. 2,97,11,473
Add : Managerial Remuneration 22,50,424
Directors' Sitting Fees 27,000
Depreciation (as per accounts) 1,16,23,658
Loss on Sale / Write off of obsolete fixed assets 4,48,317
Share Issue Expenses written off 2,76,398
Sub Total 4,43,37,270
Less : Depreciation u/s. 350 1,16,23,658
Net Profit 3,27,13,612
Remuneration @ 10 % 32,71,361
Commission :
(i) 1% of Net Profit subject to overall ceiling laid down in
sections 198 and 309 to Managing Director 3,27,136
Restricted to 3,00,000
30
}
12. 12. Related Party Disclosures : Related Party Disclosures :
(a) List of Related Parties with whom transactions have taken place and Relationship :
Name of Related Party Name of Related Party Relationship Relationship
Shri Aja Electro Chem Pvt. Ltd. Enterprises over which key management personnel and their
Shri Abhyudaya Chemicals Pvt. Ltd. relatives are able to exercise significant influence.
Shri Arya Investment Pvt. Ltd. (Associate Companies)
Essenar Investments Pvt. Ltd.
Limat Developments Ltd. Promoter - Shareholder having substantial shareholding.
Shri Dharmesh R. Harivallabhdas
Smt. Sandhya N. J ariwala
}
31
7. Profit and Loss Account includes :
Payment to Auditors in other capacity for :
(i) Tax Audit 16,530 16,530 16,200
(ii) Tax Matter 63,000 63,000 35,500
(iii) Certification Work 65,460 65,460 41,580
(iv) Other Matters 23,032 23,032 64,800
(v) Out of Pocket expenses 970 970 832
8. Since the Company operates in a single segment i.e.
"Speciality Oleo Chemicals" the disclosure requirements
of Accounting Standard (AS) 17 - "Segment Reporting"
issued by Institute of Chartered Accountants of India is
not applicable.
9. The provision for Income-Tax is made under section 115J B
of the Income-Tax Act.
10. The Assessing Officer passed an order for Income-Tax
Assessment Year 2002-2003, inter alia, disallowing
Company's claim of Depreciation of Rs. 95,50,511 which
is part of the claimed amount. The Company has preferred
an appeal against this Order. As per the decision of judicial
authorities on similar disallowances, disallowance made by
the Assessing Officer is likely to be deleted.
11. Components of Deferred Tax Liability are as under :
As on As on As on
31-3-2005 31-3-2005 31-3-2004
(A) Deferred Tax Liability :
Depreciation 2,96,18,922 2,96,18,922 2,93,55,461
Total (A) 2,96,18,922 2,96,18,922 2,93,55,461
(B) Defferred Tax Asset :
(a) Unabsorbed loss / Depreciation 93,60,198 93,60,198 2,53,99,444
(b) Expenses allowable for tax purpose when paid 7,68,211 7,68,211 4,45,655
Total (B) 1,01,28,409 1,01,28,409 2,58,45,099
(C) Net Deferred Tax Liability (A) - (B) 1,94,90,513 1,94,90,513 35,10,362
Previous Year
Rs. Rs. Rs.
(ii) 0.50% of Net Profit subject to overall ceiling laid down
in sections 198 and 309 to Executive Director 1,63,568
Restricted to 1,50,000
}
Key Management Personnel
Relatives of key Management Personnel
Nature of Nature of Associate Associate Key Management Key Management Promoter Promoter Total Total
Transactions Transactions Companies Companies Personnel & Personnel & Shareholder Shareholder
Relatives of such Relatives of such
Personnel Personnel
A) A) LOAN TAKEN / REPAID LOAN TAKEN / REPAID
i) Shri Aja Electro Chem Pvt. Ltd. 36.00 36.00 ----- ----- ----- ----- 36.00 36.00
(36.00) (----) (----) (36.00)
Balance as at 31st March, 2005 0 05.00 5.00 ----- ----- ----- ----- 0 05.00 5.00
(18.00) (----) (----) (18.00)
ii) Shri Abhyudaya Chemicals Pvt. Ltd. 24.00 24.00 ----- ----- ----- ----- 24.00 24.00
(24.00) (----) (----) (24.00)
Balance as at 31st March, 2005 0 08.00 8.00 ----- ----- ----- ----- 0 08.00 8.00
(12.00) (----) (----) (12.00)
iii) Shri Arya Investment Pvt. Ltd. 40.00 40.00 ----- ----- ----- ----- 40.00 40.00
(35.00) (----) (----) (35.00)
Balance as at 31st March, 2005 25.00 25.00 ----- ----- ----- ----- 25.00 25.00
(20.00) (----) (----) (20.00)
iv) Essenar Investments Pvt. Ltd. 15.00 15.00 ----- ----- ----- ----- 15.00 15.00
(----) (----) (----) (----)
Balance as at 31st March, 2005 15.00 15.00 ----- ----- ----- ----- 15.00 15.00
(----) (----) (----) (----)
v) Limat Developments Ltd. (OCB) ------ ------ ------ ------ 264.02 264.02 264.02 264.02
(----) (----) (55.31) (55.31)
Balance as at 31st March, 2005 ------ ------ ------ ------ NIL NIL NIL NIL
(----) (----) (264.00) (264.00)
B) B) INTEREST PAID INTEREST PAID
i) Shri Aja Electro Chem Pvt. Ltd. 1.89 1.89 ------ ------ ------ ------ 1.89 1.89
(1.84) (----) (----) (1.84)
ii) Shri Abhyudaya Chemicals Pvt. Ltd. 1.38 1.38 ------ ------ ------ ------ 1.38 1.38
(1.27) (----) (----) (1.27)
iii) Shri Arya Investment Pvt. Ltd. 2.18 2.18 ------ ------ ------ ------ 2.18 2.18
(2.82) (----) (----) (2.82)
iv) Essenar Investments Pvt. Ltd. 0.06 0.06 ------ ------ ------ ------ 0.06 0.06
(----) (----) (----) (----)
v) Limat Developments Ltd. (OCB) ------ ------ ------ ------ 16.88 16.88 16.88 16.88
(----) (----) (22.41) (22.41)
C) C) DIVIDEND PAID DIVIDEND PAID
i) Limat Developments Ltd. (OCB) ------ ------ ------ ------ 5.37 5.37 5.37 5.37
(----) (----) (5.60) (5.60)
ii) Shri Arya Investment Pvt. Ltd. 1.92 1.92 ------ ------ (----) (----) 1.92 1.92
(----) (----) (----) (----)
iii) Shri Dharmesh R. Harivallabhdas ------ ------ 2.10 2.10 (----) (----) 2.10 2.10
(----) (4.20) (----) (4.20)
iv) Smt. Sandhya N. J ariwala ------ ------ 1.07 1.07 ------ ------ 1.07 1.07
(----) (1.12) (----) (1.12)
v) Shri Nahoosh J . J ariwala ------ ------ 1.61 1.61 ------ ------ 1.61 1.61
(----) (1.68) (----) (1.68)
32
(b) Details of transactions with related parties : (Rs. in Lacs)
D) D) MANAGERIAL REMUNERATION MANAGERIAL REMUNERATION
i) Shri Rajan R. Harivallabhdas ------ ------ 14.25 14.25 ------ ------ 14.25 14.25
(----) (11.35) (----) (11.35)
ii) Shri Nahoosh J . J ariwala ------ ------ 8.26 8.26 ------ ------ 8.26 8.26
(----) (6.70) (----) (6.70)
(Figures in brackets are in respect of previous year.)
(C) List of other Companies under common control :
1. Angho Investment Pvt. Ltd.
3. Shri Ajita Investment Pvt. Ltd.
5. Arpan Investment Pvt. Ltd.
7. Ardent Investment Pvt. Ltd.
9. Agam Investment Pvt. Ltd.
11. Dharamsheel Enterprise
13. UKM Investment Pvt. Ltd.
2. Shri Amodaya Investment Pvt. Ltd.
4. Shri Amala Investment Pvt. Ltd.
6. Rekhank Investment Pvt. Ltd.
8. Archisa Investment Pvt. Ltd.
10. Anugat Investment Pvt. Ltd.
12. PCD Investment Pvt. Ltd.
14. Harihar Manufacturing & Trading Pvt. Ltd.
Note : Transactions with related parties which are not material in nature and carried out in normal course of business
such as payment of electricity bills, telephone bills, office maintenance charges etc. are not shown.
Profit after taxation as per Profit & Loss Account 1,13,31,322 1,13,31,322 1,04,47,377
Add / (Less) : Excess / (Short) provision of
Income Tax of earlier year (15,68,136) (15,68,136) 24,219
97,63,186 97,63,186 1,04,71,596
Less : Dividend on Preference Shares and Tax thereon 7,27,131 7,27,131 7,89,688
90,36,055 90,36,055 96,81,908
Weighted average number of Equity Shares 95,00,000 95,00,000 95,00,000
Basic / Diluted earning per Equity Share 0.95 0.95 1.02
Previous Year
Rs. Rs. Rs.
14. INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3, 4C & 4D OF PART II OF SCHEDULE VI INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3, 4C & 4D OF PART II OF SCHEDULE VI
OF THE COMPANIES ACT, 1956. OF THE COMPANIES ACT, 1956.
(a) As per the Memorandum under the Industrial ( Development and Regulation ) Act, 1951 submitted to the
Central Government for Industrial approval which has been acknowledged by Government of India, Ministry
of Commerce & Industry on 12th October, 2001.
PARTICULARS ANNUAL CAPACITY
(in M.Tons)
(i) Distilled Fatty Acid 6500
(ii) Fractions of Vegetable Fats or Oils 3000
(iii) Gums & Residue 300
(iv) Glycerine Crude and Refined 300
(v) Oleic Acid 1000
(vi) Fatty Amines / Amides, Dimer Acid etc. 4000
(vii) Monoglycerides & Partial Glyceride Mixture 2000
(b) The total installed capacity of the company is 6,000 M.Tons per annum measured in terms of throughput of raw
material. (As certified by the management.)
33
13. Earning per Equity Share :
(c) Details of products Manufactured, Turnover, Opening Stock and Closing stock :
Particulars Unit Opening Stock Production Turnover Closing Stock
Quantity Amount Quantity Quantity Amount Quantity Amount
Rs. Rs. Rs.
1. Deodorizer Distillate M.T. 420.025 420.025 4,02,29,841
(Mixed Tocopherols) M.T. () () (300.000) (300.000) (2,61,37,116) () ()
2. Linoleic Acid / M.T. 902.778 902.778 4,25,76,567
Oleic Acid M.T. () () (1158.033) (1158.033) (5,85,46,040) () ()
3. Dimer Acid M.T. 633.703 633.703 4,41,90,496
M.T. () () (543.226) (543.226) (3,93,44,507) () ()
4. Other Fatty Acids M.T. 1825.226 1825.226 4,34,40,300
M.T. () () (1081.715) (1081.715) (2,56,47,452) () ()
5. Others 5,49,88,323
() (4,53,85,055) ()
Add : Cenvat Duty 2,20,47,210
(2,00,41,427)
TOTAL RS. 24,74,72,737
(21,51,01,597)
(d) Raw Materials consumed:
Previous Year
Quantity Quantity Value Value Quantity Value
M.T. M.T. Rs. Rs. M.T. Rs.
1. Vegetable Oil based Fatty Acid Distillate 2164.928 2164.928 4,29,00,254 4,29,00,254 1363.531 2,71,35,501
2. Acid Oil 3412.900 3412.900 5,60,35,649 5,60,35,649 3349.203 6,36,63,243
3. Others 298.193 298.193 52,98,926 52,98,926 153.519 38,13,400
4. Chemicals 66.081 66.081 18,94,837 18,94,837 64.287 18,02,689
5942.102 5942.102 10,61,29,666 10,61,29,666 4930.540 9,64,14,833
(e) Value of Imported and Indigenous Raw Materials, Stores and spares (Including consumble stores) and percentage
thereof to the total consumption :
Value Value % % Value %
Rs. Rs. Rs.
(1) Raw Materials :
Imported 34,57,976 34,57,976 3.26 3.26 71,84,253 7.45
Indigenous 10,26,71,690 10,26,71,690 96.74 96.74 8,92,30,580 92.55
10,61,29,666 10,61,29,666 100.00 100.00 9,64,14,833 100.00
(2) Stores, Spares (Including Consumable store
and packing materials)
Indigenous 1,05,55,487 1,05,55,487 100.00 100.00 81,24,945 100.00
(f) Value of Imports calculated on C.I.F. Basis: Previous Year
Rs. Rs... .. .. .. Rs.......
Raw Material 37,05,176 37,05,176 65,83,016
Capital Goods 7,66,622 7,66,622 -----
(g) Expenditure in Foreign Currency (Net) :
For Interest on ECB Loan 16,87,857 16,87,857 22,41,335
For Kashruth Certification Fees 5,36,119 5,36,119 4,72,500
Others 3,30,959 3,30,959 2,34,153
25,54,935 25,54,935 29,47,988
34
SIGNATURES TO SCHEDULES 1 TO 17 SIGNATURES TO SCHEDULES 1 TO 17
AS PER OUR SEPARATE REPORT OF EVEN DATE Rajan R. Harivallabhdas Rajan R. Harivallabhdas
Executive Director
& Company Secretary
P A R T N E R
(h) Remittance in foreign currency on account of Dividend on Cumulative Preference Shares :
(1) No. of Non-resident Shareholder (OCB) : 1 (One)
(2) No. of Cumulative Preference Shares held
by such shareholder : 20,000
(3) Period for which Dividend relates : 01-04-2003 to 28-02-2005
(4) Amount remitted (Net) : Rs. 5,36,600
Previous Year
Rs. Rs. Rs.
(i) Earnings in Foreign Exchange
F.O.B. Basis on Exports 8,32,77,012 8,32,77,012 5,08,47,549
15. Balance Sheet Abstract and Companys General Business Profile : As per Annexure I
AHMEDABAD
AHMEDABAD
35
ANNEXURE ANNEXURE I I
BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE
I. Registration Details : Registration Details :
Registration No.: 7 8 4 5 o f 1 9 8 5 - 8 6 State Code : 0 4
Balance Sheet Date : 3 1 0 3 2 0 0 5
Date Month Year
II. Capital Raised during the year: Capital Raised during the year: (Amount in Rs. Thousands)
Public Issue Right Issue Bonus Issue Private Placement
N I L N I L N I L N I L
III. Position of Mobilisation and Deployment of Fund Position of Mobilisation and Deployment of Fund (Amount in Rs. Thousands)
Total Liabilities Total Assets
2 5 9 0 1 6 2 5 9 0 1 6
Sources of Funds
Paid-Up Capital Reserves & Surplus
1 9 5 0 0 0 3 9 3 4 2
Secured Loans Unsecured Loans
6 7 9 5 2 1 4 9 0 9
Deferred Tax Liability
1 9 4 9 0
Application of Funds
Net Fixed Assets Investments
1 7 3 8 8 0 N I L
Net Current Assets Misc. Expenditure
6 2 5 3 7 2 7 6
Accumulated Losses
N I L
IV. Performance of Company Performance of Company (Amount in Rs.Thousands)
Turnover Total Expenditure
2 2 5 8 3 8 1 9 6 1 2 7
Profit before tax Profit after Tax
2 9 7 1 1 1 1 3 3 1
Earning per Share in Rs. Dividend rate %
0 . 9 5 8 . 0 0
V. Generic Names of Principal Products/Services of Company Generic Names of Principal Products/Services of Company
(as per monetary terms)
I.T.C. Code No.(ITC Code) Product Description
3 8 2 4 9 0 9 0 D e o d o r i z e r D i s t i l l a t e
(
M i x e d T o c o p h e r o l s
)
2 9 1 7 1 9 9 0 Di m e r A c i d
3 8 2 3 1 9 0 0 L i n o l e i c A c i d
Executive Director
Ahmedabad Rajen N. J haveri Rajen N. J haveri
J une 04, 2005 General Manager (Finance) & Company Secretary
36

Ar 2005

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Ar 2005

Caricato da

Copyright:

Formati disponibili

BOARD OF DIRECTORS BOARD OF DIRECTORS

SHRI RAJ AN R. HARIVALLABHDAS SHRI RAJ AN R. HARIVALLABHDAS

Potrebbero piacerti anche