| Dear Members
The Directors of your Company have pleasure in presenting Twenty Fifth
Annual Report and the Audited Accounts of your Company for the year
ended 31.03 2013.
FINANCIAL RESULTS SUMMARY:
(Rs in Lakhs)
Particulars 2012-13 2011-12
Turnover including Other Income 46964.94 46849.82
Profit before Interest,
Depreciation and Tax 6041.52 9218.77
Less : Financial Charges 1081.08 888.47
Less : Depreciation 417.42 290.19
Profit before tax 4543.02 1
Deferred tax (liability)/Assets (424.11) (270.82)
Provision for current Taxation 913.62 2379.60
Income Tax of Earlier Years (1.69)
Profit after tax 3205.29 5391.38
Add: Profit brought forward
from previous year 88.23 6250.75
Amount available for
appropriation 14093.52 11642.13
Appropriation
Proposed Dividend
Preference shares 40.00 40.00
-Equity Shares 433.15 259.89
Dividend Distribution Tax 80.41 49.65
Transfer to General Reserve 320.53 404.36
Surplus Carried Forward 13219.43 10888.23
DIVIDEND:
Your Directors are pleased to recommend dividend at the rate of Rs.0.80
per share on 8% Cumulative Redeemable Preference Share of nominal value
of Rs. 10/- per share for the year 2012-13 and the Directors further
recommend dividend at the rate of Rs.3.00 per share on equity shares of
nominal value of Rs. 10/- per share for the year 2012-13.
The aforesaid dividend, subject to the approvals of the members at the
ensuing Annual General Meeting of the company, shall be payable to the
members whose name appear in the Register of members of the Company as
on the Book closure date.
OPERATIONS:
For the year under review your Company achieved a turnover of
Rs.46964.94 Lakhs as against Rs.46849.82 Lakhs for the preceding year
2011-12; Profit after Tax is of the order of Rs.3205.29 Lakhs whereas
Profit after Tax stood at Rs.5391.38 Lakhs for the previous year.
In terms of production as well as Sales volumes, the year under review
has been sluggish. With erratic monsoon, and carryover of inventories
on the part of dealers, demand for Fertilizers did not pick up,
impacting consumption: a difficult market led to pressure on margins,
and though the Sales Volumes have been maintained, the input costs have
been higher; as a consequence, profit has been of lower order.
The turnover and net profit after tax registered an increase of 0.25%
and decrease of 40.55% respectively over the corresponding figures of
previous year. During the year, there was a steep decline in demand for
P & K fertilizers. Demand contraction was driven by near drought
conditions in the addressable market of Maharashtra and steep increase
in P & K fertilizer prices due to rupee depreciation. A high price
differential between Urea and Phosphatic fertilizers also impacted the
demand for phosphatic fertilizers. These factors impacted production
and sales volumes of the Company during the year, which in turn
adversely impacted profitability of the Company for the year under
review.
During the year under review, your company achieved production of 4.45
Lakh MT of Single Super Phosphate and 0.06 Lakh MT comprising of NPK
Mixed Fertilizers, Magnesium Sulphate and Zinc Sulphate as against
production of 4.72 Lakh MT and 0.11 Lakh MT respectively in the
previous year.
The market conditions have been such that all India consumption of SSP
fertilizers declined steeply from 48 Lakh MT in 2011-12 to 39.65 Lakh
MT in 2012-13 dropping by as much as 17%. As against this, the market
share of your Company actually improved from 10.44% in 2011-12 to
11.60% in the year under review.
Considering that 2012-13 has been a difficult year for the Indian
Fertilizer Industry in general, and for the SSP segment of fertilizer
business, your company has fared comparatively better in its overall
performance in the year 2012-13 in terms of containing the impact in
adverse market conditions.
The Company has successfully commissioned its new SSP Plant at
Raebareli, in the State of Uttar Pradesh in March, 2013. The plant
which has a capacity of 132000 MT/annum would augment the production
capacity significantly and would enable the company to cater to the
needs of the farmers and be in a position to tap the market potential
of the region in more effective way.
CHANGE IN MANAGEMENT AND CONTROL:
Under a Share Purchase Agreement entered into on 24th January, 2013,
with the existing Promoters of the company, namely, Mr. Raoof Razak
Dhanani and his associates, Coromandel International Limited acquired
48.62% of the equity share capital of the Company from the promoters on
7th March 2013. Coromandel also acquired 100% of equity in Liberty
Urvarak Limited which holds 5.01% of equity in Liberty Phosphate
Limited. Coromandel's overall stake-holding in the company is set to go
further up pursuant to the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations which make it incumbent on Coromandel- as the
company acquiring substantial stake from the Promoters/existing
Stakeholders - to acquire another 26% minimum from the shareholders
through an Open Offer, which process is already on. Thus, effective 7th
of March, 2013, your company has become a Subsidiary of Coromandel
International Ltd.
Your company sees tremendous value accruing from its association with
Coromandel, which is a significant player in the Fertilizers and Farm
Inputs Business: the Company is thus in a position to leverage on
Coromandel's marketing network and draw on its expertise and resource
base to expand its own business
As a corollary to the change in management and control, the Board of
Directors of the company was re- constituted with effect from 7th of
March, 2013, with the appointment of following as the Additional
Directors on the Board of your company.
1. Mr. M. K. Tandon
2. Mr. Dipak Ghose
3. Mr. Kapil Mehan
4. Mr. S.Sankarasubramanian
5. Mr. S. Govindarajan
Upon reconstitution of the Board, the following directors resigned from
the Board with effect from 7th March, 2013:
Mr. Raoof Razak Dhanani
Mr. Shakil Zakaria Memon
Mr. Zafar Ullah Khan
Mr. Abdul Mabood Shaikh
Mr. Ajay Paliwal
Mr. Salim Sherani
Mr. Firoz Asgar Khambati
Mr. Hemant Motilal Shah
The Board wishes to place on record their appreciation of valuable
contribution made by the outgoing directors towards the growth of the
Company. Board would like to place on record the contribution made by
Mr. R. R. Dhanani in building Liberty Phosphate Limited into a market
leader in the country.
The Company has received notices under section 257 of the Companies
Act, 1956 from members proposing the candidatures of the additional
directors appointed during the year. Necessary resolutions are being
placed before the Members for their approval.
CONSOLIDATED FINANCIAL STATEMENT:
Consolidated Financial Statements incorporating the Accounts of the
Company and its wholly owned Subsidiary Liberty Pesticides and
Fertilizers Ltd., are appended. The Ministry of Corporate Affairs has
given general exemption from publishing the Annual Report of their
Companies where the Companies concerned append a Consolidated Statement
in their own Annual reports. In view of this, the Annual Report of the
Subsidiary Company, namely, Liberty Pesticides & Fertilizers Ltd., is
not annexed herein. However, the Accounts of the Subsidiary Company and
the related information will be made available to the Members of the
Company/its Subsidiary Company upon request, and the same will also be
available for inspection at the Registered Office of the
Company/Subsidiary Company.
A Statement under Section 212(8) of the Companies Act, 1956 is attached
after the Audited Financial Statements of the Company and forms part of
this Annual Report.
As required under Clause 32 of the Listing Agreement with the Stock
Exchange, at which the Equity Shares of the Company are listed and
traded, the Audited Consolidated Financial Statements form part of the
Annual Report.
LISTING OF SHARES:
The Equity Shares of your Company are listed on Bombay Stock Exchange
Limited.
DEPOSITS:
During the year under review, the Company has not invited / received
deposits from public under Section 58A of the Companies Act, 1956.
AUDITORS :
M/s. V. Shah & Associates, Chartered Accountants, Vadodara and M/s. K.
L. Vyas & Co., Chartered Accountants, Udaipur, Joint Statutory Auditors
of the Company retire at the ensuing Annual General Meeting and being
eligible have offered themselves for re-appointment.
Your Directors recommend their re-appointment and fixation of their
remuneration.
COST AUDITORS:
The Cost Accounts of the Company are required to be audited annually as
per directions from the Ministry of Corporate Affairs. Mr.H.R.Kapadia,
Cost Accountant, has been appointed as Cost Auditor for the year 2012-
13. The Cost Audit Report would be filed with the Central Government
within the prescribed period of 180 days from the end of the accounting
year viz. by 27.09.2013.
AUDITORS' REPORT:
The Auditors' observations are self explanatory and hence do not call
for any further clarification under section 217 of the Companies Act,
1956.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of sub-section (2AA) of Section 217 of the
Companies Act, 1956, your Directors confirm:
(i) that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) that the Directors have selected such Accounting Policies and
applied them consistently and made 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 as on 31st
March, 2013 and of the profit of the Company for that year;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the Annual Accounts on going
concern basis.
CORPORATE GOVERNANCE:
In compliance with the listing agreement with the Stock Exchange, the
Report on Corporate Governance is furnished as Annexure A'
MANAGEMENT DISCUSSIONS AND ANALYSIS:
In compliance with the listing agreement with the Stock Exchange, the
Report on Management Discussions and Analysis is enclosed as Annexure
'B'.
PARTICULARS OF EMPLOYEES:
As required by the provisions of Sub Section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules 1975, as amended, particulars of the employees are set out in the
Annexure to the Directors' Report However, as per provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts
are being sent to all the shareholders excluding the aforesaid
information. Any shareholder, interested in obtaining such particulars
may write to the Company Secretary at the registered office of the
company for a copy of the same.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO :
In pursuance to Section 217(1) (e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 the relevant information is annexed as Annexure
'C'
ACKNOWLEDGMENTS:
The Directors acknowledge with thanks the co-operation extended by
bankers viz. Canara Bank, State Bank of India, State Bank of Patiala &
IDBI Bank Limited, Railway Authorities, and various Central and State
Government authorities. The Directors also wish to place on record
their deep appreciation of the contribution made by the officials and
the management cadre executives as well as staff and workers who have
worked with commitment and devotion in improving the performance of the
Company.
For and on behalf of the Board of Directors
Place : Udaipur.
Date : 27th May, 2013 M. K. TANDON Chairman
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