The Directors are pleased to present the Twenty Eighth Annual Report
together with the Audited Accounts of the Company for the year ended
31st March, 2012.
(Amount in Rs. lacs except earnings per share)
Year ended Year ended
Sales and Other Income 258,439 163,812
Profit before Depreciation, 22,537 10,538
Exceptional Item and Tax
Depreciation 7,753 6,862
Exceptional Item (904) Nil
Profit before Tax 15,688 3,676
Provision for Tax (5,229) (1,114)
Net Profit 10,459 2,562
Earning per share 37.51 9.19
Your Directors are pleased to recommend a dividend of Rs. 3.00 (Rupees
Three only) per equity share. The outgo on dividend will be Rs. 972.18
lacs including tax on dividend.
During the year under review, the growth in Profit was possible as a
result of increased production and productivity, higher sales
realization, better Cost management and operational efficiencies.
Ethylene Oxide Derivatives (EOD) business has witnessed improvement in
profitability due to higher prices of Ethylene and Ethylene Oxide in
the world markets. Improved capacity utilization has resulted in better
cost Management. Company has also diversified towards production of
Natural gums products, which has witnessed higher export prices
realization and resultant high profit margins.
Sales and other income for the year under review has been Rs. 2,58,439
Lacs as compared to Rs. 1,63,812 Lacs last year showing an increase by
58% vis a vis last year. Profit before depreciation, exceptional item
and tax for the year was Rs. 22,537 Lacs as compared to Rs. 10,538 Lacs
last year showing an increase by 114%. The net profit after tax for the
year was Rs. 10,459 Lacs as compared to Net Profit of Rs. 2,562 Lacs last
year showing an increase by 308%.
The borrowing cost has increased to Rs. 11,320 lacs as compared to Rs.
9,152 lacs last year, due to increase in the borrowings as well as
increase in the overall interest rates by all the banks.
During the year, your Company produced 200616 MT of Chemicals compared
to 190546 MT last year. The Company has produced 105898 KBL of Ethyl
Alcohol at Kashipur and Gorakhpur distillery and has produced 891 lacs
PET Bottle for the Potable Alcohol plant at Gorakhpur.
Company has set up two 45 TPH SLOP boilers, one at Kashipur and other
one at Gorakhpur for fuel saving and for treatment of effluent.
Company has also expanded Guar Gum plant capacity to meet huge demand
of Guar oil field derivatives in international market.
The Company is the largest manufacturer of Bio-MEG in the world made
out of agriculture feedstock i.e. Molasses and Ethanol. Bio-MEG has an
application, apart from other products, in PET bottles, which is used
for packaging of beverage products. Sale in the Chemical segment has
marginally decreased to 191265 MT compared to 193597 MT last year.
The performance of Natural Gums Division under the Chemical Segment had
been overwhelming during the year under review. The Natural Gums
products had been in high demand through the year and the same momentum
is expected in coming years too. Your company has carved a niche in
world market and now is known as a consistent quality manufacturer. In
order to tap potential and opportunities, your company has undertaken a
plan for expansion of production capacity of Natural Gums Division.
With the increased capacities, your company will position itself in
world market as one of the largest producer of guar gum powder. The
existing per month capacity is being expanded further and the expanded
capacity will be operational by October 2012.
During the year under review, your Company has achieved total export
turnover of Rs. 1,25,481 lacs as compared to Rs. 70,462 lacs last year.
Your Company expects reasonable growth in the overall export sales in
the current year. Company has been granted ''One Star Export House''
status by Government of India.
Ethyl Alcohol (Potable) & Extra Natural Alcohol
During the year, your Company registered total sales of Rs. 50,168 Lacs
compared to Rs. 34,147 Lacs last year in the Ethyl Alcohol (Potable)
division. During the year thrust was given on the export of high
quality Extra Neutral Alcohol (ENA). The export turnover of Extra
Neutral Alcohol (ENA) increased to Rs. 10,281 Lac during the year
2011-2012 as compared to Rs. 8,232 Lacs during the year 2010-11,
registering an increase of 25% over the previous year. The Company was
awarded Grand Gold Award for the second consecutive year from MONDE
SELECTION, Belgium for its high quality of Extra Neutral Alcohol.
Company has the most modern captive distillery in Asia and is having
license for operations in and sale of Country Liquor and Indian Made
Foreign Liquor (IMFL) in the States of Uttar Pradesh and Uttarakhand.
During the year, IMFL brands of the Company have been supplied to
Canteen Stores Department (CSD) of Indian Defence Forces.
Company has a tie-up with Bacardi for bottling of their products at our
Kashipur bottling unit.
Company is in process of introducing its IMFL brands in the higher
range market and extensive brand building program shall be introduced
in the current financial year.
Ennature Bio-Pharma Division (100% Export Oriented Undertaking)
Company has a 100% Export Oriented Unit (100% EOU) by the name of
Ennature Bio-pharma division. The unit has established Supercritical
Fluid Extraction- CO2 and solvent extraction facility at Dehradun. The
unit is GMP ISO 9001, ISO22000, HACCP, Kosher and Halal certified.
Unit at Dehradun has started production and R&D center duly recognized
by Ministry of Science & Technology Government of India is working
vigorously on the process of stabilizing and developing various
Phytophar maceutical and Nutraceutical products for the developed
Company during the year developed Indian grown health supplements for
the developed market with Zero residual solvents by SCF-CO2 technology.
These products have given stupendous boost to the growth of the
business of Bio-Pharma. During the year, Company has become a qualified
supplier to many large conglomerates worldwide for natural colors,
nutraceuticals, health supplements and plant based Active
Pharmaceuticals Ingredients (APIs). Company has established its name as
a quality manufacturer and supplier with stringent QC and QA controls
During the year, your Company registered total sales of Rs. 3,638 lacs as
compared to Rs. 1,538 lacs last year in the Ennature Bio-Pharma Division.
The Company has major thrust and focus on new Phytochemicals, which
company is envisaging to launch.
The Company has an Industrial Gases division producing Oxygen, Nitrogen
and Argon with an overall capacity of 13,460 NM3/h. During the year
under review, Company produced approximately 651 lacs NM3 of Oxygen and
228 lacs NM3 of Nitrogen. Both Oxygen and Nitrogen were successfully
marketed and also used for own requirement. Industrial gases division
also produced 16 lacs NM3 of Argon.
The Industrial Gases division has also produced food and industrial
grade liquid Carbon Di-oxide (CO2) at Kashipur Plant having capacities
of 160 MT/day each, to meet growing demand in the domestic market.
Company has produced 45296 MT of Carbon Di-oxide (CO2). During the
year, Industrial Gases segment registered total sales of Rs. 3,144 lacs
compared to Rs. 2,941 lacs last year.
Joint Venture for Private Freight Terminal (PFT)
The Company is setting up a Private Freight Terminal (PFT) under a
joint venture with Fourcee Infrastructure Equipments Pvt. Ltd. for
providing railways-based logistics services and other facilities at
Kashipur, Uttarakhand, as provided under extant guidelines of the
Indian Railways. The facility is coming up at the area adjacent to the
existing plant of Company at Kashipur.
The Parties have entered into a Joint Venture Agreement to co-operate
and partner with each other for the purpose of setting-up, operating
and managing the said Private Freight Terminal (PFT) in order to
provide multi-modal logistics solutions to our Company and external
customers and enhance its service delivery capacity. With the
commissioning of this facility, logistics movement for both inbound and
outbound cargo would become more dependable, reliable, economical,
would also ensure on-time delivery of goods and enable better inventory
The Company is actively pursuing growth opportunities and looking at
areas to reduce its cost of production. Company is also evaluating
plans to further expand its Ethoxylates capacity to improve its product
mix and also considering the setting up of a Power Plant to reduce its
dependence on external power. Company is also installing additional EO
reactor to enhance the EO catalyst life and to have maximum production
throughout the life of the catalyst.
Company is also installing another SLOP fired boiler at Kashipur, which
will provide additional coal saving. In addition, the Company is
actively pursuing expansion opportunities for its business other than
The Company is setting up 10 ton biomass/day capacity pilot plant to
convert lignocelluloses agricultural waste biomass to ethanol by using
the bench-scale process developed at DBT-ICT Centre for energy
Bio-Sciences, Mumbai. The Pilot Plant will use agricultural non-fodder
lignocelluloses waste (i.e. Rice Straw, Wheat Straw & Bagasse) as
feedstock to manufacture ethanol. The plant will aim at solving
technical roadblocks in Lignocelluloses ethanol Technology in order to
improve the overall situation with regard to alcohol availability. The
plant is being set-up with the Department of Bio-Technology aid/ loan.
During the year under review, Company has raised Term Loans of Rs. 2533
million and repaid total loans of Rs. 1953 million.
The Company has been regular in meeting its obligations towards payment
of principal/interest to Financial Institutions
/Banks/Debenture holders/Fixed Deposit holders.
Listing of Securities
The shares of the Company shall continue to be traded at the Bombay
Stock Exchange and the National Stock Exchange.
The Company is having controlling stake in Shakumbari Sugar & Allied
Industries Limited (SSAIL), which operates a sugar manufacturing plant
in the state of Uttar Pradesh with a crushing capacity of 5500 tonnes
per day (TCD) along with a modern distillery of 60 KL per day (KLPD)
producing high quality rectified spirit and an internal bagasse fired
co-generation plant of 11.4 MW catering to the captive power needs of
the sugar and distillery units.
The Company has completed first phase of expansion plan and the
capacity of sugar manufacturing plant has been enhanced from 3200 TCD
to 5500 TCD and co- generation plant capacity has been enhanced from 3
MW to 10.4 MW of power generation.
The net worth of Shakumbari Sugar and Allied Industries Limited (SSAIL)
has been completely eroded as on 31st March, 2012, therefore, reference
report under the provisions of Section 15 of the Sick Industrial
Companies (Special Provision) Act, 1985 has been filed before BIFR.
Company has a 100% subsidiary in Singapore to augment its activities in
South Eastern region & help the marketing of products from Chemical
Plant, Natural Gums Plant and Supercritical Fluid Extraction facility
to large buyers in US, Europe and South East Asia.
Your Company has three subsidiary companies, i.e. Shakumbari Sugar &
Allied Industries Limited (SSAIL), IGL Finance Limited and IGL CHEM
International Pte. Ltd. The Ministry of Corporate Affairs, Government
of India, vide General Circular dated 8th February 2011 and 21st
February 2011 has granted a general exemption from compliance with
section 212 of the Companies Act, 1956, subject to fulfillment of
conditions stipulated in the circular for non-inclusion of Subsidiary
Companies'' Annual Report with the Annual Report of the Holding
Company. The Company has satisfied the conditions stipulated in the
circular and hence have availed the exemption. Necessary information
relating to the subsidiaries has been included in the Consolidated
The Company undertakes that annual accounts of the subsidiary companies
and the related detailed information shall be made available to
shareholders of the Company and subsidiary companies seeking such
information at any point of time. The annual accounts of the subsidiary
companies shall also be kept for inspection by any shareholders in the
head office of the company and of the subsidiary companies concerned.
The Company shall furnish a hard copy of details of accounts of
subsidiaries to any shareholder on demand.
The amount of Fixed Deposit held as on 31st March, 2012 was Rs. 9.00
lacs. There are no overdue deposits except unclaimed deposits amounting
to Rs. 9.13 lacs.
Shri R.C. Misra, Shri Autar Krishna and Shri Jitender BalaKrishnan,
Directors of the Company, retiring by rotation and being eligible,
offer themselves for reappointment. Your Directors recommend the
reappointment of retiring Directors for your approval.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
- in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
- appropriate accounting policies have been selected and applied
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 ended 31st March, 2012 and
of the profit and loss of the Company for that period;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the annual accounts have been prepared on a going concern basis.
Management Discussion and Analysis
A separate report is appended herewith.
The Board of Directors supports the broad principles of Corporate
Governance. The report on Corporate Governance as stipulated in clause
49, as amended, of the listing agreement with the stock exchanges for
the year ended 31st March, 2012 and Auditor''s Certificate on Corporate
Governance are appended herewith.
Auditors & Audit Report
The Auditors, M/s. Lodha & Co., Chartered Accountants, retiring at the
ensuing Annual General Meeting and offer themselves for reappointment.
They have confirmed that they are eligible under Section 224(1B) of the
Companies Act, 1956 for reappointment.
The Auditors in their Audit Report have invited the attention of the
Shareholders towards non provisioning by the Company against the
investment in its subsidiary Company, Shakumbari Sugar & Allied
Industries Limited (SSAIL) amounting to Rs. 5,427.50 lacs and loans
amounting to Rs. 1,546.67 lacs. The Company has already provided its
clarification as contained in the note no.34
(ii) & (iii) i.e. considering the intrinsic value of the assets of
SSAIL & long term nature of the investment, the management is confident
of the recoverability/reliability of the value of Investment and
loans provided to SSAIL, therefore, no provision in the opinion of the
Management at this stage is considered necessary.
Environment, Energy Conservation, Technology Absorpition, etc.
The Company is working actively on various projects efficiently,
approaching and targeting towards Clean Development Mechanism (CDM) and
reduction in GHG emissions.
The Company has installed unique technology for converting distillery
spentwash into fuel at both the plants viz. Kashipur and Gorakhpur.
Through this technology, the spentwash is concentrated through five
effect evaporator. The concentrate is utilized as fuel to substitute
coal in a specifically designed boiler. The high pressure steam so
generated is passed through the turbine for power generation and low
pressure steam after turbine is utilized in the plant for operation.
Due to this the company is saving fossil fuel in terms of coal and
substituting the essential power generation through DG sets.
The Biomass based Cogeneration Project activity taken up by the Company
at its Gorakhpur, U.P. plant is successfully registered under Clean
Development Mechanism (CDM) project by United Nations Framework
Convention on Climate Change (UNFCCC) for ten year fixed crediting
period 16/12/2010 to 15/12/2020. Under the Clean Development Mechanism,
emission-reduction (or emission removal) projects in developing
countries can earn certified emission reduction credits. These saleable
credits can be used by developed countries to meet a part of their
emission reduction targets under the Kyoto Protocol.
In accordance with the provisions of Section 217(1)(e) of the Companies
Act, 1956 and the Companies (Disclosure of particulars in the Report of
Board of Directors) Rules, 1988 the required information relating to
Conservation of Energy, Technology Absorption and Foreign Exchange
earnings and outgo is annexed hereto and forms part of this Report.
Your Directors wish to place on record their deep appreciation to
employees at all levels for their all-round efforts, dedication,
commitment and loyal services which helped in achieving satisfactory
performance during the year.
The required information as per Section 217(2A) of the Companies Act,
1956 read with Companies (Particular of Employees) Rules, 1975, forms
part of this report. However, as per the provisions of Section
219(1)(b) (iv) of the Companies Act, 1956, the report and accounts are
being sent to all shareholders of the Company excluding the Statement
of particulars of Employees under Section 217(2A) of the Act. Any
shareholder interested in obtaining a copy of the said statement may
write to the Company Secretary at Head Office of the Company.
Corporate Social Responsibility
Good governance demands adherence of social responsibility coupled with
creation of value in the larger interest of the general public. Your
Company, Directors and its dedicated employees continue to contribute
towards society by several worthwhile causes. Your Company aims to
enhance the quality of life of the community in general and has a
strong sense of social responsibility.
The range of following Corporate Social activities begins in and around
1. organizing regular Medical camps (three days a week) so that
villagers get medical assistance free of cost;
2. organizing blood donation camps;
3. facilitating plantation of trees for better environment;
4. facilitating in constructing roads, bridges, drains and installing
5. promoting schools in vicinity (Ajay Bhartia Saraswati Shisumandir
Jr. High School Kashipur);
6. providing furniture and financial assistance for renovation of
Community School at village Barkhedi, Kashipur;
7. installed hand pumps for drinking water, which is benefitting
8. extended support to the victims of flood affected during Monsoon;
9. distributing of blankets to poor during winter;
10. providing financial assistance for promotion of sports and
socio-cultural activities in the State of Uttarakhand;
11. supporting the local administration in fighting and managing fire
accidents and other disasters taking place in the surrounding area of
Your company has also installed hand pumps for drinking water in the
nearby villages of Gorakhpur Distillery and Constructed a shed at
village Kalesar for use as community center at Gorakhpur.
Your Company is supporting a community school at Dwarka, New Delhi
through Nirmal Bhartia Society for Education Promotion, and a
charitable institution by making grants, School is now operational. The
school is equipped with modern facilities and also has a good
infrastructure. The school possess qualified and experienced faculties,
which enable children to make a great future.
Your Company extending educational and on-job training to the students
of many professional Institutions and the professionals of many other
Management and Engineering Institutions, which helps them to start a
new beginning for their future professional career.
At the end your Company constantly strive hard to serve the society by
implementing such other policies which benefited people at large.
Your Directors place on record their deep appreciation of the support
given by the Central Government, States of Uttarakhand and Uttar
Pradesh, Financial Institutions and banks and looks forward to their
for and on behalf of the Board
Place : NOIDA, U.P U.S. Bhartia
Dated :25th July, 2012 Chairman and Managing Director