Your Directors are pleased to present the Thirteenth Annual Report
together with the Audited Accounts of the Company for the year ended on
31st March, 2003.
FINANCIAL RESULTS (Rs. In Lacs)
Year Ended Year Ended
Sales & Other Income 9416.32 6408.68
Profit before Interest 168.93 142.91
depreciation & tax
Less: Interest 78.24 79.89
Profit/(Loss) before 90.69 63.02
depreciation and tax
Less: Depreciation 51.13 50.32
Less: Provision for Tax 3.12 0.97
Profit/(Loss) after interest 36.44 11.73
Less : Provision for Deferred 21.71 5.49
Add : Balance Brought Forward 8.39 65.87
Deferred tax assets/liabilities (63.72) 142.91
as at 1.4.2001
Balance carried over 23.12 7.67
to the Balance Sheet
Since the profits for the year 2002-2003 are inadequate the Board of
Directors do not recommend any dividend for the year under review.
MANAGEMENT DISCUSSION & ANALYSIS
The sales and other income during the year under review was Rs.9416.32
Lacs as against Rs.6408.68 Lacs during the previous year. There has
been an increase of 46.93% in the sales & other income during the year
2002-2003. The production of Vanaspati and refined oils aggregated to
23291.291 tones as against 19961.754 tones in the previous year. During
the year the production of Vanaspati and Refined Oils increased by
16.68%. The Market conditions for edible oils industry continued to be
unstable due to continuous intervention by the Government in the form
of import duty and other changes. There has been a sharp increase in
the prices of the edible oils during the year under review which led to
the lower consumption of vanaspati. This was further compounded by
duty-free import of cheap vanaspati from Nepal for a part of the year
which was partially stemmed by quota restrictions imposed on imports
from Nepal. The Company's endeavour to improve efficiency,
profitability and strengthening the distribution network has resulted
in better performance during the year under review.
SWOT Analysis for the Company
- Brand Equity
The products of Kanha Vanaspati Ltd. under the brand name PUJA enjoy
high brand equity, and there is wide consumer preference for the
products of the Company in comparison to other competitive products.
The PUJA brand vanaspati is one of the largest selling brand in Uttar
Pradesh and Bihar.
- Distribution Network
The company has established a wide distribution network in Uttar
Pradesh. In addition to company's own offices and Depots, the company
has approx. 350 dealers/distributors. The Company is selling its
products in the rural areas'of Uttar Pradesh.
- Market Leadership
The company has established its presence in the edible oils segment in
the state of Uttar Pradesh. In Uttar Pradesh, the company has 12% share
in the vanspati industry. The company is hopeful to maintain its lead
in the industry in the coming year also.
- Product Development
The company is capable to improve the quality of existing products and
introduction of new offerings. Focus on research will continue which
will enable the company to launch the improved and new products of
superior quality to meet the consumer performance and expectations from
time to time.
- Sound Plants
The existing plant of the company is technically sound and the
modernization work is done from time to time and as per the
The company is facing competitions with other big players in the
industry which result in low margin and hence the low profitability.
- Raw Material
In the Vanaspati cost the raw material content is very high. The price
fluctuation of the raw material content leads to high volatility.
In the Vanaspati Industry, there is still a vast potential for the
enhanced consumption as the per capital consumption of vanaspati and
edible oils is only 1.4 kgs. and 8.00 kgs. respectively whereas the
minimum nutrition requirement per capita as per Ministry of Health is
12.00 kgs. Therefore, there are opportunities for the growth in the
The vanaspati and edible oils Industry is subject to intense controls
by the Government. Any changes in the Govt. Policy may affect the
Internal Control Systems
The company has evolved a systems of internal controls to ensure that
the assets are safeguarded and transactions are authorized, recorded
and correctly reported. The internal control system is supplemented by
management reviews. The scope of internal audit covers a wide veriety
of operational methods and ensures compliance with specified standard
with regard to availability and suitability of policies and procedures,
extent of adherence reliability of management information system,
authorization procedures in including steps for safeguarding of assets.
The company lays great emphasis on proper management of human resources
and believes that this is the most important ingredient for continuous
growth. Suitable steps are taken from time to time to have a proper
composition of skilled and unskilled workers and the training is
imparted to the employees working at various levels as and when
The statements in this report, particularly those which relate to
Management Discussions and Analysis are the forward looking statements,
within the meaning of applicable laws and regulations. Actual results
may be different from those, which are expressed or implied.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the company Shri Ajay Agarwal, Director of
the Company retires by rotation and being eligible offers himself for
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956 Directors of the Company state:
1. That in the preparation of the annual accounts, the applicable
accounting standards have been followed;
2. That the Directors have selected such accounting policies and
applied them consistently 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 and of the
profit or loss of the Company for that period;
3. That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
4. That your Directors have prepared the annual accounts on a going
M/s. V. Tripathi & Co. Chartered Accountants, Statutory Auditors of the
company, who hold office of the Auditor until the conclusion of this
Annual General Meeting, being eligible for re-appointment, has conveyed
their willingness and eligibility in terms of Section 224 (1B) of the
Companies Act, 1956. Your Directors recommend their appointment as
Auditors of the company to hold office from the conclusion of this
Annual General Meeting up to the conclusion of next Annual General
Auditors' Remarks are self explanatory and require no clarification
from the Directors.
The Central Government has directed Cost Audit to be carried out every
year in respect to Vanaspati. Cost Audit is in progress and the reports
thereof will be submitted to the Central Government.
There was unclaimed deposit for Rs. 14.10 Lacs as on 31st March, 2003.
DEMATERIALISATION OF SHARES
The fully paid up equity shares of your Company can be traded on the
stock exchange only in demat form w.e.f. 30.10.2000. The shareholders
have the option to hold their shares in demat form by opening a
depository A/c with DP of their choice.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS & OUTGO
The information relating to conservation of energy, technology
absorption and foreign exchange earnings & outgo as required under
section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of particulars in the report of Board of Directors) Rules,
1988 is given in the Annexure-A which forms part of the Directors'
PARTICULARS OF EMPLOYEES
There has been no employee who was getting the remuneration in excess
of the prescribed limits under section 217(2A) of the Companies Act,
1956. Therefore, the information as required under section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 has not been furnished.
Industrial relations remained cordial and harmonious at all levels
during the year under review. Your Directors are pleased to acknowledge
the sincere and dedicated efforts of the employees of the Company at
all levels and would like to thank them for the same.
A report on the Corporate Government alongwith Auditors' Certificate is
attached to the report.
All properties and insurable assets of the Company including Building,
Plant & Machinery and Stocks has been adequately insured whenever
considered necessary and to the extent required.
SEGMENT - WISE PERFORMANCE
Your Company is engaged in the manufacturing of edible oils and
vanaspati, which is in the context of Accounting Standard-17 issued by
the Institute of Chartered Accountants of India is considered the only
business segment i.e. Edible Oils Segment.
Your Directors convey their sincere thanks for the support, guidance
and cooperation extended to the Company by various agencies of the
Central government, State Governments, Financial Institutions, Banks,
Customers, Distributors and Suppliers of the Company. The Directors
also acknowledge the trust and confidence the shareholders have placed
in the Company. Your Directors also wish to place on record their
appreciation for the sincere and dedicated services of the employees of
the Company working at all levels.
By Order of the Board of Directors
for KANHA VANASPATI LIMITED
Place : Delhi V.B. Agarwal
Date : 30th July, 2003 (Jt. Managing Director)