The Members,
The Directors are pleased to present the 31st Annual Report together
with Audited Accounts of the Company for the year ended on March 31,
2011. The highlights of financial performance of your Company for the
year 2010-11 are here below:
(Rs. in crore)
Consolidated Standalone
2010-11 2009-10 2010-11 2009-10
Sales 5008.72 4831.61 3504.06 3329.18
Operating Profit (EBITDA) 546.25 729.12 436.20 604.59
Less: (i) Interest
and charges 49.20 51.99 31.48 31.72
(ii) Depreciation 363.70 337.48 314.33 287.56
Profit Before Exceptional
Items and Tax 133.58 339.73 90.39 285.31
Less: (i) Exceptional Items (15.04) 8.99 (15.04) 8.99
(ii) Tax Expenses 25.34 85.16 3.03 47.22
Profit for the year 123.28 245.58 102.40 229.10
Less: Depreciation provided/
written back of earlier years 28.68 (374) 28.68 (8.84)
Previous Years Tax adjustments (0.32) (0.01) (0.32) Nil
Net Profit 94.92 249.33 74.04 237.94
Balance in Profit & Loss
A/c. B/F 148.36 82.55 84.48 30.06
Balance available for
Appropriation 243.28 331.88 158.52 268.00
Less: Transferred to
General Reserve Nil 100.00 Nil 100.00
Adjustment on account of
amalgamation (2.80) Nil Nil Nil
Proposed Dividend on
Equity Shares Nil 71.61 Nil 71.61
Tax on dividend Nil 11.91 Nil 11.91
Balance carried to
Balance Sheet 246.08 148.36 158.52 84.48
DIVIDEND
Keeping in view the Company''s enterprising spirit of exploring diverse
business opportunities for growth, your directors desire to conserve
financial resource of the Company and hence not recommended a dividend
for the financial year 2010-11.
During the year, the Company has transferred Rs. 0.02 crore to Investor
Education and Protection Fund, pursuant to provisions of Investor
Education and Protection Fund Rules, 2001.
FINANCE
The Company believes in moderate gearing and maintains external debt at
levels that can be serviced from operating cash flows. Sustained cash
flows from core operations over the years has helped the Company in
resorting to short-term borrowings to fund its Capex plans.
BUSINESS OVERVIEW
Fiscal year 2011 in general was showing overall mixed growth
indicators. Inflation was in the headline exhibiting strong persistence
in 2010-11. It reflected both supply shocks and gradual generalisation
of price pressures. Real GDP growth in 2010-11 reverted to near trend
growth rate, following two successive years of below trend growth.
Consolidated Operating Result
The year under review continued to be satisfactory for your Company,
considering the present scenario. Your Company consistently maintained
moderate growth on net sales which on consolidated basis stood at Rs.
4751.31 crore compared to Rs. 4620.38 crore in the previous year. The
consolidated revenue mainly derived from Soaps and Surfactants,
Processed Minerals and Pharma. Your Company achieved Earning before
Interest, Taxes, Depreciation and Amortisation (EBITDA) of Rs. 546.25
crore, declined by 25.08% from Rs. 729.12 crore of the previous year.
The Net Profit on consolidated basis stood at Rs. 94.92 crore.
Standalone Operating Result
On Standalone basis, the net sale was increased to Rs. 3246.65 crore
from Rs. 3117.95 crore of the previous year. The EBITDA has declined to
Rs. 436.20 crore from Rs. 604.59 crore as compared to the previous
year. The net profit was at Rs. 74.04 crore during the year under
review compared to Rs. 237.94 crore of the previous year. The reduction
in the net profit was mainly on account of increase in the cost of
power & fuel, raw materials, higher depreciation and employee cost.
For detailed analysis of performance refer to Management Discussion and
Analysis attached to this Report.
SCHEMES OF ARRANGEMENT
The Hon''ble High Court of Gujarat has sanctioned (i) the Scheme of
Arrangement in the nature of demerger and transfer of Cement and Mining
Division of Nirma Credit and Capital Private Limited with the Company
vide its order dated March 14, 2011 and (ii) the Scheme of Arrangement
in the nature of amalgamation of Nirma
Consumer Care Limited, a Wholly Owned Subsidiary, with the Company vide
its order dated March 30, 2011. The appointed date of both the Schemes
was April 1, 2009. The effective date of both the Schemes was April 29,
2011 and May 4, 2011 respectively. The requisite effects of both the
schemes have been given in the Accounts for the year under review.
SHARE CAPITAL
Your Company has not issued any shares during the year under review.
Consequent upon the Amalgamation of Nirma Consumer Care Limited, a
Wholly Owned Subsidiary, with the Company, the Authorised Share Capital
of Rs. 50,00,000 of Nirma Consumer Care Limited has been added to the
Authorised Share Capital of the Company in accordance with the terms of
the Scheme from the effective date.
DE-LISTING OF EQUITY SHARES
As you are aware, your Board of Directors had at their meeting held on
October 9, 2010 decided to initiate the delisting of the equity shares
of the Company from both the stock exchanges namely the Bombay Stock
Exchange Limited (BSE) and the National Stock Exchange of India Limited
(NSE). On November 20, 2010, the resolution to effect the same was also
passed by the requisite majority of the members. The Promoters-
Acquirers acquired 13.65% of equity shares at a price of Rs. 260/- per
equity share being the price determined under the Securities Exchange
Board of India (Delisting of Equity Shares) Regulations, 2009, making
their total shareholdings to 90.82% of the paid-up equity of the
Company.
Considering the application for the delisting, BSE and NSE issued a
notice / circular on March 10, 2011 informing their members that the
trading of the shares of the Company would be discontinued with effect
from March 24, 2011 and delisting of equity shares with effect from
March 31, 2011. However on March 30, 2011, the stock exchanges have
issued circular keeping the delisting of the equity shares of the
Company in abeyance till further instructions, pursuant to the
directions from Securities and Exchange Board of India. The final
approval is under process. Meantime, the Acquirers have issued the
Announcement stating that the shareholders who have tendered their
shares in Special Depository Escrow Account or submitted to the
Registrar, under the ''Exit Offer'', may request to the Registrar for
their shares to be retuned to them.
PROJECTS
In respect of the cement project of the Company at Mahuva, Dist.
Bhavnagar, a special leave petition was fled before the Hon''ble Supreme
Court against the order of the Hon''ble High Court of Gujarat allowing
the construction at the site subject to certain conditions /
safeguards. In response to the order of the Hon''ble Supreme Court,
Expert Appraisal Committee (EAC) submitted its recommendations to the
Ministry of Environment and Forest (MoEF) and pursuant thereto, MoEF
issued Show-cause Notice dated May 11, 2011 as to why the Environmental
Clearance granted earlier to the Project should not be cancelled. The
Company has submitted its response to the Show-cause Notice and
hearings have taken place before MoEF in the month of July 2011.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS
In accordance to Clause 49 of the Listing Agreement, a report on
Corporate Governance and Management Discussion & Analysis are annexed
as part of the Directors'' Report.
DIRECTORS
Shri Kaushikbhai N. Patel and Shri Rakesh K. Patel, Directors of the
Company are liable to retire by rotation at the forthcoming Annual
General Meeting and being eligible, have offered themselves for
re-appointment. Your Directors recommend their re-appointment. Shri
Atulya Prasad Sarwan, Director, retires by rotation at the forthcoming
Annual General Meeting, has not offered himself for re-appointment.
Your Board recommends that the vacancy that would be caused by
retirement of Shri Atulya Prasad Sarwan, not be filled up at the
forthcoming Annual General Meeting.
As per Section 274(1)(g) of the Companies Act, 1956, none of the
directors of the Company are disqualified from being re-appointed as
directors. Pursuant to the Clause 49 of the Listing Agreement, the
detailed particulars of the directors seeking re-appointments have been
provided in the notice of the forthcoming Annual General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby stated that:
(i) in the preparation of the annual accounts for the financial year
ended March 31, 2011, the applicable accounting standards had been
followed along with proper explanation relating to material departures;
(ii) the directors had 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 as at March 31, 2011 and of the profit of the Company
for the year ended on that date;
(iii) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) the directors had prepared the annual accounts of the Company on
going concern basis.
SUBSIDIARY COMPANIES
Karnavati Holdings Inc., Searles Valley Minerals Inc., Searles Valley
Minerals Operations Inc., Searles Valley Residences LLC, Searles
Domestic Water Company LLC, Searles Valley Minerals Europe, Trona
Railway Company LLC and NATI LLC continue to be subsidiaries / step
down entities of the Company. Your Company has, on April 1, 2011,
incorporated a subsidiary in Mexico under the name NIRLIFE MEXICO SA
de CV.
Pursuant to the order of the Hon''ble High Court of Gujarat, dated March
30, 2011, Nirma Consumer Care Limited, a wholly owned subsidiary has
been amalgamated with the Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements pursuant to Clause 41 of the
Listing Agreement entered into with the stock exchanges and prepared in
accordance with Accounting Standard prescribed by the Institute of
Chartered Accountants of India, for the financial year ended March 31,
2011, is attached with this report. The Ministry of the Corporate
Affairs vide Circular No. 51/12/2007-CL-III dated February 8, 2011 has
granted General Exemption from complying with the provision of Section
212 of the Companies Act, 1956. The key financial information of the
subsidiaries has been disclosed in a brief abstract forming part of
this Annual Report.
PARTICULARS OF EMPLOYEES
The particulars of the employees are required to be given in the
annexure to the Directors'' Report pursuant to Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975 as amended from time to time. However, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto as per the provisions of
Section 219(1)(b)(iv) of the said Act. Member, who would like to have
such particulars, may write to the Company Secretary at the Registered
Office of the Company.
FIXED DEPOSITS
The Company has not accepted any Public Deposits during the year under
review.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particular as per Section 217(1)(e) of the Companies Act, 1956,
read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 relating to conservation of energy,
technology absorption and foreign exchange earnings and outgo is
annexed hereto and forms part of this Report.
AUDITOR & AUDITOR''S REPORT
M/s. Hemanshu Shah & Co., Chartered Accountants, Ahmedabad, the
Auditor, hold Office until the conclusion of the forthcoming Annual
General Meeting. They have confrmed that their re-appointment if made,
would be within the limits prescribed under Section 224(1B) of the
Companies Act, 1956. Notes forming part of Accounts, which are
specifically referred to by the Auditor in their report are
self-explanatory and therefore, do not call for any further comments.
RE-APPOINTMENT OF COST AUDITOR
Pursuant to the direction of the Ministry of Corporate Affairs for
appointment of Cost Auditor, your directors have re-appointed
Bhalchandra C. Desai as the Cost Auditor of the Company for the year
ending March 31, 2012.
INSURANCE
Assets of the Company are adequately insured.
ACKNOWLEDGEMENT
Your Directors take this opportunity to convey thanks to all
stakeholders including government authorities for extending their
continuous support and co-operation to the Company. Your Directors also
appreciate the efforts made by the each of the employee of the Company
for their continuous and dedicated efforts in achieving vision of the
Company.
For and on behalf of the Board
Place : Ahmedabad Dr. K.K. Patel
Date : July 29, 2011 Chairman
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