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EID Parry (India) Ltd.

BSE: 500125 | NSE: EIDPARRY |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE126A01031 | SECTOR: Sugar

BSE Live

Dec 03, 16:00
479.50 0.00 (0.00%)
Volume
AVERAGE VOLUME
5-Day
12,053
10-Day
14,951
30-Day
23,690
11,113
  • Prev. Close

    479.50

  • Open Price

    468.15

  • Bid Price (Qty.)

    478.85 (11)

  • Offer Price (Qty.)

    480.00 (5)

NSE Live

Dec 03, 15:59
481.00 0.00 (0.00%)
Volume
AVERAGE VOLUME
5-Day
249,500
10-Day
249,004
30-Day
357,342
279,903
  • Prev. Close

    481.00

  • Open Price

    466.50

  • Bid Price (Qty.)

    481.35 (40)

  • Offer Price (Qty.)

    483.95 (47)

Annual Report

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Director’s Report

The Directors have pleasure in presenting their Report together with the audited accounts for the financial year ended 31st March, 2008. The performance highlights of the Company for the year are summarised below: FINANCIAL RESULTS Rs. Lakhs 2007-2008 2006-2007 Total Income 70044 70718 Profit Before Interest and Depreciation 1898 20109 Less : Interest 1345 (211) Depreciation 4403 3287 Profit / (Loss) Before Tax (3850) 17033 Less : Provision for Tax - Current (Net of MAT Credit) - 1619 - Deferred (2255) 2615 - Fringe Benefit Tax 63 57 Profit/ (Loss) After Tax (1658) 12742 Add : Surplus brought forward 17964 15554 Balance in Profit and Loss Account of Amalgamating Company - (1290) Amount available for Appropriation 16306 27006 APPROPRIATIONS Transfer to General Reserve - 3000 Dividend on Equity Capital : Interim paid - 4016 Proposed 446 1250 Dividend Tax 76 776 Surplus carried to Balance Sheet 15784 17964 TOTAL 16306 27006 PERFORMANCE The Companys Total Income was Rs. 70044 lakhs (including other income of Rs. 4957 lakhs) for the year ended 31st March, 2008. Due to low domestic and international prices of sugar, rupee appreciation making exports unattractive and high inventory carrying cost, the Profit before Interest and Depreciation was lower by 91% at Rs. 1898 lakhs and the loss before tax was Rs. 3850 lakhs. The net loss after tax was Rs. 1658 lakhs compared to the profit after tax of Rs. 12742 lakhs last year (which included Rs. 11812 lakhs representing income of a non recurring nature). SUGAR The year started with high sugar inventory and low sugar prices that continued to slide down till December 07. The fall in prices was arrested on the basis of good exports, lowering of sugar production estimates and reduction in cane planting. While sugar started moving out of the country from July 2007, with International market being attractive together with Freight Assistance and DEPB for every tonne of Sugar export, major sugar producers started exporting than leaving surplus stock for the domestic market. This stabilised the domestic sugar price slightly during the last quarter of the year. Given the strong fundamentals of the Industry, there is a need for a long term policy from both the State and Central Governments in terms of cane price, taxes thereon and export of Sugar and price and movement of Molasses and Ethanol. (Please refer to details provided in Management Discussion and Analysis report) The Division sold all the sugar produced during the year which resulted in the sales volume being higher by 44%. Due to decline in sugar prices by 26%, the topline growth was restricted to 17% over the previous year. The 22 MW co-generation power plant commissioned at Pugalur in March 2007, became fully operational during the year which resulted in 60% increase in export to grid and consequent topline growth. The ENA project at Nellikuppam Distillery is in progress and awaiting final clearance for operations from statutory authorities. The recently acquired sugar mill in Ariyur, reached its full capacity over the year. Improvements in plant and machinery carried out during off season in October / November 2007 helped in obtaining good efficiencies during fourth quarter. The long term de-risking strategy, of maximising the crushing capacities in existing units and converting these units into integrated sugar complexes to extract value from all parts of the cane stick, is well underway. These include setting up of a 20 MW co-generation plant at Pettavaittalai and increasing the overall crushing capacity. Proposed Green Field Distilleries The Company proposes to set up Green Field Distilleries at Pudukottai and Sivaganga entailing an overall investment of about Rs.165 crores. The construction work has commenced at Sivaganga unit. The proposed distillery at Sivaganga will obtain its molasses from Pugalur and Pettavaithalai sugar units. The environmental approvals have been obtained for Pudukottai Distillery and design and engineering work is in progress. Awards The Company has continued to focus on environment efficiency. The Nellikuppam Plant bagged State level Energy Conservation Award for our initiatives in plant automation, variable frequency drive, DC drives for equipments, boiler blow down heat recovery, un burnt fly ash re injection etc. Pudukottai Plant bagged the National award for Excellent Water Efficient Unit for our water saving measures and techniques taken in last two years. Pudukottai also was one among the three for Best Innovative Case Study award by CII. JOINT VENTURE WITH CARGILL ASIA PACIFIC HOLDINGS PTE LIMITED During the financial year ended 31st March 2008, your Company invested Rs. 4592 lakhs in the equity of the Joint Venture entity viz. Silkroad Sugar Private Ltd. This Company will be setting up a Sugar refinery in Food Processing Special Economic Zone of Parry Infrastructure Company Private Limited at Vakalapudi, Kakinada rural mandal, Kakinada. BIO PESTICIDES Bio Products The Bio Products division of the Company is the world leader in the plant extract based bio pesticides business. The divisions azadirachtin based product range - NEEMAZAL is registered in over 30 countries across the globe. In the current year, the registrations obtained in Argentina, Brazil, Australia and Korea would augur well for the growth of this business. The division, besides broad basing its market presence is also in the process of introducing new bioproducts which would improve the product basket so as to emerge as a complete Organic solution provider. The division registered a turnover of Rs.2683 lakhs. Export revenue registered a growth of 12% over the previous year with Europe contributing significantly through the new registrations obtained in Spain. Participation in the GOIs organic drive in the domestic market resulted in the revenue growth of 125% over the previous year. Nutraceuticals During the year, Organic Spirulina sales was higher at 104 MT as against the last year sales of 91 MT. However, the Rupee appreciation has affected the bottom line of the business. Production of Astaxanthin and Haematococeus Algae has been stabilised at the production facility at Oonaiyur. EID has taken a 51% stake in Phytoremedies Biolabs Private Ltd., Pune, involved in the extraction of the carotenoid Lycopene from tomato. This would expand EIDs product base and also the companys image in the Nutraceuticals market as quality supplier of carotenoids products, as EID already has Natural Mixed Carotenoids, Astaxanthin and Lutein (all carotenoid products) in its product portfolio. The performance of the various divisions during the year 2007 08 is given in detail in the Management Discussion and Analysis Report forming a part of this report. DIVIDEND Your Directors are pleased to recommend a dividend of Re. 0.50 (25%) per equity share of Rs.2 /- each for the financial year ended 31st March, 2008. CORPORATE DEVELOPMENTS JOINT VENTURE WITH ROCA SANITARIO, SA, SPAIN The Board of Directors have approved sale of 47% equity holding in Parryware Roca Private Ltd (50:50 Joint Venture company between E.I.D.- Parry (India) Ltd. and Roca Sanitario, SA, Spain) to M/s Roca Bathroom Investments S P, an affiliate of Roca Sanitario S.A, Spain, subject to the necessary approvals including that of Foreign Investment Promotion Board. The consideration for the sale of 47% holding will be Euro 111,149,111 (Euro One hundred and eleven million one hundred and forty nine thousand and one hundred and eleven). BUY-BACK OF EQUITY SHARES OF THE COMPANY The Board of Directors of your Company, at their meeting held on 29th October, 2007, approved the proposal for buy-back of fully paid-up equity shares of the Company of the face value of Rs.2/- each up to a limit of 25% of the total paid-up share capital and free reserves of the Company and not exceeding 25% of the total paid-up equity capital in a financial year at a maximum price of Rs.160/- per equity share and the same was approved by the shareholders of the Company through postal ballot on 20th December, 2007 with requisite majority. Considering that the share price since the date of announcement of the results of the buy-back on 20th December, 2007 was quoting consistently higher than Rs.160/-, your Board after reviewing the then market condition, decided that the Company would not be able to implement the proposal for buy-back of fully paid-up equity shares of the Company at a price not exceeding Rs.160/- per equity share and therefore decided to withdraw the offer to buy-back the equity shares of the Company. The buy-back proposal as approved by the shareholders therefore stands withdrawn. EMPLOYEE STOCK OPTION SCHEME Under the Employee Stock Option Scheme (the Scheme) of the Company and based on the approval of the shareholders at the Annual General Meeting held on 26th July, 2007 your Company has granted 12,75,600 Options. The Details of the Options granted up to 31st March, 2008, and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure to this Report. The Companys Auditors, Messrs. Deloitte Haskins & Sells, have certified that the Scheme has been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions passed by the Members in this regard. SUBSIDIARY COMPANIES Coromandel Fertilisers Limited Coromandel Fertilisers Limited (CFL) achieved a turnover of Rs.3800.11 crore for the year ended 31st March, 2008 and the Profit After Tax was Rs.209.76 crore. The Companys Board had recommended a dividend of 175% for the year. During the year, Godavari Fertilisers and Chemicals Limited, a Subsidiary of CFL, merged with CFL with effect from 1st April, 2007, consequent to the approval of the Scheme of Amalgamation by the Honble High Court of Andhra Pradesh. Parry Chemicals Limited Parry Chemicals Limited, a 100% subsidiary of CFL, achieved a turnover of Rs. 100.68 lakhs for the year ended 31st March, 2008. The Profit After Tax was Rs. 33.66 lakhs. Parrys Sugar Limited The company, during the year ended 31st March 2008, earned an income of Rs.12.46 lakhs and after providing for expenses amounting to Rs. 0.57 lakhs, the Profit before tax was Rs.11.89 lakhs. After providing for tax of Rs. 2.65 lakhs, the Profit After Ta x was Rs.9.24 lakhs. With the brought forward amount of Rs. 9.66 lakhs, Rs. 18.90 lakhs is carried to Balance sheet. Parry Infrastructure Company Private Limited During the year ended 31st March, 2008, the company made a loss of Rs. 0.66 lakhs. This Company had received formal approval from Government of India for development, operation and maintenance of the sector specific Special Economic Zone under Special Economic Zones Act, 2005 for Food Processing at Vakalapudi village, Kakinada Rural Mandal, Andhra Pradesh. Parry America Inc. Parry America Inc, the 100% subsidiary based in USA, reported an income of US$ 3311 thousands for the year ended 31st March, 2008. The Profit After Tax was US$ 65 thousands . Including the carried forward profit of US$ 21 thousands for the year, the profit carried forward for the year was US$ 86 thousands. The main business of this company is to sell NEEMAZAL technical in US markets and trading of technical and formulations in Western countries. Parrys Investments Limited During the year ended 31st March, 2008, the company earned an income of Rs.2.20 lakhs and after providing for expenses amounting to Rs.0.37 lakhs the Profit before tax was Rs.1.83 lakhs. After providing for tax of Rs.0.55 lakhs, the Profit After Tax was Rs.1.28 lakhs. There were no major activities relating to the Company during the year. Coromandel Bathware Limited During the year ended 31st March, 2008, the company recorded a Profit of Rs. 0.16 lakhs against a loss of Rs. 0.10 lakhs in the previous year. After adjusting this amount, the balance loss of Rs. 193.20 lakhs is carried to the balance sheet. Phytoremedies Biolabs Private Limited Phytoremedies Biolabs Private Ltd. became a subsidiary of the Company with effect from 11th February 2008, consequent to the acquisition of 51% stake in the said company. During the year ended 31st March, 2008, the company made a loss of Rs. 137.93 lakhs. SUBSIDIARY ACCOUNTS In terms of the approval granted by the Central Government u/s 212 (8) of the Companies Act, 1956, copies of the Balance Sheet, Profit & Loss Account, Reports of the Board and the Auditors of all the Subsidiary Companies have not been attached to the Balance Sheet of the Company as at 31st March, 2008. However, as directed by the Central Government, the financial data of the subsidiaries have been separately furnished forming part of the Annual Report. These documents will also be available for inspection at the Registered Office of the Company and the concerned subsidiary companies, during working hours up to the date of the Annual General Meeting. However, the related detailed information of the Annual Accounts of the Subsidiary Companies will be made available to the Holding and Subsidiary Companies investors seeking such information at any point of time. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India and the same together with Auditors Report thereon form part of the Annual Report. DIRECTORS Mr. M.M. Venkatachalam, Director resigned from the Board with effect from 29th October, 2007. The Board places on record its grateful appreciation of the valuable services rendered and contributions made by Mr. M.M. Venkatachalam as Director during his tenure. Mr. K. Raghunandan, was appointed as an additional director and also designated as Deputy Managing Director with effect from 1st February, 2008. Mr. S.B. Mathur, Director and Mr. R.A. Savoor, Director retire by rotation in terms of Articles 102 and 103 of the Articles of Association of the Company and being eligible, offer themselves for re-appointment. A brief resume, expertise and details of other directorships of these Directors are attached along with the Notice of the ensuing Annual General Meeting. The term of office of Mr.P.Rama Babu, Managing Director is due to expire on 30th April, 2008. Mr.P.Rama Babu was a key member of the Senior Management Team that brought about the transformation of EID Parry through the 80s and 90s. He held several positions in the Personnel division of EID Parry. In 1992, he moved to manage Business operations as Head of the Sugar and related businesses and joined the EID Board as an Executive Director in February 2000 and promoted as Managing Director with effect from 19th January, 2004. In all the major activities of the Company, he was actively involved which ultimately resulted in the growth, profitability and market capitalisation of EID Parry. The Board of Directors place on record their grateful appreciation of the very valuable contributions made by him and wish him all the very best in future. Consequent to retirement of Mr.P.Rama Babu, Mr.K.Raghunandan will take over as Managing Director of the Company with effect from 1st May, 2008. APPROVAL OF THE CENTRAL GOVERNMENT FOR PAYMENT OF REMUNERATION TO MANAGERIAL PERSONNEL The Shareholders have approved by way of Special Resolutions through postal ballot on 7th March, 2008, the following: i) Payment of salary, allowances and incentive, provision of perquisites and other benefits to Mr.P.Rama Babu, Managing Director for the period from 1st April, 2007 to 30th April, 2008 in the absence of adequate profits for the respective financial years; ii) Appointment of Mr.K.Raghunandan as Deputy Managing Director for a period of 3 years from 1st February, 2008 to 31st January, 2011 and for the payment of salary, allowances and incentive, provision of perquisites and other benefits in the absence of adequate profits for the respective financial years. The Company had made separate applications under Section 269 of the Companies Act, 1956 to the Central Government for the above for which requisite approvals from the Government have been received. CORPORATE GOVERNANCE Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. Mr.P.Rama Babu, Managing Director and Mr. P. Gopalakrishnan, Vice President (Finance), have given a certificate to the Board as contemplated in Clause 49 of the Listing Agreement. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND In terms of Section 205C of the Companies Act, 1956, an amount of Rs. 9.30 lakhs being unclaimed dividend, interest on fixed deposit and unclaimed deposits etc. was transferred during the year to the Investor Education and Protection Fund established by the Central Government. DEPOSITS 11 deposits totalling to Rs. 0.96 lakhs due for repayment on or before 31st March, 2008 were not claimed by the Depositors on that date. Efforts are being made to contact all such deposit holders to facilitate the refund to them. The Company has discontinued acceptance of deposits since July 2003. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief : - in the preparation of the Profit & Loss Account for the financial year ended 31st March, 2008 and the Balance Sheet as at that date (financial statements), applicable Accounting Standards have been followed; - appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the 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. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of -internal controls its inherent limitations should be recognised. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function; - the financial statements have been prepared on a going concern basis. AUDITORS M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, the Companys Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Board, on the recommendation of the Audit Committee, has proposed that M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, be re-appointed as the Statutory Auditors of the Company and to hold office till the conclusion of the next Annual General Meeting of the Company. M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai have forwarded their certificate to the Company, stating that their re- appointment, if made, will be within the limit specified in that behalf in Sub-section (1B) of Section 224 of the Companies Act, 1956. COST AUDITOR The Company received the approval of the Central Government for appointment of Mr.D.Narayanan as Cost Auditor to conduct the cost audits for the financial year 2007-08. PARTICULARS OF EMPLOYEES Under the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors Report. ACKNOWLEDGEMENT The Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and also recognise the contribution made by the employees to the Companys progress during the year under review. On behalf of the Board Chennai A. VELLAYAN April 24, 2008 Chairman

Director’s Report