ANNUAL REPORT 2005-2006
Your directors have pleasure in presenting the Twentieth Annual Report
together with the audited statement of accounts of the Company for the year
ended 31st March, 2006.
(Rs. in crores)
Sales and other income 7,555.87 3,938.42
Profit before depreciation, exceptional items & tax 180.46 87.63
Depreciation 55.45 24.21
Profit before taxation & exceptional items 125.01 63.42
Exceptional Items 5.37 -
Profit before taxation 119.64 63.42
Provision for taxation 36.25 21.00
Short/(Excess) provision for tax for earlier years 0.57 (1.17)
Profit after taxation 82.82 43.59
Balance brought forward from previous year 61.23 50.65
Amount available for appropriation 144.05 94.24
General Reserve 25.00 25.00
Debenture Redemption Reserve 0.44 1.83
- Preference 1.81 1.21
- Equity 8.02 4.21
Tax on dividend 1.38 0.76
Surplus carried to Balance Sheet 107.40 61.23
On account of implementation of Schemes of Arrangements and Amalgamation
during the year, the current year's figures are not comparable with
previous year's figures.
Your directors recommend a dividend of 4% (amounting to Rs.1.81 crores as
against previous year's Rs.1.21 crores) on 45,24,285 Redeemable Cumulative
Preference Shares of Rs.100/- each.
Your directors also recommend dividend of 22% (Rs.2.20 per share) on equity
capital of Rs.36.48 crores (including 65,52,107 equity shares to be
allotted to the members of merging Companies, pursuant to Schemes of
Arrangement and Amalgamation approved by Hon'ble High Court of Bombay) for
the year under review as against 20% Rs.2.00 per share) for the previous
year. The total cash outgo on account of dividend and tax thereon amounts
to Rs.11.21 crores as against Rs.6.18 crores in the previous year.
ISSUE OF GLOBAL DEPOSITORY RECEIPTS (GDRs):
Your company has raised US Dollars 59.99 millions by issue of 88,74,000
Equity Shares underlying Global Depository Receipts (GDRs) in the
international market in the month of March, 2006. The GDRs are listed on
Luxembourg Stock Exchange.
IMPLEMENTATION OF SCHEME OF ARRANGEMENT AND AMALGAMATION:
You are aware that Ruchi Group is engaged in the following businesses:
a) Soya Processing, Vegetable Oils & Fats and Food business (SVF Business)
The aforesaid businesses were carried on by various Companies/entities
within the Ruchi Group. To consolidate the Soya Processing and allied
businesses, three different Schemes of Arrangement and Amalgamation
involving ten different companies, including Ruchi Soya Industries Limited
were implemented with the approval of Hon'ble High Court of Bombay.
Accordingly, General Foods Limited, Ruchi Health Foods Limited, Ruchi
Credit Corporation Limited, Aneja Solvex Limited, Param Industries Limited
and Ruchi Private Limited have been amalgamated with Ruchi Soya Industries
Limited. The SVF business of Anik Industries Limited (formerly known as
Madhya Pradesh Glychem Industries Limited) has also been acquired by the
Company on slump sale basis.
The Company has sought necessary approval from Stock Exchanges for
allotment of 65,52,107 Equity Shares of Rs.10/- each to the shareholders of
amalgamating companies, as per the Schemes approved by the Hon'ble High
Court of Bombay. The Company will proceed to allot the equity shares on
receipt of above approval from the Stock Exchanges.
The consolidation and re-organisation of the businesses were carried out
with the following objectives:
a) To exploit operational and market synergies.
b) To compete effectively in international market.
c) To raise resources efficiently on the strength of larger Balance Sheet.
d) To strengthen a leadership position in the core business activities.
The consolidation has also made available to the Company twelve
strategically located production facilities across the nation for effective
distribution of its value added products.
Your Directors have pleasure in informing you that the Company has won
GLOBOIL awards for the year 2005 for Highest Export of Soyabean meal and
Highest Import of Edible Oil. Also, Dun and Bradstreet has awarded the
Company as the No. 1 food processing company in India, at American Express
Corporate Awards, 2006. The awards won by the Company are based on the pre-
merger/amalgamation performance of the Company.
During the year under review, post-amalgamation sales and other income of
Rs.7,555.87 crores was recorded as against that of Rs.3,938.42 crores in
the previous year. The Company's Profit before depreciation, exceptional
items and tax increased to Rs.180.46 crores from Rs.87.63 crores in the
previous year. Profit after tax also increased to Rs.82.82 crores against
that of Rs.43.59 crores in the previous year. The figures of previous year
are not directly comparable on account of implementation of the Schemes of
Arrangement and Amalgamation during the year.
The Company exported products of Rs.919.53 crores during the year under
review as compared to Rs.429.93 crores in the previous year.
Continuous efforts of the Company in developing brand through its varied
food products assures bright future. Competition in FMCG segment is getting
fierce and your Company is fit to face the challenge. The
merger/amalgamation, recently implemented by the Board has enabled the
Company to emerge as giant in foods business. With un-matched combination
of strategically located production facilities and a far reaching
distribution network, your Company is gearing up to improve its impressive
presence in food business.
The Company also foresee its prospects in the business of bio diesel, food,
oilseed plantation, pro-active participation in domestic edible oil/oilseed
business and the business of other agri commodities.
Mr. A.B. Rao and Mr. P.D. Nagar retire by rotation in accordance with the
provisions of Articles of Association of the Company and being eligible,
offer themselves for re-appointment.
The Board of Directors appointed Mr. Sajeve Deora and Mr. Ramesh Mishra as
additional directors during the year under review. In terms of Articles of
Association, they hold office up to the forthcoming Annual General Meeting.
The Company has received notice from a member proposing them as candidates
for the office of director. Mr. Dinesh Shahra, Managing Director was re-
appointed for a term of five years with effect from 7th January, 2006.
The Report of Directors and Accounts of the subsidiary Ruchi Worldwide
Limited' together with the Auditors' Report thereon, are attached. The
requisite statement pursuant to Section 212 of the Companies Act, 1956 is
also attached herewith. Two subsidiary companies of the Company viz. Ruchi
Health Foods Limited' and Aneja Solvex Limited' have been amalgamated with
the Company as per Schemes of Arrangement and Amalgamation sanctioned by
Hon'ble High Court of Bombay.
The Company has in practice a comprehensive system of corporate governance.
A separate report of Corporate Governance forms part of the Annual Report.
A certificate of the Company's Statutory Auditors regarding compliance of
the conditions of Corporate Governance as stipulated under Clause 49 of the
Listing Agreement is annexed to the report on Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENT:
As stipulated under Section 217(2AA) of the Companies Act, 1956, your
directors confirm as under:
(i) That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanations
relating to material departures;
(ii) That the Directors had selected appropriate 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 2005-06 and of the
profit of the Company for that period;
(iii) That 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; and
(iv) That the Directors have prepared the accounts for the financial year
ended 31st March, 2006 on a going concern' basis.
Statement of particulars of employees as required under the provisions of
Section 217(2A) of the Companies Act, 1956, read with Companies
(Particulars of Employees) Rules, 1975 is annexed herewith as Annexure 'A'.
ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Information required under section 217(1)(e) read with Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988
are given in the Annexure 'B' forming part of this Report.
The Company has not accepted any deposits from the public during the year
under review. However, one of the transferor companies accepted deposits of
Rs.8.22 lacs, in an earlier year, part of which has since been repaid.
The Auditors M/s. P.D. Kunte & Co., Chartered Accountants, retire at the
forthcoming Annual General Meeting and are eligible for re-appointment. The
notes referred to by the Auditors in their report are self explanatory and
hence do not require any explanation.
Your directors place on record their gratitude for the valued support and
assistance extended to the Company by the Shareholders, Banks, Financial
Institutions and Government Authorities and look forward to their continued
support. Your directors also express their appreciation for the dedicated
and sincere services rendered by employees of the Company.
For and on behalf of the Board of Directors
Place: Mumbai KAILASH SHAHRA
Date : December 01, 2006 Chairman
Information under section 217(1)(e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in the Report of Board of Directors)
Rules 1988, and forming part of the Directors' Report.
I. CONSERVATION OF ENERGY:
The Company has been laying emphasis on the conservation of energy and
taking several measures like effective control on utilisation of energy and
regular monitoring of its consumption etc. The adoption of these measures
to conserve energy have resulted in saving of the same.
(A) Power and Fuel Consumption:
Unit 12,27,97,697.65 4,05,19,318
Total Amount 52,53,22,203.00 18,46,36,014
Rate/Unit 4.28 4.56
(b) Own generation:
Through Diesel Generator:
Unit (KWH) 72,40,432.00 1,66,52,437
Units per Ltr. of Diesel Oil 4.14 2.62
Cost/Unit (Rs.) 6.41 7.77
Quantity (tonnes) 1,90,135.01 81,218
Total Cost (Rs.) 50,79,91,637.08 20,26,65,859
Average Rate (Rs.) 2,671.74 2,495.34
3. Others (Diesel/SKO):
Qty. (Ltr.) 67,82,878.00 63,44,030
Total Amount (Rs.) 18,52,42,580.23 12,93,71,864
Average Rate (Rs.) 27.31 20.39
(B) Consumption per unit of production:
Electricity (Unit) 50.540 58.950
Coal (M. ton) 0.074 0.084
Diesel (Ltr.) 2.636 6.542
II. TECHNOLOGY ABSORPTION:
(A) Research & Development (R&D):
1. Specific areas in which R&D work carried out by the Company:
The Company is continuing R&D in development of ready to eat soya foods.
Company is also developing economical process to make modified lecithins
and their fractions such as phosphatydil choline etc. We are also engaged
in developing echo friendly processes.
2. Benefits derived as a result of R&D:
The Company is benefitted in terms of increased popularity of its products
and increased market share. Our products are being well accepted by number
of food manufacturing companies.
3. Future plan of action:
The Company will pursue its R&D work for development of soya foods and
improvement in existing processes and products.
4. Expenditure on R&D:
Expenditure incurred on R&D are charged under primary heads of accounts and
not allocated separately.
(B) Technology absorption, adaptation and innovation:
1. Efforts in brief made towards technology absorption, adaptation and
The Company has successfully developed number of soya products and modified
lecithins. We are also developing new products which were tried in our R&D.
2. Benefits derived as a result of above efforts:
With these efforts, the company has improved quality of its products and
developed new products. Modifications in processes allow saving in
III. FOREIGN EXCHANGE EARNING & OUTGO:
The Company has established an export market for its products and has been
taking keen interest for developing new export market for its products and
to increase exports.
During the year, the foreign exchange earned on export was Rs.1,471.64
crores (Previous year Rs.555.87 crores) and the foreign exchange outgo was
Rs.3,135.04 crores (Previous year Rs.1,555.22 crores).
For and on behalf of the Board of Directors
Place: Mumbai KAILASH SHAHRA
Date : December 01, 2006 Chairman