CHEMCEL BIO-TECH LIMITED - Bombay Stock Exchange · 2011-12-14 · 4 NOTICE Notice is hereby given...
Transcript of CHEMCEL BIO-TECH LIMITED - Bombay Stock Exchange · 2011-12-14 · 4 NOTICE Notice is hereby given...
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CHEMCEL BIO-TECH LIMITED
16TH ANNUAL REPORT
2010-2011
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CHEMCEL BIO-TECH LIMITED
16TH ANNUAL REPORT
CONTENTS:P. No.
1. Notice 4
2. Directors’ Report 10
3. Management’s Discussion and Analysis 14
4. Report on Corporate Governance 17
5. Auditors’ Report 34
6. Standalone Balance Sheet, P&L, Schedules, Notes to Accounts. 44
7. Cash Flow Statement. 51
8. Abstract of Balance Sheet as per Schedule VI. 52
9. Statement pursuant to Section 212 of the Companies Act, 1956 53
10. Directors’ Report, Auditors’ Report, Financials of M/s Jetro Petro 54Biotech Private Limited
11. Auditors Report on Consolidated Accounts 66
12. Consolidated financials 75
13. E Communication Registration form 83
14. Attendance Slip & Proxy Form 84
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16TH ANNUAL GENERAL MEETINGBOARD OF DIRECTORSShri K. T. Vijay Kumar - Managing DirectorShri K. C. S. Prasad - Director – ProductionShri K. Balakrishna Rao - Non Executive ChairmanShri Ch V.Vara Prasad Rao - Executive DirectorShri P. Narasimha Murthy - Independent DirectorShri K. Sri Hari Rao - Independent Director
AUDIT COMMITTEEShri P. Narasimha Murthy - ChairmanShri K. Sri Hari Rao - MemberCh.V.Vara Prasad Rao - Member
REMUNERATION COMMITTEE
Shri P. Narasimha Murthy - ChairmanShri K. Sri Hari Rao - MemberCh.V.Vara Prasad rao - Member
COMPANY SECRETARY - S.Rahmatullah
REGISTERED OFFICE:
CHEMCEL BIO-TECH LIMITED#. 16-130/12, JRD TATA Industrial EstateAuto Nagar, 3rd Cross Road ExtensionKanuru, Vijayawada – 520 007.Ph: (0866) 2544996’ Fax: (0866) 2541175E-mail: [email protected]
AUDITORS:T. Nehru, Chartered Accountant# 59-4-2/2, 3RD Cross, Ashok Nagar,MogalrajpuramVijayawada- 520010
BANKERS:Corporation BankD.No.40-9-76/B, Avr Arcade, Sai Nagar, Benz CircleVijayawada, Andhra Pradesh - 520008Kotak Mahendra Bank Limited40-1-48/1, M.G. Road Vjayawada - 520010
SHARE AND DEPOSITORY TRANSFER AGENTSM/s. Bigshare Services Private LimitedE 2/3, Ansa Industrial Estate, Saki vihar roadSakinaka, Andheri (east), Mumbai-72LISTING OF EQUITY SHARES: - Bombay Stock Exchange Limited (BSE)-Mumbai
CHEMCEL BIO-TECH LIMITED
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NOTICE
Notice is hereby given that the 16th Annual General Meeting of the members of M/s ChemcelBio-tech Limited will be held on Thursday, the 29th day of September 2011 at 4.00 P.M at‘Silver Spoon Conference Hall’, 59A-8-12B, Gurunanak Colony Road, Teachers colony,Vijayawada 520 008 to transact the following items of business:
ORDINARY BUSINESS
1. To Receive, Consider and Adopt the Audited Balance Sheet as at 31st March 2011 and the Profit andLoss Account and cash flow statement for the year ended 31st March 2011, together with the reportsof the Directors and Auditors’ thereon.
2. To appoint a Director in the place of Shri P. Narasimha Murthy, who retires by rotation and beingeligible offers him self for re-appointment.
3. To appoint Shri.T.Nehru, Chartered Accountant, Vijayawada as Statutory Auditor of the companyto hold office from conclusion of this Annual General Meeting till conclusion of the next AnnualGeneral Meeting and authorize Board of Directors of the company to fix the remuneration.
SPECIAL BUSINESS
4. Re- Appointment of Mr. K T Vijaya Kumar as Managing Director
To consider and if thought fit to pass the following resolution as Special resolution:
“RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956, consent of the Company be and is hereby accorded to reappoint Shri K.T.Vijaya Kumar, as Managing Director of the Company for a period of Two years with effect from 1st February 2011 at the following remuneration package.
i) Salary : Rs. 65,000 /- P.M.
ii) Perquisites: In addition to salary Sri.K.T.Vijaya Kumar is entitled to thefollowing perquisites, classified into three categories.
CATEGORY (A)
1. HOUSING:
Rent free furnished accommodation value not exceeding @15% of the Salary over and aboveTen percent of the salary payable by the Managing Director or House Rent Allowance @ 15%of the salary.
2. MEDICAL REIMBURSEMENT:
1-month salary per annum for self and family
3. LEAVE TRAVEL CONCESSION:For Self and Family, value not exceeding one-month salary per Annum
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4. CLUB FEES:Fees of clubs shall be reimbursed subject to a maximum of two clubs. Admission fee or lifemember fee shall not be reimbursable.
5. INSURANCE:Insurance and/or Accident Insurance, Premium not to exceed half month Basic salary.EXPLANATION:Family means for the purpose of the above the Spouse, dependant children and dependantparents.CATAGORY (B)
1. Company’s contribution for Provident Fund, Superannuating Fund, Annuity Fund to the extentnot taxable either singly or put together as per Income-Tax Act 1961.
2. Gratuity is payable at a rate not exceeding Half Month salary for each completed year ofservice and
3. Encashment of earned leave at the rate of 30 days per annum at the end of the tenure.The above will not be included in the computation of the ceiling on per perquisites.CATEGORY (C)
1. Provision for car with driver for use on Company’s business and, Mobile Phone and Telephoneat residence and reimbursement of expenditure incurred on Traveling, Entertainment etc. Thesewill not be considered as perquisites.
2. Use of Car for Private purposes and personal long distance calls on telephone will be billed bythe company.
iii) Commission: In addition to salary and perquisites as per (i) and (ii) above he, shall beenentitled to commission at the rate of 1% of the net profits of the company computed in themanner laid down under Section 309(5) of the Companies Act, 1956, Subject to the overallceiling laid down in Section 198 and Section 309 of the Companies Act, 1956.
Notwithstanding anything contained herein above, where in any financial year during thecurrency of tenure of the Managing Director, the Company has no profits or its profits areinadequate, it may still pay as minimum remuneration by way of salary, perquisites and anyother allowances not exceeding the ceiling as specified in Schedule XIII, as minimumremuneration in addition to the following perquisites which shall not be included in thecomputation of the ceiling on remuneration specified herein above.
a. Contribution to Provident Fund, Superannuating Fund or Annuity Fund to the extent theseeither singly or put together are not taxable under the Income-Tax Act 1961.
b. Gratuity is payable at a rate not exceeding Half Month salary for each completed year ofservice, and
c. Encashment of earned leave at the end of the tenure.“RESOLVED FURTHER THAT in the event of no profits or the profits of the Company areinadequate the Managing Director shall be entitled to remuneration by way of salary and perquisitesnot exceeding the limits as per Part ii of Schedule XIII specified above and he shall be entitled forAnnual Increments as per the Rules and Policies of the Company.
5. Re-Appointment of Mr. K C S Prasad as Director (Productions)“RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309, Schedule XIII and all otherapplicable provisions, if any, of the Companies Act, 1956, consent of the company be and is herebyaccorded to reappoint Shri K.C.S.Prasad as Director (production) of the Company for a period of Twoyears with effect from 1st February 2011 at the following remuneration package.
i) Salary : Rs. 50,000 /- P.M. ii) Perquisites:In addition to salary Shri K.C.S.Prasad as Director (productionis entitled to the following perquisites, classified into threecategories.
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CATEGORY (A)
1. HOUSING:
Rent free furnished accommodation value not exceeding @15% of the Salary over and aboveTen percent of the salary payable by the Managing Director or House Rent Allowance @ 15%of the salary.
2. MEDICAL REIMBURSEMENT:
1-month salary per annum for self and family
3. LEAVE TRAVEL CONCESSION:
For Self and Family, value not exceeding one-month salary per Annum
4. CLUB FEES:
Fees of clubs shall be reimbursed subject to a maximum of two clubs. Admission fee or lifemember fee shall not be reimbursable.
5. INSURANCE:
Insurance and/or Accident Insurance, Premium not to exceed half month Basic salary.
EXPLANATION:
Family means for the purpose of the above the Spouse, dependant children and dependantparents.
CATAGORY (B)
1. Company’s contribution for Provident Fund, Superannuating Fund, Annuity Fund to the extentnot taxable either singly or put together as per Income-Tax Act 1961.
2. Gratuity is payable at a rate not exceeding Half Month salary for each completed year ofservice and
3. Encashment of earned leave at the rate of 30 days per annum at the end of the tenure.The above will not be included in the computation of the ceiling on per perquisites.CATEGORY (C)
1. Provision for car with driver for use on Company’s business and, Mobile Phone and Telephoneat residence and reimbursement of expenditure incurred on Traveling, Entertainment etc. Thesewill not be considered as perquisites.
2. Use of Car for Private purposes and personal long distance calls on telephone will be billed bythe company.
iii) Commission: In addition to salary and perquisites as per (i) and (ii) above he, shall beenentitled to commission at the rate of 1% of the net profits of the company computed in themanner laid down under Section 309(5) of the Companies Act, 1956, Subject to the overallceiling laid down in Section 198 and Section 309 of the Companies Act, 1956.
Notwithstanding anything contained herein above, where in any financial year during thecurrency of tenure of the Director (Production), the Company has no profits or its profits are
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inadequate, it may still pay as minimum remuneration by way of salary, perquisites and anyother allowances not exceeding the ceiling as specified in Schedule XIII, as minimumremuneration in addition to the following perquisites which shall not be included in thecomputation of the ceiling on remuneration specified herein above.
d. Contribution to Provident Fund, Superannuating Fund or Annuity Fund to the extent theseeither singly or put together are not taxable under the Income-Tax Act 1961.
e. Gratuity is payable at a rate not exceeding Half Month salary for each completed year ofservice, and
f. Encashment of earned leave at the end of the tenure.
“RESOLVED FURTHER THAT in the event of no profits or the profits of the Company areinadequate the Director (Production shall be entitled to remuneration by way of salary andperquisites not exceeding the limits as per Part ii of Schedule XIII specified above and he shallbe entitled for Annual Increments as per the Rules and Policies of the Company.
6. (6.) TO ABANDON BIO DIESEL PROJECT.
To consider and if thought fit to pass with or without modification’s (if any)the following resolutionas Special resolution:
“RESOLVED THAT consent of the Shareholders be and is hereby accorded to the Board of Directorsof the Company to ABANDON the establishment of project of Bio Diesel Plant along with the BioDiesel business by the company and authorise the Board of Directors to utilize the Bio DieselProject funds along with the working capital of Bio Diesel business earmarked fund for Expansionand growth of existing Agro chemicals, Bio Fertilisers and other allied agro based products businessof the company”
7. AUTHORISATION TO SELL THE LAND AT KONDAPALLI
To consider and if thought fit to pass with or without modification’s (if any)the following resolutionas Special resolution:
“ RESOLVED THAT Pursuant to Section 293(1)(a) and other applicable Provisions, if any of theCompanies Act 1956, and subject to such approvals as may be necessary, the consent of theShareholders be and is hereby accorded to the Board of Directors to sell, lease, Transfer and / orotherwise dispose of the whole or part of the land admeasuring 2260.40 Sq.yards along with thebuilding and Structures located at Survey No 110, 110/1A, Plot No.260A at Industrial Area,Kondapalli, Ibrahimpatnam mandal, Krishna dist on such terms and conditions and in such Manneras the Board of Directors of the company may decide in the interest of the company, with fullpower and authority to the Board of Directors to do all such acts, things as may be necessary toimplement this resolution.
By order of the Board of Directors
Sd/- Place: Vijayawada Date : 19.08.2011 K.T.Vijaya Kumar
Managing Director
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Notes:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TOAPPOINT A PROXY TO ATTEND THE MEETING AND VOTE INSTEAD OF HIMSELF.THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENTAPPOINTING PROXY SHOULD HOWEVER BE DEPOSITED AT THE REGISTEREDOFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THECOMMENCEMENT OF THE MEETING.
2. Register of members of the Company and Share Transfer Books will remain closed from Monday,the 26th day of September 2011 to Thursday, the 29th day of September 2011 (both days inclusive).
3. Members are requested to notify immediately any change in their address to the share transferagents and in case their shares are held in dematerialized form, this information should bepassed on to their respective depositary participants with out delay.
4. Members who have multiple accounts are requested to intimate to the company, the folios ofsuch accounts, to enable the company to consolidate all their share holdings in to one account.
5. Members who hold shares in dematerialized form are requested to bring their client ID and DPIDs for easier identification of attendance at the meeting.
6. Shareholders holding shares in physical form are invited to contribute to the cause of GreenInitiative by registering their e-mail ID, by submitting the E- COMMUNICATIONREGISTRATION FORM inserted in the Annual Report.
7. Pursuant to the requirements of the listing agreement of stock exchanges, the information of thedirectors proposed to be appointed or Re-appointed is given in the annexure to the notice.
8. Members/proxies are requested to bring their copies of Annual Report and the attendanceslip duly filled in for attending the meeting. Copies of the Annual Reports will not beprovided at the meeting.
9. Members desiring any information as regards accounts are requested to write to the Companyat least seven days before the date of the meeting to enable the management to keep theinformation ready at the meeting.
Additional Information on retiring directors as required under provisions of Listing Agreement:
Brief Profile of Shri.P. Narasimha Murthy:
Mr. Polamraju Narasimha Murthy, aged 65 years is a Post Graduate in publicAdministration, Sugar Technology and is Qualified in chemical engineering. He has morethan 34 years experience in the manufacturing field.
By order of the Board of Directors
Sd/-Place: Vijayawada K. T.Vijaya KumarDate : 19.08.2011 Managing Director
ANNEXURE TO THE NOTICE - EXPLANATORY STATEMENT
(Pursuant to Section 173(2) of Companies Act, 1956)
Item No 4:
Sri.K.T.Vijaya Kumar aged 55 yrs is a graduate in Commerce and worked with M/s. Rallis India Limitedin different capacities at Vijayawada for a period of 24 years. He was in-charge of all the marketing activitiesin Coastal Andhra Pradesh and was directly responsible for sales.
Considering the experience and expertise based on the recommendation of Remuneration Committee,Board of Director Subject to approval of Shareholders appointed Sri.K.T.Vijaya Kumar as Managing Directoron the terms and conditions as mentioned in the resolution for a period of Two years w.e.f 1st February
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2011. As per the provisions of companies Act Appointment and Fixation of remuneration to the ManagingDirector requires the approval of shareholders by way of special resolution, Hence the Board of Directorsrecommended for the approval of shareholders.
This intimation may be treated as a Notice as required under Section 302 of the Companies Act 1956.
None of the Directors except Sri K.Balakrishna Rao, Sri K.T.Vijayakumar, and Sri.K.C.S.Prasad are deemedto be concerned or interested in the above resolution.ITEM NO 5
Sri.K.C.S.Prasad aged 47 yrs holds PG Diploma in Personnel Management. Since inception of our Company,he is in-charge of Production and Procurement besides General Administration.
Considering the experience and expertise based on the recommendation of Remuneration Committee,Board of Director Subject to approval of Shareholders appointed Sri.K.C.S.Prasad as Director (Production)designated as Whole Time Director on the terms and conditions as mentioned in the resolution for aperiod of Two years w.e.f 1st February 2011. As per the provisions of companies Act, 1956 Appointmentand Fixation of remuneration to the Whole time Director requires the approval of shareholders by way ofspecial resolution, hence the Board of Directors recommended for the approval of shareholders.
This intimation may be treated as a Notice as required under Section 302 of the Companies Act 1956.
None of the Directors except Sri K.Balakrishna Rao, Sri K.T.Vijayakumar, and Sri.K.C.S.Prasad are deemedto be concerned or interested in the above resolution.
Item No.6
As the import of crude Bio Diesel for our proposed Bio Diesel Plant has become almost impossible at theprevailing market conditions and the Farmers who took advance from us to supply Jetropha seed have backedout since it is non remunerative and returned substantial part of advance amount to us , the management hasleft no alternative and becomes necessary to abandon the Bio Diesel plant along with its business. Themanagement is in view to utilize the Bio Diesel Project working capital funds for the expansion and growth ofthe existing Agrochemicals, Bio Fertilisers and other allied agro based products business. As the project statedin the Prospectus issued by the company is changing, the Board of Directors seek the approval of shareholders. Further the machinery suppliers to whom advance amount was given earlier will be recovered at theearliest possible..
None of the Directors is interested in passing the above resolution.
Item No.7
As the management with the approval of shareholders proposed to abandon the bio Diesel Project at kondaplliand the same is not suitable for the existing Agro Chemical Business, the Board of Directors proposed todispose of the Land Admeasuring 2260.40 Sq.yards along with the building and Structures located at SurveyNo 110, 110/1A, Plot No.260A at Industrial Area, Kondapalli, Ibrahimpatnam mandal, Krishna dist andutilize the funds for the expansion of existing Agro Chemicals, Bio Fertilisers and other allied agro basedproducts business. As per Section 292(1)(a) of the Companies Act 1956 approval of shareholders is requiredto sell, lease, or otherwise dispose of the property of the company, Hence the Board of Directors sought theapproval of shareholders.
None of the Directors is interested in the above resolution. By order of the Board of Directors
Sd/-Place: Vijayawada K. T.Vijaya KumarDate : 19.08.2011 Managing Director
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DIRECTORS’ REPORTDear MembersM/s Chemcel Bio-tech Limited
Your Directors are pleased to present herewith the Sixteenth Annual Report on the businessand operations of the Company together with Audited Statement of Accounts for the yearended 31st March 2011. The highlights for the year under review are follows: -
1.FINANCIAL INFORMATION:
The performance of the Company during the period under review is summarized below:-
During the year under review, your Company has achieved a gross turnover of of Rs.5022.16 Lacs as against Rs. 4576.40 Lacs in 2009-10. The Operational performance of theCompany is discussed under Management Discussion and Analysis Report.
2.DIVIDEND
Your Directors considered it prudent to conserve the resources of the Company to sustainits future growth and as such have not recommended any dividend for the current financialyear.
Your Directors have proposed to transfer an amount of Rs.86,78,000/- to the General Reserveout of the profits of the company for the year 2010-2011
3. Status of implementation of Project:
At the Present market conditions extraction of Bio Diesel by importing Bio crude oil and startoperation is unviable. Management Analysis and study revealed that exporters of Biodieselcrude acquired the technology for conversion of Crude into finished biodiesel. With this operationthey are able to find their own conversion to be more remunerative than exports. In addition tothis they are encouraged by the respective governments for generating additional employmentchannel. With this development the availability of crude Bio Diesel oil is bleak. These reasonsare convincing us to decide to dispense with the proposed project of Biodiesel which is not at allfeasible under the circumstances.
Majority of Advances given to farmers for supply of seed returned the money due to nonremunerative prices for supply of Jatropha seed and their inclination towards going for commercialcrops due to assured availability of water with new projects now coming in.. Efforts are initiatedto recover the balance amounts from farmers . Also efforts are intiated with the machinerysuppliers who are convinced to refund the advances made for machinery supplies.
Our Biodiesel plant site at Kondapalli, measuring 2260.40 Sq yards located at Plot no.260A,R.S.No.110, 110/1A, Kondapalli village, Ibrahimpatnam mandal, Krishna dist, is not sufficientfor accommodating any future enhancement of capacities as and when necessitates any future
PARTICULARS 2010-2011 2009-10 Net Sales 5022.16 4576.40 Other Income 0.16 - Interest and Financial charges 120.94 98.90 Depreciation 7.83 8.88 Profit/(Loss) before taxes 114.94 178.52 Provision for taxes 28.16 41.24 Profit / (Loss) carried to Balance Sheet
86.78 137.12
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plans for installing Agro products plant as well. For expanding in the existing site, the possibilitiesare remote as all the borders are locked by roads and existing adjoining Government ownedfactories. In view of this the Board felt to dispose of this land along with the building and structuresand utilize the funds for the expansion and growth of the existing Agro based business.
As the abondonment of Bio Diesel business is against to the Prospectus issued by the company,change in the project and change in utilization of funds requires the approval of shareholders.
In view of the above, Board recommended for the approval of share holders for abandoningthe proposal of Biodiesel plant in this AGM and the fund earmarked for the said purposecan be utilized for the general corporate purpose of your company
4. CONSOLIDATED FINANCIAL STATEMENTS:
Your Directors have pleasure in attaching the consolidated financial statements pursuantto Clause 41 of the Listing Agreement entered into with the Stock Exchange. Thesestatements were prepared in accordance with the Accounting Standard 21 prescribed bythe Institute of Chartered Accountants of India in this regard. The company has nobranches.
The Auditors’ Report to the Board of Directors does not contain any qualifications.
5. MATERIAL DEVELOPMENTS• Convened Extra Ordinary General Meeting on 14th day of February 2011 for purpose
of Increasing Authorized share capital of the company from 30 Crores to 35 Crores.
• issued and allotted 20,00,000 Equity shares of Rs 10/- each on preferential basispursuant to section 81(1A) of the Companies Act, 1956 to Europlus One Realty PvtLtd not exceeding.
• Issued 40,00,000 warrants convertible into equity shares on preferential basis pursuantto section 81(1A) of the Companies Act, 1956 to Nuvant Equity Private Limited andVaishnavi Securities Limited.
6. FIXED DEPOSITS
The Company has not accepted any fixed deposits from the public within the meaning ofsection 58A of the Companies Act, 1956.
7. SUBSIDIARY COMPANY:The statement pursuant to Section 212 of the Companies Act, 1956, containing details ofsubsidiary of the Company forms part of the Annual Report. The name of the SubsidiaryCompany is “Jetro Petro Biotech Private Limited”.
8. STATUTORY DISCLOSURES:CONSERVATION OF ENERGY AND TECHNOLOGY
ABSORPTION:
In view of the nature of activities that are being carried on by your Company, Rules 2A and 2B ofthe Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988,concerning conservation of energy and technology absorption, respectively are not applicable toyour Company. Your company is being a manufacturer of pesticides and insecticides requiresminimal energy consumption and every endeavor has been made to ensure the optimal use ofenergy, avoid wastage and conserve as far as possible.
FOREING EXCHANGE EARNINGS AND OUTGOINGSRs. In Lakhs
1.Total Foreign Exchange earned Nil2.Total Foreign Exchange utilized Nil
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RESEARCH AND DEVELOPMENT
During the year No amount was spent as Capital / Recurring Expenses towards theResearch and Development.
9. DIRECTORS
• In accordance with the requirements of the Companies Act, 1956 and the Articles ofAssociation of the Company, Shri P Narasimha Murthy retires by rotation and beingeligible offer him selves for re-appointment.
• Appointment of Mr. K T Vijaya Kumar as Managing Director of the Company forperiod of Two(2) years with effect from 1st February 2011
• Appointment of Mr. K C S Prasad as Whole Time Director of the Company for periodof Two (2) years with effect from 1st February 2011
• Mr D Sankar resigned from office of Director with effect from 11th day of April 2011and Board appreciated for the services rendered by D Sankar during his tenure as aDirector.
10. AUDITORS
Sri T. Nehru, Chartered Accountant, Vijayawada, the Statutory Auditor of the Company ,retires at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.
11. AUDIT COMMITTEE
In accordance with Clause 49 of the Listing Agreement, the company has constituted anAudit Committee, which consists of Two Independent and Non Executive Directors oneIndependent Executive Director of the company Viz. Mr P.Narasimha Murthy, DrK.Srihari Rao and Mr Ch.V.Vara Prasad Rao. The Audit committee functions in terms ofthe role and powers delegated by the Board of Directors keeping in view of the Provisionsof Clause 49 of Listing Agreement and Section 292A of the Companies Act 1956.
12. PARTICULARS OF EMPLOYEES
There are no employees in the organization coming under the provisions of section 217(2A)of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules,1975 as amended.
13. DIRECTOR’S RESPONSIBILITY STATEMENT
In accordance with sub-section (2AA) of section 217 of the Companies Act, 1956, theDirectors of the Company state:
a. That in the preparation of the accounts for the financial year ended 31st March 2011,the applicable accounting standards have been followed along with properexplanation relating to material departures.
b. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit of the Company for the year under review.
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c. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the CompaniesAct, 1956 for safe guarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
d. That the Directors have prepared the accounts for the financial year ended 31st March2011 on a ‘going concern basis’.
14. CORPORATE GOVERNANCE
A separate report on corporate governance along with Auditor’s Certificate on itscompliance is attached to this report.
15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A Separate Report of Management Discussion and Analysis as required under theProvisions of listing agreement attached to this report.
16. ACKNOWLEDGEMENTS:
Your Directors wish to express their appreciation for the cooperation and continuedsupport received from the Company’s Bankers. Your Director’s also take this opportunityto place on record their appreciation for the dedicated services rendered by the executives,managers, officers, employees and workers for the dedication and sense of commitmentshown by the employees at all levels and their contribution towards the performance ofthe Company.
By Order of the Board
Sd/-Place: VIJAYAWADA K.Balakrishna RaoDate: 19.08.2011 Non Executive Chairman
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11. Management Discussion and Analysis Report
a. Industry Over view:
With more new projects coming in for preserving in unutilised water going waste intothe sea, huge acreages are going to be covered under assured irrigation. The projects arebeing completed to make available surplus water in full to the land leftover for irrigation.This has changed the entire economical status of the farmers and their purchasingcapacities. The land value has gone up multifolded which indicates profitability forcultivating water dependant crops like Paddy, Sugarcance and other commercial crops.
This will help the Agrochemical Industry to increase their sales multifolded to meet thegrowing demand with huge additional acreages coming under assured irrigation throughnew projects in the coming years.
This will help your company to increase the sales on line with the industry . To encashthis opportunity, your Company will concentrate more on Agrobased products withthe additional funds coming into the system as working capital from the funds earmarkedfor Biodiesel working capital.
Reasons for abandoning Biodiesel project:
At the Present market conditions extraction of Bio Diesel by importing Bio crude oil andstart operation is un viable. Management Analysis and study revealed that exporters ofBiodiesel crude acquired the technology for convertion of Crude into finished biodiesel.With this operation they are able to find their own convertion to be more remunerativethan exports. In addition to this they are encouraged by the respective governments forgenerating additional exployment channel. With this development the availability ofcrude Bio Diesel oil is bleak. These reasons are convincing us to decide to dispense withthe proposed project of Biodiesel which is not at all feasible under the circumstances.
Majority of Advances given to farmers for supply of seed returned the money due tonon remunerative prices for supply of Jatropha seed and their inclination towards goingfor more commercial crops due to assured availability of water with new projects nowcoming in.. Efforts are initiated to recover the balance amounts from farmers . Alsoefforts are intiated with the machinery suppliers who are convinced to refund theadvances made for machinery supplies.
Our Biodiesel plant site at Kondapalli, measuring 2260.40 Sq yards located at Plotno.260A, R.S.No.110, 110/1A, Kondapalli village, Ibrahimpatnam mandal, Krishna dist,is not sufficient for accommodating any future enhancement of capacities as and whennecessitates any future plans for installing Agro products plant as well. For expandingthe existing site, the possibilities are remote as all the borders are locked by roads andexisting adjoining Government owned factories. In view of this the Board felt to disposeof this land along with the building and structures and utilize the funds for the expansionand growth of the existing Agro based business.
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As the abondonment of Bio Diesel business is against to the Prospectus issued by thecompany, change in the project and change in utilization of funds requires the approvalof shareholders.
In view of the above, Board recommended for the approval of share holders forabandoning the proposal of Biodiesel plant in this AGM and the fund earmarked forthe said purpose can be utilized for the general corporate purpose of your company
b. Company Profile
The Company being promoted by experienced professionals having associated withthe agro chemicals industry for over three decades, is a premier manufacturer engagedin the manufacturing of agro-chemicals and bio products. The company’s mainproducts are in three forms viz., Liquids, granules and dusts. The Company is engagedin the manufacturing of agro-chemicals and bio products.
The Company’s Registered office and factory are located in their own premises at JRDTata Industrial estate, Kanuru, Vijayawada, The total area of the plot of land is about1849.02 sq.yards. The Company has two RCC buildings with 3 floors in each buildingconstructed on the plot and all the necessary plant & Machinery & other infrastructure,having spare capacity to meet the future expansions.
c. Opportunities
With new areas coming under cultivation in a massive way due to Government takingup new projects for preserving water hither to going waste into the sea, the prospects forthe sale of agrobased products will increase multifolded in the coming years. This isgiving us an opportunity to increase our concentration to meet the additional demandbeing created by the additional huge acreages coming under cultivation. Your companyis planning to increase products range putting more stress on bio products which areyielding more margins.
d. Threats, Risks & Concerns
Unhealthy competition amongst the manufacturers will force to reduce the marginsparticularly in agrochemicals.
As this is mainly an agro based industry, the behavior of monsoon plays an active rolewith scanty or excessive rains causing drought/floods and affecting the sales.
Remunerative prices to farmers, who is our ultimate consumer, for their produce willalso play a vital role in our prospects as their purchasing capacity will be affected.
e. Segment Wise Performance:
The Company is involved in manufacture of Agro Chemicals and bio-fertilizers. As theCompany is doing business in Agrobased products only, segment wise analysis ofperformance is not required.
16
f. Outlook
However, the difficulties ahead of us should not stop us from putting efforts. There is ahuge market potential for agrochemicals in India. We believe that the Government fromtime to time would announce policies and will support a significant and stable market.Further strengthening of the policy guidelines, hastening the policy implementation,initiatives by the state governments, will help us in achieving our mission.
g. Discussion on financial performance with respect to operationalperformance
During the year under review the Company has achieved a turnover of Rs. 5022.16Lakhs as against Rs. 4576.40 Lakhs in the previous year. The Company has earned a NetProfit of Rs. 86.78 Lakhs as against Rs.137.12 Lakhs in the previous year. The Companyhas made a provision of Rs.28.16 Lakhs for income tax, under consideration. An amountof Rs.137.12 Lakhs from the profits were made to the General Reserve.
The Earning per share (EPS) of the Company as on 31.03.2011 was Rs 0.32/- .
h. Material developments in Human Resources/Industrial Relations front
The Company recognizes the importance and contribution of its employees to thegrowth and development of the Company. The Company continued to maintain cordialrelations with employees and staff.
Cautionary Statement
Statements in the management discussion and analysis describing the Company’sobjectives, projections, estimates, expectations may be considered to be forward lookingstatements and actual results could differ materially from those expressed or implied.Factors which could make a significant difference to the Company’s operations includedemand supply conditions, market prices, input component costs and availability,monsoon and natural calamities, changes in government regulations and tax lawsbesides other factors such as litigation, over which the Company may not have anycontrol.
17
REPORT ON CORPORATE GOVERNANCE (Pursuant to clause 49 of the Listing Agreement with the Stock
Exchange)
1. A brief statement on Company’s philosophy on code of governance Your Company is committed to the highest level of transparency, in all aspects of its operations and interaction with its shareholders. This report on Corporate Governance is to fulfill this commitment. The Company believes that good Corporate Governance practices should be enshrined in all activities of the Company. This would ensure efficient conduct of affairs of the Company and help the company to achieve goal of maximizing value for all its stakeholders. Your Company’s business objective is to create value that can be sustained over the long term for consumers, shareholders, employees & business partners. Your Company is conscious of the fact that the success of a company is a reflection of the professional conduct and ethical values of its management & employees. Your Company affirms its commitment to follow good corporate governance practices proactively. This Chapter of the report, plus the information given under ‘Management Discussion and Analysis’ and ‘Shareholder Information’ constitutes the report on Corporate Governance for the year 2010-2011.
2. Board of Directors:
(i) The Company has combination of Promoter Directors, Independent
Non Executive Directors and Executive Directors. Chairman is Promoter Non executive Director. The composition of Independent Directors is fifty percent and is in compliance with Clause 49 of the Listing Agreement entered with the Stock Exchange.
(ii) None of the Directors on the Board is a member of more than 10
committees or Chairman of more than 5 committees across all the companies in which he is a Director. The Directors have made necessary disclosures regarding committee positions in other public companies as at 31st March 2011.
(iii) The names and categories of the Directors on the Board, their
attendance at Board Meetings during the year and at the last Annual General Meeting as also the number of directorships and committee
18
memberships held by them in other companies are given below:
* Shri D Sankar resigned from the Board with effect from 11th April
2011.
(i) Eight (8) Board Meetings were held during the year 2010-11 and the gap between 2 meetings did not exceed 4 months. The dates on which the Board Meetings held were 03.05.10, 26.05.10, 24.06.10, 09.08.10, 14.11.10, 08.01.11, 18.01.11, and 14.02.2011
No. Of Board
Meetings during the
Year 2010-2011
No. Of Committee
positions held in other public companies
Name Category
Held Attended
Whether attended
last AGM
held on 24h
September 2010
No. Of Director ships in
other Public
companies Chairman
Member
K Balakrishna Rao
Promoter, Non-Executive Chairman
8
8
Attended
Nil 0 0
K T Vijaya Kumar
Promoter, Managing Director
8 8
Attended Nil 0 0
K C S Prasad Promoter, Whole Time Director
8 6 Attended Nil 0 0
Ch.V.Vara Prasad Rao
Executive Director
8 5 Attended Nil 0 0
P Narasimha Murthy
Independent Non Executive Director
8 8 Attended Nil 0 0
K Sri Hari Rao Independent Non Executive Director
8 8 Attended Nil 0 0
D Sankar* Independent Non Executive Director
8 2 Attended Nil 0 0
19
(ii) Apart from receiving the sitting fees, Non-Executive Directors do not have any other material pecuniary relationship or transactions with the Company, its promoters or its Management, which in the opinion of the Board may affect independence of judgment of the Director.
(iii) Necessary information as mentioned in Annexure 1A to Clause
49 of the Listing Agreement has been placed before the Board for their consideration.
3. Audit Committee
(i) The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the Listing Agreement with the Stock Exchange read with Section 292 A of the Companies Act 1956.
(ii) The Company’s Audit Committee comprises of the following
Directors all of whom are, 2- Non-Executive Independent Directors and 1 – Independent Executive Director.
1. P Narasimha Murthy - Chairman 2. K Sri Hari Rao - Member 3. Ch.V.Varaprasad Rao - Member
(iii) The terms of reference stipulated by the Board to the Audit Committee
includes review of the following: a. Management discussion and analysis of financial condition and results
of operations; b. Statement of significant related party transactions (as defined by the
audit committee), submitted by management; c. Management letters / letters of internal control weaknesses issued by
the statutory auditors; d. Internal audit reports relating to internal control weaknesses; e. The appointment, removal and terms of remuneration of the Chief
internal auditor shall be subject to review by the Audit Committee f. Oversight of the Company’s financial reporting process and the
disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
g. Recommending to the Board, the appointment, re-appointment and, if
20
required, the replacement or removal of the statutory auditor and the fixation of audit fees.
h. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
i. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to.
j. Matters required being included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956.
k. Changes, if any, in accounting policies and practices and reasons for the same.
l. Major accounting entries involving estimates based on the exercise of judgment by management.
m. Significant adjustments made in the financial statements arising out of audit findings.
n. Compliance with listing and other legal requirements relating to financial statements.
o. Disclosure of any related party transactions. p. Qualifications in the draft audit report. q. Reviewing, with the management, the quarterly financial statements
before submission to the board for approval r. Reviewing, with the management, performance of statutory and
internal auditors, adequacy of the internal control systems. s. Reviewing the adequacy of internal audit function, if any, including the
structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
t. Discussion with internal auditors any significant findings and follow up there on.
u. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.
v. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
w. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. The Company continued to derive immense benefit from the deliberations of the Audit Committee .
21
(iv) During the year 2010-2011 the Audit Committee met four times on 03.05.10, 09.08.10, 14.11.10 and 14.02.2011; the statutory auditors and whole-time directors were invited for the meetings. The Company Secretary acts as the secretary of the Audit Committee. The attendance of the members of the committee are given below:
No. of Meetings during the Year 2010-2011 Name Category Held Attended
Mr. K. Sri Hari Rao Independent, Non-Executive Director
4
4
Mr. D. Sankar Independent, Non Executive Director
4
3
Mr.P Narasimha Murthy
Independent, Non Executive Director
4
4
4. Remuneration Committee The Company had constituted a Remuneration Committee in terms of Schedule XIII of the Companies Act, 1956 read with clause 49 of the listing agreement. The committee comprises of Sri.P.Narasimha Murthy, Sri.K.Hari Rao, and Sri Ch.V.Varaprasad Rao, all of whom are 2 -Non- executive Independent Directors and 1 Independent Executive Director. The broad terms of reference of the remuneration committee are to approve/recommend to the Board the salary (including annual increments) perquisites and commission including pension rights & any compensation payment to be paid to the Company’s Managing / Whole-Time-Director’s. Remuneration policy: The Company while deciding the remuneration package of the management takes into consideration the employment scenario, remuneration package of the industry, financial performance of the Company and talents of the appointee. The Executive Directors and Non- Independent Directors of the Company are not entitled to sitting fees. The Non Executive Independent Directors are not paid any remuneration except sitting fees for attending Board/ Committee
22
meetings. The Committee has access to all records of the Company During the year 2010-2011 the Committee met one time on 6th January 2011, the details of the committee members are as follows:
No. of Meetings during the Year 2010-2011 Name Category Held Attended
Mr. K. Sri Hari Rao Independent, Non-Executive Director
1 1
Mr. D. Sankar Independent, Non Executive Director
1 1
Mr.P Narasimha Murthy
Independent, Non Executive Director
1 1
5. Remuneration Of Directors
Details of remuneration/sitting fees paid to the Directors for the year 2010-2011 are given below.
(Amount in Rs.)
Name Sitting Fee Rs.
Salary, perquisites and allowances Rs.
Relationship with other Directors
Sri K Balakrishna Rao
12000/- Nil *
Sri K T Vijaya Kumar
Nil 9,85,335 *
Sri K C S Prasad Nil 8,08,146 * Sri Ch.V Vara Prasad Rao
Nil 6,21,000 None
Sri P Narasimha Murthy
12000/- N.A None
Sri K Sri Hari Rao 12000/- N.A None Sri D Sankar 3000/- N.A None
23
Executive Directors except for the sitting Fees as mentioned above. None of the directors is related to any of the Directors of the Company except Mr.K.T.Vijay Kumar, Brother of Mr. K. Bala Krishna Rao, Non Executive Chairman of the Company and Mr. K.C.S.Prasad, Son of Mr.K.Bala Krishna Rao, Non Executive Chairman of the Company. The period of appointment of Managing Director and Whole Time Directors of the Company is for period of 3 years. The Company does not have any stock option plan or performance incentives. Details of Shares of the Company held by the Directors as on March 31, 2011 are as below:
Name No.of Shares Sri K Balakrishna Rao 1155136 Sri K T Vijaya Kumar 3768169
Sri K C S Prasad 1072642 Sri P Narasimha Murthy
2000
Sri K Sri Hari Rao Nil Sri D Sankar Nil CH.V.Vara Prasad Rao 100
6. Share Transfer & Investor’s Grievance Committee
This committee comprises of 3 members Sri. K T Vijaya Kumar, Sri.K.C.S.Prasad and Sri.K.Hari Rao. The Chairman of the Committee is Shri K T.Vijaykumar. The committee looks into transfer and transmission, issue of duplicate share certificate, consolidation and sub-division of shares and investors grievance. The committee oversees the performance of the Registrars and Transfer agents and recommends measures for overall improvement in the quality of investor services. Sri Shaik Rahmathullah, Company Secretary is designated as Compliance Officer of the Company. The committee met 4 times during the year 2010-2011 on 03.05.10, 09.08.10, 14.11.10, 14.02.11. Attendance at the committee meetings was as under:
No pecuniary relationship exists between the Company and its Non –
24
Name of the Member No.of Meetings
attended Mr. K T Vijaya Kumar 4 Mr K C S Prasad 3 Mr. K Sri Hari Rao 4
There was no investor Complaints Pending /outstanding as on 31st March 2011
7. General Body Meetings
Location & Time of Last 3 Annual General Meetings
Year Venue Date
Time
2009-2010
Silver Spoon Meeting Hall,59A-8-12B,Gurunanak Colony Road,Teacher’s Colony,Vijayawada-520008
24.09.2010 4.00 P.M.
2008-2009 Silver Spoon Meeting Hall,59A-8-12B,Gurunanak Colony Road,Teacher’s Colony,Vijayawada-520008
25.09.2009 4.00 P.M.
2007-2008 16-130/12, JRD Tata Industrial Estate, Auto Nagar, Kanuru, Vijayawada – 520 007.
08.08.2008 11.30 A M
b) During the year none of the resolutions had been passed through postal ballot.
8. Disclosures During the year 2010-2011 the Company had no materially significant related party transactions, which is considered to have potential conflict with the interest of the Company at large. The disclosures as to related party transactions is disclosed in the notes to accounts. There were no instances of non-compliance, penalties, strictures imposed on the Company by the stock exchanges, SEBI or any other
25
statutory authority on any matter relating to the capital markets during the financial year.
9. Means Of Communication The quarterly/half yearly/annual results, notices of Board Meetings/ General Meetings and all other material information are normally published by the Company in Andhra Bhoomi and Financial Express or Deccan Chronicle. The half-yearly results are not sent to the shareholders. The Company currently has a website: www.chemcelbiotechltd.com. Official news releases are sent to the stock exchange at Mumbai where the shares of the Company are listed.
10. Management Discussion and Analysis report Information on management discussion and analysis has placed elsewhere in the Annual Report
11. Non-Mandatory Requirements
As regards adoption of Non-Mandatory requirement of Corporate Governance.It is submitted that the Company does not send the half yearly results to each of the shareholders.
12. General Shareholders Information
a. 16th Annual General Meeting Date and Time :29th September 2011 at 4.00 P.M. Venue : Siver Spoon Conference Hall’,
59A-8-12B, Gurunanak Colony Road,Teachers colony, Vijayawada 520 008
b. Financial Calendar (tentative) Financial Year : 1st April to 31st March First Quarter Results : July/August 2011 Second Quarter and Half yearly results : October/November 2011 Third Quarter Results : January/February 2012
26
Last Quarter Results / Audited Results : May/June 2012 c. Dates of Book closure : Monday, the 26th day of September 2011 to Thursday, the 29th day of September 2011 d. Dividend payment date : Not applicable e. Listing on Stock Exchanges : The Bombay Stock Exchange Limited, Mumbai Stock Code : 533026 ISIN Numbers in NSDL & CDSL for Equity Shares : INE213J01012 The Company has paid its annual listing fees to the stock exchange for the financial year 2010-2011 f. Market Price Data : High/Low price quotation in each Month of the last financial year 2010-2011 on the Stock Exchange, Mumbai is given below.
Month High (Rs.)
Low (Rs.)
Apr’10 12.08 8.40 May’10 11.49 7.75 June’10 10.00 7.70 July’10 11.18 8.05 Aug’10 9.87 7.00 Sep’10 7.96 6.84 Oct’ 10 7.57 6.45 Nov’ 10 7.60 5.55 Dec’ 10 6.97 4.20 Jan’ 11 7.75 5.41 Feb’ 11 7.99 4.80 Mar’ 11 6.05 4.42
Source: www.bseindia.com
27
Registrars and Transfer Agents (RTA):
M/s. Bigshare Services Private Limited, E -2/3, Ansa Industrial Estate,
Saki Vihar Road, Saki Naka, Andheri (East), Mumbai – 400072. E-mail: [email protected]
13. Share Transfer System In pursuance of SEBI notification No.D&CC/FITTC/CIR-15/2002 dated 27th December 2002, the Company had appointed M/s. Bigshare Services Private Limited as single agency for share registry work. Share transfers and communications regarding share certificates, change of address, etc., must be forwarded to the RTA. The R & T Agent process the physical Share Transfers and the Shares sent for physical transfers are generally registered within a period of 15 days from the date of receipt, if all the documents are clear in all respects. All Share Transfers are approved by the Share Transfer Committee, which meets every fortnight. All requests for Dematerialization of shares are processed and the confirmation is given to the respective Depositories, i.e, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), within 15 days of receipt.
14. Shareholding Pattern As On 31st March 2011
Company No. of
Shares held
Shareholding %
Promoters 6092176
21.82
Financial Institutions
- -
Mutual Funds - - Insurance Companies
- -
Foreign Institutional Investors
30806 0.12
Corporate Bodies
5003275
17.92
Indian Public 16305308
58.40
NRIs 468785
1.68
Clearing Members
18056
0.06
Total: 2,79,18,406 100.00
28
15. DISTRIBUTION OF SHAREHOLDING AS ON 31ST MARCH 2011
Shareholding Class
No.of Shareholders
No. of Shares held
Shareholding %
Up to 500 3249
944464
3.38
501 to 1000 1529
1349094
4.83
1001 to 2000 1050
1697597
6.08
2001 to 3000 349
924559
3.31
3001 to 4000 322
1153314
4.13
4001 to 5000 242
1177259
4.22
5001 to 10000 290
2295844
8.22
10001 and above 315
18376275
65.83
Total: 7346
2,79,18,406 100.00
16. De-Materialization Of Shares And Liquidity Trading in equity shares of the Company is permitted only in dematerialized form as per notification issued by SEBI. Dematerialization of shares are done through M/s. Bigshare Services Private Limited, and on an average the dematerialization process is completed within a period of 7 days from receipt of a valid demat request along with all documents. 90.02 % of the paid up capital has been dematerialized as on 31.03.2011.
17. Outstanding ADRs/GDRs/ Warrants or any convertible instruments, conversion date and likely impact on equity : Not Applicable
29
18. Secretarial Audit The Company gets the Secretarial Audit done by a Practicing Company Secretary for the purpose of reconciliation of the total admitted capital with both the depositories and the total issued and listed capital. The Reconciliation of Share Capital Audit Report placed before the Board of Directors on a quarterly basis is also sent to the Stock Exchanges where the Company‘s shares are Listed.
19. Plant Locations : A. Door No. 16-130/12, JRD TATA Industrial Estate
Auto Nagar, 3rd Cross Road Extension, KANURU, VIJAYAWADA – 520 007 B. Plot No.260A,IDA, Kondapalli, near Vijayawada
20. Address for Correspondence
Sl.No. Shareholders Correspondence for
Address to
1. Transfer/ Dematerialization/ consolidation/split of shares, issue of Duplicate share certificates, change of address of members and beneficial owners and any other query relating to the shares of the Company.
M/s.Bigshare Services Private Limited E -2/3, Ansa Industrial Estate, Saki Vihar Road Saki Naka, Andheri (East} Mumbai – 400072. e-mail: [email protected]
2. Investor Correspondence/ queries on Annual Report etc.
COMPANY SECRETARY Chemcel Bio-Tech Limited 16-130/12, JRD Tata Industrial Estate, Auto Nagar, Kanuru, Vijayawada – 520 007.
21. Nomination Facility
Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in the Company as permitted under Section 109A of the Companies Act, 1956 are requested to submit to the Registrars in the prescribed Form 2B for this purpose.
30
22. Company’s Policy On Prevention Of Insider Trading Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended, the Company had framed a Code of Conduct for prevention of insider trading. Mr.S.Rahamatullah Company Secretary had been appointed as the Compliance Officer for this purpose. The code is applicable to all such employees of the Company who are expected to have access to the unpublished price sensitive information relating to the Company and the same is being implemented as a self -regulatory mechanism. Date: 19.08.2011 By Order of the Board Place: Vijayawada.
K.T.Vijaya Kumar Managing Director
31
T.NehruChartered Accountant
CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATEGOVERNANCE
To
The Members ofChemcel Biotech Limited
We have examined the compliance of the conditions of Corporate Governance byChemcel Biotech Limited for the year ended 31st March 2011 as stipulated inClause 49 of the Listing Agreements of the said company with Stock Exchangesin India.
The compliance of conditions of Corporate Governance is the responsibility ofthe management. Our examination was limited to a review of the proceduresand implementations thereof adopted by the Company for ensuring thecompliance of the conditions of Corporate Governance as stipulated in the saidclause. It is neither an audit nor an expression of opinion on the financialstatements of the Company.
In our opinion and to the best of our information and explanations given to us,we certify that the company has complied with the conditions of CorporateGovernance as stipulated in the above mentioned listing agreements.
On the basis of representation received from Registrars and Share Transfer Agentsand as per the records maintained by the Company which are presented to theShareholders/Investors grievance committee, we state that during the year ended31st March, 2011 no investor grievance was pending for a period exceeding onemonth.
We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which themanagement has conducted the affairs of the Company.
Place: Vijayawada T.NEHRUDate: 19.08.2011
Chartered Accountants
32
Particulars of Directors seeking re-appointment at the forthcoming AnnualGeneral Meeting pursuant to Clause 49 of the Listing Agreement
DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS ANDSENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF
CONDUCT
Pursuant to Circular No.SEBI/CFD/DIL/CG/1/2004/12/10 dated 29th October 2004,it is hereby declared that the Company has adopted a Code of Conduct for its BoardMembers and Senior Management Personnel. I hereby confirm that the Companyhas in respect of the financial year ended March 31, 2011, received from the seniormanagement personnel of the Company and the Members of the Board a declarationof compliance with the Code of Conduct as applicable to them.
Place: Vijayawada S.RahamatullahDate: 19.08.2011 Company Secretary
Name of the Director
Qualification, Age &
Expertise in Specific
Functional Areas
Date of Birth
Qualification List of the Companies
in which Directorships is held as
on 31st March 2011
Chairman/Member of the Committees
of the Board of other Companies in
which he is a Director as on 31st
March, 2011 Shri P. Narasimha Murthy
PG and Qualified in
Chemical Engineer, age 65 years, 34
years of experience in
Manufacturing field
07.11.1945 PG in public Admin and Qualified in Chemical Engineering
Nil Nil
33
CERTIFICATE BY MANAGING DIRECTOR OF THE COPMANY
I, K.T.Vijaya Kumar, Managing Director, of M/s. Chemcel Bio-Tech Limited, hereby certify to the Board that
a) I have reviewed financial statements and the cash flow statement for the year
and that to the best of my knowledge and belief: These statements do not contain any materially untrue statement for the year or omit any material fact or contain statements that might be misleading:
(i) These statements together present a true and Fair view of the company’s Affairs is in the compliance with existing accounting standards, applicable laws and regulations.
b) There are, to the best of my knowledge and belief, no transactions entered in to by the company during the year which are fraudulent, illegal or violate of the company’s code of conduct
c) I am responsible for establishing and maintaining internal controls in the company and that we have evaluated the effectiveness of the internal control systems of the company and we have disclosed to the auditors, audit committee, deficiencies in the design or operations of internal controls, if any, of which we are aware and the steps we have taken or proposed to take rectify these deficiencies.
d) We have indicated to the auditors and the audit committee: (i) Significant changes in internal control during the year: (ii) Significant changes in accounting policies during the year and that the
same have been disclosed in the notes to the financial statements; and (iii) Instances of significant fraud of which they have become aware and the
involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system.
e) We affirm that we have not denied any personnel access to the audit committee of the Company (in respect of matters involving alleged misconduct)
f) We further declare that all board members and designated senior management have performed compliance with the code of conduct for the current year. Place: Vijayawada Date 19.08.2011 (K T Vijaya Kumar) Managing Director
34
T. NEHRU, B.Com., F.C.A59-4-2/2, 3rd Cross, Ashok Nagar, Moghalrajpuram,
Vijayawada – 520 010.Ph. : 0866-2475826Cell : 92464-72408
AUDITORS REPORT
To
The Members of CHEMCEL BIO-TECH LIMITED
1. We have audited the attached Balance sheet of CHEMCEL BIOTECH LIMITED as at31st March, 2011 and related Profit and Loss account of the Company for the year ended onthat date annexed thereto. These financial statements are the responsibility of the Company’sManagement. Our responsibility is to express an opinion on these financial statements basedon our audit.
2. We conducted our audit in accordance with accounting standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material mis-statements. An audit includesexamining on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by the management as well as evaluating the over all financial statementspresentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies, (Auditor’s Report) Order 2003 issued by the CentralGovernment in terms of Sub Section (4A) of Section 227 of the Companies Act, 1956, weenclose in the Annexure, a statement on the matters specified in the paragraphs 4 and 5 of thesaid Order.
4. Further to our comments in the annexure referred to above, we report that:- We have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purpose of our audit.- In our opinion, proper books of accounts as required by law have been kept by the
Company so far as appears from our examination of those books.- The Profit and Loss account and Balance sheet dealt with by this report are in agreement
with the books of accounts of the Company.- In our opinion, the Profit & Loss account and Balance sheet comply with the accounting
standards specified by the Institute of Chartered Accountants of India referred to inSection 211(3C) of the Companies Act, 1956.
- On the basis of written representations received from the Director’s as on 31.03.2011,and taken on record by the Board of directors, we report that none of the directors isdisqualified as on 31.03.2011 from being appointed as Directors under Section 274(1) (g)of the Companies Act, 1956.
5. In our opinion and to the best of our information and according to the explanations given tous, the said accounts give the information required by the Companies Act, 1956 in the mannerso required, and give a true and fair view in conformity with the accounting principles generally
accepted in India.
35
a. In the case of Balance sheet, of the state of affairs of the Company as on 31st March,2011.
b. In the case of Profit & Loss account, of the Profit for the period ended on that date.c. In the case of Cash Flow Statement for the year ended on 31st March, 2011.
Date :- 30.05.2011 T. NEHRU
Place :- Vijayawada Chartered Accountant
CP No. 15207
ANNEXURE TO THE AUDIT REPORT (Chemcel Biotech Ltd.)
{Referred to in paragraph (3) of report of even date}
The Auditor’s report on the account of a Company to which this order applies shall includea statement on the following matters, namely:-
I.
a) The Company is maintaining proper records showing full particulars, includingquantitative details and situation of fixed assets;
b) All fixed assets have been physically verified by the management at reasonable intervals;there is no material discrepancies noticed on such verification.
c) The Company has not disposed off any substantial part of fixed assets during this year.
II.
a) The physical verification of inventory has been conducted at reasonable intervals by themanagement;
b) The procedures of physical verification followed by the Management are reasonable andadequate in relation to the size of the company and the nature of its business. There are noinadequacies in such procedures.
c) The company is maintaining proper records of inventory and as informed to us,there is no material discrepancies noticed on physical verification.
III. a) The Company has not granted any loans, secured or unsecured to parties covered in theregister maintained under section 301 of the Companies Act, 1956. Accordingly, Clause(iii)(b) to iii(d) of paragraph 4 of the Order are not applicable to the Company for thecurrent year.
36
b) The Company has taken interest free loan of Rs. 1,64,63,000/- from Sri K. T. VijayKumar, the Managing Director of the Company, covered in the register maintained undersection 301 of the Companies Act 1956.
c) The rate of interest and other terms and conditions on which the loans have been takenby the Company are not prima facie, prejudicial to the interest of the company.
IV. The company has an adequate internal control procedure commensurate with the size ofthe company and the nature of its business, for the purchase of inventory of fixed assetsand for the size of goods. There is no accounting failure to correct major weaknesses ininternal control.
V a) In our opinion and according to explanation and information given to us, the particularsof contracts or arrangements referred to in Section 301 of the Companies Act, 1956 havebeen so entered in the Register required to be maintained under this Section.
b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of such contracts or arrangements have been made atprices which are reasonable having regard to prevailing market prices at the relevant time.
VI. The Company has not accepted deposits from the public, as per the provisions of Sections58A and 58AA of the Act and the rules framed there under.
VII. In our Opinion, the company has an internal audit system commensurate with its size andnature of its business.
VIII. According to information and explanations given to us the Central Government has notprescribed the maintenance of the cost records by the company under clause (d) of subsection (I) of 209 of Companies Act, 1956.
IX. a) The company defaulted in depositing undisputed statutory dues of an amount ofRs.1,31,00,745/-
b) The Company is disputing the sales tax liability for an amount of Rs. 8,37,576/- andincome tax liability of Rs. 46,90,183/-. Since the appeals are pending no provision has beenmade.
X. The company is a profit making company.
XI. The company has not defaulted in repayment of dues to a financial institution or bank. Thecompany has not issued any debentures.
XII. The company has not granted loans and advances on the basis of security by way of
Pledge of shares.
XIII. The Company is not a Chit Fund / Nidhi / Mutual Benefit fund / society.
XIV According to the information and explanations given to us the Company is not dealing ortrading in shares, Securities, Debentures and other Investments.
XV. The company has given guarantee for loans taken by others from Andhra Bank and theterms and conditions whereof are not prejudicial to the interest of the Company;
37
XVI. In our opinion the Term Loans availed by the Company during the year were, prime facie,applied for the purpose for which they were obtained.
XVII. The funds raised on short-term basis have been used for short-term investment and viceversa;
XVIII The Company has not made bonus allotment and right allotment to the party Covered inthe Register maintained under section 301 of the Act.
XIX. The company has not issued any debentures.
XX. The company has made preferential allotment of 20,00,000 shares of Rs. 10/- each fully paidand preferential issue of 40,00,000 of share warrants of Rs. 10/- each paid @ 2.50 Ps. Perwarrant.
XXI In our Opinion and according to the information given to us, no fraud on or by theCompany has been noticed or reported during the year.
Date :- 30.05.2011 T.NEHRU
Place :- Vijayawada Chartered Accountant
CP No.15207
CHEMCEL BIOTECH LIMITED
SCHEDULE NO. 20 : NOTES ON ACCOUNTS
1. Basis of Accounting
The financial statements are prepared under the historical cost conventions on the basis ofgoing concern as per applicable Indian Accounting standards and are based on the accrualbasis accounting.
2. Revenue Recognition
Sales – Sales excludes Excise Duty, Cess, SHEC.
All expenses and income are accounted for on accrual basis as per the requirements of theCompanies Act.
3. Fixed Assets
Fixed Assets are recorded at Cost. Cost is purchase cost, and in the case of Land, includesdevelopment cost incurred, together with all incidental cost of acquisition, borrowing costsand other related internal costs. Fixed Assets are shown Gross Block Less Depreciation.
4. Depreciation
Freehold land is not depreciated.Other assets are depreciated on Written down value method in accordance with the ratesprescribed in Schedule XIV to the Companies Act, 1956.
38
5.Impairment LossThe company assets at each Balance sheet date whether there is any indication that anyasset may be impaired and if such indication exists, the carrying value of such asset isreduced to its recoverable amount and a provision would be made for such impairment lossin the profit and loss account, however there is no such type of asset during the year.
6. Retirement Benefits
Contribution to Provident fund and gratuity provision are accounted on accrual basis.
7. Miscellaneous and Preliminary Expenses
Miscellaneous expenses are written off as per Section 35(D) of Income Tax Act.
8. Deferred Tax
Deferred tax is recognized on timing difference between taxable income and accounting incomethat originated in one period and are capable of reversal in one or more subsequent periods.
9. Capital Work in Progress:
The company has acquired additional land at Kondapalli and advance given for civil worksand machinery to set up Bio Diesel process plant, shown separately as capital work in progress.
10. Investments:
The company had taken 60 % stake in Jetro Petro Bio Tech Private Limited and invested Rs.3 lakhs, it becomes holding company to Jetro Petro Biotech Private Limited. The investmentis shown at cost.
11. Borrowing Costs:
Borrowing costs attributable to the acquisition and construction of the Qualifying Assets,which takes substantial period of time to get ready for its intended use, are capitalized as partof the cost of respective assets up to the date when such asset is ready for its intended use.Other Borrowing costs are charged to the Profit and Loss account.
12. Valuation of Inventory
Inventories of Spares, consumables, and components are valued at lower of cost and netrealizable value. Cost represents purchase cost and other incidental costs, if any. Cost ofInventories is computed on FIFO basis.
13. Micro/Small Scale Industries:
There are no dues to the Micro/Small Scale Industries. We are not having accounts withMicro/Small Scale Industries.
14. Subsidy:
The Company opted to for the sales tax deferment scheme and the amount of sales taxpayable to sales tax department is payable from the 14th year of deferment. The amount isshown as unsecured Loans and do not carry any interest.
39
15. Secured Loans & Securities:
Working Capital facility for an amount of Rs 7 Crores and inland credit of Rs. 2 Crores is
obtained from Corporation Bank, Benz Circle Branch, Vijayawada by giving the following
securities:
Hypothecation of stocks and receivables (less than six months) and personal guarantee of
Managing Director Mr. K. T. Vijay Kumar & Non Executive Chairman Mr. K. Balakirshna
Rao.
The company has obtained Term Loan for an amount of Rs. 38.80 lakhs and Rs. 91.47 lakhs
from Kotak Mahendra Bank Limited, Vijayawada by mortgaging Kondapalli site and personal
guarantee of Directors.
The company has obtained mortgage loan of Rs. 65.00 lakhs from India Bulls against third
party guarantee. The secured loan amount includes interest accrued there on as on date.
16. Confirmation Balances of Debtors / Creditors are yet to be obtained.
17. Contingent Liability/ Contingent Asset:
The disclosures required by Accounting Standard 29 “Provision, Contingent Liabilities,
contingent Assets”, Company is disputing sales tax liability of Rs. 8,37,536/- and also income
tax liability of Rs. 46,90,183/- for which no provision has been made as appeals are pending.
���� ������� ���������� ���
Related party disclosures have been set out in a separate statement annexed to this schedule.
The related parties, as defined by Accounting Standard 18 “Related Party Disclosure” issued by
the Institute of Chartered Accountants of India, in respect of which the disclosures have been
made, have been identified and taken on record by the Board.
Key Management Personnel
1. Sri K. Balakrishna Rao - Non-Executive Chairman
2. Sri K. T. Vijay Kumar - Managing Director
3. Sri K. C. S. Prasad - Director – Production
4. Sri Ch. V. Vara Prasad Rao - Executive Director.
Related Parties
Jetro Petro Biotech Private Limited- Subsidiary company.
40
Nature of transaction Amount
Advance paid to Jetro Petro Biotech Ltd Rs. 3,78,15,784/-
(paid towards supply of Jetropha seeds in terms
of agreement outstanding)
Interest free unsecured loan received from Sri K. T. Vijay Kumar Rs. 1,64,63,000/-
The following transactions were carried out with Key Management Personnel and related parties in
the ordinary course of business:
Transactions with Key Management Personnel
Particulars 2010-11 2009-10
Non Executive Chairman - 3,98,456
Managing Director 9,85,335 11,07,279
Director – Production 8,08,146 8,77,682
Executive Director 6,21,000 1,03,500
Total: 24,14,481 24,86,917
Above includes Salary, Commission and perquisites.
Transactions with other related parties
41
18. Details of Quantitative information pursuant to para 3 & 4 C of Part II Schedule VI of the Companies Act, 1956:
The installed capacity is Liquids – 1000 KL, Granules – 1000 MT and Dusts – 300 MT.
Particulars in respect of production and sales
Particulars in respect of Sales for the year 2010-11 including Packing Material
����� � �������� ����� ������� ���
� ���� �� �������������
Garden Maintenance 0
Office Maintenance 25149
Electrical Maintenance 4510
Total 29659
�
!�� � ���� ��������������"� ��� ���
Designation Salary
(Rs.)
Commission
(Rs.)
Perquisites
(Rs.)
Total
(Rs.)
Managing Directors:
-Mr. K. T. Vijay Kumar
8,97,000 86,780 1,555 9,85,335
Whole Time Directors
- Mr. K.C.S. Prasad 6,90,000 86,780 31,366 8,08,146
- Mr. Ch.V.Vara Prasad Rao 6,21,000 - - 6,21,000
Grand Total : 22,08,000 1,73,560 32,921 24,14,481
Production (Quantity)
Class of Goods
Current Year Previous Year
Raw materials consumed 19,32,496 17,21,098
Packing material consumed 3,92,249 1,59,696
Quantity Value
Liquids - Lts 15,50,552 50,21,04,848
Dusts - Kgs 1,014 84,241
Granules- Kgs 912 26,889
Total 15,52,478 50,22,15,978
42
The following is the computation of net profits of the company:
Net Profit after Tax as per Profit and Loss Account Rs. 86,78,000/-
Commission payable to Managing Director @ 1% of net profit Rs. 86,780/-
Commission payable to Production Director @ 1% of net profit Rs. 86,780/-
��� � ���� ������������������ ���
Particulars 2010-11
Rs.
2009-10
Rs.
i) Statutory Auditors 1,20,000 1,20,000
ii) Internal Auditors 40,000 40,000
iii) In other Capacity
- for Tax Audit
- for Certification & other matters
20,000
20,000
Total: 1,80,000 1,80,000
�
�� ���#$������ �����%� ��&��'� ������
Particulars 2010-11
Rs.
2009-10
Rs.
a) Travelling Expenses Nil Nil
b) Subscriptions and others Nil Nil
Total: Nil Nil
�
� ���# ���&�����%� ��&��'� ������
Particulars 2010-11
Rs.
2009-10
Rs.
Others Nil Nil
Total: Nil Nil
�
(�������������� ���)����������*�+���� ��'���������
�
Particulars Balance as on
31.03.2011
Rs.
Balance as on 31.03.2010
Rs.
Maximum Balance
during the year
Rs.
Jetro Petro Biotech Private Limited 3,78,15,784 5,52,92,783 5,52,92,783
43
Value of Imported materials consumed NIL
Value of Indigenous materials consumed 100%
Value of imports on CIF basis NIL
Value of Imported raw material, spare parts consumed NIL
Expenditure in foreign currency NIL
Earnings in foreign exchange on cash basis NIL
Figures of previous year have been re-grouped wherever necessary YES
Amount remitted during the year in Foreign Currency on account of
Dividends NIL
Earnings per share
Net Profit after tax Rs. 86,78,000
No. of Shares 2,79,18,406
Earning per Equity Share basic and diluted Rs. 0.32
FOR AND ON BEHALF OF BOARD
T. NEHRU K.BALAKRISHNA RAO K.T.VIJAY KUMAR
Chartered Accountant Non-Executive Chairman Managing Director.
S. RAHMATULLAH
Company Secretary
Place: VIJAYAWADA
Date : 30.05.2011
44
(Rs. in Thousands)
PARTICULARS
For the Year
31.03.2011
For the year
31.03.2010
I SOURCES OF FUNDS:
A Share Holders' Funds
(a) Share Capital 1 289,184 259,184
(b) Reserves and Surplus 2 155,245 146,567
444,429 405,751
B Loan Funds
(a) Secured Loans 3 80,288 76,206
(b) Unsecured Loans 4 20,405 19,705
100,693 95,911
TOTAL: 545,122 501,663
II APPLICATION OF FUNDS
A Fixed Assets:
(a) Gross Block 23,206 23,206
(b) Less: Depreciation 12,508 11,724
(c ) Net Block 5-A 10,699 11,482
Capital Work-in-Progress 5-B 73,729 73,729
B Investments: 300 300
Deferred Tax 32 32
C Current Assets, Loans & Advances:
(a) Inventories 6 54,059 49,360
(b) Sundry Debtors 7 324,029 242,169
( c) Loans and Advances 8 130,707 171,303
(d) Cash and Bank Balances 9 6 334
508,802 463,166
Less: Current Liabilities & Provisions:
(a) Liabilities 10 51,855 52,645
(b) Provisions 11 4,215 4,576
56,070 57,220
Net Current Assets: 452,732 405,946
D Miscellaneous Expenditure: 7,630 10,174
(to the extent not written off or adjusted)
Total : 545,122 501,663
0 (0)
As per our attached report of even date For and On behalf of Board of Directors
T. NEHRUChartered Accountant
Membership No. 15207
Place: Vijayawada S. RAHAMATULLAHDate: 30-05-2011 Company Secretary Managing Director
K. T. VIJAY KUMAR
CHEMCEL BIOTECH LIMITEDVIJAYAWADA
AUDITED BALANCE SHEET AS AT 31.03.2011
Non-Executive Chairman
Sch.
No.
K BALAKRISHNA RAO
45
Schedules forming part of Balance Sheet
Schedule No. 1 : SHARE CAPITAL: 31st March 2011 31st March 2010
(Rs. in Thousands) (Rs. in Thousands)
Authorised Share Capital :
3,50,00,000 Equity Shares of Rs. 10/- each 350,000 300,000
Issued, Subscribed and Paid Up Capital : - -
2,79,18,406 equity shares of Rs. 10/- each 279,184 259,184
Share Warrant A/c 10,000 -
4000000 share warrantes of Rs.10/- each paid at
Rs.2.50 each per warrant
289,184 259,184
Schedule No. 2 : RESERVES & SURPLUS:
Capital Reserve 92,941 92,941
General Reserve 53,626 39,914
Profit and Loss Account 8,678 13,712
155,245 146,567
Schedule No. 3 : SECURED LOANS:
Kotak Mahendra Bank Limited - Loan - I 1,205 2,189
India Bulls 6,329 6,144
Kotak Mahendra Bank Limited - Loan - II 6,074 7,783
Corporation Bank - CC 66,680 60,090
80,288 76,206
Schedule No. 4 : UNSECURED LOANS:
Sales Tax Deferment Loan 3,642 3,642
Loan from Mr. K. T. Vijay Kumar 16,463 15,563
Select Sis. India Pvt Ltd 300 500
20,405 19,705
Schedule No. 6 : INVENTORY:
Work in Process 515 230
Finished Goods 3,114 10,096
Packing Material 2,244 2,637
Raw Material 48,186 36,398
CHEMCEL BIOTECH LIMITEDVIJAYAWADA
54,059 49,360
46
Schedule No. 7 : DEBTORS:
Debtors considered good
Outstanding more than six months 57,475 26,316
Outstanding less than six months 266,554 215,853
324,029 242,169
Schedule No. 8 : LOANS & ADVANCES:
Deposits 2,616 2,616
Advances with Suppliers 86,645 85,601
Other Advances 41,446 83,085
130,707 171,303
Schedule No. 9 : CASH & BANK :
Cash on Hand 4 245
Banks 2 89
6 334
Schedule No. 10 : CURRENT LIABILITIES :
Advances received from Debtors 7,545 5,921
Outstanding Liabilities 12,476 3,248
Sundry Creditors 14,488 32,319
Other Advances 16,370 10,206
Deposits from Dealers 975 950
51,855 52,645
Schedule No. 11 : PROVISIONS :
Provision for Income Tax 2,816 4,124
Provision for VAT 233 -
Provision for Excise Duty 587 55
Provision for PF & Others 277 53
Provision for Gratuity 302 344
4,215 4,576
47
(Rs.
In
Th
ousa
nds)
Co
st a
s o
nA
ddit
ion
/
Co
st a
s o
nA
s at
on
Fo
r th
e A
s at
on
As
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on
01-0
4-20
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elet
ion
31-0
3-20
1101
-04-
2010
Yea
r31
-03-
2011
31-0
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1131
-03-
2010
12
34
56
78
(1+
2)(4
+5)
(3-6
)(1
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1
L
and
4,91
2
4,
912
-
-
-
4,91
2
4,
912
2
B
uild
ings
10,7
57
10
,757
5,
994
476
6,
470
4,
287
4,
763
3
P
lan
t &
Mac
hin
ery
4,70
5
4,
705
3,
425
178
3,
603
1,
102
1,
280
4
F
urn
iture
& F
ixtu
res
1,26
8
1,
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93
9
60
99
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27
0
329
5
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om
pute
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39
79
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ire
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oto
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11
7
1
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4
4
8
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ar46
6
466
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5
29
38
4
82
110
Tot
al:
23,2
06
-
23
,206
11,7
24
78
3
12
,508
10,6
99
11
,482
Sche
dule
05-
B :
Cap
ital
Wor
k in
pro
gres
s (R
s. I
n T
ho
usa
nds)
01.0
4.20
1031
.03.
2011
Bio
Die
sel L
and
Ad
van
ce5,
090
5,09
0
Bio
Die
sel L
and &
Build
ing
Adva
nce
11
,225
11,2
25
Bio
Die
sel M
ach
iner
y
Adva
nce
57,4
1457
,414
Sch
ed
ule
No.
05-
A :
FIX
ED
ASSE
TS A
ND
DE
PR
EC
IAT
IOIN
SC
HE
DU
LE
:
Net
Blo
ckS.
No
.N
ame
of
Ass
et
Gro
ss B
lock
Dep
reci
atio
n
To
tal C
apit
al W
I P
73,7
2973
,729
48
(Rs. In Thousands)
INCOME
Sales 1 502,216 457,640
Other Income 2 16 -
Increase/Decrease in Stocks 3 4,699 16,104
Total 506,931 473,745
EXPENDITURE
Manufacturing Expenses 4 459,874 405,234
Payment to Employees 5 5,137 4,786
Administrative Expenditure 6 5,248 5,346
Selling Expenses 7 9,758 27,204
Interest and Finance Charges 8 12,094 9,890
Preliminary Expenses 2,543 2,543
Total 494,654 455,004
Profit before Depreciation 12,278 18,741
Depreciation 5 783 888
Profit before Tax 11,494 17,852
Provision for Income Tax 2,816 4,124
Profit after Tax 8,678 13,728
Provision for FBT - 16
Provision for Deferred Tax 0 0
Profit trf to Balance Sheet 8,678 13,712
Notes forming part of the Financial Statements
As per our attached report of even date For and On behalf of Board of Directors
T. NEHRUChartered Accountant
Membership No. 15207
Place: Vijayawada S. RAHAMATULLAHDate: 30-05-2011 Company Secretary
CHEMCEL BIOTECH LIMITEDVIJAYAWADA
AUDITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2011
PARTICULARS Sch. No. 31.03.2011 31.03.2010
K. T. VIJAY KUMARManaging Director
K BALAKRISHNA RAONon-Executive Chairman
49
Rs. Rs. Rs.
2010-11 2009-10
Schedule No. 1 : SALES
Sales Account 489,041 454,543
Excise Duty on Sales 1,156 500
Cess on Sales 24 10
SHEC on Sales 12 5
VAT on Sales 19,615 509,847 12,085
Less: Sales Returns 7,222 9,311
Excese Duty on Sales Returns 152 62
Cess on Sales Returns 4 1
SHEC on Sales Returns 2 1
VAT on Sales Returns 252 7,631 129
502,216 457,640
Schedule No. 2 : OTHER INCOME
Discount on Sales
Interest Received 16
16 -
Schedule No. 3 : INCREASE/DECREASE IN STOCKS
Closing Raw Materials 48,186 36,398
Closing Work in Process 515 230
Closing Finished Goods 3,114 10,096
Closing Packing Material 2,244 54,060 2,637
Opening Raw Materials 36,398 1,960
Opening Work in Process 230 13,203
Opening Finished Goods 10,096 13588
Opening Packing Material 2,637 49,360 4,504
Increase in Stocks 4,699 16,104
Schedule No. 4 : MANUFACTURING EXPENSES:
Purchases less Discounts 438,760 392,237
Excise Duty on Purchases 471 443
Cess on Purchases 12 6
SHEC on purchases 6 3
Sales Tax on Purchases 18,614 12,052
Sales Tax 233 -
Vat Input 515 -
Excise Duty 587 -
Packing Material 103 86
Formulation Wages 252 190
Factory Maintenance 103 57
Power 218 161
459,874 405,234
50
Rs. Rs. Rs.
2010-11 2009-10
Schedule No. 5 : PAYMENT TO EMPLOYEES:
Salaries 4,313 3,985
Medical Allowance - 15
Leave Travel Allowance 546 414
Provident Fund Contribution 277 372
5,137 4,786
Schedule No. 6 : ADMINISTRATIVE EXPENSES:
General Insurance 175 153
Postage, Telegrams & Telephone 23 428
Legal & Professional Fee 366 483
Directors' Sitting Fees 65 35
Remuneration to Directors 2,241 2,013
Bank Charges 334 666
Auditor Fee / Remuneration 193 180
Rent, Rates & Taxes 66 106
Gratuity & ESI 377 344
Printing and Stationery 64 95
Repairs and Maintenance 12 22
Other Expenditure 1,332 822
5,248 5,346
Schedule No. 7 : SELLING EXPENSES:
Advertisement Expenses 48 176
Boarding & Lodging exp. 81 97
Discounts 5,061 22,348
Field Promotion Exp 3,063 2,539
Freight Outward & Loading Exp. 7 134
Managerial Commission on Sales 174 422
Sales Promotion 82 93
Travelling Expenses 1,243 1,395
9,758 27,204
Schedule No. 8 : INTEREST:
Interest to Banks 8,219 9,890
Interest to Others 3,875
12,094 9,890
51
o
CHEMCEL BIOTECH LIMITEDVIJAYAWADA
CASH FLOW STATEMENT FOR THE YEAR ENDING 31.03.2011
Rs. in th
CASH FLOW STATEMENT FOR THE YEAR ENDING 31.03.2011
31.03.2011
Net Profit Before Tax 11,494.00
ADD
Depreciation 783.00
Provision for Income Tax (2,816.00)
Provision for FBT 0.00
9,461.00
A Cash Flow from operating Activities
Inventories (4,699.00)
Debtors (81,859.00)
Loans & Advances 40,596.00
Current Liabilities & Provisions (1,151.00)
Expenditure 0.00
Total (37,652.00)
B Cash Flow from Investing Activities
Increase in fixed assets 0.00
Capital Work in Progress 0.00
Miscellaneous Expenditure 2,543.00
Investments 0.00
Total 2,543.00
C Cash Flow from Financing Activities
Increase in share capital 30,000.00
Decrease in minorities interest 0.00
Share Application Money 0.00
Secured Loans 4,081.00
Un Secured Loans 700.00
Total 34,781.00
Cash Flow A+B+C -328.00
Opening balance of Cash & Cash Equalents 334.00
Closing balance of Cash & Cash Equalents 6.00
ousands
31.03.2010
17,852.32
888.47
(4,123.89)
-16.24
14,600.66
(16,104.47)
(3,655.87)
(71,440.09)
26,849.15
0.00
(49,750.62)
-91.81
0.00
2,543.39
0.00
2,451.58
1,574.19
0.00
0.00
42,177.95
3,183.70
46,935.84
-363.20
697.10
333.90
52
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
(a) Registration DetailsRegistration No. : 01-21888 State Code : 1
Balance Sheet Date : 3/31/2011
(b) Capital Raised Public Issue : NIL Rights Issue : NILduring the year(Amount in Bonus Issue : NIL Private Placement/Others : 30000Rs. Thousands)
(c) Position of Total Liabilities : 545122 Total Assets : 545122Mobilisation &Development of SOURCES OF FUNDSFunds: (Amountin Rs. Thousands) Paid-up Capital : 289184 Reserves & Surplus : 155245
Secured Loans : 80288 Unsecured Loans : 20405
APPLICATION OF FUNDS
Net Fixed Assets : 10699 Investments : 300
Net Current Assets : 452732 Misc. Expenditure : 7630
Accumulated Losses nil
(d) Performance of Turnover (Incl.other income) : 502232 Total Expenditure : 494654Company(Amount in Profit/Loss before Tax : 11494 Profit/Loss After Tax : 8678Rs. Thousands)
Earning per Share in Rs. : 0.31 Dividend Rate (%) : ---
(e) Generic Names of Item Code No.(ITC Code) Agro ChemicalsPrincipal Product Description : 2421products ofCompany: (As permonetary terms)
53
Name of the Subsidiary Company Jetro Petro Bio-Tech Private Limited
01. The Financial Year of the Subsidiary Company ended on
31.03.2011
02. Date from which they become Subsidiary Company
03.10.2007
03. a. Number of Shares held by Chemcel Bio-Tech Limited with its nominee in the Subsidiary at the end of the financial year of the Subsidiary Company.
30,000 shares
a. Extent interest of Holdings Company at the end of Financial Year of the Subsidiary Company
60%
04. The net aggregate amount of the Subsidiary Company Profit /(Loss) so far as it concerns the members of the Holding Company
Not Applicable - as subsidiary company has not commenced business operations
A. Not dealt with in the Holding Company Accounts for the Financial Year ended 31st March 2011
For the previous financial years of the Subsidiary Company since it became the Holding Company’s subsidiary
Not Applicable - as subsidiary company has not commenced business operations
B. Dealt with in Holding Company’s Accounts for the financial year ended 31st March 2011
For the previous financial years of the Subsidiary Company since it became the Holding Company’s subsidiary
Not Applicable - as subsidiary company has not commenced business operations
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATIONTO COMPANY’S INTEREST ON SUBSIDIARY COMPANIES
54
T. NEHRU, B.Com., F.C.A59-4-2/2, 3rd Cross, Ashok Nagar, Mogalrajpuram
Vijayawada – 520010.
Ph. :0866-2475826
Cell :9246472408
AUDITORS REPORT
To
The Members of JETRO PETRO BIO-TECH PRIVATE LIMITED
1. We have audited the attached Balance sheet of JETRO PETRO BIO-TECH PRIVATELIMITED as at 31st March, 2011 and related Profit and Loss account of the Company for theyear ended on that date annexed thereto. These financial statements are the responsibility ofthe Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.
2. We conducted our audit in accordance with accounting standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material mis-statements. An audit includesexamining on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by the management as well as evaluating the over all financial statementspresentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies, (Auditor’s Report) Order 2003 issued by the CentralGovernment in terms of Sub Section (4A) of Section 227 of the Companies Act, 1956, weenclose in the Annexure, a statement on the matters specified in the paragraphs 4 and 5 of thesaid Order.
4. Further to our comments in the annexure referred to above, we report that:- We have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purpose of our audit.- In our opinion, proper books of accounts as required by law have been kept by the
Company so far as appears from our examination of those books.- The Profit and Loss account and Balance sheet dealt with by this report are in agreement
with the books of accounts of the Company.- In our opinion, the Profit & Loss account and Balance sheet comply with the accounting
standards specified by the Institute of Chartered Accountants of India referred to inSection 211(3C) of the Companies Act, 1956.
- On the basis of written representations received from the Director’s as on 31.03.2011,and taken on record by the Board of directors, we report that none of the directors isdisqualified as on 31.03.2011 from being appointed as Directors under Section 274(1) (g)of the Companies Act, 1956.
55
5. In our opinion and to the best of our information and according to the explanations given tous, the said accounts give the information required by the Companies Act, 1956 in the mannerso required, and give a true and fair view in conformity with the accounting principles generallyaccepted in India.
1. In the case of Balance sheet, of the state of affairs of the Company as on 31st March, 20112. In the case of Profit & Loss account, of the Profit for the period ended on that date.3. In the case of Cash Flow Statement for the year ended on 31st March, 2011
Date :- 30.05.2011
Place :- Vijayawada T.NEHRU
Chartered Accountant
CP No.15207
ANNEXURE TO THE AUDIT REPORT
{Referred to in paragraph (3) of report of even date}
The Auditor’s report on the account of a Company to which this order applies shall include astatement on the following matters, namely:-I
a) The Company is maintaining proper records showing full particulars, including quantitativedetails and situation of fixed assets;
b) All fixed assets have been physically verified by the management at reasonable intervals; there isno material discrepancies noticed on such verification.
c) The Company has not disposed off any substantial part of fixed assets during this year.
II.
a) The physical verification of inventory has been conducted at reasonable intervals by themanagement;
b) The procedures of physical verification followed by the Management are reasonable andadequate in relation to the size of the company and the nature of its business. There are noinadequacies in such procedures.
c) The company is maintaining proper records of inventory and as informed to us, there isno material discrepancies noticed on physical verification.
III.
a) The Company has not granted any loans, secured or unsecured to parties covered in the registermaintained under section 301 of the Companies Act, 1956. Accordingly, Clause (iii)(b) to iii(d) ofparagraph 4 of the Order are not applicable to the Company for the current year.(b) The Companyhas not taken any loan from a party covered in the register maintained under section 301 of theCompanies Act 1956.
56
c) The rate of interest and other terms and conditions on which the loans have been taken by theCompany are not prima facie, prejudicial to the interest of the company.
IV. The company has an adequate internal control procedure commensurate with the size ofthe company and the nature of its business, for the purchase of inventory of fixed assets and forthe size of goods. There is no accounting failure to correct major weaknesses in internal control.
V
a) In our opinion and according to explanation and information given to us, the particulars ofcontracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been soentered in the Register required to be maintained under this Section.
b) In our opinion and according to the information and explanations given to us, the transactionsmade in pursuance of such contracts or arrangements have been made at prices which arereasonable having regard to prevailing market prices at the relevant time.
VI. The Company has not accepted deposits from the public, as per the provisions of Sections58A and 58AA of the Act and the rules framed there under.
VII. In our Opinion, the company has an internal audit system commensurate with its size andnature of its business.
VIII. There is no necessity to maintain cost records prescribed by the CentralGovernment under clause (d) of sub-section (1) of Section 209 of the Act, whether such accountsand records have been made and maintained.
IX. There are no statutory dues.
X. The company has not defaulted in repayment of dues to a financial institution or bank. Thecompany has not issued any debentures.
XI. The company has not granted loans and advances on the basis of security by way of pledgeof shares.
XII. The Company is not a Chit Fund / Nidhi / Mutual Benefit fund / society.
XIII According to the information and explanations given to us the Company is not dealing ortrading in shares, Securities, Debentures and other Investments.
XIV. The company has not given guarantee for loans taken by others from bank and the terms andconditions whereof are not prejudicial to the interest of the Company;
XV. The company has no term loans.
XVI. The funds raised on short-term basis have been used for short-term investment and viceversa;
XVII The Company has not made bonus allotment and right allotment to the party Covered inthe Register maintained under section 301 of the Act.
XVIII. The company has not issued any debentures.
57
XIX. The company has not made any public issue. Hence the matter to be reported as per 4(xx)of the order, are not applicable to the Company.
XX In our Opinion and according to the information given to us, no fraud on or by theCompany has been noticed or reported during the year.
Date :- 30.05.2011
Place :- Vijayawada T.NEHRU
Chartered Accountant
CP No.15207
JETRO PETRO BIOTECH PRIVATE LIMITED
NOTES ON ACCOUNTS
Basis of Accounting
The financial statements are prepared under the historical cost conventions on the basis of goingconcern and as per applicable Indian accounting standards and are based on the accrual basis ofaccounting.
Fixed Assets
Fixed Assets are recorded at Cost only.
Depreciation
Other assets are depreciated on Written down value method in accordance with the rates prescribedin Schedule XIV to the Companies Act, 1956.
Retirement Benefits
Gratuity provision is yet to be introduced.
Miscellaneous and Preliminary Expenses
Effective from 01.04.2006, such expenditure is written off as incurred in accordance with AS – 26,Intangible Assets within 4 years.
Subsidiary
The company become a subsidiary to Chemcel Biotech Ltd. The shareholding of Chemcel BiotechLtd is 60 % of total share capital.
58
Related party disclosure
Other liabilities includes Rs. 3,78,15,784/- advanced by Chemcel Biotech Limited besides, ChemcelBiotech Lmited had invested 60% in the share capital i.e. Rs. 3,00,000/-.
Value of Imports and indigenous materials consumed NIL
Value of imports on GIF basis NIL
Expenditure in foreign currency NIL
Earnings in foreign exchange on cash basis NIL
Figures of previous year have been re-grouped wherever necessary NIL
FOR AND ON BEHALF OF BOARD
T. NEHRU P. L. NARASIMHA MURTHY
Chartered Accountant Managing Director.
Y. V. RAMANA RAO DIRECTOR
K. BALAKRISHNA RAO NOMINEE DIRECTOR
Place: VIJAYAWADADate : 30.05.2011
59
30-05-2011
60
(Amount in Rs.)
I INCOME
A Sales - -
Increase/Decrase in stocks - -
TOTAL: - -
II EXPENDITURE
Purchase account - -
Payament to Employees 7 136,000 138,000
Administrative Expenditure 8 43,705 56,481
Interest 9 1,270 24,009
Preliminary Expenditure Account 6 14,250 14,250
Total : 195,225 232,740
Profit before Depreciation (195,225) (232,740)
Depreciation 2 4,095 6,282
Profit before Tax (199,320) (239,022)
- -
Net Profit/Loss for the year (199,320) (239,022)
Notes forming part of the Financial Statements
As per our attached report of even date On behalf of Board of Directors
T. NEHRU P.L. NARASIMHA MURTHYY. V. RAMANA RAO
Chartered Accountant Managing Director Director
Membership No. 15207
Place: Vijayawada K. BALAKRISHNA RAO
Date: 26.06.2009 Nominee Director
JETRO PETRO BIOTECH (P) LTDVIJAYAWADA
Sch.N
o.
PROFIT AND LOSS ACCOUNT FOR THE PERIOD
PARTICULARS 31.03.2011 31.03.2010
30-05-2011
61
Schedule No. 1 : SHARE CAPITAL: 31st March 2011 31st March 2010
(Amount in Rs.) (Amount in Rs.)
Authorised Share Capital
1,00,000 Equity Shares of Rs. 10/- each 1,000,000 1,000,000
Issued, Subscribed and Paid Up Capital:
50,000 equity shares of Rs. 10/- each 500,000 500,000
500,000 500,000
Schedule No. 3 : CASH & BANK :
Cash on Hand 24,526 12,231
Union Bank of India 294 1,564
24,820 13,795
Schedule No. 4 : LOANS & ADVANCES:
Seed Advance to Farmers 37,464,500 54,941,500
L. Sundaraiah 236,500 236,500
Rent Deposit 10,000 10,000
- -
37,711,000 55,188,000
Schedule No. 5 : CURRENT LIABILITIES :
Chemcel Biotech Limited 37,815,784 55,242,784
T. Nehru 30,000 30,000
Venkata Ramana 282,000 140,000
Union Bank of India - Temporary OD - -
38,127,784 55,412,784
Schedule No. 6 : MISCELLANEOUS EXPENDITURE :
Preliminary Expenses 14,250 28,500
Less: Written off 14,250 14,250
Preliminary Expenses - 14,250
(to the extent not written off or adjusted)
Net Loss 882,152 682,832
882,152 697,082
62
Schedule No. 7 : PAYMENT TO EMPLOYEES:
Salaries and other benefits to Staff 136,000 138,000
136,000 138,000
Schedule No. 8 : ADMINISTRATIVE EXPENDITURE:
Audit Fee 10,000 10,000
Rent 27,000 39,600
Bank Charges 1,270 1,001
Electricity Charges 1,250 1,080
Pooja Expenses 1,000 1,200
Printing and Stationery 1,600 -
Telephone Charges 1,585 3,600
43,705 56,481
Schedule No. 9 : INTEREST :
Interest to Union Bank of India 1,270 24,009
1,270 24,009
63
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64
OPERATIONSThe Company being in a nascent stage has yet to commence its regular business. Itbecame Subsidiary of Chemcel Biotech Ltd, Vijayawada having 60% of Equity acquiredby that company. The Holding company nominated its Non Executive Chairman Sri.K. Balakrishna Rao as the Director on the Board who is having 9 Year contract with
the Holding company to supply Jetropha seeds regularly.
FUTURE PROSPECTS Future prospects to procure Jatropha seed are very much discouraging in view of
farmers expressing their reluctance to go for Jatropha cultivation due to nonremunerative prices. Besides this, Government has also announced assuredirrigation through several new projects which are already under construction andthe areas to be benefited are earmarked. Most of the seed growers are coming within the reach of these new projects which will behelping them to go for moreremunerative commercial crops. Thus they have given up growing Jatrophacultivation and majority of farmers have refunded advances given for the purpose.For the remaining advances they are making arrangement to clear the advances at theearliest. With this background the seed will not be available to procure to meet yourcompany’s requirement. As such on line with the farmers your company decided torefund the advances given by M/s Chemcel Biotech Limited for the purpose.
PUBLIC DEPOSITSYour company has not accepted any Deposits from the public during the year
under review.DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the companies Act 1956, your Directorsaffirm that:
1. In the preparation of the Annual Accounts for the year ended 31st March 2011applicable accounting standards have been followed with no material departure.
PARTICULARS 2010-2011 2009-10 Net Sales Nil Nil Expenditure 195,225 2,32,740 Profit/(Loss) before taxes
(199,320) (239,022)
Depreciation 4,095
6,282
Provision for taxes Nil Nil Profit / (Loss) carried to Balance Sheet
(199,320)
(239,022)
DIRECTORS’ REPORTDear Members – M/s Jetro Petro Biotech Pvt LtdYour Directors have pleasure in presenting the fourth Annual Report on the business and operationsof the Company together with Audited Statement of Accounts for the year ended 31st March 2011. Thehighlights for the year under review are as follows: -
1. FINANCIAL HIGHLIGHTS: The performance of the Company during the period under review is
Summarized below: -
(Amount in Rs.)
65
2. Accounting policies have been selected and applied consistently, at the same
time judgments and Estimates have been made, 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 for the year under review.
3. Proper and sufficient care has been taken 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; and.
4. Accounts for the year ended 31st March, 2011 have been prepared on a going
concern basis.
AUDITORS
Sri.T.Nehru Chartered Accountant, Vijayawada retires at the conclusion of the forthcoming
Annual General Meeting and is eligible for re-appointment. The Board recommends the
appointment of Sri.T.Nehru, Chartered Accountant as Auditor to hold office till the conclusion
of next Annual General Meeting.
ACKNOWLEDGEMENTS
We thank our Holding Company for giving us a good amount which enabled us to take
contracts with farmers and start Jetropha plantation. Further we thank Sri. Balakrishna Rao,
Non Executive Chairman of Chemcel Biotech Ltd., our nominee Director ,for giving us all
help and co-operation the year for conducting affairs of the company.
Place: Vijayawada By the order of the Board
Date: 19.08.2011 sd/-
Y. Venkata Ramana Rao
Director
66
T. NEHRU, B.Com., F.C.A 59-4-2/2, 3rd Cross, Ashok Nagar, Mogalrajpuram,
Vijayawada – 520010. Ph. : 0866-2475826 Cell : 9246472408
AUDITORS REPORT
To
The Members of CHEMCEL BIO-TECH LIMITED
1 We have audited the attached Consolidated Balance sheet of CHEMCEL BIOTECH LIMITED
and JETRO PETRO BIOTECH PVT LTD ( subsidiary) as at 31st
March, 2011 and related Profit
and Loss account of the above Companies for the year ended on that date annexed thereto along with
consolidated cash flow statement.
2 These financial statements are the responsibility of the Company’s Management. Our responsibility is to
express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with accounting standards generally accepted in India. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material mis-statements. An audit includes examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the management as well as evaluating the over all financial
statements presentation. We believe that our audit provides a reasonable basis for our opinion.
3 We have audited the financial statements of subsidiary, whose financial statement reflects net loss of
Rs.1,99,320/- as at 31.03.2011 and total revenue of Rs. Nil for the year ended on that date.
4 We report the consolidated financial statements have been prepared by the company in accordance with
the requirements of accounting standard 21, consolidated financial statements issued by the Institute of
Chartered Accountants of India and on the basis of the separate audited financial statements of Chemcel
Biotech Limited and its subsidiary included in the Consolidated Financial Statements.
5. In our opinion and to the best of our information and according to the explanations given to us, the said
accounts give the information required by the Companies Act, 1956 in the manner so required, and give a
true and fair view in conformity with the accounting principles generally accepted in India.
a. In the case of Consolidated Balance sheet, of the state of affairs of the Company as on 31st
March, 2011
b. In the case of Consolidated Profit & Loss account, of the Profit for the period ended on that date.
c. In the case of Consolidated Cash Flow Statement for the year ended on 31st
March, 2011
Date :- 30.05.2011. T. NEHRU
Place :- Vijayawada Chartered Accountant
CP No.15207
67
ANNEXURE TO THE AUDIT REPORT
{Referred to in paragraph (3) of report of even date}
The Auditor’s report on the account of a Company to which this order applies shall include a statement
on the following matters, namely:-
I.
a) The Company is maintaining proper records showing full particulars, including quantitative details and
situation of fixed assets;
b) All fixed assets have been physically verified by the management at reasonable intervals; there is no
material discrepancies noticed on such verification.
c) The Company has not disposed off any substantial part of fixed assets during this year.
II. a) The physical verification of inventory has been conducted at reasonable intervals by the management;
b) The procedures of physical verification followed by the Management are reasonable and adequate in
relation to the size of the company and the nature of its business. There are no inadequacies in such
procedures.
c) The company is maintaining proper records of inventory and as informed to us, there is no
material discrepancies noticed on physical verification.
III. a) The Company has not granted any loans, secured or unsecured to parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly, Clause (iii)(b) to iii(d) of
paragraph 4 of the Order are not applicable to the Company for the current year.
b) The Company has taken interest free loan of Rs. 1,64,63,000/- from Sri K. T. Vijay Kumar, the
Managing Director of the Company, covered in the register maintained under section 301 of the
Companies Act 1956.
c) The rate of interest and other terms and conditions on which the loans have been taken by the
Company are not prima facie, prejudicial to the interest of the company.
IV. The company has an adequate internal control procedure commensurate with the size of the company
and the nature of its business, for the purchase of inventory of fixed assets and for the size of goods.
There is no accounting failure to correct major weaknesses in internal control.
V a) In our opinion and according to explanation and information given to us, the particulars of contracts
or arrangements referred to in Section 301 of the Companies Act, 1956 have been so entered in the
Register required to be maintained under this Section.
b) In our opinion and according to the information and explanations given to us, the transactions made
in pursuance of such contracts or arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
VI. The Company has not accepted deposits from the public, as per the provisions of Sections 58A and
58AA of the Act and the rules framed there under.
VII. In our Opinion, the company has an internal audit system commensurate with its size and nature of its
business.
VIII. According to information and explanations give to us the Central Government has not prescribed the
maintenance of the cost records by the company under clause (d) of sub section (I) of 209 of Companies
Act, 1956.
68
IX. a) The company defaulted in depositing undisputed statutory dues of an amount of Rs.1,31,00,745/-
b) The Company is disputing the sales tax liability for an amount of Rs. 8,37,576/- and income tax
liability of Rs. 46,90,183/-. Since the appeals are pending no provision has been made.
X. The company is a profit making company.
XI. The company has not defaulted in repayment of dues to a financial institution or bank. The company
has not issued any debentures.
XII. The company has not granted loans and advances on the basis of security by way of pledge of shares.
XIII. The Company is not a Chit Fund / Nidhi / Mutual Benefit fund / society.
XIV According to the information and explanations given to us the Company is not dealing or trading in
shares, Securities, Debentures and other Investments.
XV. The company has given guarantee for loans taken by others from Andhra Bank and the terms and
conditions whereof are not prejudicial to the interest of the Company;
XVI. In our opinion the Term Loans availed by the Company during the year were, prime facie, applied for
the purpose for which they were obtained.
XVII. The funds raised on short-term basis have been used for short-term investment and vice versa;
XVIII The Company has not made bonus allotment and right allotment to the party Covered in the Register
maintained under section 301 of the Act.
XIX. The company has not issued any debentures.
XX. The company has made preferential allotment of 20,00,000 shares of Rs. 10/- each fully paid and
preferential issue of 40,00,000 of share warrants of Rs. 10/- each paid @ 2.50 Ps. Per warrant.
XXI In our Opinion and according to the information given to us, no fraud on or by the Company has been
noticed or reported during the year.
Date :- 30.05.2011 T.NEHRU
Place :- Vijayawada Chartered Accountant
CP No.15207
69
CHEMCEL BIOTECH LIMITED
���������� ��������������
�� �����������������
The consolidated financial statements of Chemcel Biotech Limited and its subsidiary Jetro Petro Biotech
Private Limited are prepared under the historical cost convention in accordance with generally accepted
principles in India and the Accounting Standard 21 on “Consolidated Financial statements” to the extent
possible in the same format as that adopted by the Company for its separate financial statements on the
basis of going concern and as per applicable Indian accounting standards and are based on the accrual
basis of accounting.
� �� ���������������
Sales – Sales excludes Excise Duty, Cess, SHEC.
All expenses and income are accounted for on accrual basis as per the requirements of the Companies
Act.
!� "�#�$������
Fixed Assets are recorded at Cost. Cost is purchase cost, and in the case of Land, includes development
cost incurred, together with all incidental cost of acquisition, borrowing costs and other related internal
costs. Fixed Assets are shown Gross Block Less Depreciation.
%� ��&'��������
Freehold land is not depreciated.
Other assets are depreciated on Written down value method in accordance with the rates prescribed in
Schedule XIV to the Companies Act, 1956.
(� )*&��'*�������
The company assets at each Balance sheet date whether there is any indication that any asset may be
impaired and if such indication exists, the carrying value of such asset is reduced to its recoverable
amount and a provision would be made for such impairment loss in the profit and loss account,
however there is no such type of asset during the year.
+� ����'�*�����������
Contribution to Provident fund accounted on accrual basis. Gratuity provision is introduced and
accounted on accrual basis.
,� -����..��������$/'�.�*���'0�#&�����
During the previous year the Company gone for Public Issue and all Public Issue expenses are treated as
per sec. 35(D) of Income Tax Act.
1� ����''�$��#
Deferred tax is recognized on timing difference between taxable income and accounting income that
originated in one period and are capable of reversal in one or more subsequent periods.
2� ��&���.3�'4��/'��'����
The company has acquired additional land at Kondapalli and advance given for civil works and
machinery to set up Bio Diesel process plant, which is shown separately as capital work in progress.
70
��� )� ���*�����
The company had taken 60% stake in Jetro Petro Biotech Private Limited and invested Rs. 3,00,000/- it
becomes holding company to Jetro Petro Biotech Private Limited. The investments is shown at cost.
��� ��''�5��������
Borrowing costs attributable to the acquisition and construction of the Qualifying Assets, which takes
substantial period of time to get ready for its intended use, are capitalized as part of the cost of
respective assets up to the date when such asset is ready for its intended use. Other Borrowing costs are
charged to the Profit and Loss account.
� �6�.��������)� ����'0
Inventories of Spares, consumables, and components are valued at lower of cost and net realizable value.
Cost represents purchase cost and other incidental costs, if any. Cost of Inventories is computed on
FIFO basis.
�!� -���'7�*�..)�$���'����
There are no dues to the Micro/Small Scale Industries. We are not having accounts with Micro/Small
Scale Industries.
�%� ��8��$0
The Company opted to for the sales tax deferment scheme and the amount of sales tax payable to sales
tax department is payable from the 14th
year of deferment. The amount is shown as unsecured Loans
and do not carry any interest.
�(� ����'�$�����9����'������
Working Capital facility for an amount of Rs 7 Crores and inland credit of Rs. 2 Crores is obtained from
Corporation Bank, Benz Circle Branch, Vijayawada by giving the following securities:
Hypothecation of stocks and receivables (less than six months), Plant and machinery and all movable
fixed assets of the company and personal guarantee of Managing Director Mr.K T Vijaykumar & Non
Executive Chairman Mr.K Balakrishna Rao.
The company has obtained Term Loans for an amount of Rs. 38.80 lakhs & Rs. 91.47 lacs from Kotak
Mahendra Bank Limited, Vijayawada by mortgaging Kondapalli site and personal guarantee of directors.
The company has obtained mortgage loan of Rs. 65.00 lakhs from India Bulls against third party
guarantee.
�+��������������8�.��07����������������
The disclosures required by Accounting Standard 29 “Provision, Contingent Liabilities, contingent
Assets”, Company is disputing sales tax liability of Rs. 8,37,536/- and also income tax liability of
Rs. 36,40,723/- for which no provision has been made.
�,� ��.���$&�'�0$���.���'�
Related party disclosures have been set out in a separate statement annexed to this schedule. The related
parties, as defined by Accounting Standard 18 “Related Party Disclosure” issued by the Institute of
Chartered Accountants of India, in respect of which the disclosures have been made, have been
identified and taken on record by the Board.
71
Key Management Personnel
1. Sri K. Balakrishna Rao - Non Executive Chairman
2. Sri K. T. Vijay Kumar - Managing Director
3. Sri K. C. S. Prasad - Director – Production
4. Sri Ch. V. Vara Prasad Rao - Executive Director.
Related Parties
Jetro Petro Biotech Private Limited- Subsidiary company
Transactions with other related parties
Nature of transaction Amount
Advance paid to Jetro Petro Biotech Ltd Rs. 3,78,15,784/-
(paid towards supply of Jetropha seeds in terms
of agreement)
Interest free unsecured loan received from Sri K. T. Vijay Kumar Rs. 1,64,63,000/-
The following transactions were carried out with Key Management Personnel and related parties in the
ordinary course of business:
Transactions with Key Management Personnel
Particulars 2010-11 2009-10
Chairman - 3,98,456
Managing Director 9,85,335 11,07,279
Director – Production 8,08,146 8,77,682
Executive Director 6,21,000 1,03,500
Total: 24,14,481 24,86,917
Above includes Salary, Commission and perquisites.
18. Details of Quantitative information pursuant to para 3 & 4 C of Part II Schedule VI of the Companies Act, 1956:
The installed capacity is Liquids – 1000 KL, Granules – 1000 MT and Dusts – 300 MT.
Particulars in respect of production and sales
Production (Quantity)
Class of Goods
Current Year Previous Year
Raw materials consumed 19,32,496 17,21,098
Packing material consumed 3,92,249 1,59,696
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Particulars in respect of Sales for the year 2010-11 including Packing Material
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Garden Maintenance 0
Office Maintenance 25149
Electrical Maintenance 4510
Total 29659
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Designation Salary
(Rs.)
Commission
(Rs.)
Perquisites
(Rs.)
Total
(Rs.)
Managing Directors:
-Mr. K. T. Vijay Kumar
8,97,000 86,780 1,555 9,85,335
Whole Time Directors
- Mr. K.C.S. Prasad 6,90,000 86,780 31,366 8,08,146
- Mr. Ch.V.Vara Prasad Rao 6,21,000 - - 6,21,000
Grand Total : 22,08,000 1,73,560 32,921 24,14,481
The following is the computation of net profits of the company:
Net Profit after Tax as per Profit and Loss Account Rs. 86,78,000/-
Commission payable to Managing Director @ 1% of net profit Rs. 86,780/-
Commission payable to Production Director @ 1% of net profit Rs. 86,780/-
Quantity Value
Liquids - Lts 15,50,552 50,21,04,848
Dusts - Kgs 1,014 84,241
Granules- Kgs 912 26,889
Total 15,52,478 50,22,15,978
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Particulars 2010-11
Rs.
2009-10
Rs.
i) Statutory Auditors 1,20,000 1,20,000
ii) Internal Auditors 40,000 40,000
iii) In other Capacity
- for Tax Audit
- for Certification & other matters
20,000
20,000
Total: 1,80,000 1,80,000
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Particulars 2010-11
Rs.
2009-10
Rs.
a) Travelling Expenses Nil Nil
b) Subscriptions and others Nil Nil
Total: Nil Nil
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Particulars 2010-11
Rs.
2009-10
Rs.
Others Nil Nil
Total: Nil Nil
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Particulars Balance as on
31.03.2011
Rs.
Balance as on 31.03.2010
Rs.
Maximum Balance
during the year
Rs.
Jetro Petro Biotech Private Limited 3,78,15,784 5,52,92,783 5,52,92,783
74
Value of Imported materials consumed NIL
Value of Indigenous materials consumed 100%
Value of imports on CIF basis NIL
Value of Imported raw material, spare parts consumed NIL
Expenditure in foreign currency NIL
Earnings in foreign exchange on cash basis NIL
Figures of previous year have been re-grouped wherever necessary YES
Amount remitted during the year in Foreign Currency on account of
Dividends NIL
Earnings per share
Net Profit after tax Rs. 84,78,680/-
No. of Shares 2,79,18,406
Earning per Equity Share basic and diluted Rs. 0.30
FOR AND ON BEHALF OF BOARD
T. NEHRU K.BALAKRISHNA RAO K.T.VIJAY KUMAR
Chartered Accountant Chairman Managing Director.
S. RAHMATULLAH
Company Secretary
Place: VIJAYAWADA
Date : 30.05.2011
Non Executive chairman
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Dear Shareholder,
Sub: Green Initiative in Corporate Governance\The Ministry of Corporate Affairs has taken a “Green Initiative in Corporate Governance” byallowing paperless compliance by Companies through electronic made. In accordance withthe recent circular no.17/2011 dated 21.04.2011 and circular No 18/2011dated 29.04.2011issued by the Ministry, Companies can now send various notices and documents includingannual report, to its shareholders through electronic made to the registered e-mail addresses ofshareholders. It is a welcome move for the society at large, as this will reduce paper consumptionto great extent and allow share holders to contribute towards a Greener Environment. This is agolden opportunity for every shareholder of Hindustan Unilever to contribute to the corporateSocial Responsibility initiative of the Company
We therefore invite all our shareholders to contribute to the cause by filling up the form givenbelow and send it back to us in the attached postage prepaid envelope.
Let’s be part of this ‘Green Initiative’
Please note that as a member of the company you will be entitled to receive all suchcommunication in physical form, upon request.—————————————————————————————————————————————————————-——————————
E-COMMUNICATION REGISTRATION FORM
(In terms of circular no. 17/2011 dated 21.04.2011 issued by the Ministry of Corporate Affairs)
Folio No./Dp ID& Client ID : ………………………………
Name of 1st Registered Holder : …………………………………
Name of joint Holder(s) : ………………………………
………………………….
Registered Address : ………………………………
E-mail ID(to be registered ) : ………………………………
I/we shareholder(s) of Chemcel Bio Tech Limited agree to receive Communication from the Company in
electronic mode. Please Register my above e-mail id in your for sending communication through e-mail.
Date …………………
Signature……………………………………..
Note:
Shareholder(s) are requested to keep the Company informed as and when there is any change in the e-mail
address.
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CHEMCEL BIOTECH LIMITED Registered Office : 16-130/12, JRD Tata Industrial Estate
Autonagar 3rd Cross Road Extn, Kanuru, Vijayawada-520 007
ATTENDANCE SLIP
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL
NAME AND ADDRESS OF THE SHARE HOLDER
Folio No.
DP ID
Cliend ID
No.of Shares
I certify that I/We are member/proxy for the member of the Company. I /We hereby record my/our presence
at the 16h ANNUAL GENERAL MEETING of the Company to be held on Thursday, the 29h day of
September 2011 at 4.00 PM at conference hall of ‘Silverspoon Hotel, Door no.59A-8-12B, Gurunanaknagar
Colony Road, Vijayawada 520 008.
Signature of the Shareholder(s) or proxy.
CHEMCEL BIOTECH LIMITED Registered Office: 16-130/12, JRD Tata Industrial Estate
Autonagar 3rd Cross Road Extn, Kanuru, Vijayawada-520 007
Proxy Form
Folio No. DP ID Cliend ID No.of Shares
I / We __________________________ of _________________ in the district of _____________
______________________________ being a member/members of the Company hereby appoint
______________________ of __________________ in the district of ______________ or failing him
_____________________ of ______________________ in the district of _______________ ___________
as my/our proxy to vote for me / us on my/our behalf at the 16th ANNUAL GENERAL MEETING of the
Company to be held on Thursday the 29th day of September 2011 at 4.00 PM at conference hall of
‘Silverspoon Hotel, Door no.59A-8-12B, Gurunanaknagar Colony Road, Vijayawada 520 008 or at any
adjournment(s) thereof.
Signed this __________day of ______2011
Note: The proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered office of the company not less than 48 hrs before the time for holding the aforesaid meeting. The Proxy need not be a member of the company.
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Affix Revenue Stamp of Re.1.00