SANSCO SERVICES - Annual Reports Library Services - www.sansco.net ANNUAL REPORT 2004 - 2005 KHAITAN CHEMICALS & FERTILIZERS LIMITED www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net KHAITAN CHEMICALS & FERTILIZERS LIMITED ANNUAL GENERAL MEETING : BOARD OF DIRECTORS : Date 28th July, 2005 Shailesh Khaitan - Chairman & Managing Director Day Thursday AnilAgrawal - Director Time 1.00 P.M. O.P. Bagla - Director Place Registered Office J.L. Jajoo - Director Dr. P. Goyal - Director REGISTERED OFFICE : PRESIDENT & SECRETARY: J A.B. Road, Village Nimrani, R.S. Vijayvargiya Tehsil Kasrawad, District Khargone - 451 569 (M.P.) INDORE OFFICE ; AUDITORS: 301-308, Apollo Arcade S.S. Kothari Mehta & Company 1/2, Old Palasia, 146-149, Tribhuvan Complex, Indore - 452 018 (M.P.) Ishwar Nagar, Mathura Road, New Delhi-110 065 DELHI OFFICE SOLICITORS: 201, Skipper House, Khaitan & Partners 62-63, Nehru Place, Himalaya House, 23, Kasturba Gandhi Marg, New Delhi - 110 019 New Delhi-110 001 KOLKATA OFFICE: BANKERS 46-C, Rafi Ahmed Kidwai Road, State Bank of India 3rd Floor, Kolkata - 700 016 State Bank of Indore WORKS CONTENTS : Fertilizer & Chemicals Division > Notice 3-4 1. A.B. Road, Village - Nimrani t Diretors' Report 5-8 Tehsil Kasrawad, ^ Management Discussion & Analysis Report 9-11 Dist. Khargone - 451 569 (M.P.) t Report on Corporate Governance 12-17 >• Auditors' Report 18-19 2. Village Goramachia, Kanpur Road > Balance Sheet 20 Jhansi - 248 001 (U.P.) > Profit & Loss Account 21 l> Schedules to Accounts 22-32 3. Village Dhinva, Tehsil Nimbahera > Cash Flow Statement 34 Dist. Chittorgarh (Rajasthan) LISTING OF SHARES : Soya Division (Khaitan Agro) The Slock Exchange, Mumbai (B.S.E.) Dosigaon, Industrial Area, Stock Code : 507794 Ratlam (M.P.) ISIN No. : INE745B01010 (NSDL & CDSL) www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net KHAITAN CHEMICALS & FERTILIZERS LIMITED NOTICE NOTICE is hereby given that the "23rd ANNUAL GENERAL MEETING OF KHAITAN CHEMICALS & FERTILIZERS LTD." will be held at the Registered Office of the Company at A. B. Road, Village Nimrani, Tehsil Kasrawad, Dist. Khargone, Madhya Pradesh on Thursday, the 28th day of July, 2005 at 1.00 P.M. to transact there at the following business : ORDINARY BUSINESS: 1. To receive, consider and adopt the Audited Accounts for the year ended 31st March, 2005 and the Reports of the Directors and Auditors thereon. ; 2. To declare dividend. : 3. To appoint a Director in place of Shri O.P. Bagla, who retires by rotation and, being eligible, offers himself for re- appointment. 4. To appoint a Director in place of Dr. P. Goyal, who retires by rotation and, being eligible, offers himself for re- appointment. 5. To appoint Auditors and to fix their remuneration. By Order of the Board Registered Office: S/d A. B. Road, Village-Nimrani, Dist. Khargone (M.P.) (R. S. Vijayvargiya) President & Secretary Date: 29th day of April, 2005 Place : New Delhi NOTES: 1. A member entitled to attend and vote is entitled to appoint a proxy and vote instead of himself and such proxy need not be a member of the Company. Proxy Form must Breach the Company's Registered Office at least 48 hours prior to the time of holding the meeting. 2. Member(s)/Proxies should bring the attendance slip annexed herewith duly filled in for attending the meeting. 3. The Register of Members and Transfer Book of the Company will remain closed from 16th July, 2005 to 28th July, 2005 (both days inclusive). 4. Members are requested to notify to the Company immediately, quoting Registered Folio No., Change in their Address, if any, with the pin code number. 5. Non-resident members are requested to immediately notify: - (i) change in their residential status on return to India for permanent settlement; and (ii) particulars of NRE account, if not furnished earlier. 6. Members who are holding shares in identical names in more than one folios, are requested to write to the Company/Ankit Consultancy Pvt. Ltd. the Registrar and share transfer agent, to consolidate their holding in one folio. 7. Shareholders who are still holding physical share certificate are advised to dematerialised their shareholding to avail benefit of dematerialisation. 8. The Company has transferred all unpaid/unclaimed equity dividends up to the financial year 1996-97 to the Investor Education & Protection Fund (IEPF) established by the Central Government pursuant to section 205 C of the Companies Act, 1956. 9. Members desirous of obtaining any information concerning the accounts and operations of the Company are requested to send their queries to the President & Secretary at least seven days before the date of the meeting so that the required information can be made available at the meeting. www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net I KHAITAN CHEMICALS & FERTILIZERS LIMITED I DETAILS OF DIRECTORS SEEKING RE-APPOINTMENT AT THE ANNUAL GENERAL MEETING (IN PURSUANCE OF CLAUSE 49 OF THE LISTING AGREEMENT) Name of Director Shri O. P. Bagla Dr. P. Goyal Age 62 years 61 years Qualification C.A. BSc Tech. (Chemicals Engineering) and Ph.D in Chemical Engineering Date of Appointment 7th March, 1989 16th July, 1999 Expertise Rich and vast experience in the field Excellent General Management Skills of Taxation and Finance. & Vast Project Consulting Experience Other Directorships (excluding Pvt. Nil Nil Companies) as on 31st March, 2005 Chairman / Member of the 1. Khaitan Chemicals & Fertilizers Ltd.: 1. Khaitan Chemicals & Fertilizers Ltd.: Committees as on 31st March, 2005 Member: Member: 1 . Audit Committee 1. Audit Committee 2. Shareholder's/Investor's 2. Shareholder's/Investor's Grievances Committee Grievances Committee Chairman: 1 . Audit Committee 2. Shareholder's/Investor's Grievances Committee. By Order of the Board Registered Office: S/d A. B. Road, Village-Nimrani, Dist. Khargone (M.P.) (R. S. Vijayvargiya) President & Secretary Date: 29th day of April, 2005 Place : New Delhi www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net KHAITAN CHEMICALS & FERTILIZERS LIMITED DIRECTORS' REPORT To the members, Your Directors have pleasure in presenting the 23rd Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2005. FINANCIAL RESULTS (Rs. in lacs) 2004-2005 2003-2004 Surplus before interest and depreciation 1732.32 2099.57 Less: Interest & Financial Expenses 517.75 492.82 Cash Profit before tax 1214.57 1606.75 Less: Depreciation 436.37 406.81 Misc. Expenses Written off 4.59 4.28 Surplus before tax 773.61 1195.66 Prior Period adjustments 11.27 3.05 .A Profit /(Loss) before taxation 762.34 1192.61 Provision for current tax (37.92) (98.75) Deferred Tax (304.66) (441.26) Profit /(Loss) after taxation 419.76 652.60 Income Tax of earlier year 35.33 (8.50) Add: Transfer from Capital Subsidy 0.79 0.79 Net Profit/(Loss) 455.88 644.89 Add: Profit/(Loss) B/F from previous year 108.32 (339.27) Less: Transfer to - General Reserve 25.00 35.00 Proposed Dividend @ 15% 143.87 143.87 Corporate Dividend Tax 18.80 18.43 Balance carried to Balance Sheet 376.53 108.32 DIVIDEND Your Directors are pleased to recommend 15% Dividend on Equity Shares subject to approvals of the Financial Institutions/ Banks. PROJECT & FINANCE The company has successfully commissioned the Project for manufacturing of 200,000 TPA Single Super Phosphate Plants at Nimbahera (Rajasthan). The project for manufacturing of Granulated Single Super Phosphate has been commissioned in early April, 2005. The Project to put up a 1000 TPD Soya Processing Plant at the existing location at Ratlam is going on as per schedule and expected to complete by September 2005. We expect that it would be ready for operation well before the next Soya season i.e. October, 2005. The finance for the Project has been tied up with existing bankers. During the year the company has paid off the high cost debts taken from the IDBI by availing the FCNRB loan from the State Bank of India. The company has also approached to the IFCI for prepayment of their dues also in the same manner. www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net A corporate loan of Rs.500 lacs has been availed from State Bank of Indore for supplementing the Long Term working capital requirements. , Stale Bank of India and State Bank of Indore is financing the short term working capital requirement on regular basis. PERFORMANCE & FUTURE PLAN Thcugh there was good monsoon during the year resulting in good crop of Soybean but due to very low international prices of Soy meai and edible oil, the crushing margin remains negligible through-out the year. The good monsoon should have resulted in good demand of fertilizer but due to lack of proper policy at center particularly with reference to Single Super Phosphate Fertilizer and non availability of indigenous Rock Phosphate has lead to pressures on margin and consequent under utilization of capacity inspite of good demand. During the year the financial performance of the Company is quite satisfactory 'inspite of all odds', due to company's basic strength and proper risk management. The Company's turnover has marginally decreased by 4.42% to Rs. 18486.11 lacs from Rs. 19340.93 lacs mainly on account of low seed crushing. However efficient cost and inventory controls, exploration of the future commodity facility as a hedging as well as supporting tool to the industry and better marketing strategies have helped the Company to achieve satisfactory performance in the otherwise difficult year for both segments of the company. Your directors are of the firm opinion that the company shall perform better in its both segments of operations in the coming ys,-us.