ORGIN AGROSTAR LIMITED
ANNUAL REPORT 2003-2004
Your Directors have pleasure in presenting the Fifteenth Annual Report of
your Company together with the Audited Accounts for fifteen Months' Period
ended 31st March '2004.
(Rs. In lacs)
15 months' period 15 months period
ended 31.03.2004 ended 31.12.2002
Turnover 60.97 1071.71
Other Income 8.87 30.75
Total 69.84 1102.46
Gross Profit/(Loss) (211.21) (670.28)
Depreciation 214.99 216.32
Interest 136.81 166.82
Taxation - -
Net Profit/loss) (570.11) (1053.41)
REVIEW OF OPERATIONS
The Income of the Company has decreased drastically to Rs. 69.84 Lacs.
The company could not operate the plant for most of the time due to various
reasons including high raw material prices. Most of the time Company was
engaged in the implementation of project for producing Maize Starch. This
would provide alternative raw material to the Tapioca Tuber. The project is
in the advanced stage of implementation and is expected to be completed by
the Second Quarter of this year. The Company is expected to turn around
during Second half of the year.
In addition to this project, the Company is also implementing an expansion
project to produce additional 10 MTPD of Dextrose Monohydrate and 10 MTPD
of Maltodextrine which would add substantially to the turnover and also
improve the profitability.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 217 (2AA) of the Companies Act, 1956, in respect of
Annual Accounts of the Company for 15 months period ended 31st March, 2004,
the Directors confirm that:
a. In the preparation of the Annual Accounts, the applicable accounting
standards have been followed.
b. The Directors have selected such accounting policies and applied them
consistently and make judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company as at 31st March, 2004 and of the loss of the Company for the
period ended on that date;
c. The Directors have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
presenting and detecting fraud and other irregularities;
d. The Directors have prepared the annual accounts on a going concern
Your Directors regret their inability to pay dividend to the sharesholders
for 15 months period ended 31st March 2004, in view of loss Incurred by the
The report on Corporate Governance is given elsewhere in the Annual Report.
Shri. K. Gopalakrishnan resigned as Director with effect from 04th June,
Shri. M.C. Agarwal has been appointed Additional Director of the Company in
the Board Meeting held on 30th April, 2003.
The Auditors in their report have made certain observations which have been
suitably explained in the notes to the accounts. These notes are self-
explanatory and do not call for further explanations.
M/s. N.K. Tharad & Co., Chartered Accountants, retire at the completion of
ensuing Annual General Meeting and are eligible for reappointment.
The Company has not paid Listing Fees to the following Stock Exchanges for
the year 2003-2004.
1. Ahmedabad Stock Exchange
2. The Calcutta Stock Exchange Association Limited
3. The Delhi Stock Exchange Association Limited
4. Notional Stock Exchange of India Limited
5. Madras Stock Exchange Limited
6. The Stock Exchange, Mumbai
1. Development in Human Resources
Your Directors wish to acknowledge the contribution made by each and every
employee. The direct employment strength stood at 139 compared to 159 in
the previous Accounting Period. Your company has embarked upon
reorganization of its capacities, marketing and distribution systems as
part of the Total Cost Management efforts. This includes right sizing of
the company's total Human Resources.
Information under Section 217 (2A) of the Companies Act, 1956 read with
"Particulars of Employees" Rules 1975, is not applicable for this
Accounting Period and does not form part of this report.
2. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo.
As required under Section 21 7 (1) (e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, particulars relating to conservation of energy,
technology absorption and foreign , exchange earnings and outgo ore annexed
Your Company is grateful for the cooperation and assistance extended by
Government of India, Government of Tamilnadu, Financial Institutions,
Consortium of Banks, Shareholders, our valued Customers and Suppliers.
For and on behalf of the Board
Chennai M.C. AGARWAL
24th May, 2004 Director
ANNEXURE TO DIRECTORS' REPORT
STATEMENT PURSUANT TO SECTION 217 (1) (E) OF THE COMPANIES ACT, 1956
A. CONSERVATION OF ENERGY
a. Energy conservation measures taken:
1. The Company had taken action during design stage of Maltodextrine and
DMH expansion to incorporate energy conservation techniques in the process.
2. Thermal and cold insulation have been provided to vessels and pipes to
3. Thennic Fluid Heater Burner Nozzles have been changed to conserve fuel.
4. Energy conservation audit team has been formed to evaluate the areas in
which further action can be taken to conserve energy.
b. Total Energy consumption and energy consumption per unit of production:
A. Power and fuel consumption UNIT From 01.01.2003 From 01.10.2001
To 31.03.2004 To 31.12.2002
Units KWH NIL 12,74,472
Total Amount Rs.(Lacs) NIL 116.84
Rate/Unit Rs. NIL 9.17
(b) Own Generation
(i) Through Diesel Generator
Units KWH 33,878 41,201
Unit per ltr. of Diesel Oil KWH 2.1 1.81
Cost/Unit Rs. 10.95 11.66
(ii) Through Steam Turbine
Generator Units NIL NIL
Units per ltr of fuel oil/gas NIL NIL
Cost/Unit NIL NIL
2. Coal (Specify Quality and
Quality-Leco & Husk used in
Quantity MT NIL 925
Total Cost Rs.(Lacs) NIL 9.25
Average Rate/MT Rs. NIL 1000
3. Diesel Oil (for thermic
Quantity KL NIL 49.88
Amount Rs.(lacs) NIL 10.46
Average rate/litre Rs. NIL 21.00
4. Others/Internal Generation
Quantity NIL NIL
Tatal Cost NIL NIL
Average rate/Tonne Tonne NIL NIL
5. Consumption per tonne of production with standards (if any)
UNIT From From
To 31.03.2004 To 31.12.2002
Production MT NIL 1039
Electricity KWH NIL 1226
Light Diesel Oil Ltrs. 16 48
Leco Kgs. NIL NIL
Husk Kgs. NIL 890
B. Technology Absorption
Form - B
I. Research and Development
The Company has a well equipped testing and application laboratory for
carrying out Research and Development work on Starch products. The Company
had developed a pilot farm in the factory premises for multiplying their
a. Future Plan of Action
The present efforts in regard to Tapioca Development will continue, and
discussions are under way with Research Institutions for propagating
improved hybrid varieties of Tapioca.
b. Expenditure on Research and Development
i. Capital NIL
ii. Recurring NIL
iii. Total NIL
iv. Total R & D expenditure as a percentage of total turnover. NIL
11. Technology Absorption, Adaptation and Innovation
1. a. Technology imported
Basic engineering drawings have been obtained from overseas technical
collaborator for the project. Starch Process know-how from Starcoso GmbH.
b. Year of Import 1990-91
c. Has technology been fully absorbed. Yes
d. If not fully absorbed, areas where this
has not taken place, reasons therefor
and further plan of action. N.A.
2. Technology Indigenous:
a. In house process has been developed for high Maltose Syrup, Malta
Dextrine and energy powder with a variety of flavours such as Orange,
Strawberry and Cola
C. Foreign Exchange earnings and outgo
a. Efforts : Company has exported Starch, Liquid Glucose and Honey to many
countries. Further possibilities of export to other countries are being
b. i. Export of Goods NIL
ii. Services of Exports 60,89,540
iii. Foreign Exchange earnings - Export sales (FOB) NIL
iv. Foreign exchange outgo NIL
v. Net foreign exchange earnings NIL
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
a. The main, business of the company is in Starch and Starch based
derivatives sector. This Sector has seen Positive growth during the post
year after overcoming the slackness of earlier years.
b. However unlike other major players, who use maize as the main raw
material, the company is dependent on Tapioca for it feedstock. The prices
and availability of Tapioca is highly fluctuating and hence the company is
constantly under pressure on its production costs.
c. However with the implementation of the Maize crushing project which will
produce Maize Starch, the Company would overcome this major bottleneck and
would be able to sell finished products at competitive prices.
The Company has tremendous opportunities for marketing its products in
South India being strategically located close to the main consuming
industries in the food, pharma and confectionary industries. There has been
substantial growth in these sectors due to entry of new players in the
confectionary business and rapid expansions in pharma business.
With increased production plans in downstream production like Dextrose,
Monohydrate and Maltodextrine and with the Company's ability to manufacture
products of high quality, there is tremendous potential to grow in these
The company also has exported its products to various countries and sees a
good export potential in Russia, Middle East and Far East countries.
With the completion of the Maize processing plant and enhancement of
capacities of products with better margins and there would be an
improvement of Company's performance in the next few years.
Risks and concerns:
The enormous delay in implementation of the critical projects have led to
the substantial fall in the manufacturing operations of the company. The
management is now implementing its plans in right earnest and would come
out with better performance in the next two years.
The statements above represent the view and intentions of the management
and efforts to realize the some are being done in right earnest. The
success depends on various internal and external conditions.
Internal Control System:
Your Company has established an advanced internal control system and manual
in the Purchase, Production and Marketing areas and in line with ERP system
Development in Human Resources:
The Company has an employee strength of 139 as compared to 159 in the
previous Accounting Period. The difference is due to the right sizing of
the various departments to achieve better deployment and improving
performance. The Company has cordial relations with the workers' union.