PAREKH ALUMINEX LIMITED
ANNUAL REPORT 2011-2012
Your Directors take pleasure in presenting the Eighteenth Annual Report
together with the Audited Accounts for the financial year ended on March
(Rs. in Millions)
Particulars March 31, 2012 March 31, 2011
Net Sales (Net of Excise duty) 13,697.53 9,023.46
Other Income 36.48 17.82
Total Income 13,734.01 9,041.28
Consumption of R.M. 10,297.04 6,770.17
Other Expenditures 919.95 654.17
Total Expenses 11,216.99 7,424.34
Profit before finance cost and
depreciation 2,517.02 1,616.94
Finance Costs 714.36 363.07
Depreciation 599.23 441.86
Profit before tax 1,203.43 812.01
* Current 255.00 160.00
* Mat Credit (11.67) 0.00
* Deferred 113.50 (20.50)
Net Profit after tax 846.60 672.51
Proposed Dividend 51.76 45.29
Tax on Dividend 8.40 7.70
Debenture Redemption Reserve 148.90 67.60
General Reserves 85.00 67.50
Balance carried forward 2,214.45 1,670.57
The Company for the period ended March 31, 2012 recorded a turnover of
Rs.13,697.53 million, as against Rs. 9,023.46 million for the period ended
March 31, 2011. The profit before tax is Rs. 1,203.43 million for the
period ended March 31, 2012, as against Rs. 812.01 million for the previous
period. The profit after tax is Rs. 846.60 million as against Rs. 672.51
million for the previous period.
TRANSFER TO RESERVES:
During the year under review, the balance transferred to General Reserve
amounts to Rs. 85 million as compared to Rs. 67.50 million for the previous
The Board of Directors of the Company has recommended a dividend of Rs. 4/-
per share, i.e. 40% aggregating to Rs. 51.76 million. Together with
corporate dividend tax of Rs. 8.40 million, the total payout works out to
Rs. 60.16 million. The dividend, if approved, shall be payable to the
shareholders registered in the books of the Company and the beneficial
owners as per details furnished by the depositories as on September 29,
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:
The Company has transferred a sum of Rs. 0.14 million in respect of
unpaid/unclaimed dividend for the Financial Year ended March 31, 2004 to
the Investor Education and Protection Fund of the Central Government as
required under Section 205C of the Companies Act, 1956.
In accordance with the provisions of Section 256 of the Companies Act, 1956
and the Articles of Association of the Company, Mr. Vikram Mordani retires
by rotation at the ensuing Annual General Meeting of the Company and being
eligible, offers himself for re-appointment. Your Directors recommend his
re-appointment as Director of the Company.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
hereby confirm that:-
1. In preparation of the Annual Accounts for the year ended March 31, 2012
the applicable Accounting Standards have been followed along with proper
explanation relating to material departures;
2. They have selected such accounting policies in consultation with the
Statutory Auditors and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial
year ended March 31, 2012 and the profits of the Company for that year;
3. To the best of their knowledge and information, they 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 preventing and detecting fraud and other
4. They have prepared the Annual Accounts on a going concern basis.
Your Company has neither accepted nor renewed any deposit within the
meaning of Section 58A and 58AA of the Companies Act, 1956 and rules made
thereunder during the year ended March 31, 2012.
M/s. C. V. Pabari & Co., Chartered Accountants, Mumbai, the Statutory
Auditors of the Company, who would be retiring at the conclusion of the
forthcoming Annual General Meeting have expressed their inability to
continue as the Auditors of the Company.
The Company has received special notice as required under Section 225 of
the Companies Act 1956 proposing the appointment of M/s. Chaturvedi & Shah,
Chartered Accountants, Mumbai (FRN 101720W) as the Statutory Auditors of
the Company. M/s. Chaturvedi & Shah, Chartered Accountants have forwarded
to the Company certificate stating that the appointment, if made, will be
within the limit specified in Section 224(1B) of the Companies Act, 1956.
Your Directors recommend their appointment as Statutory Auditors of the
Company for the Financial Year 2012-13 and to hold office up to the
conclusion of the next Annual General Meeting of the Company.
Pursuant to the provisions of Section 233B of the Companies Act, 1956 and
in terms of order no. 52/26/CAB-2010 dated June 30, 2011 issued by Central
Government, and subject to the approval of the Central Government, the
Company has appointed
M/s. Kasina & Associates, Cost Accountants (FRN 01303) as the Cost Auditors
of the Company for Audit of the cost accounting records for the financial
year 2011-12 and 2012-13.
MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed review of operations, performance and future outlook of your
Company is given in the Management Discussion and Analysis, which forms
part of this Report.
Your Company is compliant with the requirements of Clause 49 of the Listing
Agreement. Necessary disclosures have been made in this regard in the
Corporate Governance Report. A certificate from the Statutory Auditors of
your Company regarding compliance with the requirements of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement is
attached to this report. The report on Corporate Governance is included and
forms part of this report.
The equity shares of the Company continue to be listed on BSE and NSE. The
annual listing fees for the financial year 2012-13 have been paid to the
PARTICULARS OF EMPLOYEES:
As required under the provisions of Section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employee) Rules, 1975, as amended,
details of employees who were in receipt of remuneration exceeding the
limits as prescribed under the said Section is given as below:
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
Information as per Section 217(1)(e) read with the Companies(Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 and forming
part of the Directors' Report for the year ended March 31, 2012 are as
CONSERVATION OF ENERGY:
The Company has a strong commitment towards energy conservation for the
benefit of the nation and itself. Efforts to optimize process parameters,
modernize & upgrade technology as well as equipments, with the objective of
increasing energy productivity are continuous and ongoing. Company ensures
optimization of resources and is committed to control wastages and avoid
air and water pollution.
Water is used on minimal basis. Company in order to conserve energy and
fuel, have installed high speed globally accredited automatic machines
which has higher productivity and thus consumes less power. Company has a
strategy of recycling of certain waste and thus conserves energies.
Automatic loading area, specialized warehousing saves extra movement of
vehicles and thus saves fuel and power. Company has aspirators with scrap
bailing system to reduce scrap% and increase productivity.
TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT AND RESULTANT BENEFITS:
Company has unique innovation strategy and has developed and trained human
force to adopt international technology to be used in process. Company has
automatic packing unit for foil containers and household foils which
increases productivity and reduces manual handling and well equipped in-
house tool room for machine and mould maintenance having leath machine,
surface grinder drill machine, surface grinder, bench grinder. New stackers
developed for semi automatic machines which has increased productivity and
minimized manual handling of the product. Company is market leader in India
due to its technical innovation and focus on continues upgrdation. Company
has philosophy of continues review and development of new innovative
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year Company's foreign exchange transactions are as follows:
[Rs. in Millions]
Particulars March 31, 2012 March 31,2011
Foreign Exchange earnings 1,626.43 924.79
Foreign Exchange outgo 2,118.82 1,265.72
The Directors acknowledge with gratitude and wish to place on record their
deep appreciation of the continued support and co-operation received by the
Company from the various Government authorities, Shareholders, Bankers,
business associates, customers and Financial Institutions during the year.
The Directors place on record their deep appreciation of the dedication and
commitment of your Company's employees at all levels and look forward to
their continued support in the future as well.
For and on behalf of the Board of Directors
Chairman and Managing Director
Date : August 25, 2012.
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE AND DEVELOPMENT:
India has witnessed a huge transformation in economic and social growth
resulting into emergence of the large Aluminium container and Kitchen Foil
Industry. This industry predominantly was run as small scale operations by
individual operators but has been transformed into organized structured
Industry recognized as Packaging products mainly in Food sector, Caterings,
Railways, Airlines, Hotels, Restaurants, etc. Aluminium being biodegradable
and good for Food packaging, the Industry is gradually migrating into a
FMCG sector. Further the product application for Aluminium containers has
been into Health and Hygiene sector also like Hospitals and Health centres
resulting into a sector being termed as Aluminium Consumer goods sector.
Currently India has limited players in organized sector in Aluminium
Containers and Kitchen Foils. Hardly couple of players may fall in category
of unorganized and organized players while on small scale and local area
basis there may be few more who have insignificant share in market making.
The Country has been seeing huge demand of this products due to increased
urbanization and hygiene awareness resulting into growth by existing
players and also few global Companies are trying to market their product
initially and may get into operations as and when they find the market
ready for their products. Further the Company is constantly introducing
newer products for newer application for newer markets; thereby increasing
the overall market of the products.
Economic growth in India during the last year has distinctly slowed down.
Industrial growth was soft and not in a buoyant mode. There was no
encouraging reports from Indian Exports.
Despite the gloomy situation, Parekh Aluminex Limited (PAL) registered a
sales growth of 49% in the domestic market and 73% in the export market.
EBIDTA grew by 56% and profit after tax grew by 26%. Domestic Sales grew as
a result of the Company's expanding market presence due to increase in
applications of the product, enhanced need for hygiene and awareness about
the eco friendly nature of our products. The Company also started sales to
big retailers like Bharti Walmart, Reliance, Big Bazaar etc. Export
business grew with growth coming from US and UK markets. EBIDTA to Sales
was 17.92% last year, this year it is 18.38%; there is an improvement of
2.57% due to economies of scale and better efficiencies. Net Profit to
sales was 7.45% last year, whereas this year it is 6.18%. The deterioration
is due to high finance cost as compared to last year due to higher
borrowings. Since the Company has entered absolutely nascent retail market
of foil containers & foil rolls, with more than 250 varieties the
inventories have gone up.
The young population, urbanization, international exposure to the current
people, environmental rules and regulations, nuclear family concepts, huge
demand for improved hygiene levels, huge growth in retail markets, provides
huge opportunities to scale up this business and industry will see huge
multiple growth in years to come.
* Substitution with other packaging material
* Not meeting the demand due to production constraints
* Managing the new retail business viz: logistics, selling chain, etc.
However substitution product to be successful needs to be cheaper, eco-
friendlier and better than the Company's products.
Company shall plan expansion in advance to meet the demand and with a
strong new management team the new retail business should be able to be
RISKS AND CONCERNS:
All the plants of the Company are at one location. Due to that Company
derives huge economies of scale & efficiencies. But there is always a risk
of any natural/unnatural eventualities occurring; that shall effect the
entire operations of the Company. Since Company is entering retail sales;
there would be challenges over supply chain, logistics etc. inventories and
debtors level is expected to be high till such time that the retail
business stabilizes. Demand not matching up with the supply as by the end
of 2012-13 production capacities of the Company would be almost at the
optimum utilization. There could be a slight drop in the bottomline in case
of finance cost going up.
CURRENT YEAR'S OUTLOOK:
Going forward Company plans to focus more towards retail business, product
brand building, develop custom made products for food chains. This will
result in a fundamental change in perception about the Company and there
will be lots of value addition thereby increasing the bottom line of the
Company. Branding of the Company's product range will also improve the
image of the Company. Company has also started sales of coloured foil
containers and foil rolls, which not only gives edge to the product line
but also creates value additions. Company is also in process of putting
various systems/processes in place, so that eventually the Company is
system/processes driven. We are also in the process of building a much
stronger and professional team in various faculties to facilitate smooth
Based on Company's order book position and execution capabilities; we are
hopeful of achieving 40% growth in the topline of the Company. We also
expect to increase our retail business share. This year the team,
logistics, branding and advertisements would be in place along with the
entire supply chain to launch the retail packs of foil containers and foil
rolls. We target to have everything in place by this year end so as to kick
start the business from early next year onwards. In the current year we
shall also be exploring new markets for exports. Overall we look to the
immediate future with optimism & sense of well being.