Your Directors have pleasure in presenting the 29th Annual Report of the Companytogether with the audited statements of account for the financial year ended March 312019.
| || ||Rs. |
|1. FINANCIAL RESULTS : ||2018-19 ||2017-18 |
|Sales ||27918.18 ||26022.68 |
|Other Income ||57.58 ||52.56 |
|Total Income ||27975.76 ||26075.24 |
|Profit before interest & depreciation exceptional items and Tax ||2060.20 ||2225.47 |
|Less: Financial Expenses ||842.39 ||1072.92 |
|Less:- Depreciation ||485.27 ||475.34 |
|Profit before tax ||732.54 ||677.21 |
|Tax expense (net) ||(10.75) ||(69.36) |
|Profit after tax ||721.79 ||607.85 |
|Other Comprehensive Income ||0.02 ||0.03 |
|Total Comprehensive Income for the period ||721.81 ||607.88 |
|Earning Per Share (face value of Rs. 1/- each) ||0.80 ||0.67 |
2. Corporate Overview and the state of Company's affairs
The year 2018-19 fared well for the Company. The revenue from operation of the Companyhas increase from Rs. 260.23 Crores (Previous Year) to Rs. 279.18 Crores. During the yearturnover of the fertilizers division has increase from Rs. 136.40 Crores (Previous Year)to Rs. 165.06 Crores. During the year the sale of seed division decline as company hasshifted its focus from low-margin open-pollination (OP) variety of seeds towards highmargin own (research based) variety of seeds. Apart from the above erractic rainfall alsohad an impact on seed sales.
The year 2018-19 continued to be a challenging period with low purchases by the farmersdue to low income. Also country faced consecutive drought (in some of the regionsespecially western Madhya Pradesh parts of Maharashtra). These are main states where theCompany sells its fertiliser product.
The Government of India could successfully implement the Direct Benefit Transfer systemfor the Fertilizer Industry however some error remain. We are hopeful that they wouldalso be rectified soon. The Government of India also agreed to keep the subsidy for theSSP sector separately earmarked within the overall Phosphates and Potassium segment.This shall further improve the liquidity in the sector once implemented.
During the financial year 2018-19 the Company has kept more focus on cost cuttingmeasures and as result of this company able to increase its profitability from Rs. 607.88lakhs (Previous Year) to Rs. 721.81 lakhs.
In the coming year 2019-20 the long range forecast of monsoons is about normal. Thiscoupled with the rising trend in the commodity prices which will give bettermarketability to SSP vis a vis other NPK products we expect to perform better in thisyear.
There has not been any material changes and commitments affecting the financialposition of the company which have occurred between the end of the financial year of thecompany to which Financial Statements relate and the date of this report. There have notbeen any changes in the Nature of Business of the Company during the year.
There have not been any changes in the Share capital of the Company during the year.
3. DIVIDEND :
The Board of Directors are pleased to recommend the dividend of Rs. 0.05 per share (5%)for the year 2018-19 on equity share capital subject to the approval of the shareholdersat the Annual General Meeting (Previous Year 5%) which shall absorb Rs. 45.31 lakhs(Previous Year Rs. 45.31 lakhs).
4. CAPITAL EXPENDITURE INCURRED :
The Company had incurred Rs. 147.65 lakhs as the capital expenditure during the yearunder review (Previous Year Rs. 282.73 lakhs).
5. DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP) DETAILS:
Pursuant to the provisions of sub section (6) of section 152 the Companies Act 2013Shri. Deepak Bhartia is liable to retire by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment. The brief resume of Shri. DeepakBhartia has been provided in the corporate Governance Report forming part of this report.There have not been any changes in the Directors and KMP during the year.
Pursuant to provisions of Section 203 of the Act and the Rules made thereunderfollowing are the Key Managerial Personnel (KMP) of the Company
Shri. Shashikant C. Bhartia- Chairman & Managing Director
Shri. Deepak C. Bhartia- Managing Director
Shri. Ashwin N. Bhartia- Executive Director
Shri. Narendra Pathak- Chief Financial Officer
Shri. Prasad Todankar- Company Secretary
Independent Directors' Declaration
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the provisionsof the Companies Act 2013 read with the Schedules and Rules issued thereunder as well asRegulation 16(1)(b) of Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force).
6. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by regulators/ courts that wouldimpact the going concern status of the Company and its future operations.
7. SHARE CAPITAL:
There have not been any changes in the share capital of the Company during the year.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system Members are requested to avail thefacility of dematerialization of shares with either of the Depositories as aforesaid andupdate their bank A/c and Email ID with the respective depository Participant.
8. INVESTORS EDUCATION & PROTECTION FUND
Dividend which was declared by the Company for the year ended March 31 2012 at theAnnual General Meeting held on August 3 2012 and remained unclaimed will be transferredto the Investor Education and Protection Fund of the Central Government on November 202019 pursuant to the provisions of Companies Act 2013. Thereafter no claim shall lie ondividend for the year ended March 31 2012 from the shareholders.
9. STATUTORY AUDITORS:
The Board of Directors on the recommendation of the Audit Committee has proposed toratify the appointment of M/s Amar Bafna & Associates Chartered Accountants Mumbaiand M/s Gautam R. Agrawal & Associates Chartered Accountants Akola as JointStatutory Auditors of the Company from conclusion of this Annual General Meeting till theconclusion of the 30th Annual General Meeting of the Company. They have furnished theconfirmation regarding their eligibility to the effect that their appointment if madewould be within the prescribed limit under the Act and they are not disqualified forappointment.
10. Cost Auditors
Pursuant to section 148 of the Act read with the Companies (Cost Records and Audit)Amendment Rules 2014 the cost audit records maintained by the Company in respect of itsfertilizers business are required to be audited. Shri. T.M. Rathi the Cost Accountantscarried out the cost audit of fertilizers business during the year. The Board of Directorshas also been appointed Shri. T.M. Rathi Cost Accountant as Cost Auditors for thefinancial year 2019-20 and he have confirmed that his appointment is within the prescribedlimits. As require by the provisions of the Act a resolution seeking Members approval forthe remuneration payable to Shri. T.M. Rathi Cost Auditors is included in the Noticeconvening the AGM.
11. INTERNAL FINANCIAL CONTROLS:
The company has in place adequate internal financial control system commensurate withthe size and scale of its operations. During the year such controls were tested and theCompany has in all material respects maintained adequate internal financial controlsover financial reporting as of March 31 2019 and are operating effectively. Statutory andinternal Auditors evaluate the efficiency and adequacy of internal control systemaccounting procedures and policies adopted by the Company for efficient conduct of itsbusiness adherence to Company's policies safeguarding of Company's assets preventionand detention of frauds and errors and timely preparation of reliable financialinformation etc and internal financial control system is being upgraded as per theirrecommendation.
12. COMPANY'S POLICY ON SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCEAND REMUNERATION :
The Company has a Nomination and Remuneration Committee (NRC) and the Composition ofCommittee and the Scope of the Committee are set out in the Corporate Governance Reportforming part of this Annual Report.
The Company's Policy for selection and appointment of Directors and their remunerationis based on its NRC policy which inter alia deals with the manner of selection of theBoard of Directors and such other matters as provided under section 178(3) of the Act andSEBI Listing Regulations.
The shareholders may refer the Company's website for the detailed Nomination &Remuneration Policy of the Company on the appointment and remuneration of Directorsincluding criteria for determining qualifications independence of Director and othermatters provided under sub-section (3) of section 178.
13. AUDITORS' REPORT:
The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force. The Auditors' Report forthe financial year ended 31st March 2019 does not contain any qualification reservationor adverse remark.
14. SECRETARIAL AUDIT :
M/s. Ferrao MSR & Associates Practicing Company Secretary carried out SecretarialAudit for the Financial Year 2018- 19 and their report is annexed herewith as Annexure C to this report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
In terms of Section 204 of the Companies Act 2013 the Board of Directors of theCompany has re- appointed M/s. Ferrao MSR & Associates Practicing Company Secretaryas Secretarial Auditors to conduct the secretarial audit for the financial year 2019-20.
15. EXTRACT OF ANNUAL RETURN :
Pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management andAdministration) Rules 2014 an extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure D'
16. PUBLIC DEPOSIT :
During the year the Company has not accepted any deposit within the meaning of Section73 and 74 of Companies Act 2013 read with the Companies (Acceptance of Deposit) Rules2014 (including any statutory modification (s) or re-enactment(s) for the time being inforce).
17. CORPORATE SOCIAL RESPONSIBILITY (CSR) :
The CSR expenditure incurred by the company during the financial year 2018-19 wasRs.14.59 lakhs ( Previous Year 18.21 lakhs) which was higher than the statutoryrequirement of 2% of the average profit for the last three years. In accordance toprovision of Section 135 of the Company Act 2013 and Companies (Corporate SocialResponsibility Policy) Rules 2014 the details of the CSR expenditure is annexed to thisreport as Annexure- A.
The CSR policy of the company mainly focuses on the welfare & sustainable growthand development of the weaker section of the Society which is in line with the company'sage old policy of providing necessary financial support for the upliftment of the poorpeople as well as welfare of the physically handicapped and deaf and blind citizens. TheCSR policy of the Company has emphasis on undertaking the various activities in rural arealike Rural development Promoting education Providing healthcare and Building thecommunity centers the details of which are available on the Company's website.
18. DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to section 134 of the Companies Act 2013 with respect to Directors'Responsibility Statement it is hereby confirmed that:
i. in the preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards had been followed and there is no materialdepartures from the same;
ii. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year i:e31st March 2019 and of the profit and loss of the company for that period;
iii. the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities
iv. the directors have prepared the annual accounts on a going concern basis;
v. the directors have implemented internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
vi. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
19. MEETING OF BOARD:
Ten meetings of the Board of Directors were held during the year under review. Forfurther details please refer report on Corporate Governance published in this AnnualReport.
20. RELATED PARTY TRANSACTIONS:
The Company has formulated a Policy on Related Party Transaction (RPT) which isavailable on Company's website. All contracts / transactions as specified in Section 188of the Act entered by the Company with related parties during the financial year were inthe ordinary course of business and on an arm's length basis with necessary prior approvalof members & audit committee. The Note No. 33 to Financial Statements sets out relatedparty disclosures.
Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on arms' length basis Form AOC-2 is not applicable to theCompany.
21. DISCLOSURE REGARDING PREVENTION OF SEXUAL HARASSMENT:
The Company is committed to maintain a productive environment for all its employees atvarious levels in the organisation free of sexual harassment and discrimination on thebasis of gender. The Company has framed a policy on Prevention of Sexual Harassment inline with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act2013 ("POSH Act"). The details of which areavailable on the Company's website.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY
As per the requirement of Section 177 (9) of the Companies Act 2013 and Regulation 22of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theCompany has established a Vigil Mechanism called the Whistle Blower Policy' forDirectors and Employees to report concern of unethical behavior actual or suspected fraudor violation of the Company's Code of Conduct or ethics policy and the details of theWhistle Blower Policy has been uploaded on the Company's website.
23. CORPORATE GOVERNANCE:
Pursuant to clause 34 of the listing agreement with the BSE Ltd a separate sectiontitled "Report on Corporate Governance" is being published as a part of thisAnnual Report along with the certificate of the auditors confirming the compliance ofconditions of the corporate governance. Various disclosure as required under section 134and 135 of the Companies Act 2013 are annexed to this report or covered in the CorporateGovernance Report such as related party transaction extract of Annual returnconstitution of various Board level committees CSR policy and initiative taken during theyear remuneration of the managerial personnel secretarial audit report etc.
24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
The Management Discussion and Analysis forms an integral part of this report has beenseparately furnished in Annual Report. The Management Discussion and Analysis givesdetails of organization overall industrial economic overview current and future outlookstrength and weakness cautionary statement.
25. RISK MANAGEMENT POLICY :
The Company has got the risk management policy which is in line with applicable lawsand which aims at identifying assessing and mitigating the various risks which areinherent in the business of the Company. The risk management policy helps in enhancing thebusiness values of the Company with code of conduct adequate quality checks and internalcontrols. The risk management policy has been developed and implemented by operative teamsat various levels of management.
26. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED :
During the year company has not made any investment not given loans and not providedguarantees in pursuant to provision of section 186 of the Companies Act 2013 read withthe Companies (Meetings of Board and its Powers) Rules 2014.
27. PARTICULARS OF EMPLOYEES UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 :
There were no employees whose remuneration was in excess of the limits prescribed underSection 197 (12) of the Companies Act 2013 read with Rules 5 (2) of Companies(Appointment and remuneration of Managerial personnel) Rules 2014.
The ratio of remuneration of each director to the median employee's remuneration andother details in accordance with sub-section 12 of the Section 197 of the Act read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 form part of this report as Annexure - E.
28. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO :
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Account) Rules 2014 is set out herewith as Annexure - B.
29. ACKNOWLEDGEMENTS :
Your Directors would like to express their appreciation for the support andco-operation received from financial institutions company's bankers governmentauthorities and shareholders during the year under review. The Company wishes to place onrecord their sincere appreciation to all employees for their commitment and continuedcontribution to the Company.
| ||For and on behalf of the Board |
| ||Shashikant C.Bhartia |
|Place : Mumbai ||Chairman & Managing Director |
|Date : 30th May 2019 ||DIN :00151358 |
Particulars required under Rule 8 of Companies (Account) Rules 2014.
A. CONSERVATION OF ENERGY :
In light of the global challenges concerning energy security the Company considersenergy management as one of the key components of its responsible business strategy.
The manufacturing units have continued their efforts to reduce the specific energyconsumption. Specific energy consumption and absolute units consumption are tracked on adaily basis at individual factory/ block level and also at consolidated manufacturinglevel. Energy conservation initiatives are being planned and implemented acrossmanufacturing locations. Some of the key measures taken in all the plants are as follows:-
1. All manufacturing units continued their efforts to reduce the specific energyconsumption.
2. Reduced machine power consumption by implementing reduction of over usages underusages idling and synchronization & transmission losses.
3. All the manufacturing units increase the awareness level amongst the workforce forvarious energy conservation measures at the plant level thereby conducting its operationmore efficiently.
4. Company is continuously monitoring energy consumption per unit of production atvarious facilities and taking actions towards conservation of energy in view of risingcost of energy and keeping with the Company's commitment to be an energy efficient entity
5. Energy conservation initiatives are being planned and implemented acrossmanufacturing locations.
6. Energy audits are conducted at all the manufacturing units at regular intervals andefforts were made to ensure optimum consumption of fuel and electricity.
7. Apart from regular practices and measures for energy conservation many newinitiatives were driven across the units.
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
| ||2018-19 ||2017-18 |
|A. POWER & FUEL CONSUMPTION || || |
|1. Electricity || || |
|a) Purchased from electricity Board (No. of units) ||4724182 ||4139325 |
|Total amount (Rs. in lakhs) ||373.97 ||284.10 |
|Rate/ Unit (Rs.) ||7.92 ||6.86 |
|b) Own generation ||Nil ||Nil |
|2. Fuel- Briquettes (Kgs) ||4317028 ||2933612 |
|Total amount (Rs. in lakhs) (for fertilizers units) ||191.37 ||165.87 |
|Average rate per Kg. (Rs.) ||4.43 ||5.65 |
|B. CONSUMPTION PER UNIT OF PRODUCTION (MT) || || |
|NPK granulated mixture fertilizers || || |
|Electricity (No. of units) ||18.12 ||15.80 |
|Briquettes (in Kgs) ||23.67 ||24.40 |
|SSP fertilizers || || |
|Electricity (No. of units) ||17.76 ||16.65 |
|G.S.S.P. fertilizers || || |
|Electricity (No. of units) ||13.78 ||12.64 |
|Briquettes (in Kgs) ||23.54 ||24.08 |
A. ABSORPTION OF TECHNOLOGY : Not Applicable
B. RESEARCH AND DEVELOPMENT (R & D) :
i. Specific areas in which R & D carried out by the Company:
The main focuses of the R & D activities of the Company are on quality improvementand reduced cost of production. The R & D department of seed division mainlyconcentrates on development of new high yielding varieties of seeds. The R & Ddepartment with the help of Bio-Technology and other advanced scientific techniquesenhanced the speed and precision of plant breeding.
ii. Benefits derived as a result of above R & D:
The effective functioning of the R & D department of fertilizers division helped inimproving in the quality of production of fertilizer improvement in productionperformance effluent treatment environment protection better working conditions andworker safety.The R & D activities in seed division develop the hybrid seeds withbetter yield considering the scientific-technological advances location adaptabilitysoil and climatic conditions in general.
iii. Future plans of action:
The company will continues its focus on development in R & D activities of thecompany and thereby improve in the cost effectiveness in the production of fertilizers andseeds. R & D activities focus on developing high yielding hybrid varieties of seeds.
iv. Revenue expenditure on R & D :
Rs. 26.04 lakhs (Previous year Rs. 47.82 lakhs).
FOREIGN EXCHANGE EARNINGS AND OUTGO :
(Rs. in lakh)
| ||2018-19 ||2017-18 |
|Total foreign exchange outgo : (Raw materials) ||3125.88 ||1595.99 |
|Total foreign exchange earned ||NIL ||NIL |