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Kothari Industrial Corporation Ltd.

BSE: 509732 Sector: Agri and agri inputs
NSE: KOTHARINDL ISIN Code: INE972A01020
BSE 05:30 | 01 Jan Kothari Industrial Corporation Ltd
NSE 05:30 | 01 Jan Kothari Industrial Corporation Ltd

Kothari Industrial Corporation Ltd. (KOTHARINDL) - Director Report

Company director report

Dear Members

Your Directors hereby present their 50th Annual Report on the business and operationstogether with the Audited Accounts of the Company for the year ended March 312020.

SUMMARY OF FINANCIAL RESULTS: Rs. in Lakhs
Particulars 2019-20 2018-19
Total Revenue 1836.00 1926.93
Total Expenses 2013.07 2099.59
(Loss) before Depreciation Interest Exceptional Item Tax (177.07) (172.66)
Depreciation 19.61 47.18
Interest 1.11 0.56
Profit/(Loss) before Exceptional Item and Tax (197.79) (220.40)
Exceptional Items(net) (506.99) 281.51
Profit/(Loss) before Tax (704.78) 61.11
Tax Expenses - -
Profit/(Loss)for the year (704.78) 61.11
Other Comprehensive Income (14.81) 54.76
Total Comprehensive Income (719.59) 115.87
Earnings per share (3.69) 0.32

DIVIDEND

The Board of directors of the company has not recommended any dividend for the yearended 31st March 2020.

PERFORMANCE

The performance of the company during the year under review is satisfactory andpromising. The Board of Directors will thrive to improve the performance during thecurrent year irrespective of the Covid situation. The business plan of traded products ofthe company would augment the turnover and profitability of the company in the comingyears.

A detailed note on performance is furnished in the management discussion and analysisreport.

PROSPECTS

With the prospects of favourable monsoon during the balance of the current seasonaugmentation of supplies of traded goods from suppliers and reorientation of the marketingteam it is expected that the company would register better performance during the comingyear. DIVERSIFICATION

The company has embarked upon marketing of sanitizers and face masks (health careproducts) the demand which is increasing due to COVID 19 incidence. These products arewell received by hospitals and general public.

SHARE CAPITAL:

The paid up equity share capital as on 31st March 2020 remains unchanged atRs.955.54lakhs.

The company has not issued any shares during the year under review.

TRANSFER TO RESERVES

Your company has not transferred any amount to the reserves for the year ended 31 stMarch 2020 in the absence of profit.

MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE:

In terms of provisions of Regulation 34 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as Listing Regulations) the Management Discussion and Analysis Report isappended as Annexure I to this report..

PARTICULARS OF EMPLOYEES:

The details of remuneration of Directors and Employees in accordance with theprovisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure II to this report.

A statement showing the remuneration of employees who were in receipt of remunerationas prescribed under Rule 5(2) & Rule 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 form part of this report and will beprovided to any member on a written request to the Company Secretary.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A) Change in Board Constitution

i) Mr. Pradip D Kothari Director will retire at the forthcoming Annual GeneralMeeting. He is eligible for re-election and offers himself accordingly subject to theapproval of the members at the ensuing Annual general meeting of the company.

ii) Mr. Dilip Machado Machado independent director of the company reappointed forsecond term of 5 years at the 49th Annual General meeting of the company held on30.09.2019.

iii) The tenure of Mr. Gunasekaran independent director of the company would lapse on29.10.2020 and is eligible for reappointment. The Board of Directors on the basis of therecommendation of the Nomination and Remuneration Committee has proposed hisreappointment subject to approval of the members of the company at the ensuing AnnualGeneral Meeting for further period of 5 years commencing from 30.10.2020 to 29.10.2025.

B) Details with regards to meeting of Board of Directors during the year of the Company

(i) Composition of the Board of Directors as on the date of this Report is mentionedbelow;

Name of the Director Designation Category
Mr. Pradip D Kothari Director/Chairman Non-executive Director
Mr. Rafiq Ahmed Vice Chairman & Managing Director Executive Director
Mr. Gunasekaran Director Independent Director
Mr. Dilip Machadoo Director Independent Director
Ms.Thoopjlamudu Arulpathy Rajalaxmi Director Independent Director

(ii) Board meeting:

During the year 07 Board Meetings were held the details of which are given in theCorporate Governance Report. The intervening gap between two meetings was within theperiod as prescribed under the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

(C) Policy on Directors' Appointment and Remuneration:

The Policy of the Company on Director's Appointment and Remuneration includingcriteria for determining qualifications positive attributes independence of director andother matters provided under Section 178(3) of the Companies Act 2013 adopted by theBoard is posted on the website of the Company www.kotharis.in. We affirm that theRemuneration paid to the director is as per the terms laid out in the said policy.

(D) Declaration by Independent Directors:

The Company has received necessary declarations from each Independent Director(s) underSection 149(7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013.

(E) KEY MANAGERIAL PERSONNEL:

The following are Key Managerial Personnel:

Mr. J Rafiq Ahmed Managing Director

Mr. Anil Kumar Padhiali Company Secretary cum Compliance officer

Mr. V. Singravel Chief Financial Officer

COMPOSITION OF BOARD'S COMMITTEES:

Currently the Board has three Committees: The Audit Committee the Nomination andRemuneration Committee and the Stakeholder's Relationship Committee. All Committees areappropriately constituted. Details of the All Committee are listed in the CorporateGovernance Report.

BOARD EVALUATION:

Annual evaluation of the performance of the Board its Committees and of individualdirectors has been made pursuant to the section 134(3) of the Companies Act 2013.

The Nomination and Remuneration Committee ("NRC") reviewed the annualperformance of the individual Directors.

In a separate meeting of Independent Directors performance of non-IndependentDirectors performance of the Board as a whole was evaluated.

VIGIL MECHANISM:

The Company has established a mechanism for Director's and employees to report theirconcerns relating to fraud malpractice or any other activity or event which is againstthe interest of the Company. The Whistle Blower Policy is in place. Employees can reportto the Management concerned unethical behaviour act or suspected fraud or violation ofthe Company's Code of Conduct Policy. No Employee has been denied access to the AuditCommittee. The Vigil Mechanism policy of the company is available on our website www.kotharis.in.

CORPORATE SOCIAL RESPONSIBILITY:

As per the provision of Section 135 of the Companies Act 2013 all companies having anet worth of Rs.500 crore or more or a turnover of Rs.1000 crore or more or a net profitof Rs.5 crore or more during any financial year are required to constitute a CSR committeeand hence our Company do not meet the criteria as mentioned above hence the Company hasnot constituted any Corporate Social Responsibility Committee and the provisions ofSection 135 of the Companies Act 2013 is not applicable to the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

The Company has in place a Sexual Harassment Policy in line with the requirement of theSexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013.All the employees (permanent Contractual temporary Trainees) are covered under thispolicy. Company has constituted the internal complaint committee under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Duringthe year under review no complaints were received falling under the category of SexualHarassment of Women.

SECRETARIAL AUDITOR:

Pursuant to provisions of section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of Mr. R. Srinivasan Company Secretaries in practiceChennai to conduct the Secretarial Audit of the Company for the 12 months period ended on31 st March 2020. The Secretarial Audit Report (in Form MR-3) is attached as Annexure-IIIto this Report.

Secretarial audit report does not contain any qualifactory adverse remarks.

STATUTORY AUDITORS :

At the 48th Annual General Meeting of the company held on 26th September 2018M/s.Arockiasamy & Raj Chartered Accountants Chennai were re-appointed as StatutoryAuditors for a period of five years. The Independent Auditors' Report on the accounts forthe financial year ended 31st March 2020 does not contain any qualification remarks.

PARTICULARS ON CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTIONAND FOREIGN EXCHANGE EARNINGS AND OUTGO:

(i) Energy Conservation: The superphosphate factory is under long lease and the lesseehas taken appropriate steps to ensure energy in a comprehensive manner. The disclosurepertaining to Energy conservation is not applicable to your Company.

(ii) Foreign Exchange Earnings and Outgo: The Company has not earned or spent anyforeign exchange during the year under review. The disclosure pertaining to ForeignExchange Earnings and Outgo is not applicable to your Company.

(iii) Research and Development & Technology Absorption: The Company is not directlyengaged in manufacture. The disclosure pertaining to Research and Development &Technology Absorption is not applicable to your Company.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors confirm that: -

a) In the preparation of the Accounts for the Financial Year ended 31st March 2020 theapplicable accounting standards and schedule III of the Companies Act 2013 (including anystatutory modification(s) or re-enactment(s) for the time being in force) have beenfollowed along with the proper explanation relating to material departure;

b) They have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the Financial Year and Loss ofthe Company for that period.

c) To the best of their knowledge and information they have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; and

d) They have prepared the annual accounts on a going concern basis. The auditors haveexpressed an emphasis of matter on Going Concern in their Audit Report.

e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls though adequate are being strengthenedon an ongoing basis quite effective to operate effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURES:

Kothari Marine International Limited is a subsidiary of the Company. The subsidiaryCompany is incorporated as on 13/07/2018 with the paid up capital of Rs.1000000/-. TheCompany is holding 99.99 percent shares of that Company and does not have any AssociateCompany nor does it have Joint Venture with any entity. Consolidated Financial statementsare applicable to your Company.

CONSOLIDATION FINANCIAL STATEMENTS:

The Audited Consolidated financial statements of the company for the Financial Yearended 31 st March 2020 together with the report of the Independent Auditors form part ofthe Annual Report.

Pursuant to first proviso to subsection (3) of Section 129 read with Rule 5 of theCompanies (Accounts) Rule 2014 a statement containing salient features of financialstatements of subsidiary is annexed as Annexure IV.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The Company has not invested or given any loan or guarantee or in terms of Section 186of the Companies Act 2013 during the financial year 2019-20.

RISK MANAGEMENT

The Company has implemented a risk management policy including identification thereinof elements of risk if any which in the opinion of the Board is adequate.

EXTRACT OF ANNUAL RETURN:

As required under Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual Return inMGT-9 is annexed with this Report as Annexure - V.

RELATED PARTY TRANSACTIONS:

During the year under review the company has entered into any contract or arrangementin terms of section 188(1) of Companies Act 2013 have been on arm's length and inordinary course of business. Accordingly the particulars of the transactions asprescribed in Form AOC - 2 is annexed as Annexure-VI.

CORPORATE GOVERNANCE:

The provision of Corporate Governance is not applicable on the Company in terms ofRegulation 15(2) of SEBI (LODR) Regulations At the Company we constantly strive toevolve and follow up on the Corporate Governance guidelines. However as a matter of goodpracticeand best practices a separate section on Corporate Governance is annexed asAnnexure- VII to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:

There are no significant and material orders passed by the Regulators or Court thatwould impact the going concern status of the company.

INTERNAL FINANCIAL CONTROLS:

The Company has a well-placed proper and adequate internal control system whichensures that all assets are safeguarded and protected and that the transactions areauthorized recorded and reported correctly. The Internal Financial Controls withreference to financial statements as designed and implemented by the Company are adequate.This has been endorsed by statutory auditors in their separate report which is annexed.

INTERNAL AUDITOR:

M/s.N.Ganesan Associates Chartered Accountants as the Internal Auditor of the Companyhave carried out effective internal audit of the operations and accounts of the companyduring the year.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:

No material changes and commitments affecting the financial position of the companyoccurred.

LISTING:

The Company is not in arrears of listing fees for the financial year 2019-2020 andcompany has taken steps for revocation of suspension.

DEPOSITS:

The Company has not accepted any public deposit during the year.

ACKNOWLEDGEMENT:

Your Directors place on record their appreciation of the valuable support and help ofM/s.Gemini Fertilizers both in management and financial matters Financial InstitutionsGovernment authorities Banks and Employees. The cooperation and the forbearance of themembers are gratefully acknowledged.

By Order of the Board of Directors For KOTHARI INDUSTRIAL CORPORATION LIMITED

PRADIP D KOTHARI
Place : Chennai CHAIRMAN
Date : 28.08.2020 DIN : 01315682

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