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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 51st Annual Report onthe business and operations together with the Audited Accounts of the Company for the yearended March 312021.

SUMMARY OF FINANCIAL RESULTS:-

Rs. in Lakhs

Particulars 2020-21 2019-20
Total Revenue 1244.53 1836.00
Total Expenses 1300.81 2013.07
(Loss) before Depreciation Interest Exceptional Item and Tax (56.28) (177.07)
Depreciation 9.45 19.61
Interest 2.01 1.11
Profit/(Loss) before Exceptional Item and Tax (67.74) (197.79)
Exceptional Items(net) 0 (506.99)
Profit/(Loss) before Tax (67.74) (704.78)
Tax Expenses
Profit/(Loss)for the year (67.74) (704.78)
Other Comprehensive Income 12.20 (14.81)
Total Comprehensive Income (55.54) (719.59)
Earnings per share 0.35 (3.69)

DIVIDEND

The Board of directors of the company has not recommended any dividendfor the year ended 31st March 2021.

PERFORMANCE

The performance of the company during the year under review issatisfactory and promising. Due to nation-wide lockdown imposed on account of Covid-19turnover got affected as compare to the previous year. The Board of directors will thriveto improve the performance during the current year irrespective of the covid situation.The business plan of traded products of the company would augment the turnover andprofitability of the company in the coming years. In addition the company during the yearmarketed health care products which were in well received in market.

A detailed note on performance is furnished in the managementdiscussion and analysis report. PROSPECTS

With the prospects of favourable monsoon during the balance of thecurrent season augmentation of supplies of traded goods from suppliers and reorientationof the marketing team it is expected that the company would register better performanceduring the coming year.

DIVERSIFICATION

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

SHARE CAPITAL:

The paid up equity share capital as on 31st March 2021remains unchanged at Rs.955.54 lakhs.

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

REDUCTION OF SHARE CAPITAL

During the year under review your Board of Directors at their meetingheld on 31.10.2020 approved a Scheme of Reduction of share capital (the Scheme) toextinguish / cancel 6627000 equity shares of the Company held by Promoters group of theCompany as detailed in the Scheme which is posted on the Company's website. TheScheme was approved by the shareholders through a special resolution vide postal ballotdated June 30 2021 and was taken on record by the stock exchanges (BSE - designatedstock exchange for this purpose). The Company is in process to file the application/scheme for reduction of capital before the NCLT Chennai. Upon sanction of the Scheme byNCLT the paid-up share capital of the Company stands reduced from 19110885 equityshares of '5/- each aggregating to '95554425 to 12483885 equity shares of '5/- eachaggregating to ' 62419425.

TRANSFER TO RESERVES

Your company has not transferred any amount to the reserves for theyear ended 31st March 2021 in the absence of profit.

MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE:

In terms of provisions of Regulation 34 of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015(hereinafter referred to as Listing Regulations) the Management Discussion and AnalysisReport is appended as Annexure I to this report.

PARTICULARS OF EMPLOYEES:

The details of remuneration of Directors and Employees in accordancewith the provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended as Annexure II to this report..

A statement showing the remuneration of employees who were in receiptof remuneration as prescribed under Rule 5(2) & Rule 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 form part of thisreport and will be provided 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 AnnualGeneral Meeting. He is eligible for re-election and offers himself accordingly subject tothe approval of the members at the ensuing Annual general meeting of the company.

ii) Mr. Gunasekaran independent director of the company reappointedfor second term of 5 years at the 50th Annual General meeting of the companyheld on 30.09.2020.

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

(i) Composition of the Board of Directors as on the date of this Reportis mentioned below;

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 06 Board Meetings were held the details of which aregiven in the Corporate Governance Report. The intervening gap between two meetings waswithin the period as prescribed under the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

(C) Policy on Directors' Appointment and Remuneration:

The Policy of the Company on Director's Appointment andRemuneration including criteria for determining qualifications positive attributesindependence of director and other matters provided under Section 178(3) of the CompaniesAct 2013 adopted by the Board is posted on the website of the Company www.kotharis.in.We affirm that the Remuneration paid to the director is as per the terms laid out in thesaid policy.

(D) Declaration by Independent Directors:

The Company has received necessary declarations from each IndependentDirector(s) under Section 149(7) of the Companies Act 2013 that they meet the criteriaof independence laid 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 theNomination and Remuneration Committee and the Stakeholder's Relationship Committee.All Committees are appropriately constituted. Details of the All Committee are listed inthe Corporate Governance Report.

BOARD EVALUATION:

Annual evaluation of the performance of the Board its Committees andof individual directors has been made pursuant to the section 134(3) of the CompaniesAct 2013.

The Nomination and Remuneration Committee ("NRC") reviewedthe annual performance of the individual Directors.

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

VIGIL MECHANISM:

The Company has established a mechanism for Director's andemployees to report their concerns relating to fraud malpractice or any other activity orevent which is against the interest of the Company. The Whistle Blower Policy is in place.Employees can report to the Management concerned unethical behaviour act or suspectedfraud or violation of the Company's Code of Conduct Policy. No Employee has beendenied access to the Audit Committee. The Vigil Mechanism policy of the company isavailable on our website www.kotharis.in.

CORPORATE SOCIAL RESPONSIBILITY:

As per the provision of Section 135 of the Companies Act 2013 allcompanies having a net worth of Rs.500 crore or more or a turnover of Rs.1000 crore ormore or a net profit of Rs.5 crore or more during any financial year are required toconstitute a CSR committee and hence our Company do not meet the criteria as mentionedabove hence the Company has not constituted any Corporate Social Responsibility Committeeand the provisions of Section 135 of the Companies Act 2013 is not applicable to theCompany.

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

The Company has in place a Sexual Harassment Policy in line with therequirement of the Sexual Harassment of Women at workplace (Prevention Prohibition andRedressal) Act 2013. All the employees (permanent Contractual temporary Trainees) arecovered under this policy. Company has constituted the internal complaint committee underthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. During the year under review no complaints were received falling under the categoryof Sexual Harassment of Women.

SECRETARIAL AUDITOR:

PPursuant to provisions of section 204 of the Companies Act 2013 readwith Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 your Company engaged the services of M/s. Santosh Senapati & Co. CompanySecretary in practice Chennai to conduct the Secretarial Audit of the Company for the 12months period ended on 31st March 2021. The Secretarial Audit Report (in Form MR-3) isattached as Annexure-III to this Report..

Secretarial audit report does not contain any qualifactory adverseremarks.

STATUTORY AUDITORS & AUDITORS REPORT:

At the 48th Annual General Meeting of the company held on 26thSeptember 2018 M/s. Arockiasamy & Raj Chartered Accountants Chennai werere-appointed as Statutory Auditors for a period of five years. The IndependentAuditors' Report on the accounts for the financial year ended 31st March2021 does not contain any qualification remarks. In the Audit Report has drawn attentionto certain financial notes without however qualifying their report.

During the year under review the statutory auditors have not reportedto the Audit Committee under section 143(12) of the Companies Act 2013 any instance offraud committed against the Company by its officers of employees the details of whichwould need to be mentioned in the Board Report.

COST RECORDS:

Maintenance of cost records as specified by the Central Governmentunder sub section 148(1) of the Companies Act 2013 is not required by the Company.

PARTICULARS ON CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENTTECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

(i) Energy Conservation: The superphosphate factory is under long leaseand the lessee has taken appropriate steps to ensure energy in a comprehensive manner. Thedisclosure pertaining to Energy conservation is not applicable to your Company.

(ii) Foreign Exchange Earnings and Outgo: The Company has not earned orspent any foreign exchange during the year under review. The disclosure pertaining toForeign Exchange Earnings and Outgo is not applicable to your Company.

(iii) Research and Development & Technology Absorption: The Companyis not directly engaged in manufacture. The disclosure pertaining to Research andDevelopment & 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 31stMarch 2021 the applicable accounting standards and schedule III of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force)have been followed along with the proper explanation relating to material departure;

b) They have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial Year and Loss of the Company for that period.

c) To the best of their knowledge and information they have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; and

d) They have prepared the annual accounts on a going concern basis. Theauditors have expressed an emphasis of matter on Going Concern in their Audit.

e) The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls though adequate arebeing strengthened on an ongoing basis quite effective to operate effectively; and

f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and such systems are adequate and operatingeffectively.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURES:

Kothari Marine International Limited is an unlisted material subsidaryof the Company. The Company is holding 99.99 percent shares of that Company and does nothave any Associate Company nor does it have Joint Venture with any entity. ConsolidatedFinancial statements are applicable to your Company. The policy for determining materialsubsidiaries is available in our website at www.kotharis.in.

CONSOLIDATION FINANCIAL STATEMENTS:

The Audited Consolidated financial statements of the company for theFinancial Year ended 31st March 2021 together with the report of theIndependent Auditors form part of the Annual Report.

Pursuant to first proviso to subsection (3) of Section 129 read withRule 5 of the Companies (Accounts) Rule 2014 a statement containing salient features offinancial statements of subsidiary is annexed as Annexure IV. PARTICULARS OFLOANS GUARANTEES OR INVESTMENTS:

The Company has not invested or given any loan or guarantee or in termsof Section 186 of the Companies Act 2013 during the financial year 2020-21.

RISK MANAGEMENT

The Company has implemented a risk management policy includingidentification therein of elements of risk if any which in the opinion of the Board isadequate.

EXTRACT OF ANNUAL RETURN:

In accordance with Section 92(3) of the Act and rule 12(1) of theCompanies (Management and Administration) Rules 2014 (as amended) a copy of the AnnualReturn of the Company shall be placed on the Website of the Company athttp://kotharis.in/wp-content/ uploads/2021/08/ANNUAL-RETURN-2020-2021.pdf.

RELATED PARTY TRANSACTIONS:

During the year under review the company has entered into any contractor arrangement in terms of section 188(1) of Companies Act 2013 have been on arm'slength and in ordinary course of business. Accordingly the particulars of thetransactions as prescribed in Form AOC - 2 is annexed as Annexure-V.

CORPORATE GOVERNANCE:

The provision of Corporate Governance is not applicable on the Companyin terms of Regulation 15(2) of SEBI (LODR) Regulations At the Company we constantlystrive to evolve and follow up on the Corporate Governance guidelines. However as amatter of good practice and best practices a separate section on Corporate Governance isannexed as Annexure- VI to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:

There are no significant and material orders passed by the Regulatorsor Court that would impact the going concern status of the company.

INTERNAL FINANCIAL CONTROLS:

The Company has a well-placed proper and adequate internal controlsystem which ensures that all assets are safeguarded and protected and that thetransactions are authorized recorded and reported correctly. The Internal FinancialControls with reference to financial statements as designed and implemented by the Companyare adequate. This has been endorsed by statutory auditors in their separate report whichis annexed.

INTERNAL AUDITOR:

M/s. N. Ganesan Associates Chartered Accountants as the InternalAuditor of the Company have carried out effective internal audit of the operations andaccounts of the company during the year.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY:

No material changes and commitments affecting the financial position ofthe company occurred.

LISTING:

The Company is listed in The Bombay Stock Exchange (BSE) and CalcuttaStock Exchange Limited (CSE). The Company has been suspended from trading due to penalreason and company 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 valuablesupport and help of M/s.Gemini Fertilizers both in management and financial mattersFinancial Institutions Government authorities Banks and Employees. The cooperation andthe forbearance of the members are gratefully acknowledged.

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