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Krishana Phoschem Ltd.

BSE: 538405 Sector: Agri and agri inputs
NSE: KRISHANA ISIN Code: INE506W01012
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Krishana Phoschem Ltd. (KRISHANA) - Director Report

Company director report

For the Year 2019-20

Dear Members

Your Directors have pleasure in presenting the 16th Annual Report on thebusiness and operations of the Company together with the Audited Accounts of the Companyfor the year ended 31st March 2020.

FINANCIAL RESULT

The summary of financial results for the year and appropriation of divisible profits isgiven below:

(Rs. in Lacs)
Particulars 2019-2020 2018-2019
Turnover 16294.73 15271.02
Profit Before Taxation 2078.26 1910.04
Taxation 700.84 558.89
Profit / (Loss) after Tax 1377.42 1351.15
Profit Before Tax Margin (%) 12.75 12.51
Profit After Tax Margin (%) 8.45 8.85

Note: The above Financial Statements as per Ind- AS. For the purpose of transitioningto Ind-AS the Company has followed guidance prescribed in Ind- AS 101 "First TimeAdoption of Indian Accounting Standards" with effect from April 1 2018 as thetransition date.

STATE OF COMPANY'S AFFAIR:

During the period under review the company has achieved turnover of Rs. 16294.73 lakhswith production of 68642 M.T. of Beneficiated Rock Phosphate 102381 M.T. of Single SuperPhosphate 1070 MT of H.Acid & Other Dyes Intermediate Products 64015 M.T. ofSulphuric Acid Oleum Coloro Sulphonic Acid Liquid SO3 and other Products.

The profit of the company before tax is Rs. 2078.26 lakhs and profit after tax is Rs.1377.42 lakhs. CHANGE IN THE NATURE OF BUSINESS OF COMPANY

During the year under review there is no change in the nature of business of Company.

LISTING OF THE COMPANY

The Shares of your Company were Listed on Platform of "National StockExchange". The annual Listing Fees for the Year 2020-21 has been Paid to theexchange.

SHARE CAPITAL

During the year ended 31st March 2020 there was no change in the issued and subscribedcapital of the Company the outstanding capital as on 31st March 2020 continues to be2490.00 Lakhs comprising of 249 Lakhs shares of 10/- each.

ANNUAL RETURN (SECTION 92):

The information required pursuant to the provisions of Section 134 (3) (a) and Section92 (3) of the Companies Act 2013 read with Rule 12 of Companies (Management andAdministration) Rules 2014 the extract of the Annual Return in Form MGT-9 for thefinancial year ended on March 31st 2020 is provided in Annexure I formingpart of this report and also disclosed on the website of the Company viz. http://www.krishnaphoschem.com.

STATUTORY AUDITORS' & STATUTORY AUDITORS' REPORT

The Company has appointed M/s. Rajneesh Kanther & Associates Statutory Auditors ofthe Company for a term of 05 years from the conclusion of 14th annual generalmeeting till the conclusion of 18th AGM held in the year 2022.

The Auditor's Report is self-explanatory and therefore do not call for any furthercomments/ clarifications and Auditor's report does not contain any qualificationreservation or adverse remarks.

SECRETARIAL AUDITOR & SECRETARIAL AUDITORS' REPORT

Pursuant to the provisions of Section 204(1) of the Companies Act 2013 and theCompanies (Appointment & Remuneration of Managerial personnel) Rules 2014 thecompany has Reappointed M/s Sourabh Bapna & Associates a Proprietorship firm ofcompany Secretaries in practice to undertake the Secretarial Audit of the Company forfinancial year 2020-2021. The Secretarial Audit report for financial year 2019-20 receivedfrom Sourabh Bapna & Associatesis provided in Annexure II forming part of this report.

The Secretarial Audit report received from M/s Sourabh Bapna & Associates does notcontain any qualification reservation or adverse remarks.

COST AUDITOR

M/s. K. C. Moondra & Associates Cost Accountant was appointed as Cost Auditors ofyour Company for FY 2020-2021.

In accordance with the provisions of Section 148 of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 and on the recommendation of the AuditCommittee the Board has Re-appointed M/s K.C. Moondra & Associates Cost Accountants(Registration No.101814) at such remuneration as fixed by board of directors to conductthe audit of the cost records of the Company for the financial year ending 31stMarch2021. The appointment and the remuneration of the Cost Auditor is required to be ratifiedsubsequently by the Members of the Company and further subject to the approval of theCentral Government.

INTERNAL AUDITOR & AUDITORS' REPORT

As per section 138 of The Companies Act 2013 read with Rule 13 of Companies (Accounts)Rules 2014 the company has Re-appointed M/s Sourabh Bapna & Associates PracticingCompany Secretaries as Internal Auditor to conduct Internal Audit for the Financial Year2020-2021. The Company has received their consent for Re-appointment.

The Internal Audit Report is received by the Company and the same is reviewed andapproved by the Audit Committee and Board of Directors for the year 2019-2020. All theobservations made by the Internal Auditors have been attended to.

INTERNAL CONTROL SYSTEM

The company has in place an adequate internal control system which is commensuratewith the size scale and complexity of the company. The internal auditors independentlyevaluate the adequacy of internal controls and concurrently audit the majority of thetransactions in value terms. Independence of the audit compliance is ensured by the directreporting of Internal Audit Division and Internal Auditors to the Audit Committee of theBoard.

During the period under review the Internal Financial Control were tested and noreportable material weakness in the design or operation were observed.

RESERVES

During the Year under review The Board of Director of company have recommended totransfer Rs. 1227.32 lakhs to surplus & general reserve. With this the reserve &surplus has increased to Rs. 8878.16 lakhs.

DIVIDEND

After considering earnings requirement for funds and with the objective of rewardingthe Shareholder's the Board has recommended final dividend of 5% being Rs. 0.50 per equityshare of Rs. 10/- each for the financial year 2019-2020 subject to approval at theensuing Annual General Meeting.

EMERGENCE OF COVID-19

Towards the end of the financial year the World Health Organization (WHO) declaredCovid-19 a pandemic and the outbreak. Covid-19 is seen having an unprecedented impact onpeople and economies worldwide. The Company is taking all necessary measures in terms ofmitigating the impact of the challenges being faced in the business. The Company isworking towards being resilient in order to sail through the current situation.

In order to support the Central and State Governments and the community at large theCompany has voluntary contributions to Governments Initiatives towards the said purpose.

The Company operates its business in conformity with the highest ethical and moralstandards and employee centricity. In view of the outbreak of the pandemic the Companyundertook timely and essential measures to ensure the safety and well-being of itsemployees at all its plant locations various branch offices and the head office. TheCompany observed all the government advisories and guidelines thoroughly and in goodfaith.

DEPOSITS:

During the year the Company has not accepted deposits from the public under Chapter Vof the Companies Act 2013. Your Company has not defaulted in repayment of deposits orpayment of interest during the year. There was no public deposit outstanding as on March31 2020.

REPORTING OF FRAUDS BY AUDITORS IF ANY:

No fraud has been reported by auditors under section 143 (12) of the companies act2013.

NO DEFAULT:

The company has not defaulted in payment of interest and/or repayment of loan to any ofthe financial institutions and/or bank.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with provisions of Companies Act 2013 and company's Articles ofAssociation Sh. Sunil Kothari (DIN: 02056569) Director of the Company retire byrotation and being eligible offers himself for re-appointment. The Board recommends hisre-appointment.

During the year Mr. Praveen Ostwal Managing Director of the Company Mr. SunilKothari Whole Time Director & Chief Financial Officer and Ms. Priyanka BansalCompany Secretary of the Company were designated as Key Managerial Personnel of theCompany pursuant to Section 203 of the Companies Act 2013.

NUMBER OF MEETING OF BOARD OF DIRECTORS:

The Board of Directors duly met 10 (Ten) times on 08th April 2019 10thMay 2019 27th June 2019 23rd August 2019 16thSeptember 2019 13th November 2019 02nd December 2019 13thJanuary 2020 03rd February 2020 and 03rd March 2020 in theFinancial Year 2019-20 in respect of each meetings proper notices were given and theproceedings were properly recorded and signed in the Minutes Book maintained for thepurpose. No resolution was passed by circulation.

PARTICULARS OF EMPLOYEES

The information required pursuant to the Section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of ratio of remuneration of each director to the medianremuneration of the employees of the Company is provided in Annexure III forming part ofthis report.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOING

The details as required under section 134 (3) (m) of the Companies Act 2013 read withthe Rule 8 of Companies (Account) Rule 2014 for conservation of Energy TechnologyAbsorption and Foreign Exchange earnings and outgo are given in Annexure IV forming partof this report.

PARTICULAR OF LOAN GUARANTEE AND INVESTMENT UNDER SECTION 186:

The information required for loans given investment made or guarantee given orsecurity provided under section 186 of the Companies Act 2013 read with the rule 11 ofCompanies (Meetings of Board and its power) Rule 2014 is given in Annexure V forming partof this report.

RISK MANAGEMENT:

Proper Risk Management Practices have been followed for the purpose of riskidentification analysis response planning and monitoring controlling and reporting.Although all risks cannot be eliminated but mitigation and contingency plans have beendeveloped to lessen their impact if they occur.

RELATED PARTY TRANSACTION UNDER SECTION 188

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company during the financialyear which were in the conflict of interest of the company.

Information on transactions with related parties pursuant to Section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure VIin Form AOC-2 and the same forms part of this report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report as requiredpursuant to the SEBI ((Listing Obligations & Disclosure Requirements) Regulations2015 is provided in Annexure VII and Annexure VIII respectively forming part of thisreport.

DECLARATION OF INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 to the effect that they meet the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013. The terms andconditions for appointment of the Independent Directors are incorporated on the website ofthe Company.

BOARD EVALUATION:

Pursuant to the relevant provisions of the Companies Act 2013 and the Listingregulations the Board has carried out an annual performance evaluation of its ownworking of its Committees and the Directors. The Nomination and Remuneration Committee hascarried out evaluation of every Director. The Independent Directors evaluated performanceof the Non-Independent Directors the Board as whole and the Chairperson of the Company.

COMMITTEES OF BOARD:

The Board of Directors of your Company has constituted the following committees interms of the provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosures Requirements) Regulation 2015:

AUDIT COMMITTEE DISCLOSURE UNDER SECTION 177:

The Audit Committee of the Company consists of 2 Independent Directors and 1 ExecutiveDirector. The Chairman of the Audit Committee is financially literate and majority of themhaving accounting or related financial management experience. Company Secretary acts asSecretary to the Committee.

The following Directors are the members of Audit Committee.

(1) Shri Ashish Kothari Chairman
(2) Shri Pradeep Agrawal Member
(3) Shri Praveen Ostwal Member

During the year the Committee had 4 Meetings i.e. on 10th April 2019 31stJuly 2019 10th October 2019 and 03rd February 2020.

NOMINATION & REMUNERATION COMMITTEE DISCLOSURE UNDER SECTION 178:

In pursuant to the provisions of section 178 (4) of the Companies Act 2013 Nominationand Remuneration Policy recommended by the Nomination and Remuneration committee is dulyapproved by the Board of Directors of the Company and is given in Annexure IX forming partof this report.

The following Directors are the members of Nomination and Remuneration Committee.

(1) Shri Pradeep Agrawal Chairman
(2) Shri Ashish Kothari Member
(3) Smt. Priyanka Surana Member

The Committee meets as and when any remuneration is to be fixed for any Directors/KMPs. During the year the Committee had not conducted any Meetings .

INDEPENDENT DIRECTORS COMMITTEE:

The following are the members of independent directors committee:

(1) Shri Pradeep Agarwal Chairman
(2) Shri Ashish Kothari Member
(3) Smt. Priyanka Surana Member

During the year one Independent Directors Committee Meetings were held on 18thMarch 2020 STAKEHOLDER RELATIONSHIP COMMITTEE:

The following Committee of Directors looks after the Investor Grievances:

(1) Shri Pradeep Agarwal Chairman
(2) Shri Ashish Kothari Member
(3) Shri Praveen Ostwal Member

During the year the 4 Stakeholder Relationship Committee Meetings were held on 06thMay 2019 31st August 2019 31st October 2019 And 03rdFebruary 2020.

CORPORATE SOCIAL RESPONSIBILITY:

In pursuant to the provisions of section 135 and schedule VII of the Companies Act2013 CSR Committee of the Board of Directors was formed to recommend (a) the policy onCorporate Social Responsibility (CSR) and (b) implementation of the CSR Projects orPrograms to be undertaken by the Company as per CSR Policy for consideration and approvalby the Board of Directors. CSR Policy is disclosed on the website of the Company viz.http:/ /www.krishnaphoschem.com.

As per provision of new enacted Company Act 2013 the Board of Directors have framedCorporate Social Responsibilities Committee having the following members:-

(1) Shri Pradeep Agarwal Chairman
(2) Shri Ashish Kothari Member
(3) Shri Sunil Kothari Member

The company has incurred an expenditure as per recommendation of committee a sum of Rs.24.84 Lacs during the year 2019-20 as against Rs. 21.89 Lacs (2% of Average Net profit ofthe company made during preceding three financial year) as per provisions of Company Act2013.

The Company has been able to spent entire funds committed for CSR Activities.

The Company shall always endeavor to ensure full utilization of the allocated CSRbudget.

Your company as part of its responsibility towards society has been taking welfaremeasures from time to time.

During the year the Committee had 2 Meetings i.e. on 30th September 2019 and 18thMarch 2020.

The CSR Report for the financial year ended on March 31st 2020 is providedin Annexure X forming part of this report.

SUBSIDIARY TOINT VENTURE AND ASSOCIATE COMPANY:

The Company does not have any Subsidiary Joint Venture and Associate Company.

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

The Company has in place an Anti Sexual Harassment Policy in line with the requirementof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainee) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2019-20.

No. of complaints received: Nil

No. of complaints disposed off: Nil

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (3) (c) & 134 (5) of the CompaniesAct 2013 with respect to Directors Responsibility Statement it is hereby confirmed that:

(a) In the preparation of the annual accounts for the Financial Year ended 31stMarch 2020 the applicable accounting standards had been followed along with properexplanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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 and ofthe profit and loss of the company for the year under review;

(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts for the financial year ended 31stMarch 2020 on a going concern basis; and

(e) That the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively. and

(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

HEALTH SAFETY QUALITY AND ENVIRONMENTAL PROTECTION

Your Company is ISO 9001:2015 certified and maintains high quality of product andprocesses. The quality assurance is ensured at all stages of manufacturing processesmaintenance and support services. Quality reviews are regularly conducted and feedbackfrom end users (farmers) is accorded utmost importance. Sophisticated instruments are inplace for monitoring of critical quality parameters.

MATERIAL CHANGES AND COMMITMENTS:

There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators or Courts or Tribunalthat would impact the going concern status of the Company and its future operations.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policyaims for conducting the affairs in a fair and transparent manner by adopting higheststandards of professionalism honesty integrity and ethical behavior. A mechanism hasbeen established for employees to report concerns about unethical behavior actual orsuspected fraud or violation of Code of Conduct and Ethics. It also provides for adequatesafeguards against the victimization of employees who avail of the mechanism and allowsdirect access to the Chairperson of the audit committee in exceptional cases.

The whistle Blower Policy has been uploaded on the website of the Company(www.krishnaphoschem.com).

ACKNOWLEDGEMENT

Your Directors wish to place on record their grateful appreciation for the co-operationand assistance received from Share Holders Customers Banks Financial CorporationsMadhya Pradesh State Mining Corporation various Government Authorities for their wholehearted support. Your Directors also recognize and appreciate the efforts and hard work ofall employees of the company and their continued contribution to company's progress.

For and on Behalf of the Board of Directors

Sd/- Sd/-
Place Bhilwara (Praveen Ostwal) (Sunil Kothari)
Date 13/07/2020 Managing Director Whole Time Director
(DIN: 00412207) (DIN: 02056569)

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