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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 2018-19

Dear Members

Your Directors have pleasure in presenting the 15th Annual Report on the business andoperations of the Company together with the Audited Accounts of the Company for the yearended 31st March 2019.

FINANCIAL RESULT

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

(Rs. in Lacs)
Particulars 2018-2019 2017-2018
Turnover 15271.02 9575.87
Profit Before Taxation 2001.32 636.25
Taxation 559.95 282.10
Profit /(Loss) after Tax 1441.38 354.15
Profit Before Tax Margin (%) 13.10 6.64
Profit After Tax Margin (%) 9.44 3.70

STATE OF COMPANY'S AFFAIR:

During the period under review the company has achieved turnover of Rs. 15271.02 lakhswith production of 25468 M.T. of Beneficiated Rock Phosphate 92672 M.T. of Single SuperPhosphate 977 MT of H.Acid & Other Dyes Intermediate Products 66839 M.T. ofSulphuric Acid Oleum Coloro Sulphonic Acid Liquid SO3 and other Products.

The profit of the company before tax is Rs.2001.32 lakhs and profit after tax is Rs.1441.38 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 SME Platform of "NSE EMERGE". Theannual Listing Fees for the Year 2019-20 has been Paid to the exchange.

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 2019 is provided in Annexure I forming part of thisreport and also disclosed on the website of the Company viz.http://www.krishnaphoschem.com.

STATUTORY AUDITORS' & 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 this annual general meeting tillthe conclusion of 18th AGM held in the year 2022.

In accordance with the Companies Amendment Act 2017 enforced on 7th May 2018 by theMinistry of Corporate Affairs the appointment of Statutory Auditors is not required to beratified at every Annual General Meeting.

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 appointed M/s Sourabh Bapna & Associates a Proprietorship firm of companySecretaries in practice to undertake the Secretarial Audit of the Company for financialyear 2019-2020. The Secretarial Audit report is provided in Annexure II forming part ofthis report.

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

COST AUDITORS & AUDITORS' REPORT

M/s. K. C. Moondra & Associates Cost Accountant was appointed Cost Auditors ofyour Company for FY 2019-2020.

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 appointed M/s K.C. Moondra & Associates Cost Accountants(Registration No. 101814) remuneration at such fixed by board of directors to conduct theaudit of the cost records of the Company for the financial year ending 31stMarch 2020.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 appointed M/s Sourabh Bapna & Associates PracticingCompanies Secretaries as Internal Auditor to conduct Internal Audit for the Financial Year2019-2020. The Company has received their consent for appointment.

The Internal Audit Report is received yearly by the Company and the same is reviewedand approved by the Audit Committee and Board of Directors for the year 2018-19.

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. 1521.61 lakhs to surplus & general reserve after making provision fordividend. With this the reserve & surplus has increased to Rs. 5160.93

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 2018-2019 subject to approval at theensuing Annual General Meeting.

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 2019.

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 the Board of Directors of the Company had appointed Mr. Mahendra KumarOstwal as Additional Non-Executive Director & Mr. Pankaj Ostwal as AdditionalNon-Executive Director and Mr. Bheru Lal Ostwal as an Additional Non-Executive IndependentDirector of the Company with effect from March 26 2019 and shall hold office up to thedate of the ensuing Annual General meeting of the Company.

During the year Mr. Praveen Ostwal Chairman & Managing Director of the CompanyMr. Sunil Kothari Whole Time Director & Chief Financial Officer and Ms. PriyankaBansal Company Secretary of the Company were designated as Key Managerial Personnel ofthe Company pursuant to Section 203 of the Companies Act 2013.

NUMBER OF MEETING OF BOARD OF DIRECTORS:

The Board of Directors duly met 14 (Fourteen) times on 18th April 2018 29th May 201805th July 2018 25th July 2018 30th July 2018 24th August 2018 17th September 201820th October 2018 31st October 2018 13th December 2018 25th January 2019 09thFebruary 2019 26th February 2019 and 26th March 2019 in the Financial Year 2018-19 inrespect of each meetings proper notices were given and the proceedings were properlyrecorded and signed in the Minutes Book maintained for the purpose. No resolution was bycirculator resolution.

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 IXin 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 VI and Annexure X forming part of this report.

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 of the Independent Directors are incorporated on the website of the 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 majorityof them having accounting or related financial management experience. Company Secretaryacts as Secretary 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 12th April 2018 24th July 201830th October 2018 and 28th January 2019.

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 VII formingpart of 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 2 Meetings i.e. on 05th April 2018 and 11thMarch 2019.

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 20th March2019

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 25thApril 2018 23rd July 2018 22nd October 2018 And 11th January2019.

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 as per recommendation of committee a sum of Rs. 6.51 Lacsduring the year 2018-19 as against Rs.10.36 Lacs as per provisions of Company Act 2013.

The Company is endeavored to ensure full utilization of the allocated CSR budget. TheCompany has been able to spent majority of funds committed for CSR Activity. Whateversmall unspent Amount left was on lack of Appropriate Transparent Proposal.

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 29th September 2018 and 30thMarch 2019.

The CSR Report for the financial year ended on March 31st 2019 is provided in AnnexureVIII forming part of this report.

SUBSIDIARY JOINT 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 2018-19.

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 31st March2019 the applicable accounting standards had been followed along with proper explanationrelating 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 2019 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 10/05/2019 Managing Director Director
(DIN: 00412207) (DIN: 02056569)