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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 2017-18

Dear Members

Your Directors have pleasure in presenting the 14th Annual Report on thebusiness and operations of the Company together with the Audited Accounts of the Companyfor the year ended 31st March 2018.

FINANCIAL RESULT

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

(Rs. in Lacs)
Particulars 2017-2018 2016-2017
Turnover 9575.87 7962.08
Profit Before Taxation 636.25 614.56
Taxation 282.10 284.40
Profit /(Loss) after Tax 354.15 330.16
Profit Before Tax Margin (%) 6.64 7.72
Profit After Tax Margin (%) 3.70 4.15

STATE OF COMPANY'S AFFAIR:

During the period under review the company has achieved turnover of Rs. 9575.87 lakhswith production of 12278 M.T. of Beneficiated Rock Phosphate 61958 M.T. of S.S.P. and 644MT of H.Acid & Other Dyes Intermediate Products. The company has also startedproduction of Sulphuric Acid Oleum Coloro Sulphonic Acid & Liquid SO3 in the monthof October 2017 and achieved production of 33052 M.T.

The profit of the company before tax is Rs.636.25 lakhs and profit after tax is Rs.354.15 lakhs.

CHANGE IN THE NATURE OF BUSINESS OF COMPANY

During the year under review there is no change in the nature of business of Companyexcept addition of chemical division.

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 2018 is provided in Annexure I formingpart of this report.

AUDITORS' & AUDITORS' REPORT

The Company has appointed M/s. Rajneesh Kanther & Associates Statutory Auditors ofthe Company for a term of 05 years till the conclusion of 18th AGM held in the year 2022.They have confirmed their eligibility to the effect that their appointment if made wouldbe within the prescribed limits under the Act and that they are not disqualified forappointment.

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 2018-19. The Secretarial Audit report is provided in Annexure II forming part of thisreport.

The Secretarial Audit report received from SP Jethlia & Co. does not contain anyqualification reservation or adverse remarks.

COST AUDITORS & AUDITORS' REPORT

M/s. K. C. Moondra & Associates Cost Accountant was appointed Cost Auditors ofyour Company for FY 2018-19. In accordance with the provisions of Section 148 of theCompanies Act 2013 and the Companies (Audit and Auditors) Rules 2014 and on therecommendation of the Audit Committee the Board has appointed M/s K.C. Moondra &Associates Cost Accountants (Registration No. 101814) remuneration at such fixed byboard of directors to conduct the audit of the cost records of the Company for thefinancial year ending 31stMarch 2019. The appointment and the remuneration ofthe Cost Auditor is required to be ratified subsequently by the Members of the Company andfurther subject to the approval of the Central Government.

INTERNAL AUDITOR & 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.

DIVIDEND & RESERVES:

The Board of Director of Company proposes to retain entire profits for the business ofthe company and carry forward the Reserves & Surplus of Rs. 7123.91 Lacs.

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 2018.

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 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 9 (Nine) times on 14th April 2017 26thMay 2017 26th July 2017 21stAugust 2017 19th September2017 13th November 2017 17th November 2017 15thJanuary 2018 and 10th February 2018 in the Financial Year 2017-18 in respect ofeach meetings proper notices were given and the proceedings were properly recorded andsigned in the Minutes Book maintained for the purpose. No resolution was by circulatorresolution.

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 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:

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. Representative ofStatutory Auditor is permanent invitee. Company Secretary acts as Secretary to theCommittee. 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 20th April 2017 31stJuly 2017 30th October 2017 and 25th January 2018.

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 andRemuneration 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 1 Meetings i.e. on 07th March 2018.

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 28thApril 2017 18th July 2017 25th October 2017 And 22ndJanuary2018.

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 or Programs tobe undertaken by the Company as per CSR Policy for consideration and approval by the Boardof 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. 5.65 Lacsduring the year 2017-18 as against Rs.7.96 Lacs as per provisions of Company Act 2013.Your company as part of its responsibility towards society has been taking welfaremeasures from time to time. The CSR Report for the financial year ended on March 31st2018 is provided in Annexure VIII 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 2017-18.

No. of complaints received: Nil No. of complaints disposed off: Nil

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:

(a) In the preparation of the annual accounts for the Financial Year ended 31stMarch 2018 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 2018 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 nosignificant material orders passed by the Regulators or Courts or Tribunal that wouldimpact 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 whistleBlower 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 29/05/2018 Managing Director Whole Time Director
(DIN: 00412207) (DIN: 02056569)