Your Directors have pleasure in presenting their Annual Report together with theAudited Accounts of the Company for the year ended March 31 2020. (Amount in lakhs Rs.)
|FINANCIAL RESULTS || |
| ||Current year ||Previous year ||Current year ||Previous year |
|Turnover ||7883 ||7741 ||7883 ||7741 |
|EBIDTA ||717 ||898 ||717 ||896 |
|Finance Cost ||412 ||509 ||412 ||509 |
|Depreciation ||106 ||113 ||106 ||113 |
|Tax Provisions ||(14) ||132 ||(14) ||132 |
|Profit after tax ||213 ||144 ||212 ||142 |
|Other Comprehensive Income ||(11) ||3 ||(11) ||3 |
|Total Comprehensive Income ||202 ||147 ||201 ||145 |
BUSINESS PERFORMANCE & AFFAIRS
Your Company Sold 67350 MT Single Super Phosphate Fertiliser comprising of Powder &Granulated in the year 2019-20 compared to 63970 MT sold in last year. Thus registering agrowth of over 5%.
During the year under review Your Company achieved Earnings before providing forInterest Depreciation & Tax of Rs.717 lakhs compared to Rs.898 lakhs in previousyear. However after providing for Interest Depreciation Tax and Other ComprehensiveItems Total Income during the year stood at Rs.202 lakhs compared to Rs.147 lakhs inprevious year.
Goods and Service Tax (GST) on Sale of fertiliser is at 5% whereas Input Tax on"Goods" and "Services" purchased / availed varies from 5% to 18%.Government is refunding accumulated GST suffered on Goods only. Thus over Rupees Threecores Tax incurred on Services remains in books. The Company has taken up the matters forrefund on the basis of recent Court Orders.
Govt. of India has allowed Nutrient Based Subsidy of Rs.2826/- per MT on sale of SingleSuper Phosphate fertiliser for the year 2019-20. The subsidy has been reduced to Rs.2643per MT for the year 2020-21. The Company has incurred heavy losses due to: a. Lock down ofoperations during April & May 2020 due to COVID 19 Pandemic; b. Damages to Company'sproperties due to Cyclone Amphan in May. 2020.
However demand for Fertiliser is expected to be good and prices of Almost AllAgricultural Product are very buyont.
Shortage of Agricultural Labour:- the situation has eased considerably as migrantlabour have returned and are taking this job due to Pandemic COVID-19.
Management expects that losses incurred will be recovered due to above favourablefactors.
The Company Equity Shares are listed at a) BSE Ltd. (Bombay Stock Exchange Ltd.) withScrip Code:542123 under ISIN:INE398C01016 and b) Calcutta Stock Exchange Ltd.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL) withISIN:INE398C01016. SEBI(Listing Obligations and Disclosure Requirements) (FourthAmendment) Regulations 2018 has made transfer of securities compulsorily indematerialised form w.e.f. 1st April 2019. As on March 31 2020 94.56%of theshare capital stands dematerialized.
The Company has approached for withdrawal of Bank Loan Rating since the Present BankingLimits do not require Bank Loan Rating. The last credit rating over the years haveimproved as follows:
|Rating Issued in ||July 2019 ||May 2018 ||Jan 2017 ||Nov 2015 |
|Long Term Rating ||BB+ ||BB ||BB- ||B |
|Short term Rating ||A4+ ||A4+ ||A4+ ||A4 |
To conserve resources no dividend is proposed by the Company.
TRANSFER TO GENERAL RESERVES
The Company has transferred a sum of Rs.20 lacs to General Reserve.
SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT
In compliance with the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors upon the recommendation of the Audit Committee has approved the appointment ofCS Ajay Kumar Agarwal Proprietor of M/s Agarwal A & Associates Company Secretariesin Whole-time-Practice [C.P. No. 13493 (FCS-7604)] as the Secretarial Auditor of theCompany for the Financial Year ending March 31 2021. The Secretarial Audit Report for thefinancial year ended March 31 2020 in Form MR-3 forms an integral part of this reportand is annexed as Annexure A(i). .
MANAGEMENT DISCUSSION AND ANALYSIS
Management discussion and analysis comprising details of the overview industrystructure and development of the Company is annexed as Annexure B and forms an integralpart of the Director's Report.
There has been no alteration of share capital during the year.
The paid-up Equity Share Capital as on 31st March 2020 was Rs.360.75 lacs. During theyear under review the Company has not issued any shares. The Company has not issuedshares with Differential Voting Rights. It has neither issued Employee Stock Options norSweat Equity Shares and does not have any scheme to fund its employees to purchase theshares of the Company.
Smt Sonali Sen (DIN:00451839) was appointed as an Independent Director of the Companyon 27th August 2019 subject to approval of the members. The members of theCompany have consented to her appointment in the Annual General Meeting held on 26thSeptember 2019. Shri Dilip P Goculdas (DIN: 00367409) has been re-appointed as anIndependent Director for a further period of 5 years through a special resolution at theAnnual General Meeting held on 26th September 2019. Shri Binod Khaitan retiresby rotation and being eligible offers himself for re-appointment. Particulars of theDirectors seeking appointment / re-appointment are appended in the notes forming part ofthe notice for the ensuing Annual General Meeting.
The Board of Directors of the Company on the recommendation of the Nomination andRemuneration Committee has appointed Smt Sonali Sen (DIN:00451839) on 27thAugust 2019 as an Independent Director subject to approval of the members of the Company.The members of the Company have given consent to her appointment as an IndependentDirector of the Company for a period of Five Years and not liable to retirement in theAnnual General Meeting held on 26th September 2019.
DECLARATION BY INDEPENDENT DIRECTOR
Independent Directors hold office for a fixed period of five years and are not liableto retire by rotation. The Company has received declarations from Independent Director ofthe Company confirming that they meet the criteria of independence as prescribed underSection 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (LODR)Regulations.
The terms of appointment of Independent Directors are available in the Company's website.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Your Board of Directors met 5 times during the financial year 2019-20 the dates being30th May 2019 8th August 2019 27th August 2019 2ndNovember 2019 and 12th February 2020. Intervening gap between two meetings iswithin the time limit prescribed under the Companies Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review.
c) The directors have 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 have prepared the annual accounts on a going concern basis.
e) The directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively.
f) The directors have devised proper system to ensure compliance with the provisions ofall applicable laws and that such system are adequate and operating effectively.
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of section 134(3)(p) of the Companies Act 2013 andapplicable Regulations of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board adopted a formal mechanism for evaluating its performance andas well as that of its Committees and Individual Directors. The exercise was carried outthrough a structured evaluation process covering various aspects of the Boards functioningsuch as composition of the Board &Committees experience & competenciesperformance of specific duties & obligations governance issues etc. The evaluation ofthe Independent Directors was carried out by the entire Board and that of theNon-Independent Directors were carried out by the Independent Directors. The Directorswere satisfied with the evaluation results which reflected the overall engagement andeffectiveness of the Board and its Committees with the Company.
KEY MANAGERIAL PERSONNEL
Shri Suresh Kumar Bangur Executive Director &CEO (DIN:00040862) Shri Ajay BangurPresident & CFO (PAN:ADRPB5699N) and Shri Shankar Banerjee (ACS 45073) Dy. Secretaryof the Company are the Key Managerial Personnel of the Company.
APPOINTMENT AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES
In adherence of section 178(1) of the Companies Act 2013 the Board of Directors ofyour Company in its Meeting held on 15th May 2014 approved a policy ondirectors' appointment and remuneration including criteria for determining qualificationspositive attributes independence of a director and other matters provided u/s 178(3)based on the recommendations of the Nomination and Remuneration Committee. The broadparameters covered under the Policy are Company Philosophy Guiding Principles Nominationof Directors Remuneration of Directors Nomination and Remuneration of the Key ManagerialPersonnel (other than Managing/ Whole-time Directors) Key-Executives and SeniorManagement and the Remuneration of Other Employees. The Company's Policy relating toappointment of Directors payment of Managerial remuneration Directors' qualificationspositive attributes independence of Directors and other related matters as provided underSection 178(3) of the Companies Act 2013 is furnished in Annexure D and forms part ofthis Report.
INTERNAL CONTROL SYSTEM &ADEQUACY
Your Company has an Internal Control System commensurate with the size scale andcomplexity of operations. To maintain its objectivity and independence the InternalAuditor reports to the Chairman of the Audit Committee. The Internal Auditor monitors andevaluates the efficacy and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. Based on the report of internal auditor process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board for its direction. The Company has an adequate internalfinancial controls system over financial reporting and operating effectively as at 31March 2020.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Your Company has not entered into any transactions within the purview of Section 186 ofthe Companies Act 2013.
Your Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
M/s Abhinandan Goods Pvt. Ltd. is the wholly owned subsidiary of your Company.Particulars of subsidiary company is presented in Form AOC-1 as per Annexure E forming apart of the Directors Report. The annual financial statements of the subsidiary andrelated detailed information are kept at the Registered Office of the Company and also atthe Registered Office of the subsidiary company and will be available to investors seekinginformation at any time during business hours.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company and its subsidiary which forms apart of the Annual Financial Statements have been prepared in accordance with theprovisions of section 129(3) of the Companies Act 2013. The salient features of theFinancial Statement including details of performance and financial position of theSubsidiary Company is presented in the prescribed format in Form AOC-1 as per Annexure-Eforming a part of the Director's Report.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in Form No. MGT 9 forms part of the Board's Report andis annexed herewith as Annexure - G.
As on March 31 2020 your company had 42 permanent employees. The company acknowledgesthe importance of human value and ensures that proper encouragement both moral andfinancial is extended to employees to motivate them. The company maintained cordialrelationship with workers and staff during the year. Particulars of employees requiredunder section 197(12) of the Companies Act 2013 read with Rule 5(1) of Companies(Management and Administration) Rules 2014 is annexed in Annexure H and forms an integralpart of this report.
RELATED PARTY TRANSACTIONS
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 with Promoters KeyManagerial Personnel or other designated persons which may have potential conflictinginterest with your company at large. A statement of all Related Party Transactions isplaced before the Audit Committee for its review specifying the nature value and termsand conditions of the transactions. Details of the transactions with Related Parties areprovided in the accompanying financial statements.
CODE OF CONDUCT
The Code of Conduct adopted by your Board of Directors is applicable to Directorssenior management and employees of the Company. The Code is derived from three interlinkedfundamental principles viz. good corporate governance good corporate citizenship andexemplary personal conduct in relation to the Company's business and reputation. The Codecovers commitment to responsibility and sustainable development concern for occupationalhealth safety and environment a gender friendly workplace transparency andauditability legal compliance and the philosophy of leading by personal example.
VIGIL MECHANISM & WHISTLE BLOWER POLICY
Your Company has in place a robust vigil mechanism for reporting genuine concernsthrough the Company's whistle blower policy to deal with fraud or mismanagement if any.The Policy ensures that strict confidentiality be maintained whilst dealing with concernsand that no discrimination will be meted out to any person for a genuinely raised concern.
PREVENTION OF INSIDER TRADING
Your Company's Code of Conduct for Prevention of Insider Trading 2015 approved by theBoard of Directors inter alia prohibits purchase or sale of securities of the Company byDirectors and employees while in possession of unpublished price sensitive information inrelation to the Company.
CORPORATE SOCIAL RESPONSIBILITY
Section 135 of the Companies Act 2013 relating to Corporate Social ResponsibilityCommittee and its obligations are not applicable to your Company as it is neither havingnet worth of Rupees Five Hundred Crore or more or turnover of Rupees One Thousand Croreor more or a net profit of Rupees Five Crore or more during any financial year.
All the properties of your Company are adequately insured.
STATUTORY AUDITOR & AUDIT REPORT
M/s S.K.Agrawal & Co. Chartered Accountants (F.R.No.305158E) were appointed asthe Statutory Auditors of the Company at the 69thAGM of the Company. Theappointment was for a term of 5 (five) consecutive years from the conclusion of 69thAGM till the conclusion of 74th AGM of the Company subject to ratification bythe members at each Annual General Meeting. It is to be noted that the Companies(Amendment) Act 2017 has omitted the provision for seeking ratification of suchappointment at every intervening AGM. The Notes on financial statements referred to inAuditors Report are self-explanatory and do not call for any further comments.
COST AUDITOR & COST AUDIT
Pursuant to the provisions of Section 148 of the Act and the Companies (Cost Recordsand Audit) Rules 2014 your Company is required to have its cost records audited by aCost Accountant in practice. The Board of Directors upon the recommendation of the AuditCommittee has approved the appointment of M/s. S Gupta & Co. Cost Accountants(F.RNo.000020) as the Cost Auditors of the Company for the Financial Year ending March 312021. Pursuant to Section 148 of the Act read with Rule 14(a)(ii) of Companies (Audit andAuditors) Rules 2014 ratification of the remuneration of Cost Auditors is being soughtfrom the Members of the Company at the ensuing AGM. The details of the same are providedin the Notice convening the AGM
Your Directors have appointed M/s Batliboi Purohit & Darbari CharteredAccountants (F.R.No.303086E) as Internal Auditor for the financial year ending 31stMarch 2021.
The Audit Committee of the Board of Directors of the Company during the year underreview comprised of 3 (Three) Members namely Smt. Sonali Sen Shri Dilip P Goculdas andShri Suresh Kumar Bangur two of them are Independent Directors and one is aNon-Independent Executive Director. The Committee met four times in the financial year2019-20. The Board accepted all the recommendations of the Audit Committee during theyear.
STAKEHOLDERS RELATIONSHIP COMMITTEE
Your Company has a duly constituted stakeholder's relationship committee. One meetingof the Committee was held during the year.
BUSINESS RISK MANAGEMENT
Pursuant to section 134 (3) (n) of the Companies Act 2013 the Board of Directors ofthe company regularly evaluates its associated business risks. It has an elaborate riskmanagement procedure in place and systematic approach to mitigate risk associated withaccomplishment of objectives and operations. At present it has not identified any elementof risk threatening existence of the company in dealing with agro input products. Thisrobust Risk Management framework seeks to create transparency minimize adverse impact onbusiness objectives and enhance the Company's competitive advantage.
The Internal Audit Department is responsible for facilitating coordination with theheads of various Departments with respect to the process of identifying key risksassociated with the business manner of handling risks adequacy of mitigating factors andrecommending corrective action.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
There was no amount lying unclaimed/ unpaid with the Company for transfer to theInvestor Education and Protection Fund pursuant to the provisions of 124(5) of theCompanies Act 2013.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO ANDPARTICULARS OF EMPLOYEES
a) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilisation of energy is achieved.
b) No specific investment has been made towards reduction in energy consumption.
Company's products are manufactured by adopting the available contemporary technology.The Company constantly strives for maintaining quality of its products.
Foreign Exchange Earnings & Outgo
|Particulars ||2019-20 ||2018-19 |
|Foreign Exchange Earnings ||Nil ||Nil |
|Foreign Exchange Outgo || || |
|-Purchase of Raw materials ||Rs.205200304 ||Rs.276414877 |
|-Others ||Nil ||Rs. 167606 |
Particulars of Employees
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided by way ofAnnexure G.
SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / STATUTORY AUTHORITIES
The Company has filed a writ-petition with Honorable High Court at Kolkata challengingthe constitutional validity of West Bengal Tax on Entry of Goods into Local Areas Act2012. Consequently Court has granted stay for payment and/or recovery of such Tax.Subsequently with the amendment in Act the matter has been transferred to Tribunal wherethe matter is pending. However in view of Demand Company has made full provision of TaxAmount. The Company had filed appeal before Hon. High Court Kolkata against dismissal ofits claim of freight subsidy on fertilisers against the Ministry of FertilisersGovernment of India. During the year the High Court has given a favourable order in thematter however the Ministry of Fertilisers Government of India has misread and/ormisinterpreted the said order and made part payment of the claim. The management isconsidering taking legal recourse for recovery of the full amount however in view ofuncertainty the balance amount has prudently been written off.
In terms of Reg.15 of SEBI (Listing Obligation and Disclosure Requirement) Regulation2015 your Company has been exempted from the applicability of corporate governanceprovisions as specified in regulations 17 [17A] 18 19 20 2122 23 24 13[24A] 2526 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C D and Eof Schedule Vof SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
The COVID-19 pandemic has rapidly spread across the world as well as in India and hascaused shutdown of all offices from March 24 2020. The Company has resumed its operationsin a phased manner in line with the directives of the Government of India. The Company'smanagement has made initial assessment of likely adverse impact on business and believesthat the impact is likely to be from short to medium term in nature. The management doesnot see long term risks in the Company's ability to continue as a going concern andmeeting its liabilities as and when they fall due. The Management has also evaluated therecoverability of receivables and realisability of inventory on hand based on subsequentrealisations and customer orders respectively. However given the uncertainties associatedwith the eventual outcome nature and duration of the pandemic the impact may bedifferent from that estimated as on the date of approval of these financial statements.Further on 20thMay 2020 the Operations of the Company were also affected byAmphan cyclone which has severely damaged the assets at the factory. The Company isadequately insured and has lodged claim with insurance Company.
The Company has always believed in providing a conducive work environment devoid ofdiscrimination and harassment including sexual harassment. During the year 2019-20 nocase of Sexual Harassment was reported.
REPORTING OF FRAUDS:
There have been no instances of fraud reported by the Statutory Auditors under Section143 of the Act read with relevant Rules framed thereunder either to the Company or to theCentral Government.
The Company has proper and adequate systems and processes in place to ensure compliancewith all applicable Secretarial Standards issued by The Institute of Company Secretariesof India. There has been no change in the nature of Business.
The Board places on record its appreciation for the sustained co-operation and supportbestowed to your Company by customers vendors regulators banks financial institutionsrating agencies stock exchanges depositories auditors advisors consultantsassociates State and Central Government at all levels and all the employees for theirhelping hand cooperation and dedicated work. The Board deeply acknowledges the trust andconfidence placed on the Company and all its shareholders.
Statement in the Directors' Report and Management Discussion & Analysis Reportdescribing the Company's expectations may be forward-looking within the meaning ofapplicable securities laws and regulations. Actual results may vary materially from thoseexpressed in the statement. Important factors that could influence the Company's operationinclude global and domestic demand and supply conditions affecting selling prices newcapacity additions availability of critical materials and their costs changes ingovernment policies and tax laws economic development of the country and such otherfactors which are material to the business of the Company. The Company assumes noresponsibility to publicly amend modify or revise any forward looking statements on thebasis of any subsequent developments information or events.