To the Members,
Your Directors are pleased to present the 41 Annual Report of your
Company alongwith Audited Financial Statement for the financial year ended 31 March, 2023.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31 March,
2023 is summarized below:
(Rs. in Lakhs)
Particulars |
2022-23 |
2021-22 |
| Sales |
88,781.61 |
82,377.79 |
| Total Income |
88,929.29 |
82,503.66 |
Surplus before interest,
depreciation, exceptional items and Tax |
7,940.65 |
12,284.81 |
| Less: Financial Cost |
1,931.42 |
1,262.42 |
| Cash Profit before tax |
6,009.23 |
11,022.39 |
| Less: Depreciation |
906.19 |
733.76 |
| Exceptional Items |
- |
- |
| Profit /(Loss) before taxation |
5,103.04 |
10,288.63 |
| Provision for current tax |
1,465.69 |
2,630.03 |
| Income Tax of earlier year |
56.64 |
(19.39) |
| Deferred tax |
(154.77) |
(338.87) |
| Profit /(Loss) after taxation |
3,735.78 |
8,016.86 |
| Transfer to General Reserve |
- |
- |
| Earning Per Share (face value of Re. 1/-
each) |
3.85 |
8.27 |
REVIEW OF OPERATIONS
FERTILIZER, CHEMICALS & SPECIALITY CHEMICALS DIVISION:
The year 2022-23 continued to be a challenging period with weak
economic environment due to steep hike in commodity prices leading to unprecedented
increase in Rock Phosphate and Sulphur prices which are the major raw materials for
production of SSP Fertilizer. Also the capping of subsidy rates within Nutrient Based
Subsidy Policy by the GOI for the current year saw the prices of SSP fertilizer being
pushed up making it incompetitive vis a vis other phosphatic fertilizers enjoying full
subsidy rates.
The Company has produced 4,92,613 MT (previous year 5,34,645 MT) of
Single Super Phosphate (SSP) Fertilizer and 2,06,377 MT (previous year 2,13,969 MT) of
Chemicals & Speciality Chemicals and sold 4,73,194 MT of SSP (previous year 5,33,654
MT) & 1,13,681 MT of Chemicals (previous year 1,17,910 MT) respectively.
During the current year the turnover of your Company has increased from
Rs. 82,503.66 Lakhs for the year 2021-22 to Rs. 88,929.29 Lakhs for the year 2022-23, the
operating income has decreased from Rs. 12,284.81 Lakhs in 2021-22 to Rs. 7,940.65 Lakhs
in 2022-23, and the cash profit has decreased from Rs. 11,022.39 Lakhs to Rs. 6,009.23
Lakhs in the respective periods, while the net profit after tax has decreased from Rs.
8,016.86 Lakhs to Rs. 3,735.78 Lakhs.
The Company is continuously putting in efforts to increase the share of
‘value added fortified fertilizers in its product range. The fortified
fertilizers launched by the Company have been well accepted by the farmers.
The trend of all raw materials including Rock Phosphate and Sulphur
remained continuously rising throughout the year, excepting the last few months, mainly
due to global sentiment following the invasion of Ukraine by Russia. While assessing the
increase in prices the GOI increased the Nutrient Based Subsidy for all phosphatic and
potassic fertilizers while capping the SSP subsidy at old rates of Rs. 7513/- per MT for
the year 2022-23.
In the coming year 2023-24, the long range forecast of monsoons is
below normal. This coupled with the upward reversal in Rock Phosphate prices while at the
same time falling international prices of competitive products is likely to see challenges
in the SSP fertilizer Industry.
SOYA/AGRI DIVISION
While looking at the volatility in oil prices and uncertain thin
margins the Company has sold its plant and machinery of the Agro division thus exiting
this business. The plant and machinery was lyingidle sincelast several years.
DIVIDEND
The Board of Directors is pleased to recommend final dividend of Re.
0.30/- per equity share (face value of Re. 1/- per share) for the financial year
2022-2023, previous year Re. 0.30/- per equity share.
Dividend Distribution Policy:
Pursuant to Regulation 43A of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, The Board has
approved and adopted the Dividend Distribution Policy and the detail of the Dividend
Distribution Policy has been uploaded on the Companys website, Web-link:
http://kcfl.co.in/wp-content/uploads/2022/05/Dividend-Distribution-Policy-.pdf
SHARE CAPITAL
st
The paid up Equity Share Capital as on 31 March, 2023 was Rs. 969.89
Lakhs divided into 9,69,89,200 shares of Re. 1/- each. During the year under review, the
Company has not issued shares with differential voting rights nor granted stock options
nor sweat equity.
RESERVES AND SURPLUS
The Company has not transferred any amount to General Reserves for the
financial year 2022-23.
INVESTORS EDUCATION & PROTECTION FUND
Dividend which was declared by the Company for the financial year ended
March 31, 2016 at the Annual General Meeting held on August 11, 2016 and remained
unclaimed will be transferred to the Investor Education and Protection Fund of the Central
Government on October 9, 2023 pursuant to the provisions of Companies Act, 2013.
Thereafter no claim shall lie on dividend for the year ended March, 31, 2016 from the
shareholders.
PROJECTS & FINANCE
The Company has availed Term Loan of Rs. 22.50 Crores from Axis Bank
Ltd. for modernization of SSP and Acid Plants.
FIXED DEPOSITS
The Company has not accepted any deposits from the public during the
year under review, pursuant to the provisions of Section 73 of the Companies Act, 2013
& the Deposit Rules made there under.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Information required under Section 134(3)(m) of the Companies Act, 2013
read with the Companies (Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988 is annexed in Form-A of Annexure-A and forms part of the report.
Your directors are of the opinion that the Company has already opted
for latest technology for producing Single Super Phosphate and Sulphuric Acid. Hence,
information specified to be given in Form-B of Annexure-A is not applicable.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with Schedule V(B) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report
forms part of this Report (Annexure-B).
FOREIGN EXCHANGE EARNING AND OUTGO
The Company has earned Rs. NIL on export of goods (Previous year Rs.
NIL) and incurred Rs. 34,740.89 Lakhs (Previous year Rs. 28,951.94 Lakhs) on import of Raw
Materials, Fees & Subscription and Interest on Foreign Currency Loan.
DIRECTORS
The Board has re-appointed Shri Utsav Khaitan (DIN: 03021454), as a
Joint Managing Director of the Company for a period of three years with effect from May 1,
2023 to April 30, 2026, subject to the approval of the members in ensuing general meeting.
Particulars of the directors seeking appointment/re-appointment are
provided in the notes forming part of the notice for the ensuing Annual General Meeting,
as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
The Company has received disclosures from all the directors and none of
the directors has been disqualified as stipulated under Section 164 of the Companies Act,
2013 and rules made thereunder.
During the year, the Board of Directors met Six (6) times. The details
of the Board Meetings and the attendance of the Directors are provided in the Corporate
Governance Report (Annexure - C).
KEY MANAGERIAL PERSONNEL:
The following employees were designated as whole-time key managerial
personnel as required under section 203 of the Companies Act, 2013 by the Board of
Directors during the year under review:
(a) Shri Shailesh Khaitan, Chairman & Managing Director;
(b) Shri Utsav Khaitan, Joint Managing Director;
(c) Shri Harsh Vardhan Agnihotri, President & Chief Financial
Officer and
(d) *Shri Ajay Salitra, Company Secretary & Compliance Officer
*Shri Ajay Salitra, Appointed as the Company Secretary of the Company
w.e.f January 23, 2023 due to the Resignation of CS Kamlesh Joshi from the post of Company
Secretary & Senior General Manager.
INDEPENDENT DIRECTORS DECLARATION
The Independent Directors have confirmed and declared that they are not
disqualified to act as an Independent Director in compliance with the provisions of
Section 149 of the Companies Act, 2013 read with Regulation 16 (B) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and the Board is also of the
opinion that the Independent Directors fulfill all the conditions specified in the
Companies Act, 2013 making them eligible to act as Independent Directors.
CORPORATE GOVERNANCE
Your Company has always striven to maintain appropriate standards of
good corporate governance. The report on corporate governance as stipulated under Schedule
V (C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
forms part of this Report. The requisite certificate confirming compliance with the
conditions of corporate governance as stipulated under the said clause is attached to this
report. (Annexure C).
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company has no Subsidiary/Joint Venture/Associate Company.
PARTICULARS OF LOAN, GUARANTEES, INVESTMENTS:
During the year under review, the Company has not made any investments
or given loan or provided security or guarantees falling under the provisions of Section
186 of the "the Act".
VIGIL MECHANISM / WHISTLE BLOWER POLICY
As per the requirement of Section 177 (9) of the Companies Act, 2013,
and Regulation 22 of the SEBI (Listing Obligations and Disclosure
Requirements)Regulations, 2015, the Company has established a Vigil Mechanism called the
‘Whistle Blower Policy for Directors and Employees to report concern of
unethical behavior, actual or suspected fraud or violation of the Companys Code of
Conduct or ethics policy and the details of the Whistle Blower Policy has been uploaded on
the Companys website, Web-link: http://kcfl.co.in/wp-content/uploads/
2022/05/Vigil-Mechanism-Policy.pdf
COMPOSITION OF AUDIT COMMITTEE
As per the requirement of Regulation 18 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 read with Section
177 of the Companies Act, 2013. The present strength of the Audit
Committee comprises of Shri Balmukund Dakhera, Shri Vijay Gupta and Ms. Veena Chadha. Shri
Balmukund Dakhera, Chartered Accountant, is the Chairman of the Audit Committee of the
Company. All the members of the Audit Committee are independent and non-executive
directors. The recommendations of audit committee were duly accepted by the Board of
Directors.
NOMINATION & REMUNERATION COMMITTEE AND POLICY
Pursuant to Section 178 of the Companies Act, 2013, the rules made
there under and Regulation 19 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 the Nomination & Remuneration Committee, comprises of
Shri Balmukund Dakhera, Chairman, Shri Vijay Gupta and Ms. Veena Chadha as its members.
The Nomination & Remuneration Committee framed a policy for
selection and appointment, re-appointment, removal, appraisals of Directors and Senior
Management and the same is stated in the Corporate Governance Report (Annexure C).
AUDITORS & AUDIT REPORT
The Company has Re-appointed M/s. NSBP & Co., Chartered
Accountants, New Delhi as Statutory Auditors of the Company for carrying out the Statutory
Audit of the Company for the Term of 5 years commencing from the conclusion of 40th Annual
General Meeting to the conclusion of 45th Annual General Meeting of the Company (from
Financial Year 2022-23 to 2026-27). The Company has received a certificate from them to
the effect that their appointment as Statutory Auditors of the Company, would be within
the limit prescribed u/s 139 & 141 of the Companies Act, 2013 & also received a
peer review certificate issued by the ICAI ‘Peer Review Board, as required
under the provisions of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
There have been no instances of fraud reported by the Statutory
Auditors under Section 143(12) of the Act and Rules framed there under, either to the
Company or to the Central Government.
The notes on accounts referred to and the Auditors Report are
self-explanatory and therefore do not call for any explanatory note.
COST AUDITOR:
The Board of Directors, in pursuance of an order under Section 148 of
the Companies Act, 2013, read with Rule 14 of the Companies (Audit & Auditors) Rules,
2014, issued by the Central Government, has appointed on the recommendation of Audit
Committee M/s. M.P. Turakhia & Associates, Cost Accountants, Indore as Cost Auditors
to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer,
Sulphuric Acid and Soya products for the financial year 2023-24.
As required under Companies Act, 2013 a resolution seeking members
approval for the remuneration payable to cost Auditor forms part of the notice conveying
the Annual General Meeting for their ratification.
INTERNAL AUDITOR:
M/s. O P Bagla & Co. LLP, Chartered Accountants, New Delhi is
appointed as Internal Auditor of the Company to conduct the internal audit of the Company
for the Financial Year 2023-24, as required under Section 138 of the Companies Act, 2013
and the Companies (Accounts) Rules, 2014.
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The scope and authority of the Internal Audit
function is defined. The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the Internal Control System and suggests improvements to
strengthen the same. To maintain its objectivity and independence, the Internal Auditor
reports to the Chairman of the Audit Committee of the Board. Based on the report of
internal audit function, Company undertakes corrective action in their respective areas
and thereby strengthens the controls. Recommendations along with corrective actions
thereon are presented to the Audit Committee of the Board and accordingly implementation
has been carried out by the Company.
SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company has appointed on the recommendation of Audit Committee M/s. Ritesh Gupta &
Co., Practicing Company Secretaries, Indore (C.P. No. 3764), to undertake the Secretarial
Audit of the Company for the financial year 2023-2024.
The Secretarial Audit Report for the year 2022-23 does not contain any
qualification, reservation or adverse remark. The Secretarial Audit Report is
self-explanatory and therefore do not call for any explanatory note and the same is
annexed herewith as (Annexure - D).
SECRETARIAL STANDARDS:
The Company has complied with the Secretarial Standards issued by The
Institute of Company Secretaries of India (ICSI).
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Pursuant to Section 135 of Companies Act, 2013 and the relevant rules,
the Corporate Social Responsibility Committee comprises of Shri Jagdish Lal Jajoo as the
Chairman and Shri Utsav Khaitan, Shri Balmukund Dakhera, Shri Vijay Gupta & Ms. Veena
Chadha as its members. The detailed CSR Policy has been uploaded on Companys
Website, Web-link:http://kcfl.co.in/wp-content/uploads/2022/03/CSR-Policy.pdf
The details on CSR activities are annexed herewith as (Annexure-E)
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
Business Responsibility and Sustainability Report, as required under
the Listing Regulation, is annexed as Annexure-H to this report.
BOARD EVALUATION
Pursuant to the provisions of section 134 (3) (p) of the Companies Act,
2013 and applicable Regulations of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board adopted a formal mechanism for evaluating its
performance and as well as that of its Committees and Individual Directors, including the
Chairman of the Board. The exercise was carried out through a structured evaluation
process covering various aspects of the Boards functioning such as composition of the
Board & committees, experience & competencies, performance of specific duties
& obligations, governance issues etc.
The evaluation of the Independent Directors was carried out by the
entire Board and that of the Chairman and Non-Independent Directors were carried out by
the Independent Directors.
The Directors were satisfied with the evaluation results, which
reflected the overall engagement and effectiveness of the Board and its Committees with
the Company.
ANNUAL RETURN:
In compliance with the provisions of Section 92 of the Companies Act,
2013, the Annual Return of the Company for the financial year ended March 31, 2023 has
been uploaded on the website of the Company and the web link of the same is
http://kcfl.co.in/annual-return/
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, your Directors
confirm that:
1. in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures;
2. they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the
st
state of affairs of the Company as at 31 March, 2023 and of the profit
& loss of the Company for that period;
3. they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act,
1956/2013 for safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
4. they have prepared the annual accounts on a going concern basis.
5. they have laid down internal financial controls to be followed by
the Company and such internal financial controls are adequate and were operating
effectively.
6. they have devised proper systems to ensure compliance with the
provisions of all applicable laws and such systems were adequate and operating
effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY:
As per the requirement of Regulation 23 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated the
Policy on Materiality of Related Party Transactions. All such transactions that were
entered into during the financial year were on an arms length basis and in the
ordinary course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key Managerial Personnel or
other designated persons which may have a potential conflict with the interest of the
Company at large.
All Related Party Transactions are placed before the Audit Committee
and the same has been approved by the Board. Prior omnibus approval of the Audit Committee
is obtained for the transactions which are of a foreseen and repetitive nature and the
same is been reviewed by the Audit Committee on quarterly basis. The company has framed
Policy on Materiality of Related Party Transactions and on Dealing with Related Party
Transactions and is placed on the Companys website and the web link for the same is
http://kcfl.co.in/wp-content/uploads/
2022/05/Policy-on-Materiality-of-Related-Party-Transactions-and-on-
Dealing-with-Related-Party-Transactions.pdf
The Company has also formed Related Party Transactions Policy and the
web link for same is http://kcfl.co.in/wp-content/uploads/2022/
05/Related-Party-Transactions-Policy.pdf
Pursuant to the provisions of Section 134 (3) (h) of the Companies Act,
2013, the particulars of contracts or arrangements with related parties referred to in
Section 188(1) of the Companies Act, 2013, and prescribed in Form AOC-2 of Companies
(Accounts) Rules, 2014, are appended as Annexure-F to this report. Related Party
Transactions during the year have been disclosed as a part of Financial Statements as
required under Accounting Standard 18 issued by the Institute of Chartered Accountants of
India.
LISTING OF SHARES
Shares of the Company are listed on BSE Limited (BSE) and National
Stock Exchange of India Limited (NSE), which provides a wider access to the investors
nationwide.
The Company has made all the compliances of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 including payment of Annual
Listing fees up to March 31, 2024 to the Stock Exchanges.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the
Company has established connectivity with both the depositories i.e. National Securities
Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view
of the numerous advantages offered by the Depository system, Members are requested to
avail the facility of dematerialization of shares with either of the Depositories as
aforesaid. As on March 31, 2023, 98.77 % of the share capital stands
dematerialized.
RISK MANAGEMENT
1. Risk Management Committee:
Pursuant to Regulation 21 (5) of the SEBI (Listing Obligation and
Disclosures Requirement) Regulation, 2015, the Board has constituted the Risk Management
committee comprising Shri Utsav Khaitan, Chairman and, Shri Balmukund Dakhera and Shri
Vijay Gupta as its members, to frame, implement and monitor risk management plan of the
Company.
2. Risk Management Policy:
The Company has in place Risk Management Policy as per requirement of
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section
134(3)(n) of the Companies Act, 2013, which requires the Company to lay down procedure for
risk assessment and risk minimization. The Board of Directors, Audit committee and the
Senior Management of the Company should periodically review the policy and monitor its
implementation to ensure the optimization of business performance, to promote confidence
amongst stake holders in the business processes, plan and meet strategic objectives and
evaluate, tackle and resolve various risks associated with the Company. The business of
the Company is exposed to various risks, arising out of internal and external factors i.e.
Industry, Competition, Input, Geography, Financial, Regulatory, Other Operational,
Information Technology related other risks.
The details of Risk Management Policy as per requirement of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 134(3)(n)
of the Companies Act, 2013 has been uploaded on Companys Website in policies section
at http://kcfl.co.in/wp-content/uploads/2022/05/Risk-Management-Policy.pdf
Implementation of the Scheme:
The functional managers at all locations will be responsible for
identifying and assessing the risks within their areas of responsibilities and actions
agreed beforehand to resolve such risks. They will report for any new risk or changes in
the existing risk to the President/Managing Director. The Board and the senior executives
of the Company will oversee the implementation of the policy and review the same
periodically; the Board will be updated on key risks faced by the Company and the
mitigating actions taken to resolve them.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has in place an Anti Sexual Harassment Policy in line with
the requirements of The Sexual Harassment of Women at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and
disposed off during the year 2022-23.
No of complaints received: NIL
No of complaints disposed off: Not Applicable
MATERIAL CHANGES AFFECTING FINANCIAL POSITIONS OF THE COMPANY
No material changes have occurred and commitments made, affecting the
financial position of the Company, between the end of the financial year of the Company
and the date of this report. There is no order passed by any regulator or court or
tribunal against the company, impacting the going concern concept or future operations of
the Company.
PARTICULARS OF EMPLOYEES
In terms of provisions of Section 197(12) of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and the rules there under as amended from time to time, forms part
of this report (Annexure-G).
There are no instances of employees who was in receipt of remuneration
in excess of the limit prescribed in provisions of Section 197 (12) of the Companies Act,
2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and the rules made there under.
In accordance with the provisions of Section 136 of the Act, the Annual
Report and Accounts are being sent to all the Members of the Company excluding the
aforesaid information and the said particulars will be made available on request and also
made available for inspection at the Registered Office of the Company. Any Member
interested in obtaining such particulars may write to the Company Secretary of the
Company.
None of the employees listed in the said Annexure is a relative of any
Director of the Company. None of the employees hold (by himself or alongwith his spouse
and dependent children) more than two percent of the equity shares of the Company.
APPRECIATION:
The Board of Directors, wish to place on record its sincere
appreciation for the support and co-operation received from all its stakeholders including
customers, promoters, shareholders, bankers, suppliers, auditors, various departments/
agencies of Central/State Government and other business associates of the Company.
Your Board recognizes and appreciates the contributions made by all
employees at all level that ensure sustained performance in a challenging environment.
for and on behalf of the Board
|
(UTSAV KHAITAN) |
Place: New Delhi |
JOINT MANAGING DIRECTOR |
| Date: April 29, 2023 |
DIN: 03021454 |
+91-9892691696
