Krishana Phoschem Ltd Directors Report.

 

For the Year 2017-18

Dear Members,

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

FINANCIAL RESULT

The summary of financial results for the year and appropriation of divisible profits is given 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 COMPANYS AFFAIR:

During the period under review the company has achieved turnover of Rs. 9575.87 lakhs with production of 12278 M.T. of Beneficiated Rock Phosphate, 61958 M.T. of S.S.P. and 644 MT of H.Acid & Other Dyes Intermediate Products. The company has also started production of Sulphuric Acid, Oleum, Coloro Sulphonic Acid & Liquid SO3 in the month of 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 Company except addition of chemical division.

ANNUAL RETURN (SECTION 92):

The information required pursuant to the provisions of Section 134 (3) (a) and Section 92 (3) of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in Form MGT-9 for the financial year ended on March 31st , 2018 is provided in Annexure I forming part of this report.

AUDITORS & AUDITORS REPORT

The Company has appointed M/s. Rajneesh Kanther & Associates Statutory Auditors of the 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, would be within the prescribed limits under the Act and that they are not disqualified for appointment.

The Auditors Report is self-explanatory and therefore, do not call for any further comments/ clarifications and Auditors report does not contain any qualification, reservation or adverse remarks.

SECRETARIAL AUDITOR & SECRETARIAL AUDITORS REPORT

Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 and the Companies (Appointment & Remuneration of Managerial personnel) Rules, 2014, the company has appointed M/s Sourabh Bapna & Associates, a Proprietorship firm of company Secretaries in practice to undertake the Secretarial Audit of the Company for financial year 2018-19. The Secretarial Audit report is provided in Annexure II forming part of this report.

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

COST AUDITORS & AUDITORS REPORT

M/s. K. C. Moondra & Associates, Cost Accountant, was appointed Cost Auditors of your Company for FY 2018-19. In accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, and on the recommendation of the Audit Committee, 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 the audit of the cost records of the Company for the financial year ending 31stMarch, 2019. The appointment and the remuneration of the Cost Auditor is required to be ratified subsequently by the Members of the Company and further 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 commensurate with the size, scale and complexity of the company. The internal auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit compliance is ensured by the direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board.

During the period under review the Internal Financial Control were tested and no reportable 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 of the 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 V of the Companies Act, 2013. Your Company has not defaulted in repayment of deposits or payment of interest during the year. There was no public deposit outstanding as on March 31, 2018.

NO DEFAULT:

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with provisions of Companies Act, 2013 and companys Articles of Association, Sh. Sunil Kothari (DIN: 02056569), Director of the Company, retire by rotation and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

During the year, Mr. Praveen Ostwal, Chairman & Managing Director of the Company, Mr. Sunil Kothari ,Whole Time Director & Chief Financial Officer and Ms. Priyanka Bansal, Company Secretary of the Company were designated as Key Managerial Personnel of the 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, 26th May 2017, 26th July 2017, 21stAugust 2017, 19th September 2017, 13th November 2017 , 17th November 2017, 15th January 2018 and 10th February 2018 in the Financial Year 2017-18 in respect of each meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. No resolution was by circulator resolution.

PARTICULARS OF EMPLOYEES

The information required pursuant to the Section 197(12) of the Companies Act, 2013 read 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 median remuneration of the employees of the Company is provided in Annexure III forming part of this 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 with the Rule 8 of Companies (Account) Rule, 2014 for conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo are given in Annexure IV forming part of this report.

PARTICULAR OF LOAN, GUARANTEE AND INVESTMENT UNDER SECTION 186:

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

RISK MANAGEMENT:

Proper Risk Management Practices have been followed for the purpose of risk identification, analysis, response planning, and monitoring, controlling, and reporting. Although, all risks cannot be eliminated, but mitigation and contingency plans have been developed 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 on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company during the financial year which were in the conflict of interest of the company.

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure IX in 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 required pursuant to the SEBI ((Listing Obligations & Disclosure Requirements) Regulations, 2015, is provided in Annexure VI forming part of this report.

DECLARATION OF INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, to the effect that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013. The terms and conditions 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 Listing regulations, the Board has carried out an annual performance evaluation of its own, working of its Committees and the Directors. The Nomination and Remuneration Committee has carried out evaluation of every Director. The Independent Directors evaluated performance of 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 Executive Director. The Chairman of the Audit Committee is financially literate and majority of them having accounting or related financial management experience. Representative of Statutory Auditor is permanent invitee. Company Secretary acts 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 20th April 2017, 31st July 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, Nomination and Remuneration Policy recommended by the Nomination and Remuneration committee is duly approved by the Board of Directors of the Company and is given in Annexure VII forming part 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 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 28th April 2017, 18th July 2017, 25th October 2017, And 22nd January2018.

CORPORATE SOCIAL RESPONSIBILITY:

In pursuant to the provisions of section 135 and schedule VII of the Companies Act, 2013, CSR Committee of the Board of Directors was formed to recommend (a) the policy on Corporate

Social Responsibility (CSR) and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by 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 framed Corporate 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 Lacs during 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 welfare measures from time to time. The CSR Report for the financial year ended on March 31st, 2018 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, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirement 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, trainee) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during 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 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 March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had 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 state of affairs of the company at the end of the financial year and of the profit and loss of the company for the year under review;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 31st March, 2018 on a going concern basis; and

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

(f) The directors had devised proper systems to ensure compliance with the provisions of 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 and processes. The quality assurance is ensured at all stages of manufacturing processes, maintenance and support services. Quality reviews are regularly conducted and feedback from end users (farmers) is accorded utmost importance. Sophisticated instruments are in place for monitoring of critical quality parameters.

MATERIAL CHANGES AND COMMITMENTS:

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which 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 Tribunal that 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 Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct 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-operation and assistance received from Share Holders, Customers, Banks, Financial Corporations, Madhya Pradesh State Mining Corporation, various Government Authorities for their whole hearted support. Your Directors also recognize and appreciate the efforts and hard work of all employees of the company and their continued contribution to companys 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)