Rama Phosphates Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 34th Annual Report together with the Audited Financial Statements for the financial year ended March 31, 2019.

FINANCIAL HIGHLIGHTS

During the year under review, performance of your company is as under:

Rs in Lacs
FINANCIAL RESULTS YEAR ENDED 31/03/2019 YEAR ENDED 31/03/2018
Sales & Other Income 60,722.05 37,611.81
Profit Before Financial Charges & Depreciation 4,104.55 1,911.87
Less: Financial Charges 740.02 774.45
Profit Before Depreciation 3,364.53 1,137.42
Less : Depreciation 312.01 323.09
Net Profit Before Tax 3,052.52 814.33
Tax Expenses
Current Tax 1,176.49 317.07
Deferred Tax (64.67) (28.78)
Tax For Earlier Years 1.71 (13.12)
Net Profit Before Adjustments 1,938.99 539.16
Profit After Comprehensive income / (expense) Adjustments 1,924.99 547.67

TRANSFER OF AMOUNT TO RESERVES

The Company does not propose to transfer any amount to the general reserve for the Financial Year ended March 31, 2019.

DIVIDEND

Your Directors have recommended a dividend of Re. 1.00 (Rupee One) per equity share of Rs 10/- each fully paid up for the financial year 201819. The dividend if declared by the members at the 34th Annual General Meeting to be held on 25th September, 2019, will be paid on or before 10th October, 2019.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2019 stood at Rs 1,767.43 Lacs. During the year under review, there is no change in the Share Capital of the Company.

REVIEW OF OPERATIONS

Your company is diversified, multi-location and multi-product and manufactures Phosphatic and Fortified fertilizers, Micronutrients, Sulphuric Acid, Soya oil etc., thus, your company offers all products in single basket for the convenience of farmers. Your company is in existence since three decades and serving farming community.

With the single product company, we have grown in to multi-products company.

The manufacturing activities are given below:

- Primary : SSP Fertilizer
- Fortified : Boronated and Zincated
- Micronutrients : MgSO4, Zinc Sulphate
- Secondary Fertilizer : Soil conditioner
- Pesticide : Sulphur Dust
- Effluent disposal product : Sodium Silico Fluoride
- Chemicals : Sulphuric Acid 98%, Oleum 23%
- Traded products : PROM, Water Soluble
Products in pipeline :
- Phosphatic Fertilizers : Import of DAP and MOP
- Chemicals : Oleum 65%, LABSA, Liquid Sulphur Trioxide and Chloro Sulphonic Acid

Thus, we are in a position to cater to all segments of farming community.

Your Company have established fertilizer brands, "Gimar" and "Suryaphool" in the 12 states of operation in central, western and northern India through extensive dealers network with brand recall amongst the farming community at its best over the period of operations. This could be achieved by serving the farming community with quality and timely delivery of material. In order to capitalize on strong brand image of "Girnar" and "Suryaphool" we extended our product line to micronutrients with the existing dealers network. We shall endeavor to achieve greater growth in the years to come.

Fertilizer Division

Your company functions with the basic principle of "Service to the farmers with Quality material". This policy is practiced in letter and spirit by the company and thus we are proud to say your company has been accorded with FAI awards for 3 consecutive years for best performance on all-India basis amongst 100 plus units. Thus, this basic mantra is imbibed in our operational culture which is a driving force for the company.

Apart from Phosphatic fertilizers, your company introduced fortified fertilizers with Boron and Zinc so as to increase the yield of farm produce to cater to growing demand in the country. 80% of total consumption of SSP fertilizer takes place mainly in our operating states in which we have sold 3.85 lac MT material and achieved market share of 8.5%. We always remain as one of the top five players in the market and consistently maintained market leadership in the State of Maharashtra.

Your company has already introduced Magnesium Sulphate and Zinc Sulphate at Indore plant to bring improvement in top line and bottom line. Our expansion spree is on-going and new products are on anvil.

Soya Division SOYA DIVISION

Sl. No. Name of Unit Products Manufactured Remarks and usages
1. Indore Soya Bean Oil Used as a cooking oil and it has very good emulsifying ability with PUFA
Soya Meal (Soya De-Oiled Cake) Rich in protein and nutritious. Mainly used as cattle feed & poultry feed
Soya Liquid Lecithin Mainly used as a emulsifier or binding agent having antioxidant and flavor protector

With the favourable industry-friendly policies introduced by both the State and Central Governments like "Bhavantar scheme" and increase in incentive on export of soya meals (DOC), your company operated the oil division throughout the year at optimum capacity and crushed 55,435 MT of Soya seed against 25,183 MT in the previous year and achieved 120% quantum jump in soya crushing. In view of prevailing favourable conditions, more thrust will be given to oil division this year so as to maintain the tempo and increase our crushing. Your Company increased its thrust and focus on achieving optimum utilization of Solvent extraction unit at Indore and thus improve its operational viability.

ISO Accreditation:

Fertilizer Division has conformed with the requirements of ISO 9001 : 2015 and the same is periodically renewed

Overall Financial Performance:

The overall income achieved र 60772.05 lacs during the F.Y. 2018-19, against र 37611.81 lacs in F.Y 2017-18. This is mainly due to increase in turnover of all segments. The consolidated PBIDT reported at र 4104.55 lacs, as against र 1911.87 lacs in the previous financial year. Despite various challenges viz. Subsidy shift to DBT process, monsoon was below average in most of the companys operational areas of Madhya Pradesh and Maharashtra, sales acknowledgment through POS machines, continuous increase in fuel prices, delay in subsidy disbursement & blockage of working capital in subsidy, implementation of GST, the company could maintain consistently positive results since last 4 years. The net profit of the company for F.Y 2018-19 is र 1938.99 lacs against र 539.16 lacs in 2017-18 mainly due to positive performance of oil division and increase in sales volume of fertilizer.

Financial cost has been reduced from Rs 774.45 lacs to र 740.02 lac which is mainly due to reduction in bank interest rate based on continuous good performance of company and proper management of working capital limits. We have been assigned with BBB - (Triple B, Minus) with Stable outlook for long-term bank facilities by CARE ratings.

Depreciation cost has been marginally reduced from र 323.09 lacs to र 312.01 lacs.

The trade receivable has been increased marginally from र 5642.67 lacs to र 5691.71 lacs. Subsidy receivable has been reduced from र 6992.38 lacs to र 6337.50 lacs. At the same time, trade payable is increased from र 7481.32 lacs to र 8190.07 lacs. Thus, current ratio has been improved from 1.72 to 1.79

Turnover of fertilizer division has been increased to र 40081.32 lacs from र 29564.66 lacs mainly due to increase in sales volume of Sulphric Acid by 13% and Fertilizer by 22% as compared to previous year. It is because of demand of value added fertilizer (BSSP & ZSSP) increased during the year.

The performance of oil division is improved during the F.Y 2018-19 with increase in turnover from र 7940.48 lacs to र 20584.89 lacs and your company earned net profit before tax of र 266.73 lacs from the operation as against profit of र 118.67 lacs in previous year.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate system of internal controls that are commensurate with its size and nature of business to safeguard and protect the Company from losses, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and ensuring timely reporting of financial statements. The Company has appointed Internal Auditors to observe the internal controls, whether the work flows of organization is being done through the approved policies of the Company. In every Quarter during the approval of Financial Statements, Internal Auditors present the Internal Audit Report and Management Comments on the Internal Audit observations. Findings of the internal Audit Report are reviewed by the top management and by the Audit Committee of the Company and proper follow up actions are ensured wherever required. The Statutory Auditors have evaluated the system of the internal controls including internal financial control of the Company and have reported that the same are adequate and commensurate with the size of the Company and nature of its business.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business of the Company.

CORPORATE GOVERNANCE

A separate report on Corporate Governance and Management Discussion and Analysis is annexed as part of the Annual Report along with the Auditors Certificate on its compliance.

EXTRACT OF ANNUAL RETURN

The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 and the same is enclosed in Annexure- A to this Report.

DIRECTORS

The Board consists of Mr. Haresh D. Ramsinghani (DIN: 00035416), Mr. Deonath Singh (DIN: 00021741), Mr. Kailasam Raghuraman (DIN: 00320507), Mr. Ashish Kumar Thakur (DIN: 00031778), Mrs. Nilanjana H. Ramsinghani (DIN: 01327609) and Mr. Auro Kumar Mohapatra (DIN: 08451883).

Mrs. Nilanjana H. Ramsinghani (DIN: 01327609), Director of the Company retires by rotation and being eligible, offers herself for re-appointment. Mr. Daulat J. Ramsinghani (DIN: 00013633) ceases to be the director of the Company with effect from 1st April, 2019.

Mr. Auro Kumar Mohapatra (DIN: 08451883) is appointed as the Nominee Director of Bank of India with effect from 25th May, 2019.

INDEPENDENT DIRECTORS RE-APPOINTMENT

The Board of Directors at the meeting held on 25th May, 2019, on the recommendation of the Nomination and Remuneration Committee, recommended for the approval of the Members for the appointment of Mr. Deonath Singh, Mr. Kailasam Raghuraman and Mr. Ashish Kumar Thakur as an Independent Director of the Company, for a period of five years with effect from August 08, 2019 in terms of Section 149 of the Act and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations 2015) with effect from August 08, 2019. Appropriate resolutions seeking your approval to the above are appearing in the Notice convening the 34th AGM of the Company.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149

The Independent Directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013 and SEBI Regulations.

BOARD EVALUATION

Pursuant to the provisions of section 134 (3) of the Companies Act, 2013 and the applicable Regulations of the SEBI (Listing obligations and Disclosure Requirements), Regulations, 2015, the Independent Directors in their meeting have evaluated the performance of Non- Independent directors, Chairperson of the Company after considering the views of the Executive and Non- executive Directors, Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Companys Management and the Board.

The Nomination and Remuneration Committee has also carried out evaluation of performance of every Director of the Company. Chairperson of 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 Independent Directors are regularly updated on industry and market trends, plant process and other operational performance of the Company etc through presentations in this regard.

NUMBER OF MEETINGS

During the year ended March 31, 2019, four Board Meetings & the Annual General Meeting (AGM) were convened & held. The details of these Meetings are as under:

Dates on which the Meetings were held Total Strength of the Board No. of Directors Present
26/05/2018 8 5
30/07/2018 8 6
03/11/2018 6 6
06/02/2019 6 4
27/09/2018(AGM) 6 2

AUDIT COMMITTEE

In accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosures Requirement), the Company has constituted an Audit Committee comprising of the following Directors viz. Mr. Kailasam Raghuraman (Chairman), Mr. Deonath Singh, Mr. Ashish Kumar Thakur and Mr. Haresh D. Ramsinghani. Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

The Audit Committee meeting was held on May 26, 2018, July 30, 2018, November 03, 2018 and February 06, 2019.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee presently consists of the following Directors namely Mr. Kailasam Raghuraman - Chairman, Mr. Deonath Singh and Mrs. Nilanjana H. Ramsinghani.

The Nomination and Remuneration Committee meeting was held on May 26, 2018 and July 30, 2018.

RISK MANAGEMENT COMMITTEE

Business Risk Evaluation and Management is an on-going process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities.

As per Regulation 21(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, Risk Management Committee is applicable to top 100 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year. Hence not applicable to the Company.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee has the mandate to review and redress stakeholder grievances. Stakeholders Relationship Committee comprised of three Directors namely Mr. Deonath Singh(Chairman), Mr. Haresh D. Ramsinghani and Mr. Daulat J. Ramsinghani as on March 31, 2019.

Due to cessation of Mr. Daulat J. Ramisnghani from the Directorship of the Company w.e.f. April 01,2019., the Stakeholders Relationship Committee now consists of following Directors namely, Mr. Deonath Singh(Chairman), Mr. Haresh D. Ramsingahni and Mrs. Nilanjana H. Ramsinghani.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Companys CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st march, 2019, in accordance with the Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 (including any statutory modification(s) or reenactment(s) thereof for the time being in force) is set out in Annexure D to this report.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS BY COMPANY

There were no loans or guarantees or investments given/made by the Company under Section 186 of the Companies Act, 2013 during the year ended March 31, 2019.

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. All permanent employees of the Company are covered under the Whistle Blower Policy. 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 avails 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.ramaphosphates.com).

INTERNAL AUDITORS

The Board of Directors of the Company have appointed M/s. Mhalgi Kulkarni & Associates, Chartered Accountants, M/s. Pahadiya & Associates, Chartered Accountants, M/s. K.L. Vyas & Co., Chartered Accountants to conduct Internal Audit of the Company.

COST AUDITOR

The Board of Directors on recommendation of Audit Committee, has appointed Mr. R.S. Raghavan as the Cost Auditor for carrying out the Audit of Cost Accounting Records in respect of i) manufacturing of Chemicals (Sulphuric Acid), ii) Fertilizer and iii) Edible Oil for Plant locations at Indore, Pune and Udaipur for the financial year 2019-20 on remuneration of र 2,00,000/- (Rupees Two Lacs) per annum plus reimbursement of out of pocket expenses.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in AGM for their ratification. Accordingly, a resolution for seeking Members ratification is included at item no. 4 of the Notice convening the AGM.

STATUTORY AUDITORS

At the Annual General Meeting held on September 28, 2016, M/s Khandelwal & Mehta LLP, Chartered Accountants, (Firm Registration no: W100084), were appointed as statutory auditors of the Company to hold office till the conclusion of the 36th Annual General Meeting.

AUDITORS REPORT

M/s Khandelwal & Mehta LLP, Chartered Accountants, (Firm Registration no: W100084) have issued Auditors Report for the Financial Year ended March 31,2019 and there are no qualifications in Auditors Report.

CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required under section 134 (3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is enclosed as Annexure - B and forms part of the report.

SECRETARIAL AUDITOR REPORT

As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed Mr. Jignesh M. Pandya, Practicing Company Secretary (C.P.No: 7318) as Secretarial Auditor to conduct Secretarial audit of the company for the Financial year ended on March 31,

2019. Secretarial Audit Report issued by Mr. Jignesh M. Pandya Practicing Company Secretary in form MR-3 is enclosed as Annexure - C to this report.

There is no such incidence where Board has not accepted the recommendation of the Audit Committee during the year under review.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on an arms length basis and in ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Further, there are no material Related Party Transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The disclosure in form AOC-2 is attached herewith as Annexure E. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained for transactions which are of repetitive nature.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the company (www. ramaphosphates.com).

DEPOSITS

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments in the business operations of the Company from the financial year ended March 31, 2019 to the date of signing of the Directors Report.

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 in respect of employees of the Company is enclosed as Annexure - F and forms part of the report.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013.

No case was filed under the Sexual harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 during the year under review.

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.

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirms that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2019, 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 as at 31st March, 2019 and of the profit /loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) 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.

ACKNOWLEDGEMENT

Your Directors sincerely record their appreciation with gratitude for the continued support and assistance extended to the Company by the Financial Institutions, Banks and various Government Departments and Agencies and Creditors. The Directors place on record their appreciation for continued support of shareholders of the company. The Directors also wish to place on record the appreciation to the team of executives, staff and workers, who have shown devotion and efficiency in performing their jobs.

For and on behalf of the Board
HARESH D. RAMSINGHANI
Place: Mumbai CHAIRMAN & MANAGING DIRECTOR
Date : August 13, 2019 DIN:00035416