Directors Report of Khaitan Chemicals & Fertilizers Ltd.
Mar 31, 2019
To the Members,
The Directors are pleased to present the 37th Annual Report of your Company alongwith Audited Financial Statement for the financial year ended 31st March, 2019.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March, 2019 is summarized below: . . .
(Rs. in Lacs)
|
Particulars |
2018-19 |
2017-18 |
|
Sales |
37259.83 |
35483.68 |
|
Total Income |
37320.34 |
35628.77 |
|
Surplus before interest, depreciation, exceptional items and Tax |
4334.17 |
3745.88 |
|
Less: Financial Cost |
2201.26 |
2633.22 |
|
Cash Profit before tax |
2132.91 |
1112.66 |
|
Less: Depreciation |
875.66 |
870.65 |
|
Exceptional Items |
- |
- |
|
Profit /(Loss) before taxation |
1257.25 |
242.01 |
|
Provision for current tax |
278.56 |
47.58 |
|
Income Tax of earlier year |
12.87 |
48.80 |
|
Deferred tax |
176.08 |
(18.59) |
|
Profit /(Loss) after taxation |
789.75 |
164.22 |
|
Transfer to General Reserve |
- |
- |
|
Earning Per Share (face value of Re. 1/- each) |
0.81 |
0.17 |
REVIEW OF OPERATIONS FERTILIZER & CHEMICALS DIVISION
The year 2018-19 fared well for the Company. The prices of Sulphur and Sulphuric Acid remained high throughout the year mainly due to global sentiment and constrained domestic supply. Even though it was not viable to produce and sell large quantities of Fertilizer due to the high input costs of Sulphuric Acid, the Company could capitalize on the situation by selling higher quantities of Acid from its Sulphuric Acid Plants.
Being mostly rainfed with only around 40% land being irrigated, India remains highly dependent on monsoons for its agricultural production. In 2018, the monsoons remained below normal with deficit in the States of west Madhya Pradesh, parts of Maharashtra, Rajasthan, Gujarat etc. These are some of the main states where the Company sells its fertilizer products.
The GOI could successfully implement the partial Direct Benefit Transfer system for the Fertilizer Industry, however some glitches remain. We are hopeful that they would also be sorted out soon. The GOI has also agreed to keep the subsidy for the SSP sector separately earmarked within the overall âPhosphates and Potassiumâ segment. This shall further improve the liquidity in the sector once implemented.
During the year, the turnover of your Company has increased from Rs. 35,628.77 lacs for the year 2017-18 to Rs. 37,320.34 lacs for the year 2018-19, by about 15.70%, the operating income has increased from Rs 3,745.88 lacs in 2017-18 to Rs. 4,334.17 lacs in 2018-19, and the cash profit has increased from Rs 1,112.66 lacs to Rs 2,132.91 in the respective periods, while the net profit after tax has increased from Rs. 164.22 lacs to Rs. 789.75 lacs. The Company has produced 3,18,554 MT (previous year 3,00,375 MT) Single Super Phosphate and 180443 MT (previous year 90,768 MT) Sulphuric Acid and sold 3,03,679 MT (previous year 3,38,986 MT) Single Super Phosphate & 140329 MT (previous year 51,194 MT) Sulphuric Acid. The Company is trying to diversify its portfolio and has initiated import of NPK fertilizers in a small way. The Company has imported nil NPK fertilizers (previous year 10,986 MT) and sold 7,576 MT during the year (previous year 6,884 MT). The Company has also added value added fortified fertilizers in its product range. Both the above products launched by the Company have been well accepted by the farmers.
The Company is continuing its efforts for optimizing its current assets to leverage sales on the one hand and diversifying into new geographical markets on the other. Focus is being laid on producing more value added fortified fertilizers, to improve the product portfolio.
The raw material prices have increased and are now on an uptrend. To keep the end prices of fertilizers to the farmers within reasonable limits, the Government has maintained the Nutrient Based Subsidy rates at Rs. 2,734/- per MT.
In the coming year 2019-20, the long range forecast of monsoons is about normal. This coupled with the rising trend in the commodity prices, which will give better marketability to SSP vis a vis other NPK products and fortified grades of SSP, we expect to perform better in this year.
Another important development in the Industry has been increased focus of the Ministry of Fertilizers towards quality compliance in the SSP Industry. The movement is already gaining momentum and expected to yield good results. With the improvement in the overall quality of the Industry the organized sector and the Industry as a whole is expected to do well. SOYA/AGRI DIVISION
The Soya Industry is passing through a tough phase with widespread activities of speculation by Industry players.
The Company has reduced its activities in this segment to a large extent alongwith total control on fixed expenses.
The margins in the Industry had improved in 2017-18 due to imposition of higher customs duty on import of palm oil. However during the current year the margins were again under pressure due to lowering of palm oil prices by Malaysia.
DIVIDEND
The Board of Directors is pleased to recommend final dividend of Re. 0.05 per equity share (face value of Re. 1/- per share) for the financial year 2018-2019, previous year Re.0.05 per equity share.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2019 was Rs. 969.89 Lacs 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 2018-19.
INVESTORS EDUCATION & PROTECTION FUND
Dividend which was declared by the Company for the year ended March 31, 2012 at the Annual General Meeting held on August 3, 2012 and remained unclaimed will be transferred to the Investor Education and Protection Fund of the Central Government on September 2, 2019 pursuant to the provisions of Companies Act, 2013. Thereafter no claim shall lie on dividend for the year ended March 31, 2012 from the shareholders.
PROJECTS & FINANCE
Due to uncertainty in the economic environment, the Company has neither undertaken any major capital expenditure nor has any fresh loan been raised from banks during the year.
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 âAâ 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, Sulphuric Acid and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B of Annexure âAâ 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. 6694.67 lacs (Previous year Rs. 8312.95 lacs) on import of Raw Materials, Fees & Subscription and Interest on Foreign Currency Loan.
DIRECTORS
In accordance with the provisions of Section 152 (6)(c) of the Companies Act, 2013 and the Articles of Association of the Company, Shri Jagdish Lal Jajoo (DIN : 02758763), Whole Time Director of the Company is due to retire by rotation at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Directors recommend his reappointment for the consideration of members of the Company at the ensuing General Meeting.
The Board has re-appointed Shri Shailesh Khaitan (DIN:00041247), as a Chairman & Managing Director (KMP) of the Company for a period of three years from April 1, 2019 to March 31, 2022, subject to the approval of the members in ensuing General Meeting as a Special Resolution. The present terms of his appointment expired on 31.03.2019. Directors recommend his re-appointment. The Board has also re-appointed Shri Vijay Gupta (DIN:03511193) and Shri Balmukund Dakhera (DIN:05105269), as an Independent Directors (Non-Executive) of the Company for a period of five years commencing from April 1, 2019 to March 31, 2024, subject to the approval of the members in ensuing General Meeting as a Special Resolution. The present terms of their appointment expired on 31.03.2019. Directors recommend their reappointments.
The Board has also re-appointed Shri Utsav Khaitan (DIN:03021454), as a Whole Time Director of the Company for a period of three years with retrospective effect from April 1, 2019 to March 31, 2022, subject to the approval of the members in ensuing General Meeting as a Special Resolution. Shri Utsav Khaitan is son of Shri Shailesh Khaitan, Promoter, Chairman and Managing Director of the Company and to take him on the Board for larger long term interest of the Company. Directors recommend his re-appointment.
The Board has also re-appointed Ms. Veena Chadha (DIN:06886533), as an Independent Director (Non-Executive) of the Company for a period of five years with effect from August 7, 2019 to August 6, 2024, subject to the approval of the members in ensuing General Meeting as a Special Resolution. The present terms of her appointment is expiring on 06.08.2019. Directors recommend her re-appointment.
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 4 (Four) 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 Harsh Vardhan Agnihotri, President & Chief Financial Officer and
(c) Shri Kamlesh Josh, CompanySecretaiy (Compliance Officer) & 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 strived 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 âthe Actâ.
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 âWhistle Blower Policyâ for Directors and Employees to report concern of unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy and the details of the Whistle Blower Policy has been uploaded on the Companyâs website, Web-link: http://khaitanchemfert.com/wp-content/uploads/2016/04/KCFL-Vigil-Mechanism-Policv
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 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 had 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 35th Annual General Meeting to the conclusion of 40th Annual General Meeting of the Company (from Financial Year 2017-18 to 2021-22), which will be subject to ratification by shareholders (every year) in ensuing Annual General Meeting. 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 âPeer Review Boardâ, 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 Section143(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 Auditorsâ 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 2019-20.
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. APAS & Company, Chartered Accountants, New Delhi is appointed as Internal Auditor of the Company to conduct the internal audit of the Company for the Financial Year 2019-20, as required under Section 138 of the 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., Company Secretaries, Indore (C.P. No. 3764), to undertake the Secretarial Audit of the Company for the financial year 2019-20.
The Secretarial Audit Report for the year 2018-19 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 Company''s Website, Web-link: http://khaitanchemfert.com/ wp-content/uploads/2016/04/KCFL-CSR-Policv
The Company has not required to spend any amount towards CSR Expenditure as none of the thresholds as specified in Section 135 (1) of the Companies Act, 2013 is crossed and the details is annexed herewith as (Annexure - E)
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 the 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.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return for the year ended on 31.03.2019 in Form MGT-9 is annexed herewith as (Annexure - G). The details forming part of the extract of the Annual Return for the year ended on 31.03.2019 in Form MGT-9 has been uploaded on Companyâs Website in investor section at www.khaitanchemfert.com
DIRECTORSâ 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 state of affairs of the Company as at 31st March, 2019 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 armâs 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 Companyâs website and the web link for the same is http://khaitanchemfert.com/wp-content/uploads/2016/04/Policy-on-materiality-of-RPT-KCFL.pdf. The Company has also formed Related Party Transactions Policy and the weblink for same is http://khaitanchemfert.com/ wp-content/uploads/2016/04/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-H 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 The BSE Limited, Mumbai, 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 31st March, 2020 to the BSE.
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 and update their bank A/c and Email ID with the respective depository Participant. As on March 31, 2019, 97.96% of the share capital stands dematerialised.
RISK MANAGEMENT
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 Companyâs Website in policies section atwww.khaitanchemfert.com
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. âThe 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 2018-19.
No of complaints received: NIL
No of complaints disposed off: Not Applicableâ-
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-H).
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 thereunder.
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 along with 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
Place: Gurugram (SHAILESH KHAITAN)
Date: 09.05.2019 CHAIRMAN & MANAGING DIRECTOR
DIN:00041247
Mar 31, 2018
The Directors are pleased to present the 36,h annual report of the Company alongwith audited financial statement for the financial year ended 3râMarch, 2018.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31â March, 2018 is summarised below:
(Rs. in lacs)
|
Particulars |
2017-18 |
2016-17 |
|
Sales |
35483.68 |
36434.54 |
|
Total Income |
35628.77 |
36765.37 |
|
Surplus before interest, depreciation, exceptional items and Tax |
3745.88 |
4139.04 |
|
Less: Financial Cost |
2633.22 |
3104.06 |
|
Cash Profit before tax |
1112.66 |
1034.98 |
|
Less: Depreciation |
870.65 |
823.22 |
|
Exceptional Items |
- |
- |
|
Profit /(Loss) before taxation |
242.01 |
211.76 |
|
Provision for current tax |
47.58 |
97.66 |
|
Income Tax of earlier year |
48.80 |
1.91 |
|
Deferred tax |
(18.59) |
(53.57) |
|
Profit /(Loss) after taxation |
164.22 |
165.76 |
|
Transfer to General Reserve |
- |
- |
|
Earning Per Share (face value of Re. 1/- each) |
0.17 |
0.17 |
REVIEW OF OPERATIONS
FERTILIZER CHEMICALS DIVISION
The year 2017-18 continued to be a challenging period with low purchases by the farmers due to low income. Also the country faced a drought (in some of the regions especially Madhya Pradesh) in 2017-18, which is a rare phenomenon. As a result, the agriculture related businesses; especially fertilizers trade was very poor.
During the year, continuing impact of demonetization and implementation of GST had a major impact by way of slowdown in Indian agriculture sector. Keeping in mind the huge dependence of the agriculture sector on cash, the farmers, especially small and marginal among them, were adversely affected. The recoveries from the market have been extremely slow. All these things have strained the working capital of the company considerably.
Further a transition to partial Direct Benefit Transfer system for the Fertilizer Industry slowed down trade due to uncertainty. The Government of India has modified the procedure for release of fertilizer subsidy and partial DBT whereby a POS (Point of Sale) device has been distributed to the traders. Under the new procedure the subsidy will continue to be paid to the Industry instead of the farmer but only after sale of fertilizer to the farmer though the POS device. The system is under implementation and is being stabilized. The new system is likely to increase the working capital cycle for the Industry. Earlier the SSP Industry was claiming subsidy from GOI immediately on first point sale to dealer, however, now the we will be eligible for subsidy only on last point of sale from retailer to farmer.
During the year, even though the turnover of your Company has decreased from Rs. 36,765.37 lacs for the year 2016-17 to Rs. 35,628.77 lacs for the year 2017-18, by about 9.69% the operating income has decreased only marginally from Rs.4,139.04lacs in 201617 to Rs.3,745.88 lacs in 2017-18, and the cash profit has increased from Rs.1,034.98 lacs to Rs.1,112.66 in the respective periods, while the net profit after tax has decreased from Rs. 165.76 lacs to Rs.164.22 lacs.
The Company has produced 300375 MT (previous year 415452 MT) Single Super Phosphate and sold 338986 MT (previous year 385574 MT including export of 500 MT).
The Company is trying to diversify its portfolio and has initiated import of NPK fertilizers in a small way. The Company has imported 10986 MT NPK fertilizers (previous year 6417) and sold 6884 MT during the year (previous year 2898).
The Company is continuing its efforts for optimizing its current assets to leverage sales on the one hand and diversifying into new geographical markets on the other. Focus is being laid on producing more value added fortified fertilizers, to improve the product portfolio.
The raw material prices have increased and are now on an uptrend. To keep the end prices of fertilizers to the farmers within reasonable limits, the Government has increased the Nutrient Based Subsidy rates from Rs.2,166/- per MT to Rs.2,734/- per MT on SSP w.e.f. 01.04.2018.
In the current year 2018-19, the long range forecast of monsoons is normal. This coupled with the rising trend in the commodity prices, which will give better marketability to SSP vis a vis other NPK products, we expect to perform betterthisyear.
SOYA/AGRI DIVISION
The Soya Industry is passing through a tough phase with widespread activities of speculation by Industry players.
The Company has reduced its activities in this segment to a large extent along with total control on fixed expenses.
GOODS AND SERVICE TAX (GST):
The GST has been implemented successfully by the Government and we hope that the Company will be benefited once the entire transition of GST is complete and the same will bring more transparency in the tax administration. GST will create a common Indian market, improve tax compliance and governance.
However there are teething problems and the procedures for refund of excess input tax credits are yet to be streamlined. In the interim the working capital has been increased to some extent.
DIVIDEND
The Board of Directors is pleased to recommend final dividend of Re.0.05 per equity share (face value of Re. 1/- per share) for the financial year 2017-2018, previous year Re.0.05 per equity share.
SHARE CAPITAL
The paid up Equity Share Capital as on 31 â March, 2018 was Rs. 969.89 Lacs 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 norgranted stock options nor sweat equity.
RESERVES AND SURPLUS
The Company has not transferred any amount to General Reserves for the financial year 2017-18.
INVESTORS EDUCATION & PROTECTION FUND
Dividend which was declared by the Company for the year ended March 31, 2011 at the Annual General Meeting held on July 29, 2011 and remained unclaimed will be transferred to the Investor Education and Protection Fund of the Central Government on August 27, 2018 pursuant to the provisions of Companies Act, 2013. Thereafter no claim shall lie on dividend for the year ended March, 2011 from the shareholders.
PROJECTS & FINANCE
Due to uncertainty in the economic environment, the Company has neither undertaken any major capital expenditure nor has any fresh loan been raised from banks during the year.
The Company has reduced its non fund based limits by Rs. 20 Crores and correspondingly increased cash credit limits by Rs. 10 Crores and availed stand by line of credit by Rs. 10 Crores.
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.
MATERIAL CHANGES EFFECTING FINANCIAL POSITIONS OFTHECOMPANY
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.
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-Aof Annexure âAâ 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, Sulphuric Acid and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B of Annexure âAâ 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. 55.41) and incurred Rs.8312.95 lacs (Previous year Rs. 12653.73 lacs) on import of Raw Materials, NPK Fertilizers, Fees & Subscription and Interest on Foreign Currency Loan.
DIRECTORS
In accordance with the provisions of Section 152 (6)(c) of the Companies Act, 2013 and the Articles of Association of the Company, ShriJagdish Lai Jajoo (DIN : 02758763), Whole Time Director of the Company is due to retire at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Directors recommend his reappointment for the consideration of members of the Company at the ensuing Annual 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 5 (Five) 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) ShriShaileshKhaitan, Chairman & Managing Director;
(b) Shri Harsh VardhanAgnihotri, President & Chief Financial Officer and
(c) ShriKamlesh Joshi, Company Secretary & 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 strived 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 âthe Actâ.
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 âWhistle Blower Policyâ for Directors and Employees to report concern of unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy and the details of the Whistle Blower Policy has been uploaded on the Companyâs website, Web-link: http://khaitanchemfert.com/wp-content/uploads/2016/04/KCFL-Vigil-Mechanism-Policv
NOMINATION & REMUNERATION 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 ShriBalmukundDakhera, Chairman, Shri Vijay Gupta and Ms. VeenaChadha 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 had 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 35th Annual General Meeting to the conclusion of 40th Annual General Meeting of the Company (from Financial Year 2017-18 to 2021-22), which will be subject to ratification by shareholders (every year) in ensuing Annual General Meeting. 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 Boardâ, 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 Auditorsâ 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, CostAccountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer, SulphuricAcid and Soya products for thefinancial year2018-19.
As required under Companies Act, 2013 a resolution seeking members approval forthe remuneration payable to cost Auditor forms part of the notice conveying the Annual General Meeting for their ratification.
INTERNAL AUDITOR:
M/s. APAS& Company, Chartered Accountants, New Delhi is appointed as Internal Auditor of the Company to conduct the internal audit of the Company for the Financial Year 2018-19, as required under Section 138 of the 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 M/s. Ritesh Gupta & Co., Company Secretaries, Indore (C.P. No. 3764), to undertake the Secretarial Audit of the Company for the financial year 2018-19.
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 ShriJagdish Lai Jajoo as the Chairman and ShriUtsavKhaitan, ShriBalmukundDakhera, Shri Vijay Gupta & Ms. VeenaChadha as its members. The detailed CSR Policy has been uploaded on Companyâs Website Web-link: http://khaitanchemfert.com/wp-content/ uploads/2016/04/KCFL-CSR-Policy
The Company is not required to spend any amount towards CSR Expenditure as none of the thresholds as specified in Section 135(1) of the Companies Act, 2013 is crossed. (Annexure - E)
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 the 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.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return for the year ended on 31.03.2018 in Form MGT-9 has been uploaded on companyâs website in investor section at www.khaitanchemfert.com.
DIRECTORSâRESPONSIBILITY 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 state of affairs of the Company as at 31â March, 2018 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 WITHRELATED 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 armâs 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 Companyâs website and the web link for the same is http://khaitanchemfert.com/wp-content/uploads/2016/04/Policy-on-materiality-of-RPT-KCFL.pdf. The Company has also formed Related Party Transactions Policy and the weblink for same is http://khaitanchemfert.com/wp-content/uploads/ 2016/04/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 FormAOC-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 The Bombay Stock Exchange Limited (BSE), Mumbai, 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 31 * March, 2019 to the BSE.
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, 2018, 97.60% of the share capital stands dematerialized.
RISK MANAGEMENT
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.
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.
âThe 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 underthis 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: Not Applicableâ-
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 thereunder.
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 along with 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
(SHAILESH KHAITAN)
Place: Gurgao
Date-19.05.2018 CHAIRMAN & MANAGING DIRECTOR
DIN: 00041247
Mar 31, 2017
The Directors are pleased to present the 35th Annual Report of your Company along with Audited Financial Statement for the financial year ended 31st March, 2017.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March, 2017 is summarized below:
(Rs. in Lacs)
|
Particulars |
2016-17 |
2015-16 |
|
Sales (Gross) |
36434.54 |
39777.24 |
|
Net Sales |
36202.58 |
39404.56 |
|
Surplus before interest, depreciation, exceptional items and Tax |
4148.61 |
4165.11 |
|
Less: Financial Cost |
3114.59 |
2966.23 |
|
Cash Profit before tax |
1033.68 |
1198.88 |
|
Less: Depreciation |
820.27 |
863.61 |
|
Exceptional Items |
- |
- |
|
Profit /(Loss) before taxation |
213.41 |
335.27 |
|
Provision for current tax |
97.66 |
75.94 |
|
MAT Credit Entitlement |
(76.36) |
- |
|
Income Tax of earlier year |
1.91 |
- |
|
Deferred tax |
11.03 |
93.66 |
|
Profit /(Loss) after taxation |
179.17 |
165.67 |
|
Transfer to General Reserve |
- |
- |
|
Earning Per Share (face value of Re. 1/- each) |
0.18 |
0.17 |
REVIEW OF OPERATIONS FERTILIZERS&CHEMICALS DIVISION
The year 2016-17 continued to be a challenging period with weak economic environment due to previous two years of drought and consequently high channel stocks and low income with the farmers. Also the country faced a consecutive drought (in some of the regions) for the second year in 2016-17, which is a rare phenomenon. As a result, the agriculture related businesses; especially fertilizers trade was very poor. On top of that there was a major shortage of one of the raw materials due to running out of zinc ore deposits with Hindustan Zinc ltd., a major supplier of Sulphuric Acid to western India. That too in the peak Kharif season. The depreciating Indian currency during major part of the year compounded the situation since the Companyâs major raw material is imported.
Further the demonetization had a major impact by way of slowdown in Indian agriculture sector. Keeping in mind the huge dependence of the agriculture sector on cash, the farmers, especially small and marginal among them, were adversely affected, offsetting the benefits of a good monsoon season after two years of drought. The agricultural sector is still not fully recovered from the adverse impact of demonetization. We are keeping an eye on the market and continuing with all our schemes and promotions for rewarding non-cash payments.
During the year, even though the turnover of your Company has decreased from Rs. 39,404.56 lacs for the year 2015-16 to Rs. 36,202.58 lacs for the year 2016-17 by about 8% the operating income has decreased only marginally from Rs 4,165.11 lacs in 2015-16 to Rs 4,148.27 lacs in 2016-17, and the cash profit has decreased from Rs 1,198.88 lacs to Rs 1,033.68 in the respective periods, while the net profit after tax has increased from Rs. 165.67 lacs to Rs. 179.17 lacs. The increase in net profit after tax is mainly due to the provision of MAT Credit Entitlement Rs76.36 lacs in 2016-17against Rs. NIL lacs in 2015-16.
The Company has produced 415452 MT (previous year 337329 MT) Single Super Phosphate and sold 385574 mT including export of500 MT (previous year 404646 MT).
The Company is trying to diversify its portfolio and has initiated import of NPK fertilizers in a small way. The Company has imported 6417 MT NPK fertilizers (previous year NIL) and sold 2898 MT during the year (previous year NIL).
The Company is continuing its efforts for optimizing its current assets to leverage sales on the one hand and diversifying into new geographical markets on the other. More focus is being laid on producing value added fortified fertilizers, to improve the product portfolio. Further, with the long range forecast of normal monsoons in the current year 2017-18, we expect to perform better in this year.
The Government has also removed the statutory requirement of minimum production effective from the financial year 2016-17 onwards. This would further benefit the SSP Industry, as an unnecessary burden to produce material compulsorily has been done away with. Now, the Industry can produce only the desired quantity as per the requirement of the markets. The Government has reduced the Nutrient Based Subsidy rates from Rs.2343/- per MT to Rs. 2166/- per MT w.e.f. 01.04.2017 and this revision in subsidy would impact the realizations in the short term, however we expect the impact would be neutralized over a period with gradual increase in prices of the products.
Raw material prices now seem to have stabilized. Further with the expected long term policy of the Government of India for direct subsidy to farmers it shall help the growth of SSP Industry in a free but competitive environment.
SOYA/AGRI DIVISION
The Soya Industry is passing through a tough phase with widespread activities of speculation by Industry players.
The Company has reduced its activities in this segment to a large extent along with total control on fixed expenses.
GOODS AND SERVICE TAX (GST)
The passage of the GST bill in the Parliament is a positive for the economy and will bring in more transparency in the tax administration. GST will create a common Indian market, improve tax compliance and governance. The transition to GST is complex from an administrative as well as at echnological perspective. What will be critical is the efficiency in relation to its implementation.
DIVIDEND
The Board of Directors is pleased to recommend final dividend of Re. 0.05 per equity share (face value of Re. 1/- per share) for the financial year 2016-17, previous year Re.0.05 per equity share.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2017 was Rs. 969.89 Lacs 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 thefinancialyear2016-17.
INVESTORS EDUCATIONAND PROTECTION FUND
Dividend which was declared by the Company for the year ended March 31, 2010 at the Annual General Meeting held on July 30, 2010 and remained unclaimed will be transferred to the Investor Education and Protection Fund of the Central GovernmentonAugust27, 2017 pursuant to the provisions of Companies Act, 2013. Thereafter no claim shall lie on dividend for the year ended March, 2010 from the shareholders.
PROJECTS & FINANCE
The Company has availed loans of Rs. 11.85 Crores, from State Bank of India and Axis Bank for modernization of acid plants and purchase of vehicles.
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.
MATERIAL CHANGES EFFECTING FINANCIAL POSITION 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 conceptor future operations of the Company.
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 âAâ 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, Sulphuric Acid and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B of Annexure âAâ is not applicable.
MANAGEMENT DISCUSSION ANDANALYSIS 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 EARNINGAND OUTGO
The Company has earned Rs. 55.41 lacs on export of goods (Previous year Rs. Nil) and incurred Rs. 12653.73 lacs (Previous year Rs. 6937.79 lacs) on import of Raw Materials, NPK Fertilizers, Fees & Subscription and Interest on Foreign Currency Loan.
DIRECTORS
In accordance with the provisions of Section 152 (6) (c) of the Companies Act, 2013 and the Articles of Association of the Company, Shri Utsav Khaitan (DIN: 03021454), Whole Time Director of the Company is due to retire at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Directors recommend his reappointment for the consideration of members of the Company at the ensuing Annual 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 there under.
During the year, the Board of Directors met 5 (Five) times. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report (Annexure - C).
KEYMANAGERIAL 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 Harsh Vardhan Agnihotri, President & Chief Financial Officer and
(c) Shri Kamlesh Joshi, Company Secretary & 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 strived 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 âthe Actâ.
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 âWhistle Blower Policyâ for Directors and Employees to report concern of unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy and the details of the Whistle Blower Policy has been uploaded on the Companyâs website, Web-link: http://khaitanchemfert.com/wp-content/uploads/2016/04/KCFL-Viail-Mechanism-Policy
NOMINATION AND REMUNERATION 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 and Remuneration Committee, comprises of Shri Balmukund Dakhera, Chairman, Shri Vijay Gupta and Ms. Veena Chadha as its members.
The Nomination and 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
Pursuant to provisions of section 139 of the Companies Act, 2013 and rules made there under, the term of Office of M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, as Statutory Auditors of the Company, will conclude from the close of ensuing Annual General Meeting of the Company.
The Board of Directors places on record its appreciation to the services rendered by M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi as the Statutory Auditors of the Company.
The Company has received proposal from M/s. NSBP & Co., Chartered Accountants, New Delhi, regarding appointment of Statutory Auditors of the Company and they have also consented for carrying out the Statutory Audit of the Company.
The Board has recommended appointment of 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 35th Annual General meeting to the conclusion of 40th Annual General Meeting of the Company (from Financial Year 2017-2018 to 2021-2022), which will be subject to ratification by shareholders in ensuing Annual General Meeting. The Company has received a certificate from them to the effect that their appointment as Statutory Auditors of the Company, if made, 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 âPeer Review Boardâ, as required under the provisions of the 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 Auditorsâ 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 2017-18.
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. APAS & Company, Chartered Accountants, New Delhi is appointed as an Internal Auditor of the Company to conduct the internal audit of the Company for the Financial Year 2017-18, 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 InternalAuditfunctionisdefined.TheAuditCommitteeoftheBoardofDirectors actively reviews the adequacy and effectiveness of the Internal Control System and suggest 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 strengthen 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 M/s Ritesh Gupta & Co., Company Secretaries, Indore, to undertake the Secretarial Audit of the Company for the financial year2017-18.
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(CSR) 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 Companyâs Website, Web-link: http://khaitanchemfert.com/wp-content/uploads/2016/04/ KCFL-CSR-Policy
The Company is not required to spend any amount towards CSR Expenditure as none of the thresholds as specified in Section 135 (1) of the Companies Act, 2013 is crossed. (Annexure-E)
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 the 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.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return for the year ended March 31, 2017 in Form MGT-9 is annexed (Annexure-F).
DIRECTORSâ 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 state of affairs of the Company as at 31st March, 2017 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 armâs 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 Companyâs website and the web link for the same is http://khaitanchemfert.com/wp-content/uploads/ 2016/04/Policy-on-materiality-of-RPT-KCFL.pdf. The Company has also formed Related Party Transactions Policy and the weblink for same is http://khaitanchemfert.com/wp-content/uploads/2016/04/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-G to this report. Related Party Transactions during the year have been disclosed as a part of Financial Statements as required under Accounting Standard 18issued by the Institute of Chartered Accountants of India.
LISTING OF SHARES
Shares of the Company are listed on The Bombay Stock Exchange Limited (BSE), Mumbai, 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 upto 31st March, 2018 to the BSE.
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, 2017, 97.02% of the share capital stands dematerialized.
RISK MANAGEMENT
The Company has in place Risk Management Policy as per requirement of the 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.
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
âThe 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 2016-17.
No of complaints received: - NIL
No of complaints disposed off: Not Applicableâ''
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-H).
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 thereunder.
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 along with 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
(SHAILESH KHAITAN)
Place: Gurugram CHAIRMAN & MANAGING DIRECTOR
Date: May29,2017 DIN: 00041247
Mar 31, 2016
To the Members,
The Directors are pleased to present the 34th annual report of the Company and audited statement of accounts for the year ended 31st March, 2016.
FINANCIALRESULTS
The financial performance of the Company for the year ended 31st March,2016issummarised below:
(Rs. in Lacs)
|
Particulars |
2015-16 |
2014-15 |
|
Sales (Gross) |
39777.24 |
33388.06 |
|
Net Sales |
39404.56 |
33203.41 |
|
Surplus before interest, depreciation, exceptional items and tax |
4165.11 |
3728.09 |
|
Less: Financial Cost |
2966.23 |
3006.60 |
|
Cash Profit before tax |
1198.88 |
721.49 |
|
Less: Depreciation |
863.61 |
889.11 |
|
Exceptional Items |
- |
- |
|
Profit/(Loss) before taxation |
335.27 |
(167.62) |
|
Provision for current tax |
75.94 |
- |
|
Deferred tax |
93.66 |
(521.51) |
|
Income Tax of earlier year |
- |
3.47 |
|
Profit/(Loss)after taxation |
165.67 |
350.42 |
|
Transfer to General Reserve |
- |
- |
|
Proposed Dividend @ 5% |
48.49 |
48.49 |
|
Tax on Proposed Dividend |
9.87 |
9.87 |
|
Earnings Per Share (face value of Re. 1/- each) |
0.17 |
0.36 |
REVIEWOFOPERATIONS FERTILIZER&CHEMICALS DIVISION
The year 2015-16 continued to be a challenging period with weak economic environment. The country faced a consecutive draught for the second year in 2015-16, which is a rare phenomenon. As result, the agriculture related businesses; especially fertilizers trade was very poor. On top of that the depreciating Indian currency compounded the situation since the Company''s major raw material is imported.
Despite the adverse conditions during the year, the turnover of your Company has increased from Rs. 33203.41 lacs for the year 2014-15 to Rs. 39404.56 lacs for the year 2015-16. The operating income has increased from Rs 3728.09 lacs in 2014-15 to Rs 4165.11 lacs in 2015
16, and the cash profit has increased from Rs 721.49 lacs to Rs 1198.88 in the respective periods, while the net profit after tax has reduced from Rs. 350.42 lacs to Rs. 165.67 lacs. The reduction in net profit after tax is mainly due to the provision of deferred tax Rs 93.66 lacs in 2015-16 against Rs. (521.51) lacs in 2014-15.
The Company has produced 337329 MT (previous year 347238 MT) Single Super Phosphate and sold 404646 MT (previous year 322071 MT). The Company is continuing its efforts for optimizing its current assets on the one hand and diversifying into new geographical markets on the other. More focus is being laid on producing value added fortified fertilizers, to improve the product portfolio. Further, with the long range forecast of normal monsoons in the current year 2016-17, we expect to perform bettering this year.
The Government has also removed the statutory requirement of minimum production effective for the financial year 2016-17 onwards. This would further benefit the SSP Industry, as an unnecessary burden to produce material compulsorily has been done away with. Now, the Industry can produce only the desired quantity as per the requirement of the markets.
The Government has reduced the Nutrient Based Subsidy rates from Rs. 3173 per MT to Rs. 2343 per MT w.e.f. 01.04.2016 and this revision in subsidy would impact the realizations in the short term, however we expect the impact would be neutralized over a period with gradual increase in prices of the products.
Raw material prices now seem to have stabilized. Further with the expected long term policy of the Government of India for direct subsidy to farmers it shall help the growth of SSP Industry in a free but competitive environment.
SOYA/AGRI DIVISION
The Soya Industry is passing through a tough phase with widespread activities of speculation by Industry players.
The Company has reduced its activities in this segment to a large extent along with total control on fixed expenses.
DIVIDEND
The Board of Directors is pleased to recommend final dividend of Re.
0.05 per equity share (face value of Re. 1/- per share) for the financial year2015-2016, previous yearRe.0.05perequityshare.
INVESTORS EDUCATION & PROTECTION FUND Dividend which was declared by the Company for the year ended March
31, 2009 at the Annual General Meeting held on July 31, 2009 and remained unclaimed will be transferred to the Investor Education and Protection Fund of the Central Government on August 28,2016 pursuant to the provisions of Companies Act, 2013. Thereafter no claim shall lie on dividend for the year ended March, 2009 from the shareholders. PROJECTS&FINANCE
The Company has availed corporate loan from State Bank of India of Rs. 30 Crores, to supplement the long term working capital requirements in current year.
FIXEDDEPOSITS
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 hereunder.
MATERIAL CHANGES EFFECTING FINANCIAL POSITIONS OF THECOMPANY
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. CONSERVATION OF ENERGYAND TECHNOLOGYABSORPTION 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-Aof Annexure âAâ 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, Sulphuric Acid and Seed Processing & Oil Refinery. Hence, information specified to be given in Form-B of Annexure âAâ is not applicable. MANAGEMENTDISCUSSIONANDANALYSISREPORT In accordance with Schedule V (B) of the SEBI (Listing Obligations & Disclosure Requirements) Regulation, 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 lacs on export of goods (Previous year Rs. NIL)and incurred Rs. 6937.79 lacs (Previous year Rs. 9047.66 lacs) on import of Raw Materials, Capital Goods, Fees & Subscription and Interest on Foreign Currency Loan.
DIRECTORS
In accordance with the provisions of Section 152(6)(c) of the Companies Act, 2013 and the Articles of Association of the Company, Shri Jagdish Lal Jajoo (DIN 02758763), Whole Time Director of the Company is due to retire at forthcoming Annual General Meeting, and being eligible, has offered himself for re-appointment. Directors recommend his reappointment.
During the year under review, Dr. Prakash Goyal (DIN 00754744), Independent Director of your Company, resigned from the Board w.e.f. 05.08.2015, due to his ill health. The Board places on record its sincere appreciation for valuable services rendered and contribution made by him. 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 &Disclosure Requirements) Regulation, 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, 2013and rules made hereunder.
During the year, the Board of Directors met 5 (Five) 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 by the Board of Directors during the year under review:
(a) Shri Shailesh Khaitan, Chairman &Managing Director;
(b) Shri R. S. Vijayvargiya, President & Chief Financial Officer; (Retired w.e.f.05.08.2015)
(c) Shri H. V. Agnihotri, President & Chief Financial Officer; (Appointed w.e.f. 05.08.2015)and
(d) Shri Kamlesh Joshi, Company Secretary &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, 2013and 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 strived to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under Schedule V (C) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015forms 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 Ventures/Associate Companies.
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 âthe Actâ.
VIGILMECHANISM/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) Regulation, 2015, the Company has established a Vigil Mechanism called the âWhistle Blower Policy'' for Directors and Employees to report concern of unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct ore thicspolicy and the details of the Whistle Blower Policy has been uploaded on the Company''s website, Web-link: http://khaitanchemfert.com/wp-content/uploads/2016/04/KCFL-Vigil-Mechanism-Policy NOMINATION&REMUNERATION 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 Board has reconstituted the Nomination & Remuneration Committee, comprising 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
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company, retire at the conclusion of ensuing annual general meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from them to the effect that their appointment as Statutory Auditors of the Company, if made, 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 âPeer Review Board'', as required under the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The notes on accounts referred to and the Auditors'' Report are self-explanatory and there forefoot call for any explanatory note.
INTERNALAUDITOR
APAS & Company, Chartered Accountants, is appointed to conduct the internal audit of the Company for the Financial Year 2016-17, 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. 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 strengthen 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. COSTAUDIT
The Board of Directors, in pursuance of an order under section 148 of the Companies Act, 2013, read with Rule 14of the Companies (Audit & Auditors) Rules, 2014, issued by the Central Government, has appointed 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, SulphuricAcid and Soya products for the financial year2016-17.
SECRETARIALAUDIT
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 M/s Ritesh Gupta & Co., Company Secretaries, Indore, to undertake the Secretarial Audit of the Company for the financial year2016-17.
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).
SECRETARIALSTANDARDS
The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India(ICSI).
CORPORATESOCIALRESPONSIBILITYINITIATIVES
Pursuant to Section 135 of Companies Act, 2013and the relevant rules, the Board has re-constituted the Corporate Social Responsibility Committee comprising 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 Company''s Website, Web-link:
http://khaitanchemfert.com/wp-content/uploads/2016/04/KCFL-CSR-Policy The Company is not required to spend any amount towards CSR Expenditure as none of the thresholds as specified in Section 135 (1)of the Companies Act, 2013 is crossed. (Annexure - E)
ANNUAL EVALUATION OF BOARD
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) Regulation, 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 the Non-Independent Directors were carried out by the Independent Directors.
The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. EXTRACT OF ANNUAL RETURN
The details forming partook the extract of the Annual Return for the year ended on 31.03.2016in Form MGT-9 is annexed (Annexure-F). DIRECTORSâRESPONSIBILITYSTATEMENT
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 state of affairs of the Company as at 31st March, 2016 and of the profitless 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 23of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated the Policy on Materiality of Related Party Transactions and has also amended the existing Related Party Transactions Policy to Policy on Dealing With Related Party Transactions . All such transactions that were entered into during the financial year were on an arm''s 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 Company''s website and the web link for the same is http://khaitanchemfert.com/wp-content/uploads/2016/04/Policy-on-materiality-of-RPT-KCFL.pdf. The Company has also formed Related Party Transactions Policy and the we blink for same is http://khaitanchemfert.com/wp-content/uploads/2016/04/Related-Party-T ransactions-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-G 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.
LISTINGOFSHARES
Shares of the Company are listed on The Bombay Stock Exchange Limited (BSE),Mumbai, 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 31st March, 2017 to the BSE. 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 onMarch31st,2016,96.81%of the share capital stands dematerialized.
RISKMANAGEMENT
The Company has amended Existing Risk Management Policy as per requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 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 stakeholders 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.
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.
âThe 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 & 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 2015-16.
No of complaints received: ¦ NIL No of complaints disposed off: Not Applicableâ''
PARTICULARS OF EMPLOYEES
In terms of provisions of Section 197 (12) of the Companies Act, 2013 read with Rule5(2)and 5(3) 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-A). Ratioof remuneration of each director to the median remuneration of the employees of the Company for the Financial Year:
The information required pursuant to Section 197 read with Rule 5 (1)(i) of the Companies (Appointment and Remuneration) Rules, 2014 in respect of ratio of remuneration of each director to the median remuneration of the employees of the Company for the Financial Year, is as follows:
Shri Shailesh Khaitan : 30.72 times to median remuneration. ShriUtsavKhaitan : 8.78timestomedianremuneration.
Shri Jagdish Lal Jajoo : 6.46timestomedian remuneration. ACKNOWLEDGEMENT
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
Place: Gurgaon (SHAILESH KHAITAN)
Date: 27.05.2016 CHAIRMAN & MANAGING DIRECTOR
DIN:00041247
Mar 31, 2015
To the Members,
The Directors are pleased to present the 33rd annual report of the
Company and audited statement of accounts for the year ended 31 st
March, 2015.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31 st
March, 2015 is summarised below: (Rs. in lacs)
Particulars 2014-15 2013-14
Sales (Gross) 33388.06 39330.73
Net Sales 33203.41 39684.35
Surplus before interest, depreciation,
exceptional items and Tax 3728.09 2644.61
Less: Financial Cost 3006.60 2497.39
Cash Profit before tax 721.49 147.22
Less: Depreciation 889.11 764.44
Exceptional Items . .
Profit/(Loss) before taxation (167.62) (617.22)
Provision for current tax . .
Deferred tax 521.51 446.32
Income Tax of earlier year 3.47 (8.51)
Profit/(Loss) after taxation 350.42 (162.39)
Transfer to General Reserve . .
Proposed Dividend @ 5% 48.49 48.49
Tax on Proposed Dividend 9.87 8.24
Earning Per Share (face value of Re. 1/-each) 0.36 (0.17)
REVIEW OF OPERATIONS FERTILIZER & CHEMICALS DIVISION:
During the year, the Company has earned Rs.350.42 Lacs of PAT (previous
year: loss of Rs 162.39 Lacs) even after a decrease in total income.
The performance of the Company has marginally improved, mainly on
account of better management of current assets, forex exposure and due
to reduction in the raw material prices and other manufacturing cost.
The year 2014-15 continued to be a challenging period with weak
economic environment, depreciating currency, inconsistent and unevenly
distributed monsoons leading to financial deterioration of the farmers
economic condition.
The Company is continuing its efforts for optimizing its current
assets, however the statutory requirement of compulsory minimum
production hinders the process. The Government of India is reviewing
its stipulations for minimum production requirement.
The performance of the Company did not meet expectations in sales
volume, mainly due to low margins and conditions ofoversupplyinthe
market. The increased supply situation in the market was further
compounded due to compulsory minimum production stipulated by the GOI.
The performance of the Company in last three years was also affected by
losses on Inventories with a continuing downward trend in prices of raw
material.
The Company has produced 347238 MT (previous year 392448 MT) Single
Super Phosphate and sold 322071 MT (previous year 372984 MT).
The Industry is awaiting a long term policy from the Government of
India, to strengthen and stabilize the NBS Policy across all
fertilizers to encourage balanced & rational use of fertilizers.
Raw material prices now seem to have stabilized and therefore with the
expected long term policy of the Government of India along with the
declared road-map for direct subsidy to farmers shall help the growth
of
SSP Industry in a free but competitive environment.
The Company is determined to perform better in the current year and
achieve higher capacity utilization.
SOYA DIVISION
The Soya Industry is passing through a tough patch with large
activities of speculation with exemption and evasion of taxto/by
Industry.
The Company has reduced its activities in this segment to large extent
alongwith total control on fixed expenses.
DIVIDEND
The Board of Directors is pleased to recommend final dividend of Re.
0.05 per equity share (face value of Re. 1/- per share) for the
financial year 2014-2015, previous year Re.0.05 per equity share.
PROJECTS & FINANCE
The Dahej plant has started production after getting all clearances.
The Company has availed corporate loan from IDBI Bank Limited and State
Bank of India has also sanctioned corporate loan, to supplement the
working capital requirements in current year.
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.
CONSERVATION OF ENERGYAND TECHNOLOGYABSORPTION
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 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, Sulphuric
Acid and Seed Processing & Oil Refinery. Hence, information specified
to be given in Form-B is not applicable.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with clause 49 of the listing agreement with Stock
Exchange, the Management Discussion and Analysis Report forms part of
this Report (Annexure - B)
FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. NIL lacs
on export of goods (Previous year Rs. NIL) and incurred Rs. 9047.66
lacs (Previous year Rs. 7449.67 lacs) on import of Raw Materials,
Capital Goods, Fees & Subscription and Interest on Foreign Currency
Loan.
DIRECTORS
In accordance with the provisions of Section 152 (6)(c) of the
Companies Act, 2013 and the Articles of Association of the Company,
Shri Utsav Khaitan, Whole Time Director of the Company is due to retire
at forthcoming Annual General Meeting, and being eligible, has offered
himself for re-appointment. Directors recommend his reappointment. The
Board at its meeting held on 14.11.2014 has appointed Shri Jagdish Lai
Jajoo, as a Whole Time Director subject to the approval of shareholders
of the Company in ensuing Annual General Meeting for a period of five
years w.e.f. 15.11.2014.
Shri Jagdish Lai Jajoo, Chartered Accountant, was earlier associated
with this Company since beginning to 1995 as Vice President/ President
& Executive Director and from 22.02.1996 to 31.10.2011, he had held the
position as an Independent Director and thereafter remain on the Board
as Whole Time Director till 01.09.2014.
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 Clause 49 of the listing agreement
with the stock exchange.
The Company has received disclosures from all the directors (including
Shri Jagdish Lai Jajoo) 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 4 (Four) 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 by the Board of Directors during the year under review:
(a) Shri Shailesh Khaitan, Chairman & Managing Director;
(b) Shri R. S. Vijayvargiya, President & Chief Financial Officer;
(c) Shri Kamlesh Joshi, Company Secretary.
CORPORATE GOVERNANCE
Your Company has always strived to maintain appropriate standards of
good corporate governance. The report on corporate governance as
stipulated under clause 49 of the listing agreement forms part of this
Report. The requisite certificate from the auditors of the Company
confirming compliance with the conditions of corporate governance as
stipulated underthe said clause is attached to this report. (Annexure
-C). VIGIL MECHANISM / WHISTLE BLOWER POLICY As per the requirement of
Section 177 (9) of the Companies Act, 2013, and Clause 49 of Listing
Agreement, 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 Company's Code of Conduct or ethics policy and the details of
the Whistle Blower Policy has been uploaded on the Company's website,
Web-link: http://khaitanchemfert.com/whistle-blower-policy/
NOMINATION & REMUNERATION POLICY
Pursuant to Section 178 of the Companies Act, 2013, the rules made
thereunder and Clause 49 of Listing Agreement, the Board has
constituted the Nomination & Remuneration Committee comprising Shri
Balmukund Dakhera, Chairman and Dr. Prakash Goyal & Shri Vijay Gupta 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
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi,
Statutory Auditors of the Company retire at the conclusion of ensuing
annual general meeting and being eligible, offer themselves for re-
appointment. The Company has received a certificate from them to the
effect that their re-appointment as Statutory Auditors of the Company,
if made, would be within the limit prescribed u/s 139 of the Companies
Act, 2013 & also received peer review certificate issued by the ICAI
'Peer Review Board', as required under Clause 49 of listing
agreement. The notes on accounts referred to and the Auditors'
Report are self- explanatory and therefore do not call for any
explanatory note.
COST AUDIT
The Board of Directors, in pursuance of an order under section 148 of
the Companies Act, 2013, issued by the Central Government, has
appointed 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 2015-2016.
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 M/s Ritesh Gupta &
Co., Company Secretary in Practice, Indore, to undertake the
Secretarial Audit of the Company.
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).
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Pursuant to Section 135 of Companies Act, 2013 and the relevant rules,
the Board has constituted the Corporate Social Responsibility Committee
comprising Shri Jagdish Lai Jajoo as the Chairman and Shri Balmukund
Dakhera, Dr. Prakash Goyal, Shri Vijay Gupta and Shri Utsav Khaitan as
its members. The detail CSR Policy has been uploaded on Company's
Website, Web-link:
http://khaitanchemfert.com/corporate-social-responsibility/ During the
year the Company has decided to spend the amount for CSR by
contributing to Prime Minister's National Relief Fund. The details on
CSR activities are annexed (Annexure - E).
ANNUAL EVALUATION OF BOARD
Pursuant to the provisions of section 134 (3)(p) of the Companies Act,
2013 and Clause 49 of the Listing Agreement, 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 the Non-Independent Directors
were carried out by the Independent Directors.
The Directors were satisfied with the evaluation results, which
reflected the overall engagement of the Board and its Committees with
the Company.
EXTRACT OF ANNUAL RETURN
The details farming part af the extract of the Annual Return far the
year ended on 31.03.2015 in farm MGT 9 is annexed (Annexure - F).
DIRECTORS'RESPONSIBILITY STATEMENT
In terms of Section 134(5) af 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 state of affairs of
the Company as at 31* March, 2015 and of the profit & loss of the
Campanyfarthat 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 far 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 ta be followed by
the Company and such internal financial controls are adequate and were
operating effectively.
6. they have devised proper systems ta ensure compliance with the
provisions of all applicable laws and such systems were adequate and
operating effectively.
RELATED PARTY TRANSACTIONS
As per the requirement of Clause 49 (VII) (C) of the Listing Agreement,
the Company has formulated Related Party Transaction Policy, on
materiality and treatment of related party transactions. All such
transactions that were entered into during the financial year were on
an arm's 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 an a quarterly basis far the
transactions which are of a foreseen and repetitive nature. The Policy
as approved by the Board is placed on the Company's website, Weblink:
http://khaitanchemfert.com/related-party-transaction-policy/
None af the Directors has any pecuniary relationships ar transactions
vis-a-vis the Company. The details af the transactions with Related
Party are provided in the accompanying financial statements.
LISTING OF SHARES
Shares af the Company are listed on The Bombay Stock Exchange Limited
(BSE), Mumbai, which provides a wider access to the investors
nationwide.
The Company has made all the compliances of Listing Agreement including
payment of annual listing fees up to 31" March, 2016 ta the BSE.
RISK MANAGEMENT
Risk Management Policy is formulated in compliance with Clause 49 of
the Listing Agreement 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 ta ensure the optimization of business
performance, ta 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 af 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. Implementation of the Scheme:
The functional managers at all locations will be responsible far
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 ar changes in the existing risk ta
the President/Managing Director. The Board and the senior executives af
the Company will oversee the implementation af the policy and review
the same periodically; the Board will be updated on key risks faced by
the Company and the mitigating actions taken ta resolve them.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION. PROHIBITION AND REDRESSAL1ACT. 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 & Redressal) Act, 2013. Internal
Complaints Committee (ICC) has been set up ta redress complaints
received regarding sexual harassment. All employees (permanent,
contractual, temporary, trainees) are covered under this policy. The
fallowing is a summary af sexual harassment complaints received and
disposed off during the year 2014-15:
No of complaints received: ¦ NIL
Na af complaints disposed off: NatApplicable"-
PARTICULARS OF EMPLOYEES
The particulars af employees required to be furnished under Section
217(2A) of the Companies Act, 1956 ("the aid Act") & corresponding
Section 197 of the Companies Act, 2013 ("the new Act") and the
rules thereunder read with the Companies (Particulars of Employees)
Rules,
1975 as amended forms part of this report (Annexure-A).
Ratio of remuneration of each director to the medien remuneration of
the employees of the Company for the Financial Year:
The information required pursuant to Section 197 read with Rule 5 (1)
(i) af The Companies (Appointment and Remuneration) Rules, 2014 in
respect af ratio of remuneration af each director to the median
remuneration of the employees of the Company for the Financial Year,
will be made available for inspection at its registered office of the
Company during the working hours far a period of twenty one days before
the date af annual general meeting af the company pursuant to Section
136 of the Companies Act, 2013 and members, if any interested in
obtaining the details thereof, shall make specific request to the
Company Secretary and Compliance officer of the Company in this regard.
ACKNOWLEDGEMENT
The Board af Directors, wish ta place on record its sincere
appreciation far the support and co-operation received from all its
stakeholders including customers, promoters, shareholders, bankers,
suppliers, auditors, various departments/ agencies af Central/State
Government and other business associates of the Company.
Yaur 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
Place: Gurgaon SHAILESH KHAITAN
Date: 16.05.2015 (CHAIRMAN & MANAGING DIRECTOR)
Mar 31, 2014
The Directors are pleased to present the 32nd annual report of the
Company and audited statement of accounts for the year ended 31" March,
2014.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March,
2014 is summarised below:
(Rs. in lacs)
Particulars 2013-14 2012-13
Sales
(Gross) 39330.72 45,971.89
Net
Sales 39684.35 45,875.77
Surplus before interest, depreciation,
exceptional items and Tax 2644.61 3,077.10
Less: Financial
Cost 2497.39 2,555.60
Cash Profit before tax 147.22 521 50
Less: Depreciation 764.44 732.14
Exceptional Items . - (409.78)
Profit/(Loss) before taxation (617.22) 199.14
Provision for current tax . - 39.84
MAT Credit Entitlement . - (34.81)
Deferred tax (446.32) (5.77)
Income Tax of earlier year (8.51) (13.15)
Profit/(Loss) after taxation (162.39) 213.03
Transfer to General Reserve . - 25.00
Proposed Dividend @ 5% 48.49 48.49
Tax on Proposed Dividend 8.24 8.24
Earning Per Share (face value of Re. 1/-each) (0.17) 0.22
REVIEWOF OPERATIONS Fertilizer & Chemicals Division:
The Nutrient Base Subsidy (NBS) with free market mechanism is
encouraging more interaction between producers and farmers for
efficient use of fertilizers, for better agricultural output and which
is a long term positive for Fertilizer Industry as a whole. The
Financial year 2013-14 was again a challenging year with weak economic
environment having high inflation, high interest rates, a
volatile/weakening currency and a very late withdrawal and extended
monsoon rains resulting into sluggish demand for SSP fertilizer.
During the year, the Company reduced its current assets level which was
very high in the previous year. However, the sales during the year were
sluggish due to high pipe line inventory of other Phosphatic
Fertilizers as well as extended rains.
The performance of the Company was hit by higher financial cost
including foreign exchange loss and pressure on margin due to over-
supply conditions in the Industry, compounded with low capacity
utilization.
The Company produced 392448 MT (previous year 389052 MT) Single Super
Phosphate and sold 372984 MT (previous year402861 MT). We are,
however, confident that in a rational subsidy scheme, the SSP industry
shall grow considerably resulting in higher availability of this
''generic customized fertilizer'' for Indian farmers at competitive
prices. The growth of the Industry and the Government''s commitment to
encourage this fertilizer through greater extension services, shall
also reduce the Country''s dependence on imported phosphaticfertilizer.
The Govt, is yet to take final decision on subsidy mopped up on
Finished Goods/Work in Process on Stocks lying as on 31.03.2011 and is
yet to declare its mopping up policy.
The Company expects stabilization in raw material prices as well as
Government''s policy towards NBS (timely declaration & mopping up) which
shall benefit the whole Fertilizer Industry, including the SSP
Industry.
Soya Division:
In view of increasing speculative behavior in the market, which is not
at all aligned with either International market or with forward market
or spot prices of finished goods, the Company has reduced its
activities in this segment to a large extent.
The Company is trying to limit its fixed expenses in view of reduced
activities.
DIVIDEND
In view of net loss during the year, your Directors would like to
recommend a nominal dividend of Re. 0.05 per equity share (face value
of Re. 1/- per share) for the financial year 2013-2014, previous year
Re.0.05 per equity share.
PROJECTS & FINANCE
Dahej Project (Gujarat): The production has started in March, 2014 for
manufacturing of 200000 TPAof SSP and Phospho Gypsum. The Company is in
the process of obtaining further clearances from Environmental
Authorities Department of Fertilizer, Health and Safety etc. to start
production in full swing.
Forex Fluctuation:
During the year, the Company has incurred loss (including MTM) of Rs.
1808.78 lacs on account of Foreign Exchange Fluctuation (previous year
loss Rs. 860.35 lacs) and has been grouped in ''other expenses''.
FIXED DEPOSITS
The Company has not accepted any deposits from the public during the
year under review, pursuant to the provisions of Section 58A of the
Companies Act, 1956 & the Deposit Rules and also read with applicable
provisions of CompaniesAct, 2013.
AUDITORS & AUDIT REPORT
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi,
Statutory Auditors of the Company retire at the conclusion of ensuing
annual general meeting and being eligible, offer themselves for re-
appointment. The Company has received a certificate from them to the
effect that their re-appointment as Statutory Auditors of the Company,
if made, would be within the limit prescribed u/s 224 (1) of the
Companies Act, 1956 and also read with applicable provisions of
Companies Act, 2013 & also received peer review certificate issued by
the ICAI ''Peer Review Board'', as required under Clause 49 of listing
agreement. Regarding Emphasis of Matter under point No. 5 of the
Auditors''Report, the Management is of the view that this would not
result into a liability and therefore the Company has not provided for
mopping of subsidy on raw materials of fertilizer as on 31.03.2011 in
terms of Office Memorandum No. 23011/1/2010-MPR dated 11-07-2011 issued
by the Ministry of Chemicals & Fertilizers, Govt, of India, being
reconsidered vide their letter No. 23011/1/2010-MPR (Pt) dated
22.08.2012, wherein the GOI has decided not to effect recovery till a
policy in this regard is formulated. This has strengthened the
management''s view for not providing the above liability.
All other notes on accounts referred to and the Auditors'' Report are
self- explanatory and therefore do not call for any explanatory note.
COSTAUDIT
The Board of Directors, in pursuance of an order under section 233B of
the Companies Act, 1956 and also read with applicable provisions of the
Companies Act, 2013, issued by the Central Government, has appointed
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 2014-2015.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Information required
under section 217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 and also read with applicable provisions of the
Companies Act, 2013 is annexed in Form-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, Sulphuric
Acid, and Seed Processing & Oil Refinery. Hence, information specified
to be given in Form-B is not applicable. FOREIGN EXCHANGE EARNING AND
OUTGO The Company has earned Rs. nil lacs on export of goods (Previous
year Rs. nil) and incurred Rs. 7449.67 lacs (Previous year Rs.
18430.90) on import of Raw Materials, Capital Goods, Fees &
Subscription and Interest on Foreign Currency Loan. DIRECTORS
The Board has appointed Shri Utsav Khaitan as a Whole Time Director of
the Company for a period of five years w.e.f 20"'' May, 2014 subject to
the approval of the members in ensuing Annual General Meeting. Shri
Utsav Khaitan is son of Shri Shailesh Khaitan, Promoter, Chairman and
Managing Director of the Company and to take him on the Board for
larger long term interest of the Company. Directors recommend his
appointment.
The Board has also re-appointed Shri Shailesh Khaitan, as Chairman &
Managing Director. The present terms of appointment of Shri Shailesh
Khaitan is expiring on 31.03.2015 and in view of introduction of the
Companies Act, 2013, it would be appropriate to appoint him afresh for
a term of five years w.e.f. April 1, 2014. Directors recommend his re-
appointment.
The Board has also re-appointed Shri Jagdish Lai Jajoo, as a Whole Time
Director. The present terms of appointment of Shri Jagdish Lai Jajoo is
expiring on 31.10.2014 and in view of introduction of the Companies
Act, 2013, it would be appropriate to appoint him afresh for a term of
five years w.e.f. April 1, 2014. Directors recommend his re-
appointment.
Shri Balmukund Dakhera, Dr. Prakash Goyal and Shri Vijay Gupta, was
appointed as Directors of the Company, liable to retire by rotation
(under the erstwhile applicable provisions of the Companies Act, 1956)
and in view of introduction of the Companies Act, 2013 and Clause 49 of
the
Listing Agreement, the Company has re-appointed the above-named
Directors as an ''Independent Director'' of the Company to hold office
fora term of five years for the period of 01.04.2014 to 31.03.2019 and
they shall not be liable to retire by rotation."
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 Clause 49 of the listing agreement
with the stock exchange.
None of the Directors is disqualified from being appointed as or
holding office as Directors, as stipulated under Section 164 of the
Companies Act, 2013 and rules made thereunder.
DIRECTORS''RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000,
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 state of affairs of
the Company as at 31" March, 2014 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 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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with clause 49 of the listing agreement with Stock
Exchange, the Management Discussion and Analysis Report forms part of
this Report (Annexure - B)
CORPORATE GOVERNANCE
Your Company has always strived to maintain appropriate standards of
good corporate governance. The report on corporate governance as
stipulated under clause 49 of the listing agreement forms part of this
Report. The requisite certificate from the auditors of the Company
confirming compliance with the conditions of corporate governance as
stipulated under the said clause is attached to this report (Annexure -
C).
LISTING OF SHARES
Shares of the Company are listed on The Bombay Stock Exchange Ltd.
(BSE), which provides wider access to the investors nationwide.
The Company has made all the compliances of Listing Agreement including
payment of annual listing fees up to 31st March, 2014 to the BSE.
PARTICULARS OF EMPLOYEES
The particulars of employees required to be furnished under section
217(2A) of the Companies Act, 1956 & read with the Companies
(Particulars of Employees) Rules, 1975 as amended and also read with
applicable provisions of the Companies Act, 2013, forms part of this
report(Annexure-A.)
ACKNOWLEDGEMENT
The Board of Directors, would like to record their sincere appreciation
for the support and co-operation that your Company received from the
State Bank of India, IDBI Bank Limited, Corporation Bank, HDFC Bank
Limited and Axis Bank Ltd., various departments/ agencies of
Central/State Govt., Members, Customers, Suppliers, Employees and other
business associates of the Company.
for and on behalf of the Board
Place: New Delhi (SHAILESH KHAITAN)
Date: 20.05.2014 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2013
To the Members,
The Directors are pleased to present the 31st annual report of the
Company and audited statement of accounts for the year ended 31st
March, 2013.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March,
2013 is summarised below:
FINANCIAL RESULTS
(Rs. in lacs)
Particulars 2012-13 2011-12
Sales (Gross) 45,971,89 64,858.54
Net Sales 875,77 64,787.35
Surplus before interest,
depreciation, exceptional
items and Tax 3,077.10 6,487.83
Less: Financial Cost 2,555.60 2,609.26
Cash Profit before tax 521.50 3,878.57
Less: Depreciation 732.14 731.62
Exceptional Items (409.78) 95.06
Profit /(Loss) before taxation 199.14 3,051.89
Provision for current tax 39.84 969.61
MAT Credits
Entitlement (34.81)
Deferred tax (5.77) (86.43)
Income Tax of earlier year (13.15) 5.491
Profit /(Loss) after taxation 213.03 2.174.20
Transfer to General Reserve 25.00 1000.00
Proposed Dividend @ 5% 48.49 232.77
Tax on Proposed Dividend 8.24 37.76
Earning Per Share (face value
of Re. 1/- each) 0.22 2.24
REVIEW OF OPERATIONS
Fertilizer & Chemicals Division:
The Company welcomes the Government''s initiative to directly transfer
the subsidy to farmers which shall give the farmers unrestricted choice
as well as make them understand the real worth of fertilizers used by
them. The Nutrient 8ase Subsidy (NBS) with free market mechanism is
encouraging more interaction between producers and farmers for
efficient use of fertilizer for better agricultural output and is a
long term positive for Fertilizer Industry.
The Financial year 2012-13 was beset with challenges. A weak economic
environment, persistently high inflation, high interest rates, a
weakening currency and prolonged policies & regulatory uncertainty
resulted into sluggish demand.
During the year, lower NBS subsidy & significant increase in higher
maximum retail prices (MRP) to the farmers also affected the
consumption of phosphatic fertilisers, besides the draught in some
parts of India. The Company produced 389052 MT (previous year 522358
MT) Single Super Phosphate andsold402861 MT (previous year 538250 MT).
It is ironic that on top of the above situation, the Government of
India has delayed the release of huge subsidy since October'' 2012 and
further has declared N8S Rate for the FY 2013-14, as late as 3" May,
2013, creating uncertainty in the market.
We are confident that in a rational subsidy scheme, the SSP industry
shall grow considerably resulting in higher availability of this
''Generic Customized Fertilizer'' for Indian farmers at competitive
prices with no extra cost to exchequer. With the growth of the Industry
and the Government''s commitment to encourage this fertilizer through
greater extension services, it shall also reduce the country''s
dependence on imported phosphatic fertilizer. The Govt, is yet to take
final decision on subsidy mopped up on Finished
Goods/Work in Process on Stocks lying as on 31.03.2011 and is yet to
declare its mopping up policy
The Company expects stabilization in Raw Material prices as well as
Government''s policy towards NBS (timely declaration & mopping up) which
shall benefit the whole Fertilizer Industry, including the SSP
Industry.
The Company is in the process of increasing its granulation capacity
after getting necessary Government clearances for its various
locations. Soya Division:
In view of increasing speculative behavior in the market, which is not
at all aligned with either International market or with forward market,
the Company has virtually reduced its activities in this segment to a
large extent.
The Company is trying to limit its fixed expenses in view of reduced
activities.
DIVIDEND:
The 8oard of Directors is pleased to recommend final dividend of Re.
0.05 per equity share (face value of Re. 1/- per share) for the year
2012-2013, previous year Re.0.24 per equity share.
PROJECTS* FINANCE:
The project for manufacturing of 2,00,000 TPA of SSP and Phospho Gypsum
at Dahej, Gujarat, is going on in full swing and it is expected to
commence production in financial year 2013-14.
During the year, the Company has incurred loss (including MTM) of Rs.
860.35 lacs on account of Foreign Exchange Fluctuation (previous year
loss Rs. 910.94 lacs) and grouped in ''other expenses''.
FIXED DEPOSITS:
The Company has not accepted any deposits from the public during the
year under review, pursuant to the provisions of Section 58A of the
Companies Act, 1956 and the Deposit Rules.
AUDITORS & AUDIT REPORT:
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi,
Statutory Auditors of the Company retire at the conclusion of ensuing
annual general meeting and being eligible, offer themselves for re-
appointment. The Company has received a certificate from them to the
effect that their re-appointment as Statutory Auditors of the Company,
if made, would be within the limit prescribed u/s 224 (1) of the
Companies Act, 1956 and also received peer review certificate issued by
the 1CA1 ''Peer Review Board'', as required under Clause 49 of listing
agreement.
Regarding Emphasis of Matter under point No. 5 of the Auditors'' Report,
the Management is of the view that this would not result into a
liability and therefore the Company has not provided for mopping of
subsidy on raw materials of fertilizer as on 31.03.2011 in terms of
Office Memorandum No. 23011/1/2010-MPR dated 11-07-2011 issued by the
Ministry of Chemicals & Fertilizers, Govt, of India, being reconsidered
vide their letter No. 23011/1/2010-MPR (Pt) dated 22.08.2012, wherein
the GOI has decided not to effect recovery till a policy in this regard
is formulated. This has strengthened the management''s view for not
providing the above liability.
All other notes on accounts referred to and the Auditors'' Report are
self- explanatory and therefore do not call for any explanatory note.
COST AUDIT:
The Board of Directors, in pursuance of an order under section 233B of
the Companies Act, 1956, issued by the Central Government, has
appointed 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 year2013-2014.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION: Information required
under section 217(l)(e) of the Companies Act, 195fi read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors] Rules, 19BB is annexed in Form-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, Sulphuric
Acid, and Seed Processing & Oil Refinery. Hence, information specified
to be given in Form-B is not applicable. FOREIGN EXCHANGE EARNING AND
OUTGO: The Company has earned Rs. NIL lacs on export of goods (Previous
year Rs. NIL) and incurred Rs. 18430.90 lacs (Previous year Rs.
17087.32 lacs) on import of Raw Materials, Capital Goods, Fees &
Subscription and Interest on Foreign Currency Loan. DIRECTORS:
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Vijay Gupta, the director
of the Company is due to retire at forthcoming Annual General Meeting,
and being eligible, has offered himself for re-appointment. Directors
recommend his reappointment.
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 Clause 49 of the listing agreement
with the stock exchange.
DIRECTORS''RESPONSIBILITY STATEMENT:
In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000,
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 state of affairs of
the Company as at 31" March, 2013 and of the Profit 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 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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In accordance with Clause 49 of the listing agreements with Stock
Exchange, the Management Discussion and Analysis Report forms part of
this Report (Annexure - B)
CORPORATE GOVERNANCE: Your Company has always strived to maintain
appropriate standards of good corporate governance. The report on
corporate governance as stipulated under clause 49 of the listing
agreements forms part of this Report. The requisite certificate from
the auditors of the Company confirming compliance with the conditions
of corporate governance as stipulated under the said clause is attached
to this report. Annexure - C.
LISTING OF SHARES:
Shares of the Company are listed on the Bombay Stock Exchange (BSE),
which provides wider access to the investor nationwide. The Company
has made all the compliances of Listing Agreement including payment of
annual listing fees up to 31st March, 2013 to the BSE.
PARTICULARS OF EMPLOYEES:
The particulars of employees required to be furnished under section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 as amended, forms part of this report
(Annexure-A.)
ACKNOWLEDGEMENT:
The Board of Directors, would like to record their sincere appreciation
for the support and co-operation that your Company received from the
State Bank of India, IDBI Bank Limited, Corporation Bank, HDFC Bank
Limited and Axis Bank Ltd., various departments/ agencies of
Central/State Govt., Members, Customers, Suppliers, Employees and other
business associates of the Company.
for and on behalf of the Board
Place: Dahej (SHAILESH KHA1TAN)
Date: 14.05.2013 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2012
The Directors are pleased to present the 30th annual report of the
Company and audited statement of accounts for the year ended 31 March,
2012.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31 March,
2012 is summarized below:
(Rs. in lacs)
2011-2012 20010-2011
Sales (Gross) 64,858.54 46,033.42
Net Sales 64,787.35 46,025.66
Surplus before interest,
depreciation, exceptional
items and Tax 6,487.83 7,254.14
Less: Interest & Financial
Expenses 2,609.26 1,770.23
Cash Profit before tax 3,878.57 5,483.91
Less: Depreciation 731.62 666.16
Exceptional Items 95.06 168.06
Profit/(Loss) before taxation 3,051.89 4,649.69
Provision for current tax 969.61 1,570.40
Deferred tax (86.43) (70.54)
Income Tax of earlier year (5.49) 7.00
Profit/(Loss) after taxation 2,174.20 3,142.83
Proposed Dividend @ 24% 232.77 232.77
Earning Per Share (face value
of Re. 1/-each) 2.24 3.24
REVIEW OF OPERATIONS Fertilizer & Chemicals Division:
The Nutrient Base Subsidy (NBS) with free market mechanism encouraging
more interaction between producers and farmers for efficient use of
fertilizer for better agricultural output, is a long term positive for
Fertilizer Industry.
We are confident that in a rational subsidy scheme, the SSP industry
shall grow considerably resulting in higher availability of this
'generic customized fertilizer' for Indian farmers at competitive
prices with no extra cost to exchequer. With the growth of the Industry
and the Government's commitment to encourage this fertilizer through
greater extension services, it shall also reduce country's dependence
on imported phosphate fertilizer.
During the current year, the Government has mopped up Rs.863/- PMT on
account of stock lying as on 31.03.2011 and also stopped reimbursement
of freight subsidy of Rs.200 PMT. Both of the above works out to Rs.
1981.96 lacs for the year. The Govt, also intends to mop up subsidy on
account of stock of raw material, however, so far they have networked
out such mop up on raw material.
These arbitrary, adhoc, retrospective irrational and above all against
the basic theme of NBS, decisions of Government make the Industry
apprehensive and the future of the business uncertain.
The year 2011-12 commenced with an increasing trend in prices of raw
material & finished goods which have adversely affected the
profitability during the year. However, again while phosphoric products
like DAP have come down in the International market below the level of
March 2011, the prices of main raw materials i.e., Rock phosphate has
increased by at least 50% since March 2011. This clubbed with lower NBS
subsidy for the year 2012-13 shall hit the Industry at least during the
current Kharif season.
During the year 2011-12, the Company produced 522358 MT (previous year
433393 MT) Single Super Phosphate and sold 538250 MT (previous
year451067 MT) which was highest ever production and sales by the
Company.
The Company welcomes the Government's initiative to directly transfer
the subsidy to farmers which shall give the farmers unrestricted choice
as well as make them understand the real worth of fertilizer used
by them.
Soya Division:
In view of total speculative behavior in the market, leading to lack of
upfront crushing margin during the year, the Company has restricted the
business activities in the current year. The Company is adequately
leveraging its position by hedging its inventories to counter the high
volatility.
The performance of the Company is satisfactory pursuant to the cautious
approach followed by the Company. During the year, the Company has
crushed 47829 MT (previous year 42541 MT) Soybean seed including NIL
(previous year 10551) through Job work basis.
DIVIDEND
The Board of Directors is pleased to recommend final dividend of Re.
0.24 per equity share (face value of Re. 1/-per share) for the year
2011- 2012, which is equal to previous year.
PROJECTS & FINANCE
The project for manufacturing of 200000 TPA of SSP and Phosphor Gypsum
at Dahej, Gujarat has received all the necessary NOCs from concerned
Authorities. The Company expects to start civil work shortly. The
State Bank of India has sanctioned the term loan of Rs. 21.50
Crores for the project.
The Company has acquired land for putting up fertilizer project near
Née much (Madhya Pradesh). The Company has also applied for environment
clearance for expansion of fertilizer capacity at our existing
locations.
During the year, the Company has incurred loss (including MTM) of Rs.
910.94 lacs on account of Foreign Exchange Fluctuation (previous year
loss Rs.64.99 lacs) and grouped in 'other expenses'. Axis Bank Limited
has become part of our banking consortium.
FIXED DEPOSITS
The Company has not accepted any deposits from the public during the
year under review, pursuant to the provisions of Section 58A of the
Companies Act, 1956 and the Deposit Rules.
AUDITORS & AUDIT REPORT
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi,
Statutory Auditors of the Company retires at the conclusion of ensuing
annual general meeting and being eligible, offer themselves for re-
appointment. The Company has received a certificate from them to the
effect that their re-appointment as Statutory Auditors of the Company,
if made, would be within the limit prescribed u/s 224 (1) of the
Companies Act, 1956 and also received peer review certificate issued by
the ICAI 'Peer Review Board', as required under Clause 49 of listing
agreement.
Regarding qualification remark under point 4 of the Auditors' Report,
the Management is of the view that there is no liability and therefore
the Company has not provided for Moping of subsidy on raw materials of
fertilizer as on 31.03.2011 in terms of Office Memorandum No. 23011/1
/2010-MPR dated 11-07-2011 issued by the Ministry of Chemicals &
Fertilizers, Govt, of India, being unreasonable and un- justified,
which is neither ascertainable nor deducted/withheld by Govt, of India
as on date and being protested by the Industry.
All other notes on accounts referred to and the Auditors' Report are
self-explanatory and therefore do not call for any explanatory note.
COST AUDIT
The Board of Directors, in pursuance of an order under section 233B of
the Companies Act, 1956, issued by the Central Government, has
appointed 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 2012-2013.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Information required under section 217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 is annexed in Form-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, Sulphuric
Acid, and Seed Processing & Oil Refinery. Hence, information specified
to be given in Form-B is not applicable.
FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. NIL lacs
on export of goods (Previous year Rs. 85.34) and incurred Rs. 17087.32
lacs (Previous year Rs.9481.97 lacs) on import of Raw Materials,
Capital Goods, Fees & Subscription and Interest on Foreign Currency
Loan.
DIRECTORS
During the year under review, Shri O.P. Bagla, Director of your
Company, resigned w.e.f. 31st July, 2011. The Board placed on record
its sincere appreciation for valuable services rendered and
contribution made by him.
The Board at its meeting held on 31st October, 2011 has appointed Shri
J.L. Jajoo, as Whole Time Director of the Company subject to the
approval of shareholders of the Company in ensuing annual general
meeting for a period of three years w.e.f. 01.11.2011.
Shri J.L. Jajoo, Chartered Accountant, is associated with your Company
since beginning to 1995 as Vice President/ President/ Executive
Director, and thereafter remained on the Board as Independent Director.
Shri Balmukund Dakhera, Chartered Accountant, is appointed as an
Additional Director of the Company w.e.f. 31st October, 2011 and will
hold office up to the date of the forthcoming Annual General Meeting
and being eligible offers himself for re-election. Directors recommend
his reappointment.
Shri Shailesh Khaitan is re-appointed as Managing Director of the
Company for a period of three years w.e.f. 01.04.2012 . His term of
appointment expired on 31.03.2012.
In accordance with the provisions of the Companies Act, 1 d56 and the
Articles of Association of the Company, Dr. P. Goyal, the director of
the Company is due to retire at forthcoming Annual General Meeting, and
being eligible, has offered himself for re-appointment. Directors
recommend his reappointment.
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 Clause 49 of the listing agreement
with the stock exchange.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000,
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 state of affairs of
the Company as the 31st March, 2012 and of the Profit 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 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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with Clause 49 of the listing agreements with Stock
Exchange, the Management Discussion and Analysis Report forms part of
this Report (Annexure - B)
CORPORATE GOVERNANCE
Your Company has always strived to maintain appropriate standards of
good corporate governance. The report on corporate governance as
stipulated under clause 49 of the listing agreements forms part of this
Report. The requisite certificate from the auditors of the Company
confirming compliance with the conditions of corporate governance as
stipulated under the said clause is attached to this report. Annexure -
C. LISTING OF SHARES
Shares of the Company are listed on Bombay Stock Exchange (BSE), which
provides wider access to the investor nationwide.
The Company has made all the compliances of Listing Agreement including
payment of annual listing fees up to 31st March, 2012 to the BSE. '
PARTICULARS OF EMPLOYEES
The particulars of employees required to be furnished under section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 as amended, forms part of this
report(Annexure-A.)
ACKNOWLEDGEMENT
The Board of Directors, would like to record their sincere appreciation
for the support and co-operation that your Company received from the
State Bank of India, IDBI Bank Limited, Corporation Bank, HDFC Bank
Limited and Axis Bank Ltd., various departments/ agencies of
Central/State Govt., Members, Customers, Suppliers, Employees and other
business associates of the Company.
for and on behalf of the Board
Place: New Delhi (Shailesh Khaitan)
Date: May 29, 2012 Chairman & Managing Director
Mar 31, 2011
The Directors are pleased to present the 29th annual report of the
Company and audited statement of accounts for the year ended
31st March,2011.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31stMarch,
2011 is summarised below:
(Rs. in lacs)
2010-2011 2009-2010
Profit before interest and depreciation 7141.41 876.88
Less: Interest &financial expenses 1635.00 101.63
Cash profit before tax 5506.41 775.25
Less: Depreciation 666.16 702.86
Misc. expenses written off - 0.56
Prior period adjustments 190.57 35.02
Profit before taxation 4649.68 36.81
Less: Provision for taxation
(incl. deferred tax) 1499.86 (61.19)
Short provision for taxation-earlier
years 7.00 17.32
Prof it after taxation 3142.82 80.68
Add: Transfer from Capital Subsidy 2.83 2.83
Net Profit 3145.65 83.51
Add: Profit brought forward from previous
year 2156.61 2309.27
Amount available for appropriations 5302.26 2392.78
Less: Transfer to- General reserve 1000.00 100.00
Proposed dividend 232.77 116.39
Corporate tax on dividend 37.76 19.78
Balance carried forward to Balance Sheet 4031.73 2156.61
REVIEW OF OPERATIONS Fertilizer & Chemicals Division:
The introduction of the Nutrient-Based Subsidy (NBS) policy of the
Government of India w.e.f. 1st May, 2011 is a welcome step. Pursuant to
the NBS Policy, Company expects healthy growth in the demand for
fertilizers, especially SSP, complex fertilizers & customized
fertilizers, on the back of promotion of a more balanced nutrient consumption.
The Single Super Phosphate fertilizer is a generic customized
fertilizer containing sulphur, calcium & other micro nutrients besides
phosphate.
The Nutrient Base Subsidy (NBS) is a long term positive for Fertilizer
Industry with free market mechanism encouraging more interaction
between producers and farmers for efficient use of fertilizer for
better agricultural output.
We are confident that in a rational subsidy scheme, the SSP industry
shall benefit the most resulting in higher availability of this
generic customized fertilizer for Indian farmers at competitive prices
with no extra cost to exchequer.
During the year 2010-11, the Company produced 433393 MT
(previous year 332543 MT) Single Super Phosphate and sold 451067
MT (previous year 244520 MT) which was highest ever production
and sales by the Company.
The Companys net profit (after tax) for the year is Rs. 3145.65 Lacs,
which is not only highest but also exceeds the total of last 4 years,
despite not so good performance of the Soya Division.
The Company is determined to perform better in the current year and
achieve a higher capacity utilization.
Soya Division:
The Company is continuing with its cautious approach while
considering speculative fluctuations in the market and negligible
upfront crushing margin. The Company is adequately leveraging its
position by hedging its inventories to counter the high volatility.
During the year, the Company has crushed 42541 MT (previous year
12135 MT) Soybean seed including 10551 MT (previous year NIL)
through Job work basis
DIVIDEND
The Board of Directors is pleased to recommend final dividend of
Rs.2.40 per equity share for the year 2010-2011 as compared to
Rs. 1.20 per equity share paid in the previous year.
CAPITAL RESTRUCTURING
The Board subject to necessary approval and amendment to
Memorandum and Article of Association of the Company recommend
split of its shares from Rs. 10/- ((Rupees Ten) per share to Rs. 1/-
(Rupee one) per share. This will increase the liquidity of the shares
in the market.
PROJECTS & FINANCE
The Company has acquired manufacturing facilities of SSP and
Sulphuric Acid from M/s Jairam Phosphates Ltd., at Rajnandgaon
(Chhattisgarh) during the year for production of upto 66,000 I PA of
SSP Fertiliser and 49,500 TPAof Sulphuric Acid. The operations of the
plant commenced in March, 2011. The acquisition was funded by a term
loan of Rs. 1000 lacs and with internal accruals.
Further, the SSP Project for 2,00,000 TPA at Dahej (Gujarat) has
received the much awaited statutory environmental clearance and civil
work is being started shortly. The Company expects to start production
in the current financial year. The project cost of Rs. 3000-3500 lacs
shall be financed through internal accruals and term loans. The
Company had completed erection of LABSA (Linear Alkylbenzene Sulfonic
Acid) plant at Nimrani which shall be commissioned shortly. This shall
enable utilization of the waste products of the acid plant. HDFC Bank
Limited & Corporation Bank have become part of our banking consortium
after merging of State Bank of Indore with State Bankoflndia. FIXED
DEPOSITS
The Company has not accepted any deposits from the public during the
year under review, pursuant to the provisions of Section 58A of the
Companies Act, 1956 and the Deposit Rules.
AUDITORS & AUDIT REPORT
S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi,
Statutory Auditors of the Company retire at the conclusion of ensuing
annual general meeting and being eligible, offer themselves for re-
appointment. The Company has received a certificate from them to the
effect that their re-appointment as Statutory Auditors of the Company,
if made, would be within the limit prescribed u/s 224 (1) of the
Companies Act, 1956 and also received peer review certificate issued by
the ICAI Peer Review Board, as required under Clause 49 of listing
agreement.
All notes on accounts referred to and the Auditors Report are self-
explanatory and therefore do not call for any explanatory note. COST
AUDIT
The Board of Directors, in pursuance of an order under section 233B of
the Companies Act, 1956, issued by the Central Government, has
appointed 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 and Sulphuric Acid products for the
financial year 2011-2012.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Information required
under section 217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed in Form-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, Sulphuric
Acid, and Seed Processing & Oil Refinery. Hence, information specified
to be given in Form-B is not applicable. FOREIGN EXCHANGE EARNING AND
OUTGO The Company has earned Rs. 85.34 lacs on export of goods
(Previous year Rs. NIL) and incurred Rs. 9481.97 lacs (Previous year
Rs. 10151.76 lacs) on import of Raw Materials, Capital Goods, Fees &
Subscription and Interest on Foreign Currency Loan. DIRECTORS
Shri Shailesh Khaitan, Chairman & Managing Director has been re-
elected on the Board of Fertilizer Association of India and is Chairman
of SSP Advisory Committee. The Board appreciates his efforts and
valuable contribution to SSP industry which has brought SSP industry at
par with other Fertilizers.
Shri Vijay Gupta was appointed as an additional director of the Company
w.e.f 18th May, 2011 and will hold office up to the date of the ensuing
Annual General Meeting and being eligible offers himself for
re-election. Board greeted the new director. In accordance with the
provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri J.L. Jajoo, the director
of
the Company is due to retire at forthcoming Annual General Meeting,
and being eligible, has offered himself for re-appointment.
Particulars of the directors seeking re-appointment are provided in the
notes forming part of the notice for the ensuing Annual General
Meeting, as required under Clause 49 of the listing agreement with the
stock exchange.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies (Amendment) Act,
2000, 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 state of affairs of
the Company as the 31* March, 2011 and of the Profit 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 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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report forming part of
Directors Report for the year under review, in accordance with
Clause 49 of the listing agreement with stock exchanges, is given in
Annexure-B.
CORPORATE GOVERNANCE
The Company attaches considerable significance to good Corporate
Governance as an important step towards building investors
confidence, improve investors protection and maximizing long-term
shareholders value. Pursuant to Clause 49 of the Listing Agreement
with the Stock Exchange, a Compliance Report on Corporate
Governance and Auditors Certificate regarding compliance of
conditions of Corporate Governance is given in Annexure - C.
LISTING OF SHARES
Shares of the Company are listed on The Bombay Stock Exchange
(BSE), which provides wider access to the investor nationwide.
The Company has made all the compliances of Listing Agreement
including payment of annual listing fees up to 31st March, 2011 to the
BSE.
PARTICULARS OF EMPLOYEES
Information as per the requirement of Section 217(2A) of the
Companies Act, 1956 is given in Annexure-A.
ACKNOWLEDGEMENT
The Board of Directors, would like to record their sincere appreciation
for the support and co-operation that your Company received from the
State Bank of India, IDBI Bank Limited, Corporation Bank and HDFC
Bank Limited, various departments/ agencies of Central/State Govt.,
Members, Customers, Suppliers, Employees and other business
associates of the Company.
for and on behalf of
the Board
(SHAILESH KHAITAN)
CHAIRMAN &
MANAGING DIRECTOR
Place: New Delhi
Date: 18.05.2011
Mar 31, 2010
The Directors are pleased to present the 28th annual report of the
Company and audited statement of accounts for the year ended 31st
March, 2010,
FINANCIAL RESULTS
The financial performance of the Company for the year ended March 31,
2010 is summarised below,
(Rs. in lacs)
2009-2010 2008-2009
Profit before interest and depreciation 876.88 4481 66
Less Interest & financial expenses 101.63 1963.59
Cash profit before tax 775.25 2518.07
Less Depreciation 702.86 683.77
Misc expenses written off 0.56 1.35
Prior period adjustments 35.02 202 94
Profit before taxation 36,81 1630 01
Less Provision for taxation (incl. F8T and
deferred tax) (61.19) 561.04
Short provision for taxation - earlier
years 17.32 42.26
Profit after taxation 80.68 1026 71
Add Transfer from Capital Subsidy 2.83 2.09
Net Profit 83.51 1028.80
Add Profit brought forward from previous year 2309.27 1584 72
Amount available for appropriations 2392.78 2613 52
Less: Transfer to
General reserve 100.00 100.00
Proposed dividend 116.39 174.58
Corporate tax on dividend 19.78 29 67
Balance carried forward to Balance Sheet 2156.61 2309 27
REVIEW OF OPERATIONS
Fertilizer & Chemicals Division:
The year 2009 began with falling prices of Rock Phosphate, which
resulted in low subsidy on inventory Clubbed with under recoveries, the
falling prices caused operating losses in the first half
From 1st October, 2009, the subsidy policy was changed and an adhoc
fixed subsidy aiongwith free MRP were made applicable only for SSP
fertilizer. This made SSP costlier in relation to other phosphatic
fertilizers. However, finally and thankfully, the Government of India
has now implemented the Nutrient Based Subsidy Policy (NBS) for V &
K Fertilizer we f 01 04 2010. Even though the NBS policy was
announced in February, 2010, and made effective for all the Fertilizers
excepting SSP on 403.2010, it was made applicable on Single Super
Phosphate only from 01.05 2010 after a considerable delay. This has
resulted in low sales volume during last quarter of the year Further,
in the implementation of NBS policy, increased MRP has been allowed
to all the other fertilizers, while in case of SSP, MRP has come down
by 20-25%.
During the year 2009-10, the Company has produced 3,32,543 MT (previous
year: 2,26,000 MT) Single Super Phosphate and sold 2.44,520 MT (previous
year: 2,20.259 MT) With the strengthening of Indian Rupee, the Company
has gained Rs.774.21 lacs on account of foreign exchange fluctuations as
compared to loss of Rs 794 79 lacs in the previous year 2008-09. The
NBS policy has offered the SSP Industry a near level playing field, but
challenges remain with undue favour to other Phosphatic fertilizers,
however the Company is determined to perform better in the following
year
Soya Division:
In view of total speculative behavior in the market leading to lack of
upfront crushing margin during the year and virtually no significant
business activities have taken place The situation was unprecedented in
the history which resulted in piling up of inventory of Oilseeds
(Rapeseed/Muster Seed/ Soybean) with farmers/traders The price of
Soybean had steeply reduced to Rs 20390/- per ton on 31 03 2010 from
Rs 24260/- per ton on 02.12.2009.
The cautious approach opted by the Management, had proved to be a right
decision
DIVIDEND
The Board of Directors is pleased to recommend dividend of Rs 1.20 per
share as compared to Rs.1.80 per share paid in the previous year.
PROJECT & FINANCE
The Company has taken manufacturing facilities of Single Super Phosph
-ate on toll basis, in Rajasthan, for 5 years commencing from 2010-11.
The same is being financed with internal accruals.
The project for manufacturing of Single Super Phosphate at Dahej,
Gujarat is awaiting statutory environmental clearance to start
further.
FIXED DEPOSITS
The Company has not accepted any deposits from the public during the
year under review, pursuant to the provisions of Section 58A of the
Companies Act, 1956 and the Deposit Rules.
AUDITORS & AUDIT REPORT
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi,
Statutory Auditors of the Company retires at the conclusion of ensuing
annual general meeting and being eligible, offer themselves for
re-appointment. The Company has received a certificate from them to the
effect that their re-appointment as Statutory Auditors of the Company,
if made, would be within the limit prescribed u/s 224 (1) of the
Companies Act, 1956 and also received peer review certificate issued by
the ICAI Peer Review Board, as required under Clause 49 of listing
agreement. Regarding qualification remark under para vi of the
Auditors Report, the Management is of the view that there is no
material liability in case of gratuity & leave encashment. All other
notes on accounts referred to and the Auditors Report are self-
explanatory and therefore do not call for any explanatory note.
COST AUDIT
The Board of Directors, in pursuance of an order under section 233B of
the Companies Act, 1956, issued by the Central Government, has
appointed 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 and Sulphuric Acid products for
the financial year 2010-2011.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Information required under section 217(1 )(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 is annexed in Form-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, Sulphuric Acid, and Seed Processing & Oil Refinery. Hence,
information specified to be given in Form-B is not applicable.
FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. NIL on
export of goods (Previous year Rs. NIL) and incurred Rs. 10151.76 lacs
(Previous year Rs. 3760.52 lacs) on import of Raw Materials, Fees &
Subscription and Interest on Foreign Currency Loan. DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
articles of association of the Company, Dr. P. Goyal, the director of
the Company is due to retire at forthcoming annual general meeting, and
being eligible, has offered himself for re-appointment.
Particulars of the director seeking re-appointment are provided in the
notes forming part of the notice for the ensuing Annual General
Meeting, as required under Clause 49 of the listing agreement with the
stock exchange.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000,
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 state of affairs of
the Company as the 31st March,2010 and of the Profit 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 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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report forming part of Direc
-tors Report for the year under review, in accordance with Clause
49 of the listing agreement with stock exchanges, is given in
Annexure - B.
CORPORATE GOVERNANCE
The Company attaches considerable significance to good Corporate
Governance as an important step towards building investors
confidence, improve investors protection and maximizing long-term
shareholders value. Pursuant to Clause 49 of the Listing Agreement
with the Stock Exchange, a Compliance Report on Corporate Governance
and Auditors Certificate regarding compliance of conditions of
Corporate Governance is given in Annexure - C.
LISTING OF SHARES
Shares of the Company are listed on Bombay Stock Exchange (BSE),
which provides wider access to the investor nationwide. The Company
has made all the compliances of Listing Agreement including payment
of annual listing fees up to 31st March, 2010 to the BSE.
PARTICULARS OF EMPLOYEES
Information as per the requirement of Section 217(2A) of the Compa
-nies Act, 1956 is given in Annexure-A.
ACKNOWLEDGEMENT
The Board of Directors, would like to record their sincere apprecia
-tion for the support and co-operation that your Company received
by the State Bank of India, State Bank of Indore, IDBI Bank Ltd.,
various departments/ agencies of Central/State Govt., members,
customers, suppliers, employees and other business associates of
the Company
For and on behalf of the Board
Place New Delhi (SHAILESH KHAITAN)
Dated: 14.05.2010 CHAIRMAN & MANAGING DIRECTOR
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