DIRECTORS’ REPORT To The Members, Your Directors are pleased to present the 33 rd annual report of the Company and audited statement of accounts for the year ended 31st March, 2015. FERTILIZER & CHEMICALS DIVISION: During the year, the Company has earned Rs. 350.42 Lacs of PAT (previous year: loss of as 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 of over supply in the 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 347238MT (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 tax to /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 & deposit Rules. 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 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 For,- 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 good (previous year Rs. NIL ) and incurred Rs. 9047.66 lacs (previous year Rs. 7449.67 lacs ) on import of Raw Material , Capital Fees & Subscription and Interest on Foreign Currency Loan. Directors In accordance with the provisions of section 152(6)© of the Companies Act 201 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 Lal Jajoo as a whole Time Director subject to the approval of shareholders of the Company in ensuring Annual general Meeting for a period of five years w.e.f. 15.11.2014. Shri Jagdish Lal 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 notices for the ensuing annual general meeting as required under alause49 of the listing agreement with the stock exchange . The Company has received disclosures from all the directors (including shri Jagdish Lal JAjoo0 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. 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) VIGIL MERCHANISM/ 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 Bigil 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 (Annexure –c) AUDITORS & AUDIT REPORT M/s. S.S. Kothari Metha & 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, Suplphuric 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 Lal 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, Weblink: http://khitanchemfert.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 (2) (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, performances 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 part of the extract of the Annual return for the year ended on 31.032015 in form MGT 9 is annexed(annexure-F) DIRECTORS RESPONSIBILITY STATEMENT In terms of the 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 judgment 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,2015 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 record 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. 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 amnibus approval of the audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature . The Policy as approved as by the Board is placed on the company’s website weblink: http://khaitanchemfert.com/related-party-transaction-policy/ None of the Directors has any pecuniary relationships or transactions vis-a vis the Company. The details of the transactions with Related party are provided in the accompanying financial statements. LISTING OF SHARES Share 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, 2016 to 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 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. The Company has in place an anti Sexual harassment policy in the 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 2014-2015. No of complaints received: Nil No of complaints disposed off: Not applicable PARTICULARS OF EMPLOYEES The Particulars Of Employee Required to be furnished under section 217 (2a) of the companies Act,1956 (“the old 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 from part of this report. ( Annexure-A) Ratio of 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(10 (i) of the Companies (appointment and Remuneration) Rules 204 in respect of ratio of remuneration of each director to the median remuneration of the employees of he company for the Financial year will be made available for inspection at its registered office of the company during the working hours for a period of twenty one days before the date of annual general meeting of 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. ACKNOWLEDGMENT 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, promaters shareholders, bankers, suppliers auditors, Various department 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 behalf on the board ( shailesh khaitan) Chairman & managing directors Place : Gurgaon Date : 16.05.2015 |