Mar 31, 2023
Your Board of Directors have pleasure in presenting the 38th Annual Report on the business and operations of the Company together with audited financial statements for the Financial Year ended March 31,2023.
1. Standalone Financial Results |
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The financial performance of your Company on standalone basis is summarized below: |
(Rs. in Crore) |
|
Particulars |
Financial Year |
|
2022-23 |
2021-22 |
|
Revenue from Operations |
27,772.81 |
16,068.83 |
Other Income |
259.04 |
95.56 |
Total Income |
28,031.85 |
16,164.39 |
Total Expenses |
26,580.06 |
14,212.48 |
Profit before Tax |
1,451.79 |
1,951.91 |
Total Tax Expenses |
382.48 |
664.79 |
Profit for the Year |
1,069.31 |
1,287.12 |
Other Comprehensive Income for the Year (Net of Tax) |
(64.88) |
(23.45) |
Total Comprehensive Income for the Year |
1,004.43 |
1,263.67 |
Retained Earnings - Opening Balance |
5,289.32 |
4,426.15 |
Add: |
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Profit for the Year |
1,069.31 |
1,287.12 |
Any Other Change |
(1.24) |
0.29 |
Re-measurement (Loss) / Gain on Defined Benefit Plans |
(0.29) |
0.34 |
Less: |
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Cash Dividend |
312.16 |
374.58 |
Transfer to General Reserve |
50.00 |
50.00 |
Retained Earnings - Closing Balance |
5,994.94 |
5,289.32 |
The Company has three plants i.e Gadepan-I, Gadepan-II and Gadepan-III located at Gadepan, District Kota, Rajasthan to manufacture Urea. Apart from manufacture of Urea, the Company is also engaged in marketing of other fertilisers such as Di-Ammonium Phosphate ("DAP"), Muriate of Potash ("MOP"), NPK fertilisers, Speciality Plant Nutrients and Crop Protection Chemicals.
The Financial Year 2022-23 was a challenging year for the Company. The year started with elevated prices of fertilizers, adverse movement in USD Rupee exchange rate and fixation of subsidy rates by Government of India for DAP, MOP and NPK fertilisers which negatively impacted the profitability of the Company in spite of higher sales volumes of DAP, MOP and NPK fertilizers in the Financial Year 2022-23 as compared to the previous financial year. Higher prices of DAP, MOP and NPK fertilisers and higher cost of production of Urea on account of substantial increase in natural gas prices resulted in increase of working capital deployment by the Company and consequently interest cost of the Company.
The prices of fertilisers and natural gas started coming down by the end of Financial Year 2022-23. Further, release of additional allocation of subsidy by the Government of India towards the end of the year 2022 had supported the Company in keeping its working capital deployment under control as at March 31, 2023. The additional contribution by new geographies along with strong growth in crop protection chemicals and speciality plant nutrients have contributed positively to the top line and bottom line of the Company. During the Financial Year 2022-23, the Company continued its focus on speciality plant nutrients and crop protection chemicals and introduced various new products.
The Company imparts the highest emphasis on Environment Social Governance parameters and achieved best ever safety performance in the Financial Year 2022-23. The Company continued to implement appropriate measures to maintain the reliability of the plants in the long run and increase the energy efficiency of its plants. Energy saving initiatives as well as good operational performance yielded significant benefits to the Company. During the Financial Year 2022-23, the Company achieved lowest ever energy consumption in plants of the Company and lowest ever water consumption at Gadepan site which apart from positive impact on financial results of the Company also resulted in lesser environmental footprints.
The production of ammonia in the Company is in excess of its requirement for manufacture of Urea due to technical reasons and such excess ammonia is sold by the Company in the market. There was strong demand due to global supply disruptions and high international prices. The Company achieved highest ever sales of ammonia during the year under review with strong contribution.
The Company had been continuously monitoring the situation arising on account of COVID-19 pandemic considering both internal and external factors and its production, dispatches, sales and market collections remained unaffected. The detailed information on the business operations of the Company, the Industry in which the Company operates and other relevant information is given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
3. Technical Ammonium Nitrate Plant
Your Company had decided to set up a plant for manufacture of Technical Ammonium Nitrate, with a capacity of approximately 2,40,000 MT per annum including a plant to manufacture approximately 2,10,000 MT per annum of Weak Nitric Acid ("Project") at its existing site at Gadepan, District Kota, Rajasthan. The Company awarded a contract on April 5, 2023 to Larsen and Toubro Limited for implementation of the Project. The contract includes designing, engineering, procurement, supply of equipment and materials, construction, project management, pre-commissioning and commissioning of the Project and its associated facilities and grant/ transfer of requisite license to the Company. The Project is scheduled to be completed within 30 months from April 5, 2023 and is subject to necessary statutory and other approvals.
The Board of Directors of the Company declared an interim dividend of Rs. 4.50 per equity share of Rs. 10 each @ 45% (Previous Year -Rs. 4.50 per equity share @ 45%) during the Financial Year ended March 31, 2023. Further, the Board of Directors recommended final dividend of Rs. 3 per equity share of Rs. 10 each @ 30% (Previous Year - Rs. 3 per equity share @ 30%) for the Financial Year 2022-23 which shall be paid after approval of shareholders at the ensuing Annual General Meeting of the Company. The total dividend for the Financial Year 2022-23 amounts to Rs. 7.50 per equity share of Rs. 10 each (Previous Year - Rs. 7.50 per equity share) with total outgo of Rs. 312.16 Crore (Previous Year - Rs. 312.16 Crore) on account of interim and final dividend.
The Dividend Distribution Policy of the Company is available on the website of the Company and can be accessed at the weblink: https://www.chambalfertilisers.com/pdf/Final-Dividend-Distribution-Policy.pdf. There has been no change in this policy during the year under review. The interim and final dividend declared/recommended by the Board of Directors are in accordance with the Dividend Distribution Policy of the Company.
5. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, the rules framed thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the applicable accounting standards, the Company has prepared Consolidated Financial Statements. The audited Consolidated Financial Statements alongwith Auditor''s Report and the Statement containing salient features of the financial statements of subsidiaries/joint venture (Form AOC - 1) forms part of the Annual Report.
6. Corporate Governance Report and Code of Conduct
Your Directors are committed to maintain high standards of Corporate Governance. The Corporate Governance Report for the Financial Year 2022-23 is attached as Annexure "B" to this Report. All the Directors of the Company and senior management personnel have confirmed the compliance of Code of Conduct and Ethics of the Company. The declaration of the Managing Director confirming compliance with the ''Code of Conduct and Ethics'' of the Company is enclosed as Annexure "C" to this Report and Auditor''s Certificate regarding compliance with the conditions of Corporate Governance is enclosed as Annexure "D" to this Report.
7. Subsidiaries and Joint Venture
The details of the subsidiaries and joint venture as on March 31, 2023 are given below:
(a) Subsidiaries
CFCL Ventures Limited ("CVL") is a subsidiary of your Company in Cayman Islands. CVL has step down subsidiaries namely ISGN Corporation in United States of America and ISG Novasoft Technologies Limited ("ISGN, India") in India. There was no business activity in these subsidiaries during the year under review.
ISGN, India had received the order dated January 24, 2023 of National Company Law Tribunal, Bengaluru Bench confirming the reduction of its equity share capital. The paid-up equity share capital of ISGN, India has been reduced from Rs. 36,23,07,000 (3,62,30,700 equity shares of Rs. 10 each fully paid up) to Rs. 6,68,07,000 (66,80,700 equity shares of Rs. 10 each fully paid up). ISGN, India is in the process of completing the process of reduction of its equity share capital as provided in relevant rules and the order of National Company Law Tribunal.
Chambal Infrastructure Ventures Limited is a wholly owned subsidiary of the Company in India. There was no business activity in this subsidiary during the year under review.
(b) Joint Venture: Indo Maroc Phosphore S. A. - IMACID
Indo Maroc Phosphore S. A. - IMACID ("IMACID") is a joint venture of your Company in Morocco with Tata Chemicals Limited and OCP S.A., Morocco. Each partner is having equal stake (33.33% each) in the joint venture. IMACID is engaged in the manufacture of phosphoric acid in Morocco.
The performance of IMACID is summarized below: |
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Particulars |
April 01,2022 to March 31,2023 |
April 01,2021 to March 31,2022 |
Production of Phosphoric Acid (MT) |
3,89,867 |
5,00,367 |
Sales of Phosphoric Acid (MT) |
3,87,090 |
4,57,266 |
Revenue |
Moroccan Dirham 5323.13 Million (Rs. 4088.16 Crore) |
Moroccan Dirham 5342.27 Million (Rs. 4337.92 Crore) |
Profit after Tax |
Moroccan Dirham 224.72 Million (Rs. 172.58 Crore) |
Moroccan Dirham 1131.94 Million (Rs. 919.13 Crore) |
The lower demand for phosphoric acid and increase in the prices of its raw material resulted in lower margins which led to sharp decline in profit after tax for the Financial Year 2022-23.
The Company does not have any material subsidiary as per the provisions of the Listing Regulations.
The performance of the subsidiaries of the Company is summarized in Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section 129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the overall performance of the Company is also provided in Note no. 46 to the Consolidated Financial Statements.
The Company shall place the financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013.
No subsidiary, associate or joint venture has been acquired or ceased/ sold / liquidated during the Financial Year 2022-23.
8. Health, Safety, Environment Protection and Quality
The Company continuously strives to improve the standards of Health, Safety, Security, Environment Protection and Quality of products. The Company has implemented a Health, Safety, Security, Environment & Quality Policy as part of a formal process to achieve this objective. The brief outline of the Company''s initiatives in this regard is as under:
(a) Health & Hygiene
The health assessment and occupational disease monitoring of employees and contractor work force is carried out through periodic medical examinations and hygiene monitoring at workplace.
A well-equipped Occupational Health Center at Gadepan operates round the clock to provide health services to employees and their families, contractor workforce and villagers in the vicinity of the plants. Three well equipped ambulances are available at Gadepan which also cater to the requirements of villagers in medical emergencies. The Company also facilitates employees to consult a Company affiliated doctor to ensure the well-being of the employees. The Company also organizes training and awareness programs on health and hygiene related matters from time to time through external experts. In addition to this, various health camps and campaigns like pulse polio & swine flu vaccination, blood donation, immunization program for children, etc. are also organized periodically. The self-sustainable complex at Gadepan provides a neat, clean and healthy environment for the employees and their families which goes a long way in their well-being.
(b) Safety Management
The Company strives to maintain the highest levels of health and safety of all its employees and contractor workforce through a well-defined health and safety management system. A strong process safety management system is also in place to take care of safety in the operation of plants and maintenance of equipment and machinery.
In order to take care of safety aspects in maintenance jobs at the plants, a cross functional team of senior management members reviews the jobs on a daily basis from safety perspective and ensures that all recommended safety measures are taken to prevent hazards while carrying out the jobs. Extensive training and drills are conducted by internal and external experts which helps the Company in maintaining and improving safety systems.
Your Company had reviewed the safety plan and executed various improvement schemes to strengthen workplace safety in the plants based on the learnings from incidents of the other companies. During the year under review, the Company has implemented improved Scaffolding Management System to reduce the risk of working at height.
The Chief Inspector of Factories & Boilers, Jaipur, Government of Rajasthan has recognized your Company for its safety, health and welfare practices and compliances of Factories Act, 1948 in the category of large-scale industry.
The schemes of "Near-Miss" and "Make-to-Good" reporting are also in place and various programs and campaigns are organized to encourage safety awareness and involvement among employees and contractor workforce. Keeping in view the nature of its operations, the Company has a well-defined "Onsite Disaster Management Plan" and "Mutual Aid and Response Group" arrangement with neighboring industry which works for the mutual benefit of all participants. In case of any fire emergency, the Company also provides services to neighboring villages of Gadepan plants.
(c) Environment Protection
Your Company follows the principles of prevention of pollution, minimization of waste, recycling and conservation of natural and other resources. During the Financial Year 2022-23, approximately 75% of the sludge generated from Reverse Osmosis (RO)
plant was sent to cement companies for co-processing instead of dumping in land fill at the site approved by the Pollution Control Board.
Your Company has a robust mechanism in place to ensure that all the environmental parameters are maintained within the permissible limits. A dedicated Environment Management Cell monitors the compliances related to environment.
During the Financial Year 2022-23, the Company has implemented various schemes to reduce plant energy consumption. These schemes have resulted in reduction of greenhouse gases emissions and in turn will also result in further reduction of specific water consumption.
The Company is fully conscious of its responsibility towards environmental sustainability. The Company has installed roof top solar panels in Gadepan campus having capacity of 1000 Kilo Watt peak power as a step towards use of renewable energy. This will enable the Company to replace around 13.7% of grid power utilized by the Company in its Gadepan complex.
The Company has been conferred with Environment Protection Award 2022 for a Nitrogenous Fertilizer Plant (Runner Up) by The Fertiliser Association of India.
The Company has developed and maintained a dense green belt at Gadepan campus which also comprises a variety of fruit trees. It provides a healthy environment for the employees and their families and also helps in maintaining the ecological balance in the area. Your Company augmented 55 hectares area of green belt with irrigation network in the last two years. The green belt is maintained with utmost care and augmented through regular plantation. Only treated wastewater is used for maintaining the green belt through irrigation network spread all over the Gadepan complex.
The Gadepan-III plant of the Company is a zero liquid discharge plant. Effluents from Gadepan-III plant along with part of effluents from Gadepan-I and Gadepan-II plants are treated in reverse osmosis-zero liquid discharge plant and permeate therefrom is used as make up water for cooling towers, which results in lesser intake of fresh water from the river. The Gadepan-III plant is most energy efficient and therefore consumes less natural resources.
''Single Use Plastic'' is strictly banned in the Gadepan campus as per Government guidelines.
The Company also operates Bio-Methanation plant at Gadepan to handle the kitchen waste of the canteen and township facilities and bio-gas is utilized in the kitchen of guest house at Gadepan complex.
(d) Quality Management
The Company is always focused on providing quality products to its customers and continuously works towards improvement in product quality through process improvements and technological interventions.
The quality is ensured at all stages of manufacturing processes, maintenance and support services. The Urea manufactured by the Company is preferred in its marketing territory because of its quality. The Company sources the products marketed by it from the reputed manufacturers in India and abroad and appropriate measures are taken to ensure quality of the products. The Company gives utmost importance to customer feedback which is one of the most important tool for improvement.
9. Corporate Social Responsibility
The Company has always given the utmost importance of its responsibility towards the community through its Corporate Social Responsibility projects and programmes.
With the concept of "Investing Today for a Sustainable Tomorrow", your Company is actively supporting the communities in the fields of Education including Technical and Vocational Education, Rural Development, Health care and Sanitation, Employability and Empowerment, Environmental Sustainability, Animal Welfare and Soil Health, Disaster Management and Promotion of Sports.
The highlights of the Corporate Social Responsibility ("CSR") projects and programmes of the Company are as under:
a) Project Akshar - Pre-Primary & School Education
Your Company has been consistently working on ensuring quality education and conducive learning environment. With the view to improve the level of education, the Company is reaching out to more than 12,000 students enrolled in 47 Aanganwadi centers and 53 Government schools adopted by the Company in Kota and Baran districts of Rajasthan. The Company is also extending its support to 52 schools of Punjab, Haryana and Madhya Pradesh.
The Company had developed 3 new Aanganwadi centers in nearby villages of plant location during the Financial Year 2022-23. These adopted Aanganwadi centers are now being developed as model preschool centres on PENCIL concept i.e. Protective, Effective ''N'' Context-based Initiation of Learning.
The Company has been focusing on science and digital education to make it as integral part of curriculum for rural students. The Company had been regularly conducting cultural programs, extracurricular activities, sports and career counseling sessions in adopted schools to ensure holistic development of students.
CFDAV School is being run in collaboration with Dayanand Anglo Vedic College Trust & Management Society wherein majority of students are from nearby villages of the plant location.
The Company was conferred with Bhamashah Award for its commendable contribution in the development of various Government schools in Kota district by the Government of Rajasthan and the Corporate Social Responsibility Award 2020-21 by the Federation of Indian Chambers of Commerce and Industries for its exemplary efforts in the field of education.
b) Project Saksham - Technical and Vocational Education
Project Saksham is aimed in helping rural youth to enhance their technical skills to avail better employment opportunities.
Your Company is supporting 5 Industrial Training Institutes offering 1316 seats annually and one Government Polytechnic College offering 240 seats per year, near its plants at Gadepan. Apart from regular trade-based theoretical and practical classes, certificate training courses on Occupational Health and First Aid, Fire and Safety and Personality Development were offered to the students.
Short term vocational training courses were offered to rural youth, especially girls through vocational training centers. During the Financial year 2022-23, short term vocational courses such as tailoring, motor driving, soft toys making, beauty services, electrical wiring, food processing, embroidery, jewellery making, tie and dye techniques, hand block printing, plumbing and auto mechanic courses were offered to rural youth.
c) Project Saakar - Rural Development
The Company is committed to improve the quality of life for rural communities by developing basic infrastructure facilities in nearby villages of Gadepan and selected villages of Bundi district. During the Financial Year 2022-23, several infrastructure development projects were undertaken including developing common spaces for the community i.e. community hall, recreational areas, play area and walkways, cement concrete roads, entrance gates and installation of high mast lights. Storm water drain network was also strengthened in Gadepan and adjoining villages. Open gym facilities were established in 5 villages and efforts were also made to reduce plastic waste in villages through solid waste management initiatives.
d) Project Arogya - Health care and Sanitation
Project Arogya aims to strengthen healthcare services in rural areas of Kota and Baran districts of Rajasthan. During the Financial Year 2022-23, the second phase of infrastructure development jobs at adopted Government Primary Health Centers at Gadepan, Simliya and Kundanpur were completed. These adopted centers are offering early diagnosis of health issues and preventive healthcare facilities to over 1,15,000 community members.
The Company had organized specialized sessions and awareness camps in 32 villages near Gadepan plant location and 12 villages of Haryana, Madhya Pradesh and Punjab during the Financial Year 2022-23. The Company has also installed Reverse Osmosis ("RO") units in schools in Haryana, Madhya Pradesh and Punjab to ensure safe drinking water facilities. The Company is installing tuberculosis detection unit at the Government Primary Health Center at Gadepan to cater the needs of rural community of Kota and Baran districts.
e) Project Pragati - Employability and Empowerment
Project Pragati supports the community especially youth, women and farmers to become economically self-reliant.
Your Company organizes skill-based training programs for women. The Company is also supporting small and marginalized farmers to adopt modern and sustainable agriculture practices. The community members of nearby villages are facilitated to avail the benefits of various government social security schemes such as pension scheme, affordable housing, employment cards, Pradhan Mantri Ujjwala Yojana, Jan Aadhaar Yojana, Atal Pension Yojana etc.
f) Project Bhoomi - Environmental Sustainability, Animal Welfare and Soil Health
Project Bhoomi aims to introduce modern and sustainable agriculture methods amongst small and marginalized farmers in three northwestern states i.e. Punjab, Haryana and Rajasthan. Crop residue management initiative was successfully completed in 141 villages of 4 districts of Punjab and 70 villages of 4 districts of Haryana and residue burning was successfully prevented in over 75,000 acre land in these states. The project successfully reached out to over 1.10 lakhs farmers to promote alternative methods of crop residue management.
The agriculture development laboratory at Gadepan continues to facilitate farming communities to get soil testing services for their farmland, which helps them to understand the nutrient needs of their farms and optimize the farm inputs.
Your Company is also working to protect flora and fauna of the villages and nearby areas of its plants location. The second phase of development activities at Sorsan Eco Forest Reserve was completed during the Financial Year 2022-23. Plantation drives were also organized to increase the green cover in nearby villages.
g) Disaster Management
Your Company extended support to flood-affected rural communities in Sangod, Itawa and Sultanpur blocks of Kota district. The Company had made available food kits, ration and temporary shelters to provide immediate relief to flood-affected families.
h) Promotion of Sports
The Company focuses on building and upgrading rural sports infrastructure and developing sports culture in schools, technical institutes and nearby villages of plant location. With the aim of promoting sports at grassroot level, pragmatic interventions were launched in 20 senior secondary schools and 6 technical institutes at nearby villages. Apart from regular training sessions on various sports, your Company has been organizing various competitive events at village, school and cluster level.
The second phase of infrastructure development at sports stadium in the Sangod Block was completed and the stadium is now equipped with sports facilities such as cinder track, football ground, basketball, volleyball and badminton court and indoor and outdoor gymnasium. 2 mini sports development centers were also developed near the plant location. These centers have been offering regular training and support to the students and rural youth and aim to increase participation in state and national level sports events.
The composition and terms of reference of Corporate Social Responsibility Committee are given in the Corporate Governance Report. The Corporate Social Responsibility Policy of the Company is available on the website of the Company at http://www.chambalfertilisers.com/csroverview. The Annual Report on Corporate Social Responsibility (CSR) Activities for the Financial Year 2022-23 (including the details of the development and implementation of the Corporate Social Responsibility Policy) as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure "F" to this Report.
For the purpose of Section 135 of the Companies Act, 2013, the amount equivalent to 2% of the average net profits of the Company made during the immediately preceding three financial years works out to Rs. 34.28 Crore. As against this, the Company had spent Rs. 34.30 Crore on CSR projects / programmes during the Financial Year 2022-23.
10. Directors and Key Managerial Personnel
The Board of Directors of the Company was having eight directors as on March 31,2023 with seven Non-Executive Directors including four Independent Directors and a Managing Director.
The shareholders of the Company at the Annual General Meeting held on September 13, 2022 appointed Mr. Berjis Minoo Desai (Director Identification Number: 00153675) as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years from September 13, 2022 to September 12, 2027. The Board of Directors is of the opinion that Mr. Berjis Minoo Desai is a person of integrity with high level of ethical standards and having worked in the areas of mergers and acquisitions, corporate and financial laws, international business laws and international commercial arbitration, he possesses requisite expertise and experience for appointment as Independent Director of the Company. Mr. Berjis Minoo Desai is exempt from the requirement to undertake online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.
Mr. Marco Philippus Ardeshir Wadia (Director Identification Number: 00244357) and Ms. Radha Singh (Director Identification Number: 02227854) completed their tenure as Independent Directors of the Company on September 14, 2022 and ceased to be the Directors of the Company with effect from September 15, 2022.
The tenure of appointment of Mr. Vivek Mehra (Director Identification Number: 00101328), Independent Director, shall expire on September 17, 2023. Mr. Vivek Mehra, being eligible, has offered himself for re-appointment as Independent Director. On the recommendation of the Nomination and Remuneration Committee and considering the other relevant factors, the Board of Directors recommends to the shareholders of the Company, the re-appointment of Mr. Vivek Mehra as Independent Director of the Company to hold office for a second term of 5 (five) consecutive years from September 18, 2023 to September 17, 2028.
Mr. Abhay Baijal, Chief Financial Officer of the Company, retired from the services of the Company on January 31, 2023 and ceased to be the Chief Financial Officer and Key Managerial Personnel of the Company with effect from February 01,2023. The Board of Directors appreciated the contribution of Mr. Abhay Baijal during his service tenure as Chief Financial Officer of the Company.
On the recommendations of the Nomination and Remuneration Committee and Audit Committee, the Board of Directors has appointed Mr. Anand Agarwal as Chief Financial Officer and Key Managerial Personnel of the Company with effect from February 01, 2023.
Mr. Rajveer Singh ceased to be the Company Secretary and Key Managerial Personnel of the Company from close of business hours on May 5, 2023. On the recommendation of the Nomination and Remuneration Committee, the Board of Directors has appointed Mr. Anuj Jain as Company Secretary and Key Managerial Personnel of the Company with effect from May 6, 2023.
Mr. Chandra Shekhar Nopany (Director Identification Number: 00014587) is due for retirement at the forthcoming Annual General Meeting and has offered himself for re-appointment.
All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013, the rules framed thereunder and the Listing Regulations. In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the data bank maintained by the Indian Institute of Corporate Affairs.
During the Financial Year 2022-23, Mr. Gaurav Mathur had not received any commission or remuneration from any subsidiary of the Company.
Four meetings of the Board of Directors were held during the Financial Year 2022-23.
Other information on the Directors and the Board Meetings is provided in the Corporate Governance Report attached as Annexure "B" to this Report.
A certificate obtained by the Company from a Company Secretary in practice, confirming that none of the Directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director of companies by the Securities and Exchange Board of India /Ministry of Corporate Affairs or any such statutory authority, is enclosed as Annexure "E" to this Report.
11. Internal Financial Controls
The Company has internal financial controls commensurate to the size and nature of its business. The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business and operations including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The details of the internal control system are also given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
In pursuance of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Remuneration Policy. The Remuneration Policy, inter-alia, includes the appointment criteria & qualification requirements, process for appointment & removal, retirement policy, remuneration structure, etc. of the Directors including Managing Director and Whole Time Director(s), Key Managerial Personnel ("KMP") and other senior management personnel of the Company. As per the Remuneration Policy of the Company, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with a high level of ethical standards. In case of appointment as an Independent Director, the person should fulfill the criteria of independence prescribed under the Companies Act, 2013, rules framed thereunder and the Listing Regulations. The Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Managing Director and Whole Time Director(s) and payment of sitting fee & commission to the Non-Executive Directors and describes fundamental principles for determination of remuneration of senior management personnel and other employees which are as follows:
a) demand-supply relationship of the concerned job expertise;
b) need of organization to retain and attract talent and its ability to pay;
c) employees'' social aspiration for enhancing standard of living; and
d) compensation trends in the industries in which the Company operates.
There has been no change in the Remuneration Policy during the year under review. The Remuneration Policy of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/pdf/RemunerationPolicy.pdf.
13. Disclosures under the Companies Act, 2013, Rules thereunder and Secretarial Standards
a) Your Company has not issued any shares during the Financial Year 2022-23.
b) No significant and material orders have been passed by the regulators or courts or tribunals or statutory and quasi-judicial bodies impacting the going concern status and Company''s operations in future.
c) All related party transactions entered during the Financial Year 2022-23, were on arm''s length basis and in the ordinary course of business. No material related party transaction (in terms of the Company''s Policy on Related Party Transactions) was entered during the year by the Company and no contracts or arrangements were entered during the year with related parties which are required to be disclosed under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2.
d) A copy of annual return of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/annualreturns/
e) The following information is given in the Corporate Governance Report attached as Annexure "B" to this Report:
i) The performance evaluation of the Board of Directors, the Committees of the Board of Directors, Chairman of the Company and the individual Directors;
ii) The composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism/Whistle Blower Policy.
f) The particulars of loans and guarantees given, security provided and investments made, if any, under Section 186 of the Companies Act, 2013 are provided in Notes to the Financial Statements.
g) During the Financial Year 2022-23, the auditors, secretarial auditors and cost auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.
h) The Company has complied with the applicable Secretarial Standards prescribed under Section 118(10) of the Companies Act, 2013.
i) The Company has complied with the provisions relating to the constitution of Internal Complaints Committees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
j) There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year 2022-23 and the date of this Report.
14. Directors Responsibility Statement Your Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
b) the Directors 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 March 31, 2023 and of the profit and loss of the Company for the year ended March 31, 2023;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
15. Auditors and Cost Auditors
The Notes to the Financial Statements read with the Auditor''s Reports are self-explanatory and therefore do not call for further comments or explanations. There has been no qualification, reservation, adverse remark or disclaimer in the Auditor''s Reports.
The shareholders of the Company, at the Annual General Meeting held on September 13, 2022, had re-appointed M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration Number: 012754N/ N500016) as Auditor of the Company, to hold office for the second term of 5 (five) consecutive years from the conclusion of Thirty Seventh Annual General Meeting of the Company till the conclusion of Forty Second Annual General Meeting of the Company.
The maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is required by the Company in respect of production of fertilisers and accordingly such accounts and records are made and maintained by the Company.
The Board of Directors of the Company has appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting the audit of cost records of the Company, as applicable, for the Financial Year ending March 31, 2024. As required under the Companies Act, 2013 and Rules framed thereunder, your Directors are seeking ratification from the members of the Company for the remuneration payable to M/s. K.G. Goyal & Associates, Cost Accountants.
The Board of Directors of the Company had appointed M/s. RMG & Associates, Company Secretaries for conducting the secretarial audit of the Company for the Financial Year 2022-23. The Secretarial Audit Report issued by the aforesaid Secretarial Auditor is attached as Annexure "G" to this Report.
There has been no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.
17. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The Company undertakes continuous efforts to make its manufacturing facilities and allied operations energy efficient and explores options in this regard from time to time. The energy conservation can be achieved by using energy more efficiently or by reducing the usage of energy. Gadepan-III plant of the Company is more energy efficient in comparison to Gadepan-I and Gadepan -II plants. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure "H" attached to this Report.
Your Company has developed and implemented a detailed Risk Management Policy. The Risk Management Committee of the Company periodically reviews all risks, finalise the risk document and monitors various risks of the Company including the risks, if any, which may threaten the existence of the Company. The composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report.
The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk Management Committee, is also reviewed by the Audit Committee and the Board of Directors periodically.
During the year under review, the Company had not accepted any deposits from the public under Chapter V of the Companies Act, 2013. There was no public deposit outstanding as at the beginning and end of the Financial Year 2022-23.
Your Company always strives to keep its human resources motivated and encourages healthy relations, which is the base of a strong and long-running organization. Your Company maintains a cordial work environment, promotes the culture of entrepreneurship at all levels in the organization and encourages the employees to contribute their best. The information required to be disclosed in pursuance of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure "I" to this Report.
21. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option Scheme 2010, as amended and revised from time to time ("ESOS 2010") for grant of stock options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Whole Time Director(s)/ Managing Director of the Company. Each stock option when exercised is converted into one fully paid-up equity share of Rs. 10/- of the Company.
The Company has not granted any stock options during the year under review.
There has been no change in ESOS 2010 during the Financial Year 2022-23. ESOS 2010 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("ESOP Regulations") and implemented through CFCL Employees Welfare Trust ("Trust"). For the purpose of ESOS 2010, the Trustee of the Trust was holding 68,000 equity shares of the Company as on March 31, 2023 (3,27,000 equity shares as on March 31, 2022), being 0.02 % of the paid-up share capital of the Company, which were equivalent to the outstanding stock options. The ownership of these shares cannot be attributed to any particular employee till he/ she exercises the stock options granted to him / her and the concerned shares are transferred to him / her. Hence, the concerned employees to
whom the stock options were granted under ESOS 2010 cannot exercise voting rights in respect of the aforesaid shares held by the Trustee of the Trust as such employees are not holders of such shares. The Trustee has not exercised the voting rights in respect of the aforesaid shares during the Financial Year 2022-23.
The disclosures required to be made under ESOP Regulations are given on the website of the Company at the weblink: https://www.chambalfertilisers.com/pdf/ESOP-Disclosure-2022-23.pdf. The disclosures in respect of ESOS 2010 are also given in the Notes to the Financial Statements.
22. Business Responsibility and Sustainability Report
In pursuance of the provisions of the Listing Regulations, the Business Responsibility and Sustainability Report for the Financial Year 2022-23, describing the initiatives taken by the Company from environmental, social and governance perspective, forms part of the Annual Report.
The in-house Investor Service Centre of your Company is located in the Corporate Office of the Company at New Delhi which provides prompt and efficient service to the investors. The Company takes various initiatives for investor awareness including sending reminders to investors about their unclaimed dividends and shares due for transfer to Investor Education and Protection Fund.
The equity shares of your Company are listed at National Stock Exchange of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock Exchanges for the Financial Year 2023-24.
The members are requested to refer to general shareholders'' information given in Corporate Governance Report attached hereto.
The Board of Directors wishes to place on record its appreciation of the assistance and co- operation extended by all the stakeholders including the Department of Fertilisers, Government of India, Government of Rajasthan and other State Governments, Financial Institutions & Banks, investors and customers. The Board of Directors also conveys its appreciation of the services rendered by each and every employee with utmost commitment, hard work and dedication.
For and on behalf of the Board of Directors of Chambal Fertilisers and Chemicals LimitedRita Menon Gaurav Mathur
Place : New Delhi Director Managing Director
Date : May 26, 2023 DIN: 00064714 DIN: 07610237
Mar 31, 2022
Your Board of Directors have pleasure in presenting the 37th Annual Report on the business and operations of the Company together with audited financial statements for the Financial Year ended March 31, 2022.
1. Standalone Financial Results
The financial performance of your Company on standalone basis is summarized below: |
(Rs. in Crore) |
|
Particulars |
Financial Year |
|
2021-22 |
2020-21 |
|
Revenue from Operations |
16068.83 |
12719.01 |
Other Income |
95.56 |
69.91 |
Total Income |
16164.39 |
12788.92 |
Total Expenses |
14212.48 |
10829.98 |
Profit before Tax |
1951.91 |
1958.94 |
Total Tax Expenses |
664.79 |
611.90 |
Profit for the Year |
1287.12 |
1347.04 |
Other Comprehensive Income for the Year (Net of Tax) |
(23.45) |
151.57 |
Total Comprehensive Income for the Year |
1263.67 |
1498.61 |
Retained Earnings - Opening Balance |
4426.15 |
3254.12 |
Add: |
||
Profit for the Year |
1287.12 |
1347.04 |
Any Other Change |
0.29 |
0.19 |
Re-measurement Gain on Defined Benefit Plans |
0.34 |
- |
Less: |
||
Cash Dividend |
374.58 |
124.86 |
Transfer to General Reserve |
50.00 |
50.00 |
Re-measurement Loss on Defined Benefit Plans |
- |
0.34 |
Retained Earnings - Closing Balance |
5289.32 |
4426.15 |
2. Operations
The Company is engaged in manufacture of Urea and it has three plants located at Gadepan, District Kota, Rajasthan (i.e. Gadepan-I, Gadepan-II and Gadepan-III) with aggregate annual production capacity of around 3.4 million Metric Tons ("MT") of Urea. Apart from manufacture of Urea, the Company markets other fertilisers such as Di-Ammonium Phosphate ("DAP"), Muriate of Potash ("MOP"), NPK fertilisers, Specialty Plant Nutrients and Crop Protection Chemicals.
The Financial Year 2021-22 started with the onset of new variant of Novel Corona Virus ("COVID-19") which once again disrupted life in India and some other countries. The new wave of COVID-19 infections came when the country was recovering from the impact of COVID-19 pandemic and it turned out to be more lethal with high number of fatalities. While the world was grappling with the COVID-19 pandemic, other challenges like increase in prices of feedstock / raw material and port restrictions & congestions also emerged on the horizon. The prices of fertilisers had started moving upward around the end of the previous financial year and this trend accelerated during the Financial Year 2021-22. The cost of inputs such as natural gas, ammonia, phosphoric acid and potash continuously rose which led to increase in prices of all grades of fertilisers. The increase in prices and change in trade flows due to higher demand mainly in Latin America and United States of America coupled with restrictions on imports from China had impacted the availability of fertilisers for Indian market. In view of these factors, there was substantial reduction in sales volumes of major fertilisers like DAP and MOP in India during the Financial Year 2021-22 in comparison to the previous year. The geo-political situation arising due to Russia-Ukraine conflict had added to the challenges of the business and industry across the globe.
The Company was not untouched by the volatility in the prices and demand supply mismatches in the international market which had impacted Company''s sales volumes of DAP and MOP during the Financial Year 2021-22. In the face of challenges in DAP and MOP market, the Company used the opportunities available in other products and it was able to increase the sales volumes of NPK fertilisers during the year under review. The Company continued its focus on specialty plant nutrients and crop protection chemicals and achieved best ever revenue and profitability from these products thereby partly compensating for lower sales of DAP and MOP. The higher product prices also resulted into higher working capital deployment. However, regular payment of subsidy by the Government of India and healthy market collections had supported the Company in keeping its working capital under control.
During the year under review, the Urea production of the Company was marginally lower in comparison to the previous year due to short interruptions in the plants which were caused due to technical reasons. The Company continued to take appropriate measures to maintain
the reliability of the plants in the long run. The Government of India had allowed the Company to make additional production of Urea from Gadepan-III plant of the Company during the Financial Year 2021-22. In view of this, Gadepan -III plant achieved the highest ever annual production during the Financial Year 2021-22.
The production of ammonia in the Company is in excess of its requirement for manufacture of Urea due to technical reasons and such excess ammonia is sold by the Company in the market. As there was strong demand due to global supply disruptions, the Company had achieved highest ever sales of ammonia during the year under review.
The Company has evaluated options to better utilize the ammonia instead of selling it in the market and decided to set up a plant for manufacture of Technical Ammonium Nitrate (âTAN Projectâ) at the existing site of its plants at Gadepan, District Kota, Rajasthan, with a capacity of approximately 2,20,000 MT per annum and estimated cost of approximately Rs. 1170 Crore. The TAN Project will also include a plant to manufacture approximately 1,80,000 MT per annum of weak nitric acid which is an intermediate and will largely be utilized for manufacture of Technical Ammonium Nitrate. TAN Project is estimated to be completed within 36 months and implementation thereof is subject to necessary statutory and other approvals.
The Company had been continuously monitoring the situation arising on account of COVID-19 pandemic considering both internal and external factors and its production, dispatches, sales and market collections remained unaffected. The Company was able to continue its operations at normal levels.
The detailed information on the business operations of the Company, the Industry in which the Company operates and other relevant information is given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
The Board of Directors of the Company declared an interim dividend of Rs. 4.50 per equity share of Rs. 10 each @ 45% (Previous Year -Rs. 3 per equity share @ 30%) during the Financial Year ended March 31,2022. Further, the Board of Directors recommended final dividend of Rs. 3 per equity share of Rs. 10 each @ 30% (Previous Year - Rs. 4.50 per equity share @ 45%) for the Financial Year 2021-22 which shall be paid after approval of shareholders at the ensuing Annual General Meeting of the Company. The total dividend for the Financial Year 2021-22 amounts to Rs. 7.50 per equity share of Rs. 10 each (Previous Year - Rs. 7.50 per equity share) with total outgo of Rs. 312.16 Crore (Previous Year - Rs. 312.16 Crore) on account of interim and final dividend.
The Dividend Distribution Policy of the Company is available on the website of the Company and can be accessed at the weblink: http://www.chambalfertilisers.com/pdf/Final-Dividend-Distribution-Policy.pdf. There has been no change in this policy during the year under review. The interim and final dividend declared/recommended by the Board of Directors are in accordance with the Dividend Distribution Policy of the Company.
4. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, the rules framed thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) and the applicable accounting standards, the Company has prepared Consolidated Financial Statements. The audited Consolidated Financial Statements alongwith Auditor''s Report and the Statement containing salient features of the financial statements of subsidiaries/joint venture (Form AOC - 1) forms part of the Annual Report.
5. Corporate Governance Report and Code of Conduct
Your Directors are committed to maintain the high standards of transparency and Corporate Governance which are always given high priority by the Company. The Corporate Governance Report for the Financial Year 2021-22 is attached as Annexure "B" to this Report. All the Directors of the Company and senior management personnel have confirmed the compliance of Code of Conduct and Ethics of the Company. The declaration of the Managing Director confirming compliance with the ''Code of Conduct and Ethics'' of the Company is enclosed as Annexure "C" to this Report and Auditor''s Certificate regarding compliance with the conditions of Corporate Governance is enclosed as Annexure "D" to this Report.
6. Subsidiaries and Joint Venture
The details of the subsidiaries and joint venture are given below:
(a) Subsidiaries
CFCL Ventures Limited (âCVLâ) is a subsidiary of your Company in Cayman Islands. ISGN Corporation in United States of America and ISG Novasoft Technologies Limited (âISGN, Indiaâ) in India are subsidiaries of CVL. There was no business activity in these subsidiaries during the year under review.
Chambal Infrastructure Ventures Limited is a wholly owned subsidiary of the Company in India. There was no business activity in this subsidiary during the year under review.
Inuva Info Management Private Limited (''''Inuva'''') was a subsidiary of ISGN, India. The National Company Law Tribunal, Kolkata Bench, vide its order dated May 03, 2021, had approved dissolution of Inuva upon voluntary liquidation. Accordingly, Inuva stands dissolved from May 03, 2021 and ceased to be a subsidiary of ISGN, India, CVL and the Company.
(b) Joint Venture: Indo Maroc Phosphore S. A. - IMACID
Indo Maroc Phosphore S. A. - IMACID (âIMACIDâ) is a joint venture of your Company in Morocco with Tata Chemicals Limited and OCP S.A., Morocco. Each partner is having equal stake in the joint venture (33.33% each). IMACID is engaged in the manufacture of phosphoric acid in Morocco.
The performance of IMACID is summarized below: |
||
Particulars |
April 01,2021 to March 31,2022 |
April 01,2020 to March 31,2021 |
Productionof Phosphoric Acid (MT) |
5,00,367 |
4,68,987 |
Sales of Phosphoric Acid (MT) |
4,57,266 |
3,97,670 |
Revenue |
Moroccan Dirham 5342.27 Million (Rs. 4337.92 Crore) |
Moroccan Dirham 2638.01 Million (Rs. 2097.22 Crore) |
Profit after Tax |
Moroccan Dirham 1131.94 Million (Rs. 919.13 Crore) |
Moroccan Dirham 337.56 Million (Rs. 268.36 Crore) |
The prices of phosphoric acid continuously rose during the year under review. The overall improvement in demand and high prices of phosphoric acid in international market augured well for IMACID. The plant of IMACID has performed well to achieve much higher production in comparison to the previous year. The higher production and buoyancy in international market with better margins enabled IMACID to achieve highest ever annual sales, revenue and profit after tax.
The Company does not have any material subsidiary as per the provisions of the Listing Regulations.
The performance of the subsidiaries of the Company is summarized in Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section 129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the overall performance of the Company is also provided in Note no. 48 to the Consolidated Financial Statements.
The Company shall place the financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013.
Except as mentioned above, no subsidiary, associate or joint venture has been acquired or ceased/ sold / liquidated during the Financial Year 2021-22.
7. Health, Safety, Quality and Environment Protection
Your Company is committed towards maintaining high standards of Health, Safety, Security, Environment Protection and Quality of products & processes while conducting its business operations. In order to fulfil this commitment, the Company had implemented Health, Safety, Security, Environment & Quality Policy. The Company has also established an Integrated Management System based on ISO-45001:2018, ISO-14001:2015 and ISO- 9001:2015.
The brief details of the initiatives of the Company in this regard are as under:
(a) Health & Hygiene
Your Company has strong focus on the health assessment and occupational disease monitoring of employees and contractor work force which is carried out through periodic medical examinations and hygiene monitoring at work place.
A well-equipped health center at Gadepan operates round the clock to provide health services to employees and their families, contractor workforce and villagers in the vicinity of the plants. Well equipped ambulances are available at Gadepan which also cater to the requirements of villagers in medical emergencies. The Company also facilitates employees to consult a Company affiliated doctor to ensure the well-being of the employees. The Company also organizes training and awareness programs on health and hygiene related matters from time to time. The health center at Gadepan also geared up to provide oxygen support to employees and their family members in severe cases of COVID-19 infection.
The Company has been taking all the preventive measures for protection against COVID-19 pandemic. The awareness sessions on preventive measures of COVID-19 pandemic like social distancing, wearing mask, hand sanitization, hygiene, etc. were regularly organized amongst employees, contractor workforce and residents of township at Gadepan. Almost all the employees, their eligible family members and contractor workers have been vaccinated against COVID-19.
(b) Safety Management
In order to ensure the highest levels of health and safety of the employees and contractor workforce, there is a well-defined health and safety management system in place in your Company. A strong process safety management system is also in place to take care of safety in operation of plants and maintenance of equipment and machinery.
Award for Excellence in Safety 2021 has been conferred on the Company by The Fertiliser Association of India.
In order to take care of safety aspects, a cross functional team reviews the maintenance jobs on daily basis at its plants at Gadepan and ensures that all recommended actions are taken to prevent hazards in execution of maintenance work. In order to maintain and strengthen the safety systems and promote a safe working environment, trainings and drills are conducted on regular basis by internal and external experts and âNear-Missâ and âMake-to-Goodâ reporting schemes are in place. The Company has a well-defined âOnsite Disaster Management Planâ and âMutual Aid and Response Groupâ arrangement with neighboring industry which works for the mutual benefit of all participants. The dedicated fire tenders of the Company at Gadepan are available round-the-clock which are also provided to the neighboring villages in case of any fire emergency. As a step towards raising the safety standard, your Company had engaged an external expert to conduct the safety diagnostic survey at the plant site and actions are being taken in the identified areas.
(c) Environment Protection
Your Company gives utmost importance to the protection of environment and conservation of natural resources. There is a strong focus on optimization of resource consumption (including raw materials, fuels and water) and reduction of waste generation and
emissions to the atmosphere. Your Company has a robust mechanism in place to ensure that all the environmental parameters are maintained within the permissible limits.
The Company is fully conscious of its responsibility towards environmental sustainability. As a step towards use of renewable energy, the Company is in the process of installing roof top solar units in Gadepan complex having capacity of approximately 1000 Kilo Watt peak power. This will enable the Company to replace around 13.7% of grid power being utilized by the Company in its Gadepan complex.
Environment Protection Award 2021 for a Nitrogenous Fertilizer Plant (Runner Up) has been conferred on the Company by The Fertiliser Association of India.
The Company has developed and maintained a dense green belt at Gadepan campus which also comprises variety of fruit trees. It provides a soothing environment to the employees and their families and also helps in maintaining the ecological balance in the area. The green belt is maintained with lot of care and augmented through regular plantation. Only treated waste water is used for maintaining the green belt through irrigation network spread all over the Gadepan complex.
The Gadepan-III plant of the Company is a zero liquid discharge plant. Effluent from Gadepan-III plant is treated in reverse osmosis-zero liquid discharge plant and permeate therefrom is used as make up water for cooling towers, which results in lesser intake of fresh water from the river. The Gadepan-III plant is most energy efficient and therefore consumes less natural resources.
The Company also operates Bio-Methanation plant at Gadepan to handle the kitchen waste of the canteen and township facilities and bio-gas is utilized in the kitchen facility of guest house at Gadepan complex.
(d) Quality Management
The Company always focused on providing quality products to its customers and continuously work towards improvement in product quality through process improvements and technological interventions. The quality is ensured at all stages of manufacturing processes, maintenance and support services. The urea manufactured by the Company is preferred in its marketing territory because of its quality. The Company sources the products marketed by it from the reputed manufacturers in India and abroad and appropriate measures are taken to ensure quality of the products. The customer feedback is collected through targeted surveys as well as other forms of customer engagements and given due importance by the Company in its business decisions related to quality of products and processes.
8. Corporate Social Responsibility
The Company has always been conscious of its responsibility towards society and its Corporate Social Responsibility ("CSR'''') projects and programmes have made a positive impact on the society through holistic and sustainable interventions over the years. The Company continue to extend its support to improve quality of life of the people in rural areas.
The CSR projects and programmes of the Company cover the areas of Education including Technical and Vocational Education, Rural Development, Health care and Sanitation, Employability and Empowerment, Environmental Sustainability, Animal Welfare and Soil Health, Disaster Management and Promotion of Sports.
The highlights of the CSR projects and programmes of the Company are as under:
a) Project Akshar - Pre-Primary & School Education
Your Company is making consistent efforts to improve standard of education in Government schools through integration of technology into regular curriculum, development of quality infrastructure, promotion of co-curricular activities and enhancing community participation. During the Financial Year 2021-22, additional 9 Government schools and 6 Aanganwadi centers were adopted by the Company, taking the total to 53 Government schools and 47 Government Aanganwadi centers adopted by the Company in Kota and Baran districts of Rajasthan. Your Company has also extended its support to 34 Government schools in Punjab, Haryana and Madhya Pradesh. During the Financial Year 2021-22, large number of students and Aanganwadi children in the states of Rajasthan, Madhya Pradesh, Haryana and Punjab had benefitted from the Company''s CSR initiative.
The Company had been focusing on promotion of science curriculum in schools in recent years. Accordingly, 4 mini science centers and 4 science laboratories were developed in adopted Government schools.
CFDAV School is being run in collaboration with Dayanand Anglo Vedic College Trust & Management Society wherein majority of students are from nearby villages.
b) Project Saksham - Technical and Vocational Education
The Company strives to equip rural youth with technical skills required in various sectors through quality training, infrastructure development, industry exposure, etc. Your Company is supporting 5 Industrial Training Institutes and one Government Polytechnic College near its plants at Gadepan. The second phase of planned infrastructure development in Government Polytechnic College, Baran was successfully completed during the Financial Year 2021-22.
After reduction in cases of COVID-19 infection, the institutes had started focusing on regular classroom contact programme, practical sessions and on campus placement drives to provide job opportunities to students.
Short term vocational training courses were offered to rural youth through vocational training centers in nearby villages. These centers are offering short term courses on motor driving, tie & dye techniques, embroidery training, solar panel assembling & maintenance, beauty services, soft toys making, jewellery making, block printing, food processing and advance tailoring, to rural youth.
c) Project Saakar - Rural Development
Your Company has undertaken several initiatives to improve basic amenities in villages in the vicinity of its plants at Gadepan to improve standard of living of the community members. The Company has undertaken development of rural infrastructure facilities including construction of cement concrete roads, interlocking tiles pathways, community halls, crematoriums, etc. and installation of street lights. These initiatives have brought ease and convenience in the day to day life of villagers and improved their standard of living.
d) Project Arogya - Health care and Sanitation
Your Company aims to improve healthcare facilities and access of medical services in rural areas. The Company had adopted 3 Government Primary Health Centers at Gadepan, Simliya and Kundanpur of Kota district and renovated these adopted centers during the Financial Year 2021-22. Additional healthcare facilities like pathological test facilities, X-ray machines, new born child care machines, etc. were provided in these health centers.
The Company had also organised general and specialized health checkup camps and awareness sessions in villages in the vicinity of its plants at Gadepan and 12 villages of the states of Punjab, Haryana and Madhya Pradesh during the Financial Year 2021-22. Various healthcare awareness sessions organized by the Company have brought a positive change in the attitude and behavior of the community members. The healthcare facilities were also extended in the remote villages of Dehradun and Tehri districts in Uttarakhand.
e) Project Pragati - Employability and Empowerment
With the objective of socio-economic empowerment of community members, especially women and youths in rural areas, the Company has supported various entrepreneurial activities through women self-help groups which enable them to earn a decent income from various activities. Your Company has also supported rural women in their livelihood earning initiatives of making of school uniforms, school bags, reusable carry bags, etc.
Your Company is also facilitating small and marginalized farmers to adopt modern agriculture practices and optimize farm input cost to improve the farm income.
The Company is continuously assisting the community to avail the benefits of various social security schemes like pension scheme, affordable housing, employment cards, pradhan mantri ujjwala yojana, etc.
f) Project Bhoomi - Environmental Sustainability, Animal Welfare and Soil Health
The Company continues to provide its support to farming community, especially small and marginalized farmers through its agriculture development laboratory. The laboratory provides soil testing reports to farmers for balanced usage of fertilizers and also provides advisory services to optimize farm inputs.
During the Financial Year 2021-22, crop residue management work was successfully completed in 75 selected villages in the states of Punjab and Haryana, with the objective of preventing crop stubble burning and adopting alternate methods for crop residue management and the farmers were sensitized to adopt alternative methods of crop residue management.
g) Disaster Management
During the second wave of COVID-19 pandemic, the country had seen unprecedented shortage of medical oxygen. In order to ensure availability of medical oxygen in nearby community health centers, your Company had provided 10 pressure swing adsorption oxygen plants in Kota and Baran districts of Rajasthan and also made available oxygen concentrators. Apart from this, medical equipment, face masks and other items were also provided to the community health workers and community members to fight against COVID-19 pandemic. Intensive information, education and communication activities were undertaken to sensitize community members in nearby villages towards COVID-19 vaccination.
h) Promotion of Sports
During the Financial Year 2021-22, the Company had taken initiative for the development of sports stadium in the Sangod Block of Kota District. This shall create sports ecosystem and nurture rural youth to increase their participation in state and national level sports events.
The composition and terms of reference of Corporate Social Responsibility Committee are given in the Corporate Governance Report. The Corporate Social Responsibility Policy of the Company is available on the website of the Company at http://www.chambalfertilisers.com/csroverview. The Annual Report on Corporate Social Responsibility (CSR) Activities for the Financial Year 2021-22 (including the details of the development and implementation of the Corporate Social Responsibility Policy) as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure "F" to this Report.
For the purpose of Section 135 of the Companies Act, 2013, the amount equivalent to 2% of the average net profits of the Company made during the immediately preceding three financial years works out to Rs. 27.90 Crore. As against this, the Company had spent Rs. 27.997 Crore on CSR projects / programmes during the Financial Year 2021-22.
9. Directors and Key Managerial Personnel
The Board of Directors of the Company was having nine directors as on March 31, 2022 with eight Non-Executive Directors including five Independent Directors and a Managing Director.
The members of the Company at the Annual General Meeting held on September 16, 2021 had approved the appointment of Mr. Gaurav Mathur (DIN: 07610237) as Managing Director of the Company for the period from April 16, 2021 to January 05, 2025.
Mr. Anil Kapoor (DIN: 00032299) completed his tenure as Managing Director of the Company on April 15, 2021 and ceased to be the Managing Director and Director of the Company with effect from April 16, 2021.
The second consecutive term of Mr. Marco Philippus Ardeshir Wadia (DIN: 00244357) and Ms. Radha Singh (DIN: 02227854), Independent Directors shall expire on September 14, 2022. Accordingly, they are not eligible for re-appointment as Independent Directors of the Company in terms of Section 149 (11) of the Companies Act, 2013. The Board of Directors expresses its sincere gratitude and appreciation of the contributions made by Mr. Marco Philippus Ardeshir Wadia and Ms. Radha Singh as Independent Directors of the Company.
There was no change in Chief Financial Officer and Company Secretary of the Company during the year under review.
Mr. Shyam Sunder Bhartia (DIN: 00010484) is due for retirement at the forthcoming Annual General Meeting and has offered himself for re-appointment.
All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013, the rules framed thereunder and the Listing Regulations. In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the data bank maintained by the Indian Institute of Corporate Affairs.
During the Financial Year 2021-22, Mr. Anil Kapoor and Mr. Gaurav Mathur had not received any commission or remuneration from any subsidiary of the Company.
Five meetings of the Board of Directors were held during the Financial Year 2021-22.
Other information on the Directors and the Board Meetings is provided in the Corporate Governance Report attached as Annexure "B" to this Report.
A certificate obtained by the Company from a company secretary in practice, confirming that none of the Directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director of companies by the Securities and Exchange Board of India /Ministry of Corporate Affairs or any such statutory authority, is enclosed as Annexure "E" to this Report.
10. Internal Financial Controls
The Company has internal financial controls commensurate to the size and nature of its business. The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business and operations including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The details of internal control system are also given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
In pursuance of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Remuneration Policy. The Remuneration Policy, inter-alia, includes the appointment criteria & qualification requirements, process for appointment & removal, retirement policy, remuneration structure, etc. of the Directors including Managing Director and Whole Time Director(s), Key Managerial Personnel ("KMP''O and other senior management personnel of the Company. As per the Remuneration Policy of the Company, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with high level of ethical standards. In case of appointment as an Independent Director, the person should fulfill the criteria of independence prescribed under the Companies Act, 2013, rules framed thereunder and the Listing Regulations. The Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Managing Director and Whole Time Director(s) and payment of sitting fee & commission to the Non-Executive Directors and describes fundamental principles for determination of remuneration of senior management personnel and other employees which are as follows:
a) demand-supply relationship of the concerned job expertise;
b) need of organization to retain and attract talent and its ability to pay;
c) employees'' social aspiration for enhancing standard of living; and
d) compensation trends in the industries in which the Company operates.
There has been no change in the Remuneration Policy during the year under review. The Remuneration Policy of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/pdf/RemunerationPolicy.pdf.
12. Disclosures under the Companies Act, 2013, Rules thereunder and Secretarial Standards
a) Your Company has not issued any shares during the Financial Year 2021-22.
b) No significant and material orders have been passed by the regulators or courts or tribunals or statutory and quasi-judicial bodies impacting the going concern status and Company''s operations in future.
c) All related party transactions entered during the Financial Year 2021-22, were on arm''s length basis and in the ordinary course of business. No material related party transaction (in terms of the Company''s Policy on Related Party Transactions) was entered during the year by the Company and no contracts or arrangements were entered during the year with related parties which are required to be disclosed under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2.
d) A copy of annual return of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/annualreturns/
e) The following information is given in the Corporate Governance Report attached as Annexure "B" to this Report:
i) The performance evaluation of the Board of Directors, the Committees of the Board of Directors, Chairman of the Company and the individual Directors;
ii) The composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism/Whistle Blower Policy.
f) The particulars of loans and guarantees given, security provided and investments made, if any, under Section 186 of the Companies Act, 2013 are provided in Notes to the Financial Statements.
g) During the Financial Year 2021-22, the auditors, secretarial auditors and cost auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.
h) The Company has complied with the applicable Secretarial Standards prescribed under Section 118(10) of the Companies Act, 2013.
i) The Company has complied with the provisions relating to the constitution of Internal Complaints Committees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
j) There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year 2021-22 and the date of this Report.
13. Directors Responsibility Statement Your Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
b) the Directors 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 March 31, 2022 and of the profit and loss of the Company for the year ended March 31, 2022;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
14. Auditors and Cost Auditors
The Notes to the Financial Statements read with the Auditor''s Reports are self-explanatory and therefore, do not call for further comments or explanations. There has been no qualification, reservation, adverse remark or disclaimer in the Auditor''s Reports.
M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016) shall retire at the ensuing Annual General Meeting of the Company and, being eligible, has offered themselves for re-appointment as Auditor of the Company. On the recommendations of the Audit Committee, the Board of Directors recommends re-appointment of M/s. Price Waterhouse Chartered Accountants LLP as Auditor of the Company to hold office for a term of 5 (five) consecutive years from the conclusion of thirty-seventh Annual General Meeting of the Company till the conclusion of forty-second Annual General Meeting of the Company.
The maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is required by the Company in respect of production of fertilisers and accordingly such accounts and records are made and maintained by the Company.
The Board of Directors of the Company has appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost records of the Company, as applicable, for the Financial Year ending March 31,2023. As required under the Companies Act, 2013 and Rules framed thereunder, your Directors are seeking ratification from the members of the Company for the remuneration payable to M/s. K.G. Goyal & Associates, Cost Accountants.
The Board of Directors of the Company had appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for the Financial Year 2021-22. The Secretarial Audit Report issued by the aforesaid Secretarial Auditor is attached as Annexure "G" to this Report.
There has been no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.
16. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The conservation of energy can be achieved by using the energy more efficiently or by reducing the usage of energy. The Company continuously makes efforts to conserve energy in its manufacturing facilities and allied operations and look for avenues to use alternate sources of energy, to reduce its carbon footprint. Gadepan-III plant of the Company is more energy efficient in comparison to Gadepan-I and Gadepan -II plants. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure "H" attached to this Report.
Your Company has developed and implemented a Risk Management Policy. The Risk Management Committee of the Company periodically reviews all risks, finalise the risk document and monitors various risks of the Company including the risks, if any, which may threaten the existence of the Company. The composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report.
The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk Management Committee, is also reviewed by the Audit Committee and the Board of Directors periodically.
During the year, the Company had not accepted any deposits from the public under Chapter V of the Companies Act, 2013. There was no public deposit outstanding as at the beginning and end of the Financial Year 2021-22.
Your Company always gives utmost importance to the well-being and development of its human resource, which is a strong factor in the success and growth of the Company. Your Company maintains a cordial work environment and encourages the employees to contribute their best. The information required to be disclosed in pursuance of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure "I" to this Report.
20. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option Scheme 2010, as amended and revised from time to time (âESOS 2010â) for grant of stock options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Whole Time Director(s)/ Managing Director of the Company. Each stock option when exercised would be converted into one fully paid up equity share of Rs. 10/- of the Company.
The Company has not granted any stock options during the year under review.
There has been no change in ESOS 2010 during the Financial Year 2021-22. ESOS 2010 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (âESOP Regulationsâ) and implemented through CFCL Employees Welfare Trust (âTrustâ). For the purpose of ESOS 2010, the Trustee of the Trust was holding 3,27,000 equity shares of the Company as on March 31, 2022 (5,81,000 equity shares as on March 31, 2021), being 0.08 % of the paid up share capital of the Company, which were equivalent to the outstanding stock options. The ownership of these shares cannot be attributed to any particular employee till he/ she exercises the stock options granted to him / her and the concerned shares are transferred to him / her. Hence, the concerned employees to whom the stock options were granted under ESOS 2010 cannot exercise voting rights in respect of aforesaid shares held by the Trustee of the Trust as such employees are not holders of such shares. The Trustee has not exercised the voting rights in respect of the aforesaid shares during the Financial Year 2021-22.
The disclosures required to be made under ESOP Regulations are given on the website of the Company at the weblink: http://chambalfertilisers.com/pdf/ESOP-Disclosure-2021-22.pdf. The disclosures in respect of ESOS 2010 are also given in the Notes to the Financial Statements.
21. Business Responsibility Report
In pursuance of the provisions of the Listing Regulations, the Business Responsibility Report for the Financial Year 2021-22, describing the initiatives taken by the Company from environmental, social and governance perspective, forms part of the Annual Report.
The in-house Investor Service Centre of your Company is located in the Corporate Office of the Company at New Delhi which provides prompt and efficient service to the investors. The Company takes various initiatives for investor satisfaction including reminders to investors about unclaimed dividends and shares due for transfer to Investor Education and Protection Fund.
The equity shares of your Company are listed at National Stock Exchange of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock Exchanges for the Financial Year 2022-23.
The members are requested to refer to general shareholders'' information given in Corporate Governance Report attached hereto.
The Board of Directors wishes to place on record its appreciation of the support and co- operation extended by all the stakeholders including the Department of Fertilisers, Government of India, Government of Rajasthan and other State Governments, Financial Institutions & Banks, investors and customers. The Board of Directors also conveys its appreciation of the services rendered by each and every employee with utmost commitment, hard work and dedication.
For and on behalf of the Board of Directors of Chambal Fertilisers and Chemicals Limited
Place : New Delhi Rita Menon Gaurav Mathur
Date : May 19, 2022 Director Managing Director
Mar 31, 2021
Dear Members,
Your Board of Directors have pleasure in presenting the 36th Annual Report on the business and operations of the Company together with audited financial statements for the Financial Year ended March 31,2021.
1. Standalone Financial Results
The financial performance of your Company on standalone basis is summarized below: (Rs. in Crore)
Particulars |
Financial Year |
|
2020-21 |
2019-20 |
|
Revenue from Operations |
12719.01 |
12205.95 |
Other Income |
59.89 |
179.34 |
Total Income |
12778.90 |
12385.29 |
Total Expenses |
10819.96 |
11093.01 |
Profit before Exceptional Items and Tax |
1958.94 |
1292.28 |
Exceptional Items |
- |
(33.42) |
Profit before Tax |
1958.94 |
1325.70 |
Total Tax Expenses |
611.90 |
101.39 |
Profit for the Year |
1347.04 |
1224.31 |
Other Comprehensive Income for the Year (Net of Tax) |
151.57 |
(251.62) |
Total Comprehensive Income for the Year |
1498.61 |
972.69 |
Retained Earnings - Opening Balance |
3254.12 |
2381.60 |
Add: |
||
Profit for the Year |
1347.04 |
1224.31 |
Any Other Change |
0.19 |
0.57 |
Less: |
||
Cash Dividend (including Dividend Distribution Tax) |
124.86 |
301.05 |
Transfer to General Reserve |
50.00 |
50.00 |
Re-measurement Loss on Defined Benefit Plans |
0.34 |
1.31 |
Retained Earnings - Closing Balance |
4426.15 |
3254.12 |
The Company manufactures Urea in its three plants located at Gadepan, District Kota, Rajasthan. The Company is also engaged in marketing of other fertilisers and agri-inputs such as Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP), Ammonium Phosphate Sulphate (APS), different grades of NPK fertilisers, Sulphur, Micronutrients and Agrochemicals.
The Financial Year 2020-21 started amidst the outbreak of Novel Corona Virus ("COVID-19") pandemic and the country was under lockdown. The economies world over were severely impacted by COVID-19 pandemic and there were lot of apprehensions about the economic activity in the country. However, the Company was able to continue its operations at normal levels. The Company''s production, dispatches, sales and market collections remained unaffected. The Company is continuously monitoring the situation arising on account of COVID-19 pandemic considering both internal and external factors and taking appropriate measures in this regard. When many sectors were under stress due to pandemic, the agriculture sector remained unaffected and consecutive good monsoon in the second year helped the Company in maintaining the growth momentum.
The Company had achieved highest ever production and sales of Urea and highest ever sales volumes of DAP and MOP fertilisers. There was also growth in sales of NPK fertilisers, Sulphur, Micro-nutrients and Agrochemicals. The sales volumes of APS fertilizer were also encouraging. During the year under review, the Company has crossed an important milestone of sales of 5 Million MT of fertilisers. The increased sales volumes of Urea and increased volumes and better margins on marketed products have enabled the Company to achieve highest ever revenue and profit after tax during the year.
After establishing itself firmly in its existing marketing territory, the Company is now looking forward to expanding its reach in new geographies in eastern, western and southern part of India. The Company is increasing its presence by opening marketing offices in these territories. Apart from DAP and MOP, the focus of the Company is to expand its volumes of APS/ NPK fertilisers in the new territories. The expansion of its marketing area will also allow the Company to get the advantage of different weather cycles and seasons for sale of products.
The Government of India had made additional allocation for fertiliser subsidy to clear the backlog. The outstanding subsidy of the Company as on March 31, 2021 was Rs. 1103.28 Crore as against Rs. 5349.33 Crore outstanding as on March 31, 2020. This has improved the liquidity position of the Company which has resulted into substantial reduction in the finance cost and its benefit will continue in the coming year also. Further, the credit rating for long term borrowings of the Company has been upgraded from CRISIL AA/Positive to CRISIL AA /Stable. The detailed information on the business operations of the Company, the Industry in which the Company operates and other relevant information is given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
The Board of Directors of the Company declared an interim dividend of Rs. 3.00 per equity share of Rs. 10 each @ 30% during the Financial Year ended March 31, 2021. Further, the Board of Directors recommended final dividend of Rs. 4.50 per equity share of Rs. 10 each @ 45% for the Financial Year 2020-21. The total dividend for the Financial Year 2020-21 amounts to Rs. 7.50 per equity share of Rs. 10 each with total outgo of Rs. 312.15 Crore on account of interim and final dividend. During the Financial Year 2019-20, the Company paid total dividend (i.e. interim dividend) of Rs. 4.00 per equity share of Rs. 10 each @ 40%.
The Dividend Distribution Policy of the Company is attached as Annexure "B" to this Report and also available on the website of the Company and can be accessed at the weblink: http://www.chambalfertilisers.com/pdf/Final-Dividend-Distribution-Policy.pdf. The Dividend Distribution Policy was amended with effect from November 05, 2020 mainly to incorporate the following changes:
(i) Inclusion of total dividend pay-out ratio of about 25% (inclusive of tax on distribution of dividend in the hands of the Company, if any) of the annual standalone profits after tax of the Company, to make the Dividend Distribution Policy more specific in respect of dividend distribution out of profits of the Company.
(ii) Inclusion of additional factors viz. buy-back of shares of the Company and investment in new business(s), for utilization of retained earnings of the Company, in order to enable the Company to have more options in this regard.
The interim and final dividend declared/recommended by the Board of Directors are in accordance with the Dividend Distribution Policy of the Company.
4. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, the rules framed thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the applicable Accounting Standards, the Company has prepared Consolidated Financial Statements. The Audited Consolidated Financial Statements alongwith Auditor''s Report and the Statement containing salient features of the financial statements of Subsidiaries/Joint Venture (Form AOC - 1) forms part of the Annual Report.
5. Corporate Governance Report and Code of Conduct
Your Directors strive to maintain the high standards of transparency and Corporate Governance. The Corporate Governance Report for the Financial Year 2020-21 is attached as Annexure "C" to this Report. All the Directors of the Company and senior management personnel have confirmed the compliance of Code of Conduct and Ethics of the Company. The declaration of the Managing Director confirming compliance with the ''Code of Conduct and Ethics'' of the Company is enclosed as Annexure "D" to this Report and Auditor''s Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "E" to this Report.
6. Subsidiaries and Joint Venture
The details of the subsidiaries and joint venture are given below:
(a) Subsidiaries
(i) CFCL Ventures Limited, Cayman Islands and its subsidiaries
CFCL Ventures Limited ("CVL") is a subsidiary of your Company in Cayman Islands and ISGN Corporation ("ISGN, USA") in USA and ISG Novasoft Technologies Limited ("ISGN, India") in India are subsidiaries of CVL.
There was no business activity in these subsidiaries during the year under review.
Inuva Info Management Private Limited ("Inuva") was a subsidiary of ISGN, India. The National Company Law Tribunal, Kolkata Bench vide its order dated May 03, 2021 had approved dissolution of Inuva upon voluntary liquidation. Accordingly, Inuva stands dissolved from May 03, 2021 and ceased to be a subsidiary of ISGN, India and the Company.
(ii) Other Subsidiaries
Chambal Infrastructure Ventures Limited is a wholly owned subsidiary of the Company in India. There was no business activity in this subsidiary during the year under review.
India Steamship Limited ("ISS, India") was a wholly owned subsidiary of the Company in India. The National Company Law Tribunal, Jaipur Bench vide its order dated February 09, 2021 had approved dissolution of ISS, India through voluntary liquidation. Accordingly, ISS, India stands dissolved from February 09, 2021 and ceased to be a subsidiary of the Company. Further, India Steamship Pte. Ltd. ("ISS, Singapore"), a wholly owned subsidiary of the Company in Singapore, had earlier applied for closure and voluntary striking-off its name from the register of Accounting and Corporate Regulatory Authority, Singapore ("ACRA"). The name of ISS, Singapore was struck-off from the register of ACRA on April 06, 2020 and it ceased to be a subsidiary of the Company.
(b) Joint Venture: Indo Maroc Phosphore S. A. - IMACID ("IMACID")
IMACID is a joint venture of your Company in Morocco with Tata Chemicals Limited and OCP, Morocco. Each partner is having equal stake in the joint venture (33.33% each). IMACID is engaged in the manufacture of phosphoric acid in Morocco.
The performance of IMACID is summarized below:
Particulars |
April 01,2020 to March 31,2021 |
April 01,2019 to March 31,2020 |
Production of Phosphoric Acid (MT) |
468,987 |
344,381 |
Sales of Phosphoric Acid (MT) |
397,670 |
293,093 |
Revenue |
Moroccan Dirham 2638.01 Million (Rs. 2097.22 Crore) |
Moroccan Dirham 1944.07 Million (Rs.1425.01 Crore) |
Profit after Tax |
Moroccan Dirham 337.56 Million (Rs. 268.36 Crore) |
Moroccan Dirham 12.34 Million (Rs. 9.04 Crore) |
The phosphoric acid is raw material for manufacture of phosphatic fertilisers. The demand of phosphoric acid gradually improved and there was also upward movement in sales prices thereof during the Financial Year 2020-21 which has improved the margins of IMACID. The higher production and sales with higher margins have enabled IMACID to substantially improve its financial performance during the Financial Year 2020-21.
The Company does not have any material subsidiary as per the provisions of the Listing Regulations.
The performance of the subsidiaries of the Company is summarized in Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section 129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the overall performance of the Company is also provided in Note no.47 to the Consolidated Financial Statements.
The Company shall place the financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013.
Except as mentioned above, no subsidiary, associate or joint venture has been acquired or ceased/ sold / liquidated during the Financial Year 2020-21.
7. Health, Safety, Quality and Environmental Protection
Your Company is operating three hi-tech Urea plants having world class technology. The health and safety of people is of paramount importance for the Company and it continuously strives to improve the health and safety standards in its operations. The Company has in place a Health, Safety, Security, Environment & Quality Policy as part of a formal process to achieve this objective. An Integrated Management System based on ISO- 45001:2018, ISO-14001:2015, ISO- 9001:2015 has been established and the Company has also adopted Process Safety Management System. The brief outline of the Company''s initiatives in this regard is as under:
(a) Health & Hygiene
The health assessment and occupational disease monitoring of employees and contractor work force is carried out through periodic medical examinations and hygiene monitoring at work place.
The Company''s health centre at Gadepan is equipped with requisite medical facilities and doctors and it provides healthcare services to employees & their families, contractor workforce and villagers in the vicinity of the plants. Three well equipped ambulances are available at Gadepan which also cater to the requirements of villagers in medical emergencies. The Company also facilitates employees to consult a Company affiliated doctor to ensure the well-being of the employees. Training and awareness programs on health and hygiene related matters are organized from time to time.
The Company has taken all the preventive measures for protection against COVID-19 pandemic. Further, awareness sessions on preventive measures of COVID-19 pandemic like social distancing, wearing mask, hand sanitization, hygiene, etc. are being regularly organised amongst employees, contractor workforce and residents of township at Gadepan.
(b) Safety Management
The Company strives to maintain highest levels of health and safety of all the employees and contractor workforce through a well-defined health and safety management system. The Company has implemented a number of safety measures for accident prevention like hazard identification and risk assessment, job safety analysis, safety work permit system, etc. The Company has a strong Process Safety Management System in place to take care of safety in operation of plants and maintenance of equipment and machinery.
In order to take care of safety aspects in maintenance jobs in the plants, a cross functional team of senior employees review the jobs on a daily basis from safety perspective. Extensive trainings and drills are conducted by internal and external experts which helps in maintaining and improving safety systems. To encourage safety awareness, schemes of "Near-Miss" and "Make-to Good" reporting are in place and various programmes and campaigns are also organized. Keeping in view the nature of its operations, the Company has a well-defined "Onsite Disaster Management Plan" and "Mutual Aid and Response Group" arrangement with neighbouring industry. The Company also provides services to all neighbouring villages surrounding Gadepan plants in case of any fire emergency.
Your Company has achieved zero reportable accident during last three consecutive years.
(c) Environment Protection
Your Company recognizes its responsibility towards protection of environment and always looks for opportunities to improve its environmental performance. The Company gives utmost importance to conservation of natural resources (including raw materials, fuels and water). The philosophy of "Reduce, Re-use & Re-cycle" has been adopted for usage of the resources and reduction of waste generation and emissions.
In order to achieve zero liquid discharge in third Urea plant of the Company ("Gadepan-III Plant"), a reverse osmosis - zero liquid discharge plant has been installed for treatment of effluent, which has resulted in lesser intake of fresh water from the river. Online continuous ambient air monitoring stations have been installed in the premises in prominent directions. To monitor the quality of liquid effluent, online continuous liquid effluent monitoring systems have been installed.
The Company has developed dense green belt in Gadepan campus which provides healthy environment to people residing in and around the campus. The greenery at the campus is maintained through regular care and plantation of trees.
As a recognition to the dedicated efforts of the Company, it has been awarded state level first prize in the large scale industry category under the "Factories Safety Award Scheme-2021" by the Government of Rajasthan for the best safety performance during last three years. Your Company has also won "Fertilizers Association of India Environmental Protection" award for the year 2019-20.
(d) Quality Management
Your Company has adopted state of the art technology in its plants to ensure best in class quality of Urea. The relevant raw material, Urea manufactured by the Company and the fertilisers marketed by the Company are tested at the Company''s laboratory at Gadepan. The Company sources the products marketed by it from the reputed manufacturers, some of whom are large multi-national organisations. The Company also undertakes market surveys, customer feedback surveys, etc. and the outcome thereof is considered appropriately for improvement in quality and different areas of operations.
8. Corporate Social Responsibility
The Corporate Social Responsibility ("CSR") is ingrained in the working of your Company since long and its CSR projects and programmes have benefitted the community at large over the years. The CSR initiatives of the Company largely focused on the areas where it makes lasting impact to uplift the social and financial status of the people in the villages and improves their living standard. The Company has developed CSR projects and programmes keeping in view the needs and requirements of the community in the rural areas especially the villages near its plants.
The CSR projects/ programmes of the Company cover mainly the areas of Education including Technical and Vocational Education, Rural Development, Healthcare and Sanitation, Employability and Empowerment, Environment Sustainability, Animal Welfare and Soil Health, Disaster Management, etc. As a socially responsible organization, your Company has made contribution of Rs. 5.00 Crore to the Prime Minister''s Citizen Assistance and Relief in Emergency Situation Fund i.e PM CARES Fund during the Financial Year 2020-21.
The brief outline of the CSR projects / programmes of the Company is as under:
a) Project Akshar-Pre-Primary and School Education
Your Company is supporting 44 Government schools and 41 Government Aanganwadi centers of Kota and Baran Districts of Rajasthan. The Company works for enhancing overall education standard in these Government schools through remedial / extra classes, development of infrastructure, promotion of extra-curricular activities, etc. With the continuous efforts of the Company, these schools are now having quality infrastructure facilities to support the education of the students. During the Financial Year 2020-21, the Company had started 30 new SMART classes to introduce digital interface, bringing the total number to 61 SMART classes in the aforesaid Government schools. The science labs were established in two senior secondary schools for developing science acumen amongst students of higher classes. The substantial improvement in the academic performance of the students in these schools over the years is testimony to the efforts made by the Company in this regard.
The schools were closed since March 2020 due to outbreak of COVID-19 pandemic. The students were facilitated through online classes, e-content sharing and problem solving sessions to ensure continuous academic engagement of students.
CFDAV School is being run in collaboration with Dayanand Anglo Vedic College Trust & Management Society and over 63% students in this school are from nearby villages.
b) Project Saksham - Technical and Vocational Education
Your Company is continuously focusing on equipping rural youth with suitable technical skills with an objective to enhance employment opportunities through 5 Industrial Training Institutes and one Government Polytechnic College near its plants at Gadepan. Renovation and infrastructure development work at Government Polytechnic College, Baran was successfully completed during the Financial Year 2020-21. The Company aims to make this institute as one of the top three polytechnic colleges of Rajasthan in next 2 years. During the Financial Year 2020-21,8 additional SMART classes were installed in the adopted institutes, taking the total to 24 SMART classes in 6 institutes.
During the COVID - 19 pandemic, online classes were organized in the institutes to support the students.
During the Financial Year 2020-21, the Company also offered vocational training programs in 3 vocational training centers. These centers are providing courses on solar panel assembling & maintenance, Tie & Dye techniques and jewellery designing to rural youths.
c) Project Saakar - Rural Development
Realizing the need of improvement in rural infrastructure facilities, your Company has undertaken rural development projects to cater to the basic needs of the community members residing in nearby villages. During the Financial Year 2020-21, the Company had focused on development of the basic facilities in nearby villages such as rural roads, electrification of public places, storm water drainage system, community hall and community sheds. The Company had undertaken construction of 3 new integrated Aanganwadi centers in school premises and renovation of 11 Government schools during the Financial Year 2020-21.
d) Project Arogya - Healthcare and Sanitation
The Company aims to create a quality healthcare network in rural areas to cater to the needs of community members. The healthcare activities and awareness sessions were resumed in the month of November 2020. The community members were facilitated in healthcare camps, awareness sessions on low cost protein and iron rich meal, water borne disease and its prevention, etc. in 26 villages. The Company has also carried out awareness sessions in these villages for COVID-19 vaccination. The healthcare facilities were also extended in the remote villages of Dehradun and Tehri districts in Uttarakhand.
e) Project Pragati - Employability and Empowerment
With the objective of creating alternate livelihood opportunities for the community members, especially women in rural areas, the Company is facilitating various self-help groups in nearby villages. These groups are emerging as small livelihood clusters and supporting the members to earn a decent income from various on-farm and off-farm livelihood activities. Your Company is supporting rural women for production of reusable face masks, school uniforms, school bags, reusable carry bags, jute bags and low cost sanitary napkins.
The Company is also facilitating small and marginalized farmers to adopt modern agriculture practices and optimize farm input cost to improve the farm income.
f) Project Bhoomi - Environmental Sustainability, Animal Welfare and Soil Health
The Company is running two agriculture development laboratories in Gadepan (Rajasthan) and Agra (Uttar Pradesh) along with a mobile soil testing van in Budaun District of Uttar Pradesh. These laboratories are facilitating farming community, especially small and marginalized farmers to avail soil health card facility and farm advisory services for balanced usage of fertilisers and optimize farm output. In order to promote sustainable agriculture practices amongst small and marginalized farmers, a farmer education center has been established.
g) Disaster Management
Your Company remained at the forefront to provide immediate relief to the community residing in areas near its plants and to the migrating population which is the most affected section of the community with COVID - 19 pandemic. In order to provide immediate relief to the community members, more than 9500 food kits were distributed in the community. In addition to this, more than 37,000 reusable face masks were distributed amongst community members. The Company had organized sanitization drives at villages in collaboration with the local government on periodic basis.
The Ministry of Corporate Affairs, Government of India had amended the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") vide its notification dated January 22, 2021. The Corporate Social Responsibility Policy of the Company has been amended mainly to align it with the requirements under the amended CSR Rules and the CSR activities to be undertaken by the Company has been updated. The revised policy contains aims and objectives of CSR Projects / Programmes of the Company and includes guiding principles for selection, implementation and monitoring of CSR activities as well as formulation of the annual action plan. The Corporate Social Responsibility Policy of the Company is available at the website of the Company at http://www.chambalfertilisers.com/csroverview.
The composition and terms of reference of Corporate Social Responsibility Committee are given in the Corporate Governance Report. The Annual Report on Corporate Social Responsibility Activities (including the details of the development and implementation of the Corporate Social Responsibility Policy) as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure "G" to this Report.
For the purpose of Section 135 of the Companies Act, 2013, the amount equivalent to 2% of the average net profits of the Company made during the immediately preceding three financial years works out to Rs. 19.58 Crore. As against this, the Company had spent Rs. 19.65 Crore on CSR projects / programmes during the Financial Year 2020-21.
9. Directors and Key Managerial Personnel
The Board of Directors of the Company was having ten directors as on March 31, 2021 with eight Non-Executive Directors including five independent directors, a Managing Director and a Joint Managing Director.
The shareholders of the Company at the Annual General Meeting held on September 10, 2020 appointed Mrs. Rita Menon (DIN: 00064714) as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years from September 10, 2020 to September 09, 2025. The Board of Directors is of the opinion that Mrs. Rita Menon is a person of integrity with high level of ethical standards and having worked in senior positions in various departments / ministries of Government of India, she possesses requisite expertise and experience for appointment as Independent Director of the Company. Mrs. Rita Menon is exempt from the requirement to undertake online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.
The shareholder of the Company at the Annual General Meeting held on September 10, 2020 has also approved the appointment of Mr. Pradeep Jyoti Banerjee (DIN: 02985965) as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years from December 01,2019 to November 30, 2024.
Mr. Nimesh Nagindas Kampani (DIN: 00009071), completed his tenure on September 14, 2020 and ceased to be a Director of the Company with effect from September 15, 2020.
Mr. Anil Kapoor (DIN: 00032299) completed his tenure as Managing Director of the Company on April 15, 2021 and ceased to be the Managing Director and Director of the Company with effect from April 16, 2021. The Board of Directors expresses its sincere thanks and appreciation of the immense contribution made by Mr. Anil Kapoor during his tenure as Managing Director of the Company.
Mr. Gaurav Mathur (DIN: 07610237) had been working as Whole Time Director designated as Joint Managing Director of the Company since January 06, 2020. The Board of Directors at its meeting held on February 04, 2021 had appointed Mr. Gaurav Mathur as Managing Director of the Company for a period from April 16, 2021 to January 05, 2025, subject to approval of the shareholders of the Company.
There was no change in Chief Financial Officer and Company Secretary of the Company during the year under review.
Ms. Radha Singh (DIN: 02227854), Independent Director shall attain the age of 75 years on November 24, 2021. The shareholders of the Company at the Annual General Meeting held on September 15, 2017, had re-appointed Ms. Radha Singh as an Independent Director of the Company for further term of 5 (five) consecutive years, that is, upto September 14, 2022. Pursuant to Regulation 17(1A) of Listing Regulations, the Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has recommended to the shareholders of the Company, to approve continuation of Ms. Radha Singh as an Independent Director of the Company after she attains the age of 75 years.
Mr. Saroj Kumar Poddar (DIN: 00008654) is due for retirement at the forthcoming Annual General Meeting and has offered himself for reappointment. Further, Mr. Saroj Kumar Poddar attained the age of 75 years on September 15, 2020 and pursuant to Regulation 17(1A) of Listing Regulations, the Board of Directors, on the recommendation of the Nomination and Remuneration Committee, recommends to the shareholders of the Company, the re- appointment of Mr. Saroj Kumar Poddar, as a Director of the Company, liable to retire by rotation.
All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013, the rules framed thereunder and the Listing Regulations. In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the data bank maintained by the Indian Institute of Corporate Affairs.
During the Financial Year 2020-21, Mr. Anil Kapoor and Mr. Gaurav Mathur had not received any commission or remuneration from any subsidiary of the Company.
Five meetings of the Board of Directors were held during the Financial Year 2020-21.
Other information on the Directors and the Board Meetings is provided in the Corporate Governance Report attached as Annexure "C" to this Report.
A certificate obtained by the Company from a company secretary in practice, confirming that none of the Directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director of companies by the Securities and Exchange Board of India /Ministry of Corporate Affairs or any such statutory authority, is enclosed as Annexure "F" to this Report.
10. Internal Financial Controls
The Company has internal financial controls commensurate to the size and nature of its business. The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business and operations including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The details of internal control system are also given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
In pursuance of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Remuneration Policy. The Remuneration Policy, inter-alia, includes the appointment criteria & qualification requirements, process for appointment & removal, retirement policy, remuneration structure, etc. of the Directors including Managing Director and Whole Time Director(s), Key Managerial Personnel (KMP) and other senior management personnel of the Company. As per the Remuneration Policy, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with high level of ethical standards. In case of appointment as an Independent Director, the person should fulfill the criteria of independence prescribed under the Companies Act, 2013, rules framed thereunder and the Listing Regulations. The Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Managing Director and Whole Time Director(s) and payment of sitting fee & commission to the Non-Executive Directors and describes fundamental principles for determination of remuneration of senior management personnel and other employees which are as follows:
a) demand-supply relationship of the concerned job expertise;
b) need of organization to retain and attract talent and its ability to pay;
c) employees'' social aspiration for enhancing standard of living; and
d) compensation trends in the industries in which the Company operates.
The Remuneration Policy was amended with effect from February 04, 2021 mainly to modify the definition of "Senior Management" and deletion of the definition of "Management Committee" to keep flexibility in order to accommodate organizational changes from time to time.
The policy was also updated by including the provisions related to requirement of possession, by the Directors, of one or more core skills/ expertise / competencies identified by the Board of Directors.
The Remuneration Policy of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/pdf/ RemunerationPolicy.pdf.
12. Disclosures under the Companies Act, 2013, Rules thereunder and Secretarial Standards
a) Your Company has not issued any shares during the Financial Year 2020-21.
b) No significant and material orders have been passed by the regulators or courts or tribunals or statutory and quasi-judicial bodies impacting the going concern status and Company''s operations in future.
c) All related party transactions entered during the Financial Year 2020-21, were on arm''s length basis and in the ordinary course of business. No material related party transaction (in terms of the Company''s Policy on Related Party Transactions) was entered during the year by the Company and no contracts or arrangements were entered during the year with related parties which are required to be disclosed under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2.
d) A copy of annual return of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/ annualreturns/
e) The following information is given in the Corporate Governance Report attached as Annexure "C" to this Report:
i) The performance evaluation of the Board of Directors, the Committees of the Board of Directors, Chairman of the Company and the individual Directors;
ii) The composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism/Whistle Blower Policy.
f) The particulars of loans and guarantees given, security provided and investments made, if any, under Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.
g) During the Financial Year 2020-21, the auditors, secretarial auditors and cost auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.
h) The Company has complied with the applicable Secretarial Standards prescribed under Section 118(10) of the Companies Act, 2013.
i) The Company has complied with the provisions relating to the constitution of Internal Complaints Committees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
j) There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year 2020-21 and the date of this Report.
13. Directors Responsibility Statement Your Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
b) the Directors 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 March 31, 2021 and of the profit and loss of the Company for the year ended March 31, 2021;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
14. Auditors and Cost Auditors
The Notes to the Financial Statements read with the Auditor''s Reports are self-explanatory and therefore, do not call for further comments or explanations. There has been no qualification, reservation, adverse remark or disclaimer in the Auditor''s Reports.
The shareholders of the Company, at the Annual General Meeting held on September 15, 2017, had appointed M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016) as Auditors of the Company to hold office for a term of 5 (five) consecutive years from the conclusion of thirty-second Annual General Meeting of the Company held on September 15, 2017 till the conclusion of thirty-seventh Annual General Meeting of the Company.
The maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is required by the Company in respect of production of fertilisers and accordingly such accounts and records are made and maintained by the Company.
The Board of Directors of the Company has appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost records of the Company, as applicable, for the Financial Year ending March 31,2022. As required under the Companies Act, 2013 and Rules framed thereunder, your Directors are seeking ratification from the members of the Company for the remuneration payable to M/s. K.G. Goyal & Associates, Cost Accountants.
The Board of Directors of the Company had appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for the Financial Year 2020-21. The Secretarial Audit Report issued by the aforesaid Secretarial Auditor is attached as Annexure "H" to this Report.
There has been no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.
16. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The energy conservation is of paramount importance for sustainability of the operations and it also results into saving of natural and financial resources. The Company always seeks to make its manufacturing facilities energy efficient and evaluates various options to achieve this objective. Gadepan-III Plant of the Company is energy efficient in comparison to the existing plants. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure "I" attached to this Report.
Your Company has developed and implemented a Risk Management Policy. The Risk Management Committee of the Company periodically reviews all risks, finalise the risk document and monitors various risks of the Company including the risks, if any, which may threaten the existence of the Company. The composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report.
The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk Management Committee, is also reviewed by the Audit Committee and the Board of Directors periodically.
During the year, the Company has not accepted any deposits from the public under Chapter V of the Companies Act, 2013. There was no public deposit outstanding as at the beginning and end of the Financial Year 2020-21.
Your Company believes that human resource is vital to the growth and sustainability of an organization. Your Company always strives to keep its human resource motivated and encourages merit and healthy relations. The information required to be disclosed in pursuance of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure "J" to this Report.
20. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option Scheme 2010, as amended and revised from time to time ("ESOS 2010") for grant of stock options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Whole Time Director(s)/ Managing Director of the Company. Each stock option when exercised would be converted into one fully paid up equity share of Rs. 10/- of the Company.
The Company has not granted any stock options during the year under review.
There has been no change in ESOS 2010 during the Financial Year 2020-21. ESOS 2010 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations") and implemented through CFCL Employees Welfare Trust ("Trust"). For the purpose of ESOS 2010, the Trustee of the Trust was holding 5,81,000 equity shares of the Company as on March 31, 2021 (9,18,500 equity shares as on March 31, 2020), being 0.14 % of the paid up share capital of the Company. The ownership of these shares cannot be attributed to any particular employee till he/ she exercises the stock options granted to him / her and the concerned shares are transferred to him / her. Hence, the concerned employees to whom the stock options were granted under ESOS 2010 cannot exercise voting rights in respect of aforesaid shares held by the Trustee of the Trust as such employees are not holders of such shares. The Trustee has not exercised the voting rights in respect of the aforesaid shares during the Financial Year 2020-21.
The disclosures required to be made under ESOP Regulations read with SEBI circular no. CIR/CFD/Policy Cell/2/2015 dated June 16, 2015 are given on the website of the Company at the weblink: http://chambalfertilisers.com/pdf/ESOP-Disclosure-2020-21.pdf. The disclosures in respect of ESOS 2010 are also given in the notes to the Financial Statements.
21. Business Responsibility Report
In pursuance of the provisions of the Listing Regulations, the Business Responsibility Report for the Financial Year 2020-21, describing the initiatives taken by the Company from environmental, social and governance perspective, forms part of the Annual Report.
The in-house Investor Service Centre of your Company is located in the Corporate Office of the Company at New Delhi which provides prompt and efficient service to the investors. The Company takes various initiatives for investor satisfaction including reminders to investors about unclaimed dividends.
The equity shares of your Company are listed at National Stock Exchange of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock Exchanges for the Financial Year 2021-22.
The members are requested to refer to general shareholders'' information given in Corporate Governance Report attached hereto.
The Board of Directors wishes to place on record its appreciation of the support and co-operation received from all the stakeholders including the Department of Fertilisers, Government of India, Government of Rajasthan and other State Governments, Financial Institutions & Banks, investors and customers. The Board of Directors also conveys its appreciation of the commitment, hard work and dedication of the employees at all levels.
For and on behalf of Board of Directors
Place : New Delhi Rita Menon Gaurav Mathur
Date : May 10, 2021 Director Managing Director
Mar 31, 2018
Dear Members,
The Board of Directors have pleasure in presenting the 33rd Annual Report on the business and operations of the Company together with audited financial statements for the financial year ended March 31, 2018.
1. Standalone Financial Results (Rs. in Lakhs)
Particulars |
Financial Year |
|
2017-18 |
2016-17 |
|
Revenue from Operations |
746616.60 |
743083.18 |
Other Income |
15207.67 |
17822.69 |
Total Income |
761824.27 |
760905.87 |
Total Expenses |
689810.80 |
699255.38 |
Profit before Tax from Continuing Operations |
72013.47 |
61650.49 |
Tax Expenses |
24364.10 |
18211.22 |
Profit for the Year from Continuing Operations |
47649.37 |
43439.27 |
Profit / (Loss) for the Year from Discontinued Operations |
367.72 |
(929.18) |
Profit for the Year |
48017.09 |
42510.09 |
Other Comprehensive Income for the Year (Net of Tax) |
(2126.47) |
(169.43) |
Total Comprehensive Income for the Year |
45890.62 |
42340.66 |
Retained Earnings-Opening Balance |
164699.30 |
136711.88 |
Add: |
||
Profit for the Year |
48017.09 |
42510.09 |
Any Other Change |
(24.70) |
84.05 |
Less: |
||
Cash Dividend (including Dividend Distribution Tax) |
9517.82 |
9517.90 |
Transfer to General Reserve |
5000.00 |
5000.00 |
Re-measurement Loss on Defined Benefit Plans |
16.79 |
88.82 |
Retained Earnings- Closing Balance |
198157.08 |
164699.30 |
2. Operations
The Company is engaged in manufacture of Urea and Single Super Phosphate (SSP) and marketing of other Agri-inputs such as Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP), NPK Fertilisers, agrochemicals, seeds, micronutrients, etc.
The production and sales of Urea and sales of MOP were higher in comparison to the previous year but there was some decrease in the DAP sales volumes. The performance of NPK fertilisers, agrochemicals and other products remained subdued.
There was marginal increase in the revenue of the Company over the previous year though the Company achieved highest ever Profit after Tax during the year under review. The Company achieved better profitability in comparison to the previous year mainly due to higher sales of Urea and MOP with efficient Urea manufacturing operations, lower finance cost and healthy margins in some of the products marketed by the Company.
The Company had executed agreements in May 2017 for sale of all the 4 ships owned by the Company. With the delivery and sale of the last ship of the Company on September 7, 2017, the Company had completed the sale / disposal of all the ships forming part of the shipping business and ceased to have shipping business operations. The shipping business operations have been shown as discontinued operations in the financial statements of the Company for the financial year 2016-17 and 2017-18.
The detailed information on the business operations of the Company and the Industry in which the Company operates is given in the Management Discussion and Analysis Report attached as Annexure âAâ to this Report.
3. New Urea Project
The implementation of new Urea plant at Gadepan for production of 1.34 Million MT of Urea per annum at a cost of approximately USD 900 Million (âGadepan - III Plantâ) is progressing satisfactorily. The Companyâs project team is continuously monitoring the progress and adequate measures are being taken to achieve quality and safety during the construction phase. Engineering and procurement activities have been completed as almost all itemized equipment has been received at site. The construction activities in Offsite and Utility facilities of Gadepan- III Plant are complete and commissioning of various packages is in progress. The construction activities in Ammonia-Urea plants are moving towards completion. The commercial production of Urea from Gadepan- III Plant is expected to start as per schedule in January 2019.
The Company had entered into agreements with GAIL (India) Limited and Indian Oil Corporation Limited for purchase of natural gas mainly for Gadepan-III Plant. The Company has incurred total expenditure of Rs. 393861.58 Lakhs till March 31, 2018 on Gadepan - III Plant. This project will give a major thrust to the operations of the Company by adding about 63% to the present Urea production capacity of the Company.
4. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each (Previous Year - Rs. 1.90 per equity share) for the financial year ended March 31, 2018. The total outgo on this account will be Rs. 9517.82 lakhs including dividend distribution tax.
The Dividend Distribution Policy of the Company is attached as Annexure âBâ to this Report. There has been no change in this policy during the year under review. This policy is also available on the website of the Company and can be accessed at the weblink -http://www.chambalfertilisers.com/pdf/Final-Dividend-Distribution-Policy.pdf.
5. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, Rules thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) and the applicable Accounting Standards, the Company has prepared Consolidated Financial Statements. The Audited Consolidated Financial Statements alongwith Auditorâs Report and the Statement containing salient features of the financial statements of Subsidiaries/Joint Venture (Form AOC - 1) forms part of the Annual Report.
6. Corporate Governance Report and Code of Conduct
Your Directors strive to maintain highest standards of Corporate Governance. The Corporate Governance Report for the Financial Year 2017-18 is attached as Annexure âCâ to this Report. The declaration of the Managing Director confirming compliance with the âCode of Conduct and Ethicsâ of the Company is enclosed as Annexure âDâ to this Report and Auditorâs Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure âEâ to this Report.
7. Subsidiaries and Joint Venture
The Company had eight subsidiaries and a joint venture as on March 31, 2018, the details of which are given below:
(a) Subsidiaries
(i) CFCL Ventures Limited, Cayman Islands and its subsidiaries
CFCL Ventures Limited, Cayman Islands is a subsidiary of your Company and it operates business through its subsidiaries, namely, ISGN Corporation, USA and ISG Novasoft Technologies Limited, India. Inuva Info Management Private Limited, India is a subsidiary of ISG Novasoft Technologies Limited.
ISGN Corporation, USA is engaged in designing, developing, marketing and distribution of software products for mortgage lending industry in USA. The business includes licensing of the technology products as well as providing software as a service. This business is supported by ISG Novasoft Technologies Limited, India, which is having its software development centre in India. ISGN Corporation, USA continued its focus on cost reduction including reduction in sales, general and administrative expenses. The performance of software business remained subdued during the Financial Year 2017-18. There was no business activity in Inuva Info Management Private Limited.
(ii) Other Subsidiaries
India Steamship Pte. Limited, Singapore, India Steamship International FZE, UAE, India Steamship Limited, India and Chambal Infrastructure Ventures Limited, India are wholly owned subsidiaries of your Company. There was no business activity in these subsidiaries during the year under review.
(b) Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID)
IMACID is a joint venture of your Company with Tata Chemicals Limited and OCP, Morocco and each partner is having equal stake in the joint venture. IMACID is engaged in the manufacture of phosphoric acid in Morocco.
During the calendar year 2017, IMACID produced 409,160 MT of phosphoric acid against 336,984 MT produced during the calendar year 2016. Sales of phosphoric acid during the calendar year 2017 were 408,013 MT against the previous year sales of 336,341 MT.
During the calendar year 2017, IMACID achieved revenue of Moroccan Dirham (MAD) 2279.87 million (Rs. 150851.90 Lakhs) against revenue of MAD 2068.30 million (Rs.140419.38 Lakhs) achieved during the calendar year 2016. The profit after tax of IMACID was MAD 177.98 million (Rs. 11776.21 Lakhs) during the year 2017 as against MAD 12 million (Rs. 814.78 Lakhs) in the calendar year 2016. The settlement of earlier insurance claims, receipt of demurrage claims pertaining to previous years and improved margins due to lower input prices were the main factors behind better performance of IMACID.
During the quarter ended March 31, 2018, IMACID achieved operating income of MAD 559.33 million (Rs. 39308.31 Lakhs).
The performance of the subsidiaries of the Company is summarized in Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section 129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the overall performance of the Company is also provided in Note no. 51 to the Consolidated Financial Statements.
The Company shall place the audited financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013 and shall provide a copy of these statements to any shareholder seeking it. These documents will also be available for inspection by members during business hours at the registered office of the Company at Gadepan, Distt. Kota, Rajasthan, PIN-325208.
No subsidiary, associate or joint venture has been acquired or ceased / sold / liquidated during the year under review.
8. Health, Safety, Quality and Environmental Protection
Your Company believes that a safe and healthy work environment is essential for ensuring employee well-being and enhancing Companyâs overall performance. To maintain high standards of safe and productive workplace, your Company has formulated a Health, Safety, Security, Environment & Quality (âHSSEQâ) policy. The Company has developed systems in accordance with internationally recognized standards of OHSAS-18001:2007, ISO-14001:2015 and ISO-9001:2015. Adherence to the HSSEQ policy is continuously monitored by senior management through regular reviews. The Company strives for continuous improvement through benchmarking studies and other appropriate methodology.
The details of various activities and achievements of the Company in this regard are as under:
(a) Health & Hygiene
Your Company accords highest priority to the health & hygiene of its employees and contract workers. Their health is assessed and monitored through periodic medical examinations. A well-equipped health centre at Gadepan operates round-the-clock to provide health services to employees & their families, contractor workforce and people residing in the vicinity of the plants. New medical equipment and services are continuously added to upgrade the facilities at the health centre. Specialist doctors regularly visit the health centre and three well equipped ambulances are available on round the clock basis. A well-defined hygiene monitoring system ensures that all facilities are clean and sanitized properly.
To create awareness about health and hygiene related matters, regular training programs are organized for employees & their families and contractor work-force. Various health camps and campaigns like pulse polio & swine flu vaccination, blood donation, immunization programme, etc. are also organized periodically.
(b) Safety Management
A robust safety management system is in place in your Company to ensure highest level of safety of all the employees, contractor workforce as well as equipment and machinery. Effective implementation of the safety management system is ensured through hazard identification, risk assessment and mitigation procedures, safety work permit system, etc. A strong Process Safety Management system is also in place. Before executing any maintenance job in the plants, a cross functional team reviews the jobs on a daily basis from a safety perspective and ensures that all preventive measures are taken to prevent hazards.
To maintain and improve upon the well-established safety systems, extensive trainings and drills are conducted by internal and external experts on rescue, work at height, working inside confined space, fire-fighting, emergency handling, electrical safety, material handling, road safety, use of breathing air sets, etc. As part of safety awareness, schemes of âNear-Missâ & âMake-to Goodâ reporting are in place. The employees are encouraged to report unsafe acts / conditions so that corrective action can be taken immediately.
Your Company has a well-defined âOnsite Disaster Management Planâ and MARG (Mutual Aid and Response Group) arrangement with neighboring industry. Regular mock drills, fire drills and table top drills are conducted to ensure its effectiveness. The Company also provides services to all neighboring villages surrounding Gadepan plants through district administration in case of any fire emergency.
(c) Environment Management
Your Company is sensitive towards the impact of its operations on the environment and gives utmost priority to environment protection. Extensive environmental monitoring is carried out to assess pollution risk to all personnel working directly or indirectly with it or residing in surrounding areas of its plants. Resource consumption (including raw materials, fuels and water), waste generation and emissions to the atmosphere are focus areas to assess impact of operations on environment.
Your Company has appropriate mechanism in place to ensure that all the environmental parameters are maintained within the permissible limits. A dedicated Environment Management Cell is in place to monitor the compliances related to environment. The Company has installed five air quality monitoring stations for continuous monitoring of pollution levels in surrounding atmosphere. The Company has developed a vast green belt at its Gadepan complex with variety of trees and shrubs which has played a vital role in maintaining the ecological balance and provided soothing and healthy environment to the people working / residing in and around the complex. Only treated waste water is used in maintaining the green belt through irrigation network spread all over the complex.
(d) Quality Management
Your Company gives highest priority to control and maintain the quality of raw materials and end products. The Company has installed Vibro-priller in Urea plant to improve the product quality by maintaining uniformity in prill size of Urea and reducing prill temperature. The Company has high quality equipment and instruments for monitoring of critical quality parameters. The Company look for opportunities to improve quality and efficiency and feedback from farmers, dealers and retailers is given high importance.
(e) Achievements
Your Company regularly participates in national and international surveys and awards for independent assessment and opportunity for improvement. Your Company has received FAI Environmental Protection Award in the nitrogenous fertilizer plants category for the year 2016-17 from the Fertiliser Association of India during the year under review.
9. Corporate Social Responsibility (âCSRâ)
Your Company has formulated a long term strategy to contribute to the well-being and development of the society especially the rural population around its plants at Gadepan. As part of its CSR initiatives, the Company is working mainly in the areas of Pre-primary & School Education, Technical & Vocational Education, Rural Development, Women Empowerment, Community Healthcare and Soil Health. This multi-pronged CSR approach is showing notable improvement in the quality of life of rural population.
The brief outline of the CSR initiatives of the Company is as under:
a) Pre-primary & School Education
Education is the flagship CSR program of your Company which covers the wide spectrum from pre-primary to secondary school education and technical education. The education program strives to provide access to quality education to more than 6600 children in 36 Aanganwadis and 37 government schools of District Kota and Baran in Rajasthan. These Aanganwadis/ schools are playing a catalytic role in changing the perception of the rural community towards education. The intervention of the Company through its CSR programs / projects is in the form of improvement in the standard of education through organizing coaching / additional classes in the schools, improvement and development of infrastructure facilities, teachersâ training, computer education, digital literacy, etc. Your Company is providing free of charge advanced pre-engineering and pre-medical coaching to meritorious students. To promote digital learning and introduce technological advancements in adopted government schools, 15 smart interactive classes have been established. In addition to this, 14 Information and Communication Technology Labs have also been established in selected Government Schools under Public Private Partnership (âPPPâ) mode. The Computer Learning Program is providing computer education to students from 1st to 12th standard. To promote digital literacy amongst rural community, Community Information and Training Centers are being run in three villages in the vicinity of Companyâs plants at Gadepan. These centers are also working as community facilitation hubs for various online activities. CFDAV School is being run in collaboration with DAV College Trust and Management Society and a large number of students from villages adjoining Gadepan are getting quality education therein. During the year under review, a scheme to provide safe drinking water to the students of 14 adopted schools was taken up by installing Reverse Osmosis with water cooler systems.
b) Technical and Vocational Education
Your Company had adopted Industrial Training Institute (ITI) of Sangod, Sultanpur, Baran and Jhalawar. In addition to this, the Company has also adopted ITI, Khanpur (District Jhalawar, Rajasthan) under PPP mode. The Company has got CSR Excellence Award - 2018 for Skill Development from the Government of Rajasthan. ASSOCHAM has awarded Gold Trophy to ITI Jhalawar in recognition of outstanding contribution and Certificate of Merit in Best ITI- Skill Development through PPP Model (2016-2017). The employees of the Company take active participation in management of these ITIs. During academic year 2017-18, various companies had conducted âOn-campus Placement Drivesâ for ITI students and large number of students got placement offers. In order to improve the employability of the trainees, various short term courses like Occupational Health and First Aid, Fire and Safety, Spoken English and Personality Development were also organized in these ITIs. In addition to this, a new short term course âNursery Development & Managementâ has been started under âKISMAT- Knowledge Integrated Skills Modules for Agriculture, Horticulture and Animal Husbandry Trainingâ project in PPP mode at ITI Baran. The Company has developed Sports complex and upgraded other infrastructure facilities in ITI Sultanpur, Sangod, Baran & Jhalawar to develop these ITIs as model institutes.
To develop skill sets amongst youth, especially girls, four vocational training centers are being run in Gadepan, Simliya, Palaitha and Kundanpur villages. During the financial year 2017-18, 177 youths were trained in various skills and linked to various livelihood activities.
c) Rural Development
The Company believes that development and maintenance of rural infrastructure is critical for overall development of the society. A significant investment has been made by the Company for development of rural infrastructure. Three adjoining Gram Panchayats -Gadepan, Bhonra and Sarola have received provisional âOpen Defecation Freeâ status from Government of Rajasthan during the Financial Year 2017-18. An advanced solid waste management system is being developed in Gadepan gram panchayat. In order to developâGadepanâ as a model village, various facilities like community hall, village pond, approach roads, street lights and haat bazaar are under planning/ progress in convergence with various agencies. The Company has also implemented various other rural development projects in PPP mode with Government / Government agencies in the villages near its plants at Gadepan.
d) Health Care
Your Company is facilitating community by providing free of charge preventive healthcare facilities in villages near its plants at Gadepan. The awareness camps were organised in 33 schools, 26 villages and 4 ITIs. During the Financial Year 2017-18, nearly 28,000 community members were contacted in various health campaigns and general & specialized health camps. The healthcare facilities were also being provided in remote villages of Tehri and Dehradun Districts in Uttarakhand.
e) Employability and Empowerment
In order to promote livelihood opportunities in rural areas, especially for women and youth, your Company has taken several initiatives. A garment production house has been started with the women of the nearby villages adjoining Gadepan which is providing livelihoods to women of the marginalized community.
Your Company has also supported in formation of 36 Self Help Groups wherein around 350 women of nearby villages are facilitated for inter-loaning, saving and entrepreneurial activities. A Self Help Group shop is also being established where women can sell their handmade / homemade products under one brand name.
f) Soil Health
The Company is running two agriculture development laboratories in Agra and Gadepan (shifted from Kota) and three mobile soil testing vans in Rajasthan and Uttar Pradesh. The objective behind this initiative is to help the farmers in optimum utilisation of nutrients.
The composition and terms of reference of Corporate Social Responsibility Committee are given in the Corporate Governance Report. The Annual Report on CSR activities (including the details of the development and implementation of the Corporate Social Responsibility Policy) as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure âFâ to this Report.
For the purpose of Section 135 of the Companies Act, 2013, the amount equivalent to 2% of the average net profits of the Company made during the immediately preceding three financial years works out to Rs.1113.06 Lakhs. As against this, the Company had spent Rs. 1118.50 Lakhs on CSR projects / programs during the Financial Year 2017-18.
10. Directors and Key Managerial Personnel
The Board of Directors of the Company consists of eight directors. There are seven non-executive directors including four independent directors and a Managing Director. During the year, the Managing Director has not received any commission or remuneration from any subsidiary of the Company.
Mr. Kashi Nath Memani (DIN: 00020696), ceased to be a Director of the Company upon completion of his tenure at the Annual General Meeting (âAGMâ) of the Company held on September 15, 2017. Further, the shareholders of the Company at the AGM held on September 15, 2017 had re-appointed Mr. Marco Philippus Ardeshir Wadia (DIN: 00244357) and Ms. Radha Singh (DIN: 02227854) as Independent Directors of the Company for a further term of 5 (five) consecutive years, that is, upto September 14, 2022.
Mr. Nimesh Nagindas Kampani (DIN: 00009071) was appointed as an Independent Director of the Company at the AGM held on September 15, 2017 to hold office for a term of 3 (three) consecutive years from September 15, 2017 to September 14, 2020.
Mr. Saroj Kumar Poddar, Director (DIN: 00008654) is due for retirement at the forthcoming AGM and has offered himself for re-appointment The tenure of appointment of Mr. Aditya Narayan, Independent Director shall expire on the conclusion of the ensuing AGM scheduled to be held on September 18, 2018. Mr. Aditya Narayan has requested the Board of Directors not to consider him for re-appointment. The Board of Directors expresses its sincere gratitude and appreciation of the contribution of Mr. Aditya Narayan as an Independent Director of the Company.
All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149 of the Companies Act, 2013 and the Listing Regulations.
In pursuance of the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Anil Kapoor, Managing Director, Mr. Abhay Baijal, Chief Financial Officer and Mr. Rajveer Singh, Vice President - Legal & Company Secretary are Key Managerial Personnel of the Company. During the year, there was no change in the Key Managerial Personnel.
The Board met five times during the financial year 2017-18.
Other information on the Directors and the Board Meetings is provided in the Corporate Governance Report attached as Annexure âCâ to this Report.
11. Internal Financial Controls
The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The details of internal control system are given in the Management Discussion and Analysis Report attached as Annexure âAâ to this Report.
12. Remuneration Policy
In pursuance of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Remuneration Policy which is attached as Annexure âGâ to this Report and available at the website of the Company at the weblink-http://www.chambalfertilisers.com/pdf/Remuneration-Policy.pdf.
The Remuneration Policy, inter-alia, includes the appointment criterion & qualification requirements, process for appointment & removal, retirement policy and remuneration structure & components, etc. of the Directors, Key Managerial Personnel (KMP) and other senior management personnel of the Company. As per the Remuneration Policy, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with high level of ethical standards. In case of appointment as an independent director, the person should fulfill the criteria of independence prescribed under the Companies Act, 2013, rules framed thereunder and the Listing Regulations. The Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Managing Director and payment of sitting fee & commission to the non-executive directors and describes fundamental principles for determination of remuneration of senior management personnel and other employees which are as follows:
a) demand-supply relationship of the concerned job expertise;
b) need of organization to retain and attract talent and its ability to pay;
c) employeesâ social aspiration for enhancing standard of living; and
d) compensation trends in the industries in which the Company operates.
In view of sale and disposal of all the ships of the Company during the year and discontinuation of the shipping business, the necessary updations were made in the Remuneration Policy of the Company by deleting the provisions / references related to shipping business.
13. Disclosures under the Companies Act, 2013, Rules thereunder and Secretarial Standards
a) Your Company has not issued any shares during the Financial Year 2017-18.
b) No significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.
c) All Related Party Transactions entered during the year were on armâs length basis and in the ordinary course of business. No material Related Party Transactions (transaction(s) exceeding ten percent of the annual consolidated turnover of the Company as per last audited financial statements), were entered during the year by the Company. Accordingly, disclosure of contracts or arrangements with Related Parties as required under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.
d) The extract of annual return is attached as Annexure âHâ to this Report.
e) The following information is given in the Corporate Governance Report attached as Annexure âCâto this Report:
i) The performance evaluation of the Board, the Committees of the Board, Chairperson and the individual Directors;
ii) The Composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism.
f) The particulars of loans and guarantees given and investments made under Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.
g) During the year, the auditors, the secretarial auditors and cost auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.
h) The Company has complied with the applicable Secretarial Standards prescribed under Section 118(10) of the Companies Act, 2013.
14. Directors Responsibility Statement Your Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
b) the Directors 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 March 31, 2018 and of the profit and loss of the Company for the year ended March 31, 2018;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
15. Auditors and Cost Auditors
The Notes to the Financial Statements read with the Auditorâs Reports are self-explanatory and therefore, do not call for further comments or explanations. There has been no qualification, reservation, adverse remark or disclaimer in the Auditorâs Reports.
The shareholders of the Company, at the AGM held on September 15, 2017, has appointed M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016) as Auditors of the Company to hold office for a term of 5 (five) consecutive years from the conclusion of Thirty-second AGM of the Company held on September 15, 2017 till the conclusion of Thirty-seventh AGM of the Company (subject to ratification of such appointment at every AGM, if so required under the Companies Act, 2013). In pursuance of the relevant provisions of the Companies (Amendment) Act, 2017 made effective vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, Government of India, the provision under Section 139 of the Companies Act, 2013 related to ratification of appointment of auditors at every AGM has been omitted. Accordingly, the ratification of appointment of auditors of the Company at the forthcoming AGM of the Company is not required.
The Board of Directors of the Company has appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost accounts of the Company, as applicable, for the financial year 2018-19. As required under the Companies Act, 2013 and Rules framed thereunder, your Directors are seeking ratification from the members of the Company for the remuneration payable to M/s. K.G. Goyal & Associates, Cost Accountants.
16. Secretarial Audit
In pursuance of the provisions of Section 204 of the Companies Act, 2013, the Board of Directors of the Company had appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for the financial year 2017-18. The Secretarial Audit Report issued by the aforesaid Secretarial Auditors is attached as Annexure âIâ to this Report.
There has been no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.
17. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The energy efficient operation of plants results into manifold benefits in the form of saving of natural and financial resources and reduction of carbon footprint. The Company takes continuous initiatives to make its manufacturing facilities energy efficient. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure âJâ attached to this Report.
18. Risk Management
Your Company has developed and implemented a Risk Management Policy. The Company has voluntarily constituted Risk Management Committee which periodically reviews all risks, finalise the risk document and monitors various risks of the Company including the risks, if any, which may threaten the existence of the Company. The composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report.
The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk Management Committee, is also reviewed by the Audit Committee and the Board of Directors periodically.
19. Deposits
During the year, the Company has not accepted any deposits from the public under Chapter V of the Companies Act, 2013. There was no public deposit outstanding as at the beginning and end of the financial year 2017-18.
20. Particulars of employees
The human resource is an important asset which has played pivotal role in the performance and growth of the Company over the years. Your Company maintains very healthy work environment and the employees are motivated to contribute their best in the working of the Company. The information required to be disclosed in pursuance of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure âKâ to this Report.
21. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option Scheme 2010, as amended and revised from time to time (âESOS 2010â) for issue and allotment of options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10/- of the Company.
The Company has not granted any stock options during the year under review.
There has been no change in ESOS 2010 during the financial year 2017-18. ESOS 2010 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (âESOP Regulationsâ) and implemented through CFCL Employees Welfare Trust (âTrustâ). For the purpose of ESOS 2010, the Trustee of the Trust was holding 16,96,900 equity shares of the Company as on March 31, 2018 (22,47,902 equity shares as on March 31, 2017), being 0.41% of the paid up share capital of the Company. The ownership of these shares cannot be attributed to any particular employee till he / she exercises the stock options granted to him / her. Hence, the concerned employees to whom the stock options were granted under ESOS 2010 cannot exercise voting rights in respect of aforesaid shares held by the Trustee of the Trust as such employees are not holders of such shares. The Trustee has not exercised the voting rights in respect of the aforesaid shares during the financial year 2017-18.
The disclosures required to be made under ESOP Regulations read with SEBI circular no. CIR/CFD/Policy Cell/2/2015 dated June 16, 2015 are given on the website of the Company at the weblink http://www.chambalfertilisers.com/pdf/esop-2018.pdf. The disclosures in respect of ESOS 2010 are also given in the notes to the Financial Statements.
22. Business Responsibility Report
In pursuance of the provisions of the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective forms part of the Annual Report.
23. Investor Service Centre
The in-house Investor Service Centre of your Company is located in the Corporate Office of the Company at New Delhi which provides prompt and efficient service to the investors. The Company takes various initiatives for investor satisfaction such as reminders to investors about undelivered shares, unclaimed dividend, etc.
The equity shares of your Company are listed at National Stock Exchange of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock Exchanges for the financial year 2018-19.
The members are requested to refer to general shareholdersâ information given in Corporate Governance Report appended hereto.
24. Acknowledgements
The Board of Directors wish to place on record its appreciation of the co-operation extended by all the stakeholders including the Department of Fertilisers, Government of India, Government of Rajasthan and other State Governments, Financial Institutions & Banks, investors and customers. The Board of Directors also convey its sincere appreciation of the commitment and dedication of the employees at all levels.
For and on behalf of Board of Directors
Place : New Delhi Saroj Kumar Poddar
Date : May 10, 2018 Chairman
Mar 31, 2017
DIRECTORS'' REPORT
Dear Members,
The Board of Directors have pleasure in presenting the 32nd Annual Report on the business and operations of the Company together with audited financial statements for the financial year ended March 31, 2017.
1. Financial Results (Rs. in Crore)
Particulars |
2016-17 |
2015-16 |
Revenue from operations |
7430.83 |
8790.26 |
Other Income |
178.23 |
134.45 |
Total Income |
7609.06 |
8924.71 |
Total Expenses |
6992.56 |
8425.42 |
Profit before Exceptional Items and Tax from continuing operation |
616.50 |
499.29 |
Exceptional Items |
- |
(392.25) |
Profit before tax from continuing operation |
616.50 |
107.04 |
Tax expenses |
182.11 |
152.66 |
Profit / (loss) after tax from continuing operation |
434.39 |
(45.62) |
Profit / (loss) after tax from discontinued operation |
(9.29) |
34.48 |
Profit / (loss) after tax |
425.10 |
(11.14) |
Other comprehensive income (net of taxes) |
(1.69) |
3.97 |
Total comprehensive income |
423.41 |
(7.17) |
Retained earnings-opening balance |
1367.12 |
1471.99 |
Add: |
||
Profit / (loss) for the period |
425.10 |
(11.14) |
Dividend on treasury shares and saving on payment of dividend distribution tax |
0.84 |
1.39 |
Re-measurement gain on defined benefit plans |
- |
0.06 |
Less: |
||
General Reserve |
50.00 |
- |
Dividend paid on Equity Shares (including dividend distribution tax) |
95.18 |
95.18 |
Re-measurement loss on defined benefit plans |
0.89 |
- |
Retained earnings- closing balance |
1646.99 |
1367.12 |
In pursuance of the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, Government of India, relating to the Companies (Indian Accounting Standard) Rules, 2015, the Company has adopted Indian Accounting Standards ("Ind AS") beginning April
01, 2016 with the comparatives for the financial year ended March 31, 2016. Further information regarding transition to Ind AS has been provided in the notes forming part of the Financial Statements.
2. Operations
The Company has two business segments viz. Fertilizers and other Agri-inputs and Shipping. The Company is engaged in manufacture of Urea and Single Super Phosphate (SSP) and markets other Agri-inputs such as Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP), insecticides, seeds, micronutrients, etc. The Fertilizer and other Agri-inputs Division registered robust performance during the year under review. The sales volumes of DAP and MOP were higher in comparison to the last year though there was some decrease in the sales volumes of Urea. The Shipping Division operates ships (Aframax tankers) for transportation of petroleum products. The performance of Shipping Division remained under pressure due to adverse market conditions.
The Company has executed an agreement for sale of ship - Ratna Shalini on May 2, 2017. Further, the Company has executed agreements for sale of remaining 3 ships - Ratna Shruti, Ratna Shradha and Ratna Namrata on May 20, 2017. The transactions are expected to be completed by September 15, 2017. After delivery of all the vessels, the Company intends to close the shipping business in due course of time which is expected to be completed by December 31, 2017. The Company has decided to close the shipping business considering the long term business outlook of shipping business and to focus on its core business of Fertilizers and Other Agri-inputs. In view of the above, the Shipping Division has been re-classified as held for sale/ discontinued operation as per Ind AS 105.
The detailed information on the business segments of the Company and the respective industries are given in the Management Discussion and Analysis Report attached as Annexure "A" to this report.
3. New Urea Project
During the Financial Year 2015-16, your Company had started the implementation of new Urea plant at Gadepan for production of 1.34 Million MT of Urea per annum at a cost of approximately USD 900 Million ("Gadepan - III Project"). The commercial production of Urea from Gadepan - III Project is scheduled to start in January 2019. Safety and quality with timely implementation of the project are focus areas during the construction phase. The construction of Gadepan- III Project is in full swing and progressing as per schedule. The Company''s team of experienced and dedicated professionals is continuously monitoring the progress.
Gadepan - III Project is being funded through a mix of debt and internal accruals. Till March 31, 2017, the Company has spent Rs. 1624.63 Crore on Gadepan - III Project. The major capital expenditure in Gadepan - III Project shall take place during the Financial Year 2017-18. This project will give a major thrust to the operations of the Company by adding about 63% in the present Urea production capacity of the Company.
4. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each (Previous Year - Rs. 1.90 per equity share) for the financial year ended March 31, 2017. The total outgo on this account will be Rs. 95.18 Crore including dividend distribution tax.
The Dividend Distribution Policy of the Company is attached as Annexure "B" to this report. This policy is also available on the website of the Company and can be accessed at the we blink - http://www.chambalfertilizers.com/pdf/Final-Dividend-Distribution-Policy.pdf.
5. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, Rules there under, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the applicable Accounting Standards, the Company has prepared Consolidated Financial Statements. The Audited Consolidated Financial Statements along with Auditors'' Report and the Statement containing salient features of financial statements of subsidiaries and joint venture (Form AOC - 1) forms part of the Annual Report.
6. Corporate Governance Report and Code of Conduct
Your Directors are committed for adhering the highest standards of Corporate Governance. The Corporate Governance Report for the Financial Year 2016-17 is attached as Annexure "C" The declaration of the Managing Director confirming compliance with the ''Code of Conduct and Ethics'' is enclosed as Annexure "D" and Auditors'' Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "E".
7. Subsidiaries and Joint Venture
(a) Subsidiaries
(i) Chambal Infrastructure Ventures Limited
Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned subsidiary of your Company which was incorporated to pursue the business opportunities in power sector. CIVL had been pursuing since long for various approvals including renewal of Memorandum of Understanding with the Government of Odisha for setting up a power project. In view of in-ordinate delays, CIVL has decided to withdraw the application for extension of Memorandum of Understanding and not to pursue the power project in Odisha.
(ii) CFCL Ventures Limited, Cayman Islands and its subsidiaries
CFCL Ventures Limited, Cayman Islands was a wholly owned subsidiary of CFCL Technologies Limited, Cayman Islands, a subsidiary of your Company. With a view to achieve administrative and operational cost efficiencies and simplification of the corporate structure of the subsidiaries, CFCL Technologies Limited merged with CFCL Ventures Limited with effect from December 20, 2016 and CFCL Ventures Limited became a direct subsidiary of your Company.
CFCL Ventures Limited operates business through its subsidiaries, namely, ISGN Corporation, USA and ISG Nova soft Technologies Limited, India. Inuva Info Management Private Limited, India is a subsidiary of ISG Nova soft Technologies Limited. CFCL Ventures Limited and its aforesaid three subsidiaries have changed their respective financial years to align with the financial year of your Company. Accordingly, the financial year of each of these subsidiaries comprises of 15 months period ended on March 31, 2017.
ISGN Corporation, USA had entered into a stock purchase agreement on January 28, 2016 for sale and transfer of its entire shareholding in its wholly owned subsidiary, namely ISGN Solutions, Inc., USA to First source Group USA, Inc., USA. Further, ISG Novasoft Technologies Limited had signed an agreement on January 28, 2016 for sale of its Business Process Outsourcing business to First source Process Management Services Limited, India on slump sale basis. These transactions were completed on May 18, 2016. Accordingly, ISGN Solutions Inc., USA and its subsidiaries, namely ISGN Fulfillment Agency LLC, USA and ISGN Fulfillment Services Inc., USA, ceased to be the subsidiaries of your Company during the year under review.
ISGN Corporation, USA is engaged in designing, developing, marketing and distribution of software products for mortgage lending industry in USA. This business is supported by ISG Nova soft Technologies Limited, India. After sale and disposal of its subsidiaries as mentioned above, ISGN Corporation, USA is now a pure-play technology product company with concerted focus on sale of software products to existing and new customers. ISGN Corporation, USA registered a robust growth in its technology product business during the 15 months period ended March 31, 2017. Continuous efforts have been made to reduce the cost of operations and modernize key software products. This has enabled ISGN Corporation to increase its revenue stream in technology product business.
(iii) India Steamship Pte. Limited, Singapore India Steamship Pte. Ltd, Singapore is a wholly owned subsidiary of your Company and principal activity of the subsidiary is to carry on the business of ship chartering. There was no business activity in this subsidiary during the year under review.
(iv) India Steamship International FZE, UAE
India Steamship International FZE, UAE is a subsidiary of your Company and it has operated through in-chartered vessels during part of the year.
(v) India Steamship Limited, India
India Steamship Limited is a wholly owned subsidiary of your Company. There was no business activity in this subsidiary during the year under review.
(b) Joint Venture : Indo Maroc Phosphor S. A., Morocco (IMACID)
IMACID is a joint venture of your Company with Tata Chemicals Limited and OCP, Morocco with equal stake of each partner. IMACID is engaged in the manufacture of phosphoric acid in Morocco.
During the calendar year 2016, IMACID achieved revenue of Moroccan Dirham (MAD) 2068.30 million (Rs. 14041.94 million) against revenue of MAD 2777.42 million (Rs. 18125.35 million) achieved during the calendar year 2015. The profit after tax of IMACID was MAD 8.04 million (Rs. 54.58 million) during the year as against MAD 194.01 million (Rs. 1266.10 million) in the calendar year 2015. The lower production and sales of phosphoric acid due to lower demand and breakdown of captive power plant for major part of the year has adversely affected the performance of IMACID.
During the quarter ended March 31, 2017, IMACID achieved operating income of MAD 476.93 million (Rs. 3068.40 million).
The performance of the subsidiaries of the Company is summarized in Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section 129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the overall performance of the Company is provided in Note No. 56 to the Consolidated Financial Statements forming part of the Annual Report.
The Company shall place the audited financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013 and shall provide a copy of these statements to any shareholder seeking it. These documents will also be available for inspection by members during business hours at the registered office of the Company at Gade pan, Dist. Kota, Rajasthan.
Save and except M/s. ISGN Solutions Inc., USA, ISGN Fulfillment Agency LLC, USA and ISGN Fulfillment Services Inc., USA, which ceased to be the subsidiaries of your Company and CFCL Technologies Limited which merged with CFCL Ventures Limited, no other subsidiary, associate or joint venture has been acquired/ included or ceased during the year under review.
8. Health, Safety, Quality and Environmental Protection
Your Company continuously strives to integrate sustainability into its operations through effective resource management, fostering a safe and productive work place, materials stewardship, responsible energy use, water use optimization, positive waste management and conservation of bio-diversity.
There is a well-defined Health, Safety, Security, Environment & Quality ("HSSEQ") policy which demonstrates management''s strong commitment towards the same. The adherence to HSSEQ policy is continuously monitored by senior management through regular reviews. Your Company has established, on a sustainable basis, an Integrated Management System based on 0HSAS-18001:2007, IS0-14001:2015 and IS0-9001:2015. It has also adopted Process Safety Management and guidelines of British Safety Council. As a result of relentless and enhanced focus, there has been no reportable accident during last two years.
The details of various activities and achievements of the Company in respect of HSSEQ are as under:
(a) Health & Hygiene
Your Company aims to prevent work-related illness and occupational diseases as well as ensure good working environment through periodic medical examinations and hygiene monitoring at work place. Apart from two full time Doctors and trained nursing staff, specialist doctors like child specialist, eye specialist, dental surgeon, Gynecologist, etc. visit the Health Centre at Gadepan regularly. There are three ambulances available on round the clock basis at the plant location of the Company.
The Health Centre at Gadepan provides services round the clock to employees, their families, contractor workforce and villagers in the vicinity of the plants. The Company regularly organizes health and hygiene related training and awareness programs through external experts.
(b) Safety and Security Management
Your Company is committed to ensure highest level of health and safety of employees and contractor workforce. During the year, the Company had engaged a reputed external agency to carry out complete review of security of the plant and township areas. Based on the findings of this exercise, the Company is revamping its security set up through re-enforcement of physical infrastructure and enhanced technological interventions.
The Company has pro-actively taken various initiatives to prevent any mishap or accident in its operations. Effective implementation of the safety system is ensured through hazard identification, risk assessment & mitigation procedures, safety work permit system, etc. Before executing any maintenance job in the plants, a cross functional team review the jobs on a daily basis from a safety perspective to ensure that all recommended actions to prevent hazards are taken.
The continuous training programs and drills are conducted on rescue, work at height, working inside confined space, fire-fighting, emergency handling, electrical safety, material handling, road safety, use of breathing air sets, etc.
Safety is one of the focus area in the construction of the new Urea plant at Gadepan. In addition to dedicated team of safety professionals of the Company, the contractor and sub-contractors are available on round the clock basis to monitor safe working at project site.
(c) Environment Management
Your Company has always followed, in letter and spirit, the principles of prevention of pollution, minimization of waste & re-cycle and conservation of natural & other resources.
Your Company is sensitive towards the impacts of its operations on environment including with respect to resource consumption, waste generation and emissions to the atmosphere.
Your Company has a robust mechanism in place to ensure that all the environmental parameters are maintained within the permissible limits. A dedicated Environment Management Cell is in place to monitor the environmental compliances.
The Company''s Gadepan complex made a positive change in ecology due to development of a dense green belt and regular plantation. This has provided a soothing and healthy environment for people to live and work and habitat to many species of birds. Only treated waste water is used in maintaining the green belt through irrigation network spread all over the Gadepan complex. The use of polythene bags is strictly prohibited in the Gadepan campus.
(d) Quality Management
Your Company is committed to provide products and services maintaining high standards of quality and offering value for money to its customers and consumers in a responsible manner.
The Company has always followed stringent guidelines on product quality and rigorous systems and processes are in place to monitor and control the quality of raw materials and the products.
''Quality is continually improved by determining and taking care of internal and external customer requirements, future needs and expectations. Quality reviews are regularly conducted and feedback from end users (farmers) is accorded high value. The Company has a well-equipped advanced quality control lab for monitoring of all critical parameters of the products manufactured by the Company. In case of the end products sourced from third party manufacturers, the concept of quality is embedded since inception. The products are sourced from reputed national and international suppliers. In addition to this, the Company ensures the quality of the products through regular checks.
(e) Achievements
Your Company regularly participates in national and international benchmarking surveys and awards for independent assessment and opportunity for continual improvement. Your Company has received following prestigious awards during the year under review:
- "Best Production Performance Award 2016 for overall performance of a Company" (Winner) from The Fertilizer Association of India.
- "Environmental Protection Award 2016" (Winner) in the SSP Fertilizer Plants Category from The Fertilizer Association of India.
- "Rajasthan Energy Conservation Award - 2016" (1st Prize) by Government of Rajasthan, Department of Energy, Jaipur.
9. Corporate Social Responsibility
Your Company believes that responsible social behavior is vital for the success of an organization on sustainable basis. The Corporate Social Responsibility ("CSR") is deeply engrained in the corporate philosophy of the Company. Your Company is contributing in the sustainable development of the community through focused interventions in the areas of education, healthcare, livelihood training, soil health, infrastructure development, etc.
The CSR programmes / projects of the Company are implemented directly as well as through KK Birla Memorial Society and other Non Governmental Organizationsâ (NGO) which are engaged in specific areas. The brief outline of the CSR initiatives of the Company are as under:
(a) School Education
Education is the flagship programme of the CSR activities of the Company. The Company is creating positive impact in the lives of the children and youths by extending support from pre-school education to job oriented courses at Industrial Training Institutes.
The Company has adopted 36 Aanganwadi centers in 26 villages of District Kota and Baran. These Aanganwadi centers play an important role in preparing the children for formal education. Further, your Company has adopted 16 primary schools, 13 upper primary schools and 10 secondary and senior secondary schools in the villages surrounding its plants at Gadepan with the objective of improving the learning levels of students. Pratham Education Foundation, a renowned NGO, has been engaged to improve the learning level of students from nursery to 5th standard. Motion Education Development Society has been engaged for remedial education for students of class 6th to 12th standard. A significant improvement has been observed in the learning level of students in these schools post adoption by the Company. The renovation of two new schools was carried out during the year. All the adopted schools are now having separate toilet blocks for girls and boys. The Company also provided stationery, school bags, note books and winter wear to around 5000 students. Your Company is also imparting basic computer courses to rural youths through its four Community Information Technology Centers located in villages in the vicinity of its plants at Gadepan.
CFDAV School is being run in the Gadepan complex for Nursery to Class 10 students in collaboration with DAV Trust and Management Society. Around 65% students in CFDAV School are from adjoining villages.
(b) Technical Education
The Company had adopted Industrial Training Institute (ITI) of Sangod, Sultanpur, Jhalawar and Baran. ITI Sangod has become one of the best institutions of Rajasthan and has received various accolades at state and national level for its quality training and placement record. Department of Technical Education has awarded Best ITI of the Region Award to ITI, Sangod, during the year under review. The first phase of renovation work in ITIs at Jhalawar and Baran is complete and five new trades had been introduced in ITIs at Sangod, Baran and Jhalawar thereby increasing 250 seats in these ITIs. The senior employees of the Company are involved in the management of these ITIs and Company''s employees also take extra classes for students therein.
In addition to the above, your Company is running four vocational training centers in the villages near Gadepan. These centers operate in association with District Adult Education Association. During the year, around 170 youths were trained in various skills and linked with various livelihood activities.
(c) Community Health Care
The Company provides free of charge healthcare services in adjoining villages of districts Kota and Baran. The Company has engaged an NGO - School Health Annual Report Programme to provide health services in the villages of districts Kota and Baran. The healthcare initiatives in the villages near Mussoorie (Uttarakhand) are being implemented in collaboration with Manorama Devi Birla Charitable Trust.
(d) Infrastructure Development
Your Company has continued to contribute towards village rural infrastructure development. The Company had leveraged funds from various government schemes to develop rural infrastructure in nearby villages to improve quality of life. The Company is also contributing towards Swachh Bharat Abhiyan by constructing individual household toilets in adjoining villages.
(e) Soil Health
The Company is running two agriculture development laboratories in Agra and Kota. In addition to this, three mobile soil testing vans are operating in Rajasthan and Uttar Pradesh.
The composition and terms of reference of Corporate Social Responsibility Committee are given in the Corporate Governance Report. The Annual Report on CSR activities (including the details of the development and implementation of the Corporate Social Responsibility Policy) as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure "F" to this report.
For the purpose of Section 135 of the Companies Act, 2013, the amount equivalent to 2% of the average net profits of the Company made during the immediately preceding three financial years works out to Rs. 9.38 crore. As against this, the Company had spent approximately Rs. 9.46 crore on CSR projects / programmes.
10. Directors and Key Managerial Personnel
The Board consists of eight directors - seven non-executive directors including four independent directors and a Managing Director. Mr. Chandra Shekhar Nopany, Director (DIN: 00014587) is due for retirement at the forthcoming Annual General Meeting ("AGM") and has offered himself for re-appointment.
The Board of Directors at its meeting held on May 11, 2016 had re-appointed Mr. Anil Kapoor (DIN: 00032299) as Managing Director of the Company for a period of 3 years with effect from February 16, 2017, which has been approved by the members of the Company at the AGM held on September 22, 2016. During the year, the Managing Director has not received any commission or remuneration from any subsidiary of the Company.
The tenures of appointment of Mr. Marco P.A. Wadia, Ms. Radha Singh and Mr. Kashi Nath Memani, Independent Directors shall expire on the conclusion of the ensuing AGM scheduled to be held on September 15, 2017. Mr. Marco P.A. Wadia and Ms. Radha Singh, being eligible, have offered themselves for re-appointment as Independent Directors. On the recommendations of the Nomination and Remuneration Committee, the Board of Directors recommends to the shareholders of the Company, the re-appointment of Mr. Marco P.A. Wadia and Ms. Radha Singh as Independent Directors of the Company to hold office for a further term of 5 (five) consecutive years upto September 14, 2022.
Mr. Kashi Nath Memani has expressed his unwillingness for re-appointment. Mr. Memani has been associated as Independent Director with the Company for last 8 years. The Company has immensely benefited from his vast knowledge and experience. The Board of Directors expresses its sincere gratitude and appreciation of the contribution made by Mr. Memani as an Independent Director of the Company.
All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149 of the Companies Act, 2013 and the Listing Regulations.
In pursuance of the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Anil Kapoor, Managing Director, Mr. Abhay Baijal, Chief Financial Officer and Mr. Rajveer Singh, Assistant Vice President - Legal & Company Secretary are Key Managerial Personnel of the Company. During the year, there was no change in the Key Managerial Personnel.
The Board met five times during the financial year 2016-17.
Other information on the Directors and the Board Meetings is provided in the Corporate Governance Report attached as Annexure "C" to this report.
11. Internal Financial Controls
The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The details of internal control system are given in the Management Discussion and Analysis Report attached hereto as Annexure "A".
12. Remuneration Policy
The Remuneration Policy of the Company including criterion for determining qualifications, positive attributes, independence of Directors and other matters as prescribed under Section 178 of the Companies Act, 2013 and Listing Regulations is annexed to this Report as Annexure "G".
13. Disclosures under the Companies Act, 2013 and Rules there under
(a) Your Company has not issued any shares during the Financial Year 2016-17.
(b) No significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.
(c) All Related Party Transactions entered during the year were on arm''s length basis. No material Related Party Transactions (transaction(s) exceeding ten percent of the annual consolidated turnover of the Company as per last audited financial statements), were entered during the year by the Company. Accordingly, disclosure of Related Party Transactions as required under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.
(d) The extract of annual return is attached to this Report as Annexure "H".
(e) The following information is given in the Corporate Governance Report attached as Annexure "C" to this report:
i) The performance evaluation of the Board, the Committees of the Board, Chairperson and the individual Directors;
ii) The Composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism.
(f) The particulars of loans and guarantees given and investments made under Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.
(g) During the year, the auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.
14. Directors Responsibility Statement
Your Directors hereby state that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
(b) the Directors 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 March 31, 2017 and of the profit and loss of the Company for the year ended March 31, 2017;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
15. Auditors
The Notes to the Financial Statements read with the Auditors'' Reports are self-explanatory and therefore, do not call for any further comments or explanations.
In pursuance of the provisions of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, regarding rotation of auditors upon completion of the maximum tenure prescribed therein, M/s. S. R. Batliboi & Co. LLP, Auditors (Registration No. 301003E/ E300005) and M/s. Singhi & Co., Chartered Accountants (Registration No. 302049E), Branch Auditors of Shipping Business of the Company, will retire at the conclusion of the ensuing AGM of the Company.
The Board places on record its appreciation of the services rendered by M/s. S. R. Batliboi & Co. LLP and M/s. Singhi & Co. during their association with the Company.
On the recommendations of the Audit Committee, the Board recommends to the shareholders of the Company, the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) as the Auditors of the Company to hold office from the conclusion of 32nd AGM of the Company till the conclusion of 37th AGM of the Company to be held in the year 2022, subject to ratification by members at every AGM.
The Board of Directors of the Company appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost accounts of the Company, as applicable, for the financial year 2017-18. As required under the Companies Act, 2013 and Rules framed there under, your Directors are seeking ratification of the members for the remuneration payable to M/s K.G. Goyal & Associates, Cost Accountants.
16. Secretarial Audit
In pursuance of the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for the financial year 2016-17. The Secretarial Audit Report issued by the aforesaid Secretarial Auditors is attached as Annexure "I" to this report.
There is no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.
17. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The Company continuously strives to make its manufacturing facilities energy efficient. The energy conservation is of paramount importance for sustainability of the operations and it also results into saving of natural and financial resources. The Company has four double hull Aframax Tankers and these ships are more energy efficient as compared to the old vessels. The Company continuously makes efforts to make the vessels more energy efficient through energy saving measures and technological up gradations. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure "J"attached to this report.
18. Risk Management
Your Company has developed and implemented a Risk Management Policy. The Company has voluntarily constituted Risk Management Committee which periodically reviews all risks, finalise the risk document and monitors various risks of the Company including the risks, if any, which may threaten the existence of the Company. The composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report.
The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk Management Committee, is also circulated to the Audit Committee and the Board of Directors for their review periodically.
19. Deposits
During the year, the Company has not accepted deposits from the public under Chapter V of the Companies Act, 2013. There was no public deposit outstanding as at the beginning and end of the financial year 2016-17.
20. Particulars of employees
The human resource has played vital role in the performance and growth of the Company over the years. Your Company has very healthy work environment which enables the employees to contribute their best in the working of the Company. Information required to be disclosed in pursuance of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure "K" to this report.
21. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option Scheme 2010, as amended and revised from time to time ("ESOS 2010") for issue and allotment of options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10/- of the Company.
The Company has not granted any stock options during the year under review.
ESOS 2010 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations") and implemented through CFCL Employees Welfare Trust ("Trust"). For the purpose of ESOS 2010, the Trustee of the Trust was holding 22,47,902 equity shares of the Company as on March 31, 2017 (22,53,402 equity shares as on March 31, 2016), being 0.54% of the paid up share capital of the Company. The ownership of these shares cannot be attributed to any particular employee till he / she exercises the stock options granted to him / her. Hence, the concerned employees to whom the stock options were granted under ESOS 2010 cannot exercise voting rights in respect of aforesaid shares held by the Trustee of the Trust as such employees are not holders of such shares. The Trustee has not exercised the voting rights in respect of the aforesaid shares during the financial year 2016-17.
The disclosures required to be made under ESOP Regulations read with SEBI Circular No. CIR/CFD/Policy Cell/2/2015 dated June 16, 2015 are given on the website of the Company at the we blink http://www.chambalfertilizers.com/pdf/esop-2017.pdf. The disclosures in respect of ESOS 2010 are also given in the notes to the Financial Statements.
22. Business Responsibility Report
In pursuance of the provisions of the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective forms part of the Annual Report.
23. Investor Service Centre
The in-house Investor Service Centre of your Company is located in the Corporate Office of the Company at New Delhi which provides prompt and efficient service to the investors. The Company takes various initiatives for investor satisfaction such as reminders to investors about undelivered shares, unclaimed dividend, etc.
The equity shares of your Company are listed at National Stock Exchange of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock Exchanges for the financial year 2017-18.
The members are requested to refer to general shareholders'' information given in Corporate Governance Report appended hereto.
24. Acknowledgements
Your Directors wish to place on record their appreciation of the faith reposed in the Company by all the stakeholders including the Department of Fertilizers, Government of India, State Governments, Domestic and International Financial Institutions & Banks, investors and customers. Your Directors also wish to thank the employees at all levels for their exemplary commitment, hard work and dedication which has been critical for the Company''s sustained performance.
For and on behalf of Board of Directors
Place : New Delhi S. K. Poddar
Date : May 20, 2017 Chairman
Mar 31, 2016
Dear Members,
The Directors have pleasure in presenting the 31st Annual Report on
the business and operations of the Company together with audited
accounts for the financial year ended March 31, 2016.
1. Financial Results and Appropriations
(Rs. in crore)
Particulars 2015-16 2014-15
(a) Turnover (excluding excise duty) 9535.86 8868.05
(b) Gross Profit after Finance Cost but
before Exceptional Items, Depreciation
and Tax 776.67 680.46
(c) Depreciation / Amortization 160.38 173.32
(d) Profit before Exceptional Items and
Tax 616.29 507.14
(e) Exceptional Items (370.05) (107.02)
(f) Profit before Tax 246.24 400.12
(g) Provision for Current Tax 188.57 148.56
(h) Provision for Deferred Tax Charge /
(Credit) (28.63) 14.78
(i) Profit after Tax 86.30 236.78
(j) Balance of Profit Brought Forward 1482.89 1390.86
(k) Profit available for Appropriation 1569.19 1627.64
(l) Appropriations:
- General Reserve - 50.00
- Proposed Dividend on Equity Shares 79.08 79.08
- Tax on Dividend 16.10 16.10
- Proposed Dividend on Equity Shares
held by Trust - (0.43)
- Reversal of Dividend on Equity
Shares held by Trust related to
earlier years 1.73 -
- Saving on payment of Dividend
Distribution Tax (0.96) -
(m) Balance Carried Forward to Balance
Sheet 1473.24 1482.89
2. Operations
The Company has two business segments viz. Fertilisers and other
Agri-inputs and Shipping. During the year under review, the Company has
completed the sale of its textile business i.e. Birla Textile Mills to
Sutlej Textiles and Industries Limited as a going concern on slump sale
basis with effect from April 1, 2015. The Fertiliser and other
Agri-inputs Division registered an increase in the turnover mainly on
account of higher sales of products like imported fertilisers and own
manufactured Single Super Phosphate. The traded products continued to
make significant contribution to the bottom-line of the Company. The
Shipping Division has also registered higher turnover mainly on account
of better realisations from own vessels and achieved much better
performance in comparison to previous year.
During the year under review, your Company has decided to set up new
Urea plant at Gadepan for production of 1.34 Million MT of Urea per
annum at a cost of approximately USD 900 Million ("Gadepan - III
Project"). The Company has awarded contracts to Toyo Engineering
Corporation, Japan and Toyo Engineering India Pvt. Limited, India for
implementation of Gadepan - III Project. The Company has fully tied up
the debt portion of the cost of Gadepan - III Project and the aforesaid
contractors have started implementation of Gadepan - III Project. The
commercial production of Urea from Gadepan - III Project is scheduled
to start in January 2019. This project will be a stepping stone in the
journey of growth of your Company as there will be an increase of about
63% in the present Urea production capacity of the Company.
The Approval of the shareholders of the Company was taken during the
year for sale of one or more than one or all five ships/ vessels or the
entire shipping business of the Company.
During the year under review, the Company has made a provision of Rs.
296.19 Crore on account of impairment in the value of its investment in
CFCL Technologies Limited, Cayman Islands, a subsidiary of the Company.
In addition to this, the Company has made a provision for impairment
loss of Rs. 111.99 Crore as a result of sale transaction of the vessel
- Ratna Puja. In view of this, the Profit after Tax during the year
under review was much lower in comparison to the previous year.
The detailed information on the business segments of the Company and
the respective industries are given in the Management Discussion and
Analysis Report attached as Annexure "A" to this report.
3. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10
each (Previous Year - Rs. 1.90 per equity share) for the financial year
ended March 31, 2016. The total outgo on this account will be Rs. 95.18
crore including dividend distribution tax.
4. ''Corporate Governance Report'' and Code of Conduct
Your Company is committed to maintain highest standards of Corporate
Governance and strives to improve the corporate governance standards
and practices. Corporate Governance Report for the Financial Year
2015-16 is attached as Annexure "B". The declaration of the Managing
Director confirming compliance with the ''Code of Conduct and Ethics'' is
enclosed as Annexure "C" and Auditors'' Certificate confirming
compliance with the conditions of Corporate Governance is enclosed as
Annexure "D".
5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID)
IMACID is a joint venture of your Company with Tata Chemicals Limited
and OCP, Morocco with equal stake of each partner. IMACID is engaged in
the manufacture of phosphoric acid in Morocco.
During the year 2015, IMACID achieved revenue of Moroccan Dirham (MAD)
2777.42 million (Rs. 18527.70 million) against revenue of MAD 2376.30
million (Rs. 16,686.12 million) achieved during the year 2014. The
profit after tax of IMACID was MAD 194.01 million (Rs. 1,294.21
million) during the year as against MAD 90.09 million (Rs. 632.20
million) in the year 2014.
During the quarter ended March 31, 2016, IMACID achieved operating
income of MAD 419.22 million (Rs. 2861.75 million).
The financial position of IMACID as at December 31, 2015 was as under:
Share Capital - MAD 620 million (Rs. 4,135.92 million)
Total Assets - MAD 1266.18 million (Rs. 8446.47 million)
Reserves and Surplus - MAD 256.09 million (Rs. 1708.33 million)
Total Liabilities - MAD 1266.18 million (Rs. 8446.47 million)
Investments - NIL
6. Subsidiaries
(i) Chambal Infrastructure Ventures Limited and its Subsidiaries
Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned
subsidiary of your Company which was incorporated to pursue the
business opportunities in Power sector. CIVL had established two
down-stream wholly owned subsidiaries viz. Chambal Energy
(Chhattisgarh) Limited ("CECL") and Chambal Energy (Orissa) Limited
("CEOL"). The Hon''ble High Court of Delhi has granted its sanction to
the scheme of amalgamation of CECL and CEOL with CIVL. The order of the
Hon''ble High Court has been filed by the aforesaid companies with the
concerned Registrar of Companies. Accordingly, CECL and CEOL stand
amalgamated with CIVL with effect from the appointed date of April 1,
2015.
The new site for CIVL''s power project in Odisha has been approved by
the Government of Odisha and the matter is being pursued with the
concerned authorities for renewal of Memorandum of Understanding for
setting up power project.
(ii) CFCL Technologies Limited, Cayman Islands and its Subsidiaries
CFCL Technologies Limited, a subsidiary of the Company, operates
business through its step-down subsidiaries mainly in USA and India.
ISGN Corporation, USA is a wholly owned subsidiary of CFCL Technologies
Limited. ISGN Solutions Inc., USA is a wholly owned subsidiary of ISGN
Corporation, USA. ISGN Corporation is engaged in designing, developing,
marketing and distribution of software products for mortgage lending
industry in USA. ISGN Solutions Inc. is mainly engaged in providing
loan fulfillment solutions in USA such as closing and settlement
services, valuation services, mortgage processing services, vendor
management solutions for residential mortgage lenders, etc. These
businesses are being supported by ISG Novasoft Technologies Limited,
India (a downstream subsidiary of CFCL Technologies Limited) through
its centres in India.
The decline in the performance of Software Business continued in the
Year 2015 due to the mortgage market seeing significant dip in business
volumes across the industry. Considering the market scenario, financial
condition and future prospects, ISGN Corporation, USA has entered into
a stock purchase agreement on January 28, 2016 for sale and transfer of
its entire shareholding in ISGN Solutions, Inc., USA to First source
Group USA, Inc., USA for a sale consideration of USD 12.56 million
(subject to closing and other adjustments). The shareholders of the
Company has approved the aforesaid transaction through postal ballot on
May 3, 2016. On completion of the transaction, ISGN Solutions, Inc. and
its two subsidiaries viz. ISGN Fulfillment Services Inc., USA and ISGN
Fulfillment Agency LLC, USA will cease to be subsidiaries of the
Company.
Further, ISG Novasoft Technologies Limited has signed an agreement on
January 28, 2016 for sale of its Business process outsourcing business
to First source Process Management Services Limited, India on slump sale
basis at a consideration of Rs. 3 crore.
The aforesaid transactions are expected to be completed by end of May
2016.
(iii) India Steamship Pte. Limited, Singapore
India Steamship Pte. Limited, Singapore is a wholly owned subsidiary of
your Company and it has operated during the year by in-chartering the
vessels.
(iv) India Steamship International FZE, UAE
India Steamship International FZE, UAE ("ISS, UAE") was a wholly owned
subsidiary of India Steamship Pte. Limited, Singapore. During the
year, your Company had acquired entire shareholding of ISS, UAE from
India Steamship Pte. Limited, Singapore. Consequently, ISS, UAE became
direct subsidiary of your Company. ISS, UAE has commenced the
in-chartering of ships during second half of the Financial Year
2015-16.
(v) India Steamship Limited, India
India Steamship Limited is a wholly owned subsidiary of your Company.
There was no business activity in this subsidiary during the year under
review.
The four downstream subsidiaries of the Company, namely Richmond Title
Services, LP, USA, Richmond Title Genpar, LLC, USA, Richmond Investors,
LLC, USA and ISGN Fulfillment Services Inc., Arizona, USA were
dissolved during the year under review.
Save and except as mentioned above, no other subsidiary, associate or
joint venture have been acquired/ included or ceased during the year
under review.
The performance and financial position of the subsidiaries of the
Company is summarized in Form AOC - 1 attached to the Financial
Statements of the Company in pursuance of Section 129 of the Companies
Act, 2013. The Company shall place the audited financial statements of
its subsidiaries on its website in pursuance of Section 136 of the
Companies Act, 2013 and shall provide a copy of these statements to any
shareholder seeking it. These documents will also be available for
inspection by members during business hours at the registered office of
the Company at Gadepan, Dist. Kota, Rajasthan.
7. Health, Safety, Quality and Environmental Protection
Your Company gives highest priority to Environment Protection and
Safety with a well-defined Environment, Health and Safety ("EHS")
policy. The adherence to EHS policy is continuously monitored by senior
management through regular reviews.
Your Company has established, on a sustainable basis, an Integrated
Management System based on OHSAS-18001:2007, ISO-14001:2004 and
ISO-9001:2008. It has also adopted Process Safety Management and
guidelines of British Safety Council. Your Company has achieved the
mile-stone of Zero reportable accident during the financial year
2015-16.
The details of various activities and achievements of the Company in
this regard are as under:
(a) Health & Hygiene
There is a strong focus on health assessment and occupational disease
monitoring of employees and associates through periodic medical
examinations and hygiene monitoring at work place. Apart from two full
time Doctors and trained nursing staff, specialist doctors like child
specialist, Eye specialist, dental surgeon, Gynecologist, ENT surgeon,
etc. visit the Health Centre at Gadepan regularly. There are three
ambulances available on round the clock basis at the plant location of
the Company.
The Health Centre at Gadepan provides its services round the clock to
employees, their families, contractor work force and villagers in the
vicinity of the plants. For enhancing awareness towards health related
matters, periodical training and awareness programs are organized
through external experts.
(b) Safety Management
A robust occupational health and safety management system is in place
in your Company at Gadepan to take care of all the employees,
contractor workforce as well as equipment and machinery. Effective
implementation of the safety system is ensured through Hazard
identification, risk assessment & mitigation procedures, safety work
permit system, etc. Before executing any maintenance job in the plant,
a cross functional team of senior management members review the jobs on
a daily basis from a safety perspective to ensure that all recommended
actions to prevent hazards are taken.
The extensive trainings and drills were conducted by internal and
external experts on rescue, work at height, working inside confined
space, fire-fighting, emergency handling, electrical safety, material
handling, road safety, use of Breathing Air sets, etc. To encourage
safety awareness and involvement among employees and contractor
workforce, scheme of "Near-Miss" & "Make- to Good" reporting is in
place in the fertiliser plants.
In order to create more awareness on Safety & Environment, various
programmes were organized throughout the year like, National Safety
Week, Road Safety Week, Fire Services Day, World Environment Day, etc.
involving employees, their families and contractor workforce.
Your Company has a well-defined "Onsite Disaster Management Plan" and
MARG (Mutual Aid and Response Group) arrangement with neighboring
industry. Regular mock drills, fire drills and table top drills were
conducted to verify emergency preparedness. Prompt fire-fighting
services were provided to villages surrounding Gadepan plants. As a
part of safety improvement initiative, online monitoring and reporting
system - Uttam Suraksha Setu is in place.
(c) Environment Management
Your Company is conscious of its responsibility towards environment
protection. This has led to an increasing focus over the years on
reduction of environmental impact with respect to natural resource
consumption (including raw materials, fuels and water), waste
generation and emissions to the atmosphere. Your Company has taken
concrete steps to achieve zero liquid effluent discharge after
implementation of Gadepan - III Project.
Investors, suppliers, customers, local communities as well as
government and regulatory agencies are vital stakeholders in our
efforts towards green manufacturing. Your Company has a robust
mechanism in place to ensure that all environmental parameters are
maintained within the permissible limits. A dedicated Environment
Management Cell is in place at Gadepan to monitor the environmental
compliances.
The Company''s Gadepan complex made a positive change in ecology due to
development of a dense green belt / forest comprising of variety of
fruits and shrubs. This has provided a soothing & healthy environment
for people to live and work and habitat to many species of birds. Only
treated waste water is used in maintaining the green belt through
irrigation network spread all over the Gadepan complex.
(d) Quality Management
Your Company is ISO 9001:2008 certified and maintains high quality of
product and processes. The quality assurance is ensured at all stages
of manufacturing processes, maintenance and support services. Quality
reviews are regularly conducted and feedback from end users (farmers)
is accorded utmost importance. Sophisticated instruments are in place
for monitoring of critical quality parameters.
(e) Achievements
Your Company regularly participates in national and international
benchmarking surveys and awards for independent assessment and
opportunity for continual improvement. Your Company has received
following awards during the year under review:
- Environmental Protection Award (Winner) in the SSP Fertiliser Plants
Category for the year 2014-15 from Fertiliser Association of India.
- "Rajasthan Energy Conservation Award-2015" by Govt. of Rajasthan,
Department of Energy, Jaipur.
8. Corporate Social Responsibility ("CSR")
Your Company is conscious of its responsibility towards its
stakeholders including the community at large and makes continuous
efforts to contribute to their well-being. Your Company has taken
several initiatives for sustainable development of rural community in
the vicinity of its plants in partnership with local administration at
Village, Block and District level.
The Company has made meaningful impact in the areas of education,
healthcare, infrastructure development, soil health and skill
development through its CSR programmes / projects. The CSR programmes /
project of the Company are implemented directly as well as through KK
Birla Memorial Society (KKBMS) and other Non-Governmental Organisations
which are engaged in specific areas.
The major highlights of the CSR projects/ programmes of the Company
during the Financial Year 2015-16 are as under:
a) School Education
The education is a flagship programme of the CSR activities of the
Company. The Company is creating an impact in the lives of the children
and youths by extending supports from pre-school education to job
oriented courses at Industrial Training Institutes.
The Company has adopted 31 Balwadis in 26 villages of District Kota in
partnership with Pratham Education Foundation. The Balwadis play an
important role in preparing the children for pre-primary education. As
a part of its CSR initiative, your Company has adopted 7 more schools
during the year taking the total number of adopted schools to 39
Government Primary, Upper Primary, Secondary and Senior Secondary
Schools in 26 villages in the vicinity of its plants in Kota and Baran
Districts of Rajasthan. The objective of this programme is to improve
the education standards in these schools. Pratham Education Foundation,
a renowned Non-Governmental Organisation has been engaged to improve
the learning level of students from nursery to 8th standard. Kumar
Classes - a coaching institute from Kota has been engaged for remedial
education for students of secondary and senior secondary classes. A
significant improvement has been observed in the learning level of
students in these schools post adoption by the Company. The renovation
of 6 adopted schools was carried out during the year. Further, girls
toilets were constructed in 6 schools in Sultanpur Block. The Company
also provided stationery, school bags, note books and winter wears to
around 3500 students. Your Company is also imparting basic computer
courses to rural students through its 4 Community Information
Technology Centre''s located in villages contiguous to its urea plants.
CFDAV School is being run in the Gadepan complex for Nursery to Class
10 students in collaboration with DAV Trust and Management Society.
Around 64% students in CFDAV School are from adjoining rural areas.
b) Technical Education
The Company had adopted Industrial Training Institute (ITI) at Sangod
and Sultanpur in 2011 and 2014 respectively under Public Private
Partnership scheme ("PPP"). ITI Sangod has become one of the best
institutions of Rajasthan and has received various accolades at state
and national level. ASSOCHAM has awarded Gold Trophy to ITI, Sangod
adjudging it as best ITI under PPP model category in India. During last
4 years, ITI Sangod has been able to achieve almost 100% placement of
students in the Industry. To further strengthen the Company''s
commitment towards skill education, your Company has adopted Government
ITIs at Jhalawar and Baran during the year under review. The renovation
work of these ITIs is under progress. The senior employees of the
Company are involved in the management of these ITIs and Company''s
engineers also take extra classes for students therein.
In addition to the above, your Company is running four vocational
training centers in the villages near Gadepan. These centers are in
operation in partnership with District Adult Education Association
(supported by Jan Shikshan Sansthan). During the year, around 255
youths were trained in various skills.
c) Community Health Care
The Company provides free of charge healthcare in adjoining villages of
Kota district and villages near Mussoorie (Uttarakhand) in
collaboration with Manorama Devi Birla Charitable Trust. During the
year under review, the Company has collaborated with the NGO - School
Health Annual Report Programme (SHARP) to provide health services in
the villages of Kota district.
d) Infrastructure Development
Your Company has continued to contribute towards village rural
infrastructure development. During the year under review, the Company
has constructed 8 cement concrete roads / pavements in the villages
near Gadepan under PPP scheme. Construction of 5 basketball courts and
10 pathways were carried out in the adopted Government Schools.
e) Soil Health
The Company is running two state-of-the-art agriculture development
laboratories in Agra and Kota. During the year under review, the
Company has started operating a Mobile Soil Testing Van in Varanasi to
facilitate farming community. This initiative has received accolades
from the Prime Minister of India. Three soil testing vans operated by
the Company reach to the farmlands deep into the rural area.
The composition of Corporate Social Responsibility Committee is given
in the Corporate Governance Report. The details of the development and
implementation of the Corporate Social Responsibility Policy and Annual
Report on CSR activities as prescribed under Section 135 of the
Companies Act, 2013 and the Companies (Corporate Social Responsibility
Policy) Rules, 2014 which is annexed herewith as Annexure "E".
For the purpose of Section 135 of the Companies Act, 2013, the amount
equivalent to 2% of the average net profits of the Company made during
the immediately preceding three financial years works out to Rs. 8.45
crore. As against this, the Company spent Rs. 9.06 crore on CSR
projects / programmes.
9. Directors and Key Managerial Personnel
(i) Directors
The Board consists of eight directors - seven non-executive directors
including four independent directors and a Managing Director. Mr. Shyam
S. Bhartia (DIN: 00010484) is due for retirement at the forthcoming
Annual General Meeting and has offered himself for re-appointment.
Mr. Aditya Narayan (DIN 00012084), had been appointed as an Independent
Director of the Company at the Annual General Meeting of the Company
held on September 15, 2015 to hold office from April 01, 2015 for a
term upto the conclusion of the Annual General Meeting of the Company
to be held in the calendar year 2018.
The Board of Directors at its meeting held on May 11, 2016 had
re-appointed Mr. Anil Kapoor (DIN 00032299) as Managing Director of the
Company for a period of 3 years with effect from February 16, 2017 and
the Board commends the re-appointment of Mr. Anil Kapoor for approval
of the shareholders.
During the year, the Managing Director has not received any commission
or remuneration from any subsidiary of the Company.
All the Independent Directors have submitted declarations that they
meet the criteria of independence as provided under Section 149 of the
Companies Act, 2013 and the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015
("Listing Regulations").
The Board met six times during the Financial Year 2015-16.
Other information on the Directors and the Board Meetings is provided
in the Report on Corporate Governance annexed to this Report as
Annexure "B".
(ii) Key Managerial Personnel
Mr. M.S Rathore ceased to be Secretary of the Company with effect from
May 01, 2015. The Board of Directors had appointed Mr. Rajveer Singh as
Secretary of the Company and designated him as Key Managerial Personnel
in such capacity, with effect from May 01, 2015.
10. Internal Financial Controls
The Company has policies and procedures in place for ensuring the
orderly and efficient conduct of its business including adherence to
the Company''s policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of
the accounting records and the timely preparation of reliable financial
information. The details of internal control system are given in the
Management Discussion and Analysis Report attached hereto as Annexure
"A".
11. Remuneration Policy
The Remuneration Policy of the Company including criterion for
determining qualifications, positive attributes, independence of
Directors and other matters as prescribed under Section 178 of the
Companies Act, 2013 and Listing Regulations is annexed to this Report
as Annexure "F"
12. Disclosures under the Companies Act, 2013 and Rules thereunder
a) Your Company has not issued any shares during the Financial Year
2015-16.
b) No significant and material orders have been passed by the
regulators or courts or tribunals impacting the going concern status
and company''s operations in future.
c) All Related Party Transactions entered during the year were on arm''s
length basis. No material Related Party Transaction (transaction
exceeding ten percent of the annual consolidated turnover of the
Company as per last audited financial statements), was entered during
the year by the Company.
The Company has sold and transferred its Textile Business i.e. Birla
Textile Mills ("BTM") to Sutlej Textiles and Industries Limited
("STIL") as a going concern on slump sale basis with effect from April
1, 2015. The discussions were held with different parties for sale /
disposal of BTM but same did not reach any fruitful conclusion. Then,
STIL evinced their interest in purchasing BTM from the Company. It was
decided to sell and transfer BTM in light of (i) there being limited
scope for expansion of BTM at the current location in the State of
Himachal Pradesh as the land in the factory premises was fully
utilized, (ii) necessity of further capital expenditure of around Rs.
50 -60 Crore in coming years to maintain the productivity and keep the
unit cost competitive; and (iii) downward trend in the textile
business.
The Company has treated the said transaction as related party
transaction and the shareholders of the Company has approved the said
transaction at the Annual General Meeting held on September 15, 2015.
The details of this transaction are given in Form AOC-2 attached to
this report as Annexure "G".
d) The extract of Annual Return is attached to this Report as Annexure
"H"
e) The following information is given in the Corporate Governance
Report attached to this Report as Annexure "B".
i. The Performance evaluation of the Board, the Committees of the
Board, Chairperson and the individual Directors;
ii. The Composition of Audit Committee; and
iii. The details of establishment of Vigil Mechanism.
f) The particulars of loans and guarantees given and investments made
under Section 186 of the Companies Act, 2013 are given in the Notes to
the Financial Statements.
g) During the year, the auditors have not reported any fraud under
Section 143(12) of the Companies Act, 2013 and the Companies (Audit and
Auditors) Rules, 2014.
13. Directors Responsibility Statement
Your Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed and no material departures have been made
from the same;
b) the Directors 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 March 31, 2016 and of the profit and loss of the
Company for the year ended March 31, 2016;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
d) the Directors have prepared the annual accounts on a going concern
basis;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
14. Auditors
The Notes to the Financial Statements read with the Auditors'' Report
are self-explanatory and therefore, do not call for any further
comments or explanations.
M/s. S. R. Batliboi & Co. LLP, Auditors (Registration No. 301003E/
E300005) and M/s. Singhi & Co., Chartered Accountants (Registration No.
302049E) Branch Auditors of Shipping Business of the Company are
retiring at the ensuing Annual General Meeting ("AGM") of the Company
and being eligible, offered themselves for re-appointment. Your
Directors are seeking re-appointment of M/s. S.R. Batliboi & Co. LLP,
Auditors and M/s. Singhi & Co., Branch Auditors of Shipping Business of
the Company from the conclusion of the ensuing 31st AGM of the Company
till the conclusion of 32nd AGM of the Company.
The Board of Directors of the Company appointed M/s. K.G. Goyal &
Associates, Cost Accountants for conducting audit of cost accounts of
the Company, as applicable, for the financial year 2016-17. As required
under the Companies Act, 2013 and Rules framed thereunder, your
directors are seeking ratification of the members for the remuneration
payable to M/s K.G. Goyal & Associates, Cost Accountants.
15. 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 Board of Directors of the Company has
appointed M/s. RMG & Associates, Company Secretaries for conducting
secretarial audit of the Company for the financial year 2015-16. The
Secretarial Audit Report issued by the aforesaid Secretarial Auditors
is annexed herewith as Annexure "I".
There is no qualification, reservation, observation, disclaimer or
adverse remark in the Secretarial Audit Report.
16. Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The Company continuously endeavors to make its plants energy efficient
and reviews various options to conserve energy on regular basis. The
energy conservation is of paramount importance for sustainable business
and it also results into saving of natural and financial resources. The
Company has four double hull Aframax Tankers and these ships are more
energy efficient as compared to the old vessels. The requisite
information with regard to conservation of energy, technology
absorption and foreign exchange earnings and outgo in terms of the
Companies (Accounts) Rules, 2014 is set out in Annexure "J" attached
hereto.
17. Risk Management
Your Company has developed and implemented a Risk Management Policy.
The Company has constituted Risk Management Committee which
periodically reviews all risks, finalise the risk document and monitors
various risks of the Company including the risks, if any, which may
threaten the existence of the Company. The composition and terms of
reference of the Risk Management Committee are given in the Corporate
Governance Report.
The risk document containing Key and Non-Key risks including way
forward for mitigation thereof, as approved by the Risk Management
Committee, is also circulated to the Audit Committee and the Board of
Directors for their review periodically.
18. Deposits
During the year, the Company has not accepted deposits from the public
under Chapter V of the Companies Act, 2013. Your Company has not
defaulted in repayment of deposits or payment of interest during the
year. There was no public deposit outstanding as on March 31, 2016.
19. Particulars of employees
Your Company recognizes that people are the most valuable resource of
the Company. The committed work force has played an important role in
the growth of the Company over the years. The Company always strives to
keep its human resource motivated and encourages merit and healthy
relations. Information required to be disclosed in pursuance of Section
197 of the Companies Act, 2013, read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, forms part of
this Report and is attached hereto as Annexure "K".
20. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option
Scheme 2010 on August 27, 2010 (as amended on September 13, 2013) for
issue and allotment of options exercisable into not more than 41,62,000
equity shares of face value of Rs. 10/- each to eligible employees and
Managing Director of the Company. Each option when exercised would be
converted into one fully paid up equity share of Rs. 10/- of the
Company. Consequent upon promulgation of Securities and Exchange Board
of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP
Regulations"), the shareholders of the Company had approved the revised
CFCL Employees Stock Option Scheme, 2010 ("ESOS 2010") on September 15,
2015 in compliance with the ESOP Regulations.
The details of material changes made in CFCL Employees Stock Option
Scheme 2010 during the year are as under:
a) Provision has been made for ''CFCL Employees Welfare Trust''
("Trust"), to purchase shares from the secondary market.
b) The provision for direct subscription of shares by the employees
upon exercise of stock options has been deleted as ESOS 2010 envisaged
secondary acquisition of shares and in such case, as per ESOP
Regulations, it has to be implemented through Trust only.
c) In order to give more time to the employees for exercise of options,
the exercise period has been increased from five years to eight years
from the date of vesting.
d) Certain other changes were made mainly to align ESOS 2010 with the
requirements under ESOP Regulations The Company has not granted any
stock options during the year.
ESOS 2010 is in compliance with ESOP Regulations and implemented
through the Trust. The Trustee of the Trust is holding 22,53,402 equity
shares (0.54% of the paid up share capital) of the Company for the
purpose of ESOS 2010. The ownership of these shares cannot be
attributed to any particular employee till he / she exercises the stock
options granted to him / her. Hence, the concerned employees to whom
the stock options were granted under ESOS 2010 cannot exercise voting
rights in respect of aforesaid shares held by the Trustee of the Trust
as such employees are not holders of such shares. The Trustee has not
exercised the voting rights in respect of the aforesaid shares in the
Annual General Meeting of the Company held during the Financial Year 20
15-16.
The disclosures required to be made under ESOP Regulations read with
SEBI circular no. CIR/CFD/Policy Cell/2/2015 dated June 16, 2015 are
given on the website of the Company at the weblink
http://www.chambalfertilisers.com/pdf/esop-2016.pdf. The disclosures in
respect of ESOS 2010 are also given in the notes to the Financial
Statements.
21. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, Rules
thereunder, Listing Regulations and the applicable Accounting
Standards, the Company has prepared Consolidated Financial Statements.
The Audited Consolidated Financial Statement alongwith Auditors'' Report
and the Statement containing salient features of financial statements
of subsidiaries and joint venture (Form AOC -
1) forms part of the Annual Report.
22. Investor Service Centre
The In-house Investor Service Centre of your Company located at New
Delhi, provides prompt service to the investors. The Company takes
various measures for investor satisfaction such as reminders to
investors about new corporate benefits, undelivered shares, unclaimed
dividend, etc.
The equity shares of your Company are listed at National Stock Exchange
of India Limited and BSE Limited. The Company has paid annual listing
fees to these Stock Exchanges for the Financial Year 2016-17.
The members are requested to refer to general shareholders'' information
given in Corporate Governance Report appended hereto.
23. Acknowledgements
Your Directors wish to place on record their appreciation of the
support and co-operation received from all stakeholders including the
Department of Fertilisers, Government of India, State Governments,
Domestic and International Financial Institutions & Banks. Your
Directors also convey their sincere appreciation of the commitment,
hard work and devotion of every employee of the Company which has
enabled the Company to achieve sustained performance.
For and on behalf of Board of Directors
Place: New Delhi S. K. Poddar
Date: May 11, 2016 Chairman
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 30th Annual Report on
the business and operations of the Company together with audited
accounts for the financial year ended March 31,2015.
1. Financial Results and Appropriations
(Rs. in crore)
Particulars 2014-15 2013-14
(a) Turnover (excluding excise duty) 8868.05 7976.42
(b) Gross Profit after Finance Cost but
before Exceptional Items, Depreciation and 680.46 576.23
Tax
(c) Depreciation / Amortization 173.32 230.31
(d) Profit before Exceptional Items and Tax 507.14 345.92
(e) Exceptional Items (107.02) -
(f) Profit before Tax 400.12 345.92
(g) Provision for Current Tax 148.56 40.14
(h) Provision for Deferred Tax 14.78 2.71
(i) Profit after Tax 236.78 303.07
(j) Balance of Profit Brought Forward 1390.86 1229.01
(k) Profit available for Appropriation 1627.64 1532.08
(l) Reversal of Dividend on Equity Shares
held by CFCL Employees Welfare Trust (Trust) - 0.87
(m) Appropriations:
* General Reserve 50.00 50.00
* Proposed Dividend on Equity Shares 79.08 79.08
* Tax on Dividend 16.10 13.44
* Proposed Dividend on Equity Shares
held by Trust (0.43) (0.43)
(n) Balance Carried Forward to Balance 1482.89 1390.86
Sheet
2. Operations
The Fertilisers and other Agri-inputs business of the Company
contributes 87% of the total revenue, whereas Shipping and Textile
contributes the remaining. The Company has registered an increase in
the turnover mainly on account of increase in sale of branded products
like fertilisers, pesticides and other agri-inputs, increase in prices
of natural gas and depreciation in value of Indian Rupee vis-a-vis USD
(as the natural gas prices are denominated in USD). The turnover of
Shipping Division was higher mainly on account of revenue from
in-chartered vessels, better realisations from own vessels and foreign
exchange rate variations. The turnover of Textile Division was almost
at the level of last year.
The Fertilisers business faced multiple challenges during the year. The
Company had to shutdown Gadepan - II plant from February 8, 2015 due to
un-favourable policy of the Government of India for production beyond
100% capacity. This has resulted into lower production of Urea. Delays
in disbursement of subsidy by Government of India continued to affect
the profitability of the Company as the interest burden continued to
mount. However, impressive performance of branded products gave a
major boost to the profitability of the Company. The Company has
established itself as a major player in its marketing territory
offering wide range of products to farming community.
The Shipping Division made a come-back by achieving much better
performance in comparison to the last year. The year started with a
subdued note but it was looking up during the later part of the year as
charter rates firmed up in March 2015.
The performance of Textile Division remained subdued due to low demand
scenario in the market. The realisations remained under stress causing
lower profitability of the Textile Division. During the last quarter,
the Board of Directors of your Company has approved the sale of its
textile business to Sutlej Textile & Industries Limited, as a going
concern on slump sale basis. The parties are in the process of
obtaining necessary approvals for the transaction. The detailed
information on all the business segments of the Company and the
respective industries are given in the Management Discussion and
Analysis Report attached as Annexure "A" to this report.
3. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10
each (Previous Year - Rs. 1.90 per equity share) for the financial year
ended March 31, 2015. The total outgo on this account will be Rs. 95.18
crore including dividend distribution tax.
4. 'Corporate Governance Report' and Code of Conduct
The Company is committed to maintain highest standards of Corporate
Governance and strives to improve the corporate governance standards.
Corporate Governance Report for the Financial Year 2014-15 is attached
as Annexure "B". The declaration of the Managing Director confirming
compliance with the 'Code of Conduct and Ethics' is enclosed as
Annexure "C" and Auditors' Certificate confirming compliance with the
conditions of Corporate Governance is enclosed as Annexure "D".
5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID)
IMACID is a joint venture of your Company with two other partners -
Tata Chemicals Limited and OCP, Morocco, each partner holding equal
stake in the joint venture. IMACID is engaged in the manufacture of
phosphoric acid in Morocco.
During the year 2014, IMACID achieved revenue of Moroccan Dirham (MAD)
2376.30 million (Rs. 16686.12 million) against revenue of MAD 2135.72
million (Rs. 14713.50 million) achieved during the year 2013. The
profit after tax of IMACID was MAD 90.09 million (Rs. 632.60 million)
during the year as against MAD 83.15 million (Rs. 572.80 million) in
the year 2013.
During January - March 2015 quarter, IMACID achieved operating income
of MAD 486.91 Million (Rs. 3045.17 million).
The Financial position of IMACID as at December 31,2014 was as under:
Share Capital - MAD 620 Million
Total Assets - MAD 1444.71 Million
Reserves and Surplus - MAD 150.12 Million
Total Liabilities - MAD 1444.71 Million
Investments - NIL
6. Subsidiaries
(i) Chambal Infrastructure Ventures Limited and its Subsidiaries
Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned
subsidiary of your Company. CIVL was set up to pursue the business
opportunities in Power Sector. CIVL had established two down-stream
wholly owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited
and Chambal Energy (Orissa) Limited. CIVL has identified a new site for
its project in Odisha and the matter is being pursued with the
concerned authorities for approval of the new site and renewal of
Memorandum of Understanding.
During the financial year 2014-15, the Board of Directors of CIVL
approved merger and amalgamation of Chambal Energy (Chhattisgarh)
Limited and Chambal Energy (Orissa) Limited with CIVL. CIVL is in the
process of filing the scheme with the Hon'ble Delhi High Court.
(ii) CFCL Overseas Limited, Cayman Islands
In pursuance of Section 186 of the Companies Act, 2013, a company
should make investment through not more than two layers of investment
companies. Accordingly, your Company has approved voluntary winding of
its wholly owned subsidiary - CFCL Overseas Limited ("COL"). In
pursuance of voluntary liquidation, all the assets of COL including its
investments in CFCL Technologies Limited, Cayman Islands have been
transferred to your Company (being sole shareholder of COL). As a
result, CFCL Technologies Limited has become direct subsidiary of your
Company. As per the Certificate of Dissolution dated March 26, 2015
issued by the Registrar of Companies, Cayman Islands, COL will be
deemed to be dissolved on June 26, 2015.
(iii) CFCL Technologies Limited, Cayman Islands and its Subsidiaries
CFCL Technologies Limited, a subsidiary of your Company, operates
business through its step-down subsidiaries mainly in USA and India.
The Software Business is end-to-end provider of technologies and
services to the mortgage industry in USA.
There was sharp decline in the performance of Software Business during
the Year 2014. There was significant reductions in business volumes
from all the key clients In USA market due to downward trend in the
mortgage industry.
(iv) India Steamship Pte. Limited, Singapore and its Subsidiary
India Steamship Pte. Limited, Singapore ("ISS, Singapore") is a wholly
owned subsidiary of your Company. ISS, Singapore has hired a vessel on
time-charter for one year in August 2014. India Steamship International
FZE, UAE is a wholly owned subsidiary of ISS, Singapore. There was no
business activity in this entity during the year under review.
(v) India Steamship Limited, India (ISL)
ISL is a wholly owned subsidiary of your Company. There was no business
activity in ISL during the year under review.
Save and except voluntary liquidation of CFCL Overseas Limited as
mentioned earlier, no subsidiary, associate or joint venture have been
acquired/ included or ceased during the year under review.
The performance and financial position of the subsidiaries of the
Company is summarized in Form AOC - 1 attached to the Financial
Statements of the Company in pursuance of Section 129 of the Companies
Act, 2013. The Company shall place the audited financial statements of
its subsidiaries on its website in pursuance of Section 136 of the
Companies Act, 2013 and shall provide a copy of these statements to any
shareholder seeking it. These documents will also be available for
inspection by members during business hours at the registered office of
the Company at Gadepan, Dist. Kota, Rajasthan.
7. Health, Safety and Environmental Protection
The commitment of your Company to Environmental Protection and Safety
begins with the comprehensive EHS (Environment, Health and Safety)
policy formulated by the Company. Your Company accords highest priority
to EHS which is reflected in the day to day operations of the Company.
Apart from regular reviews and monitoring at the operating levels, the
senior management also continuously monitors the EHS parameters. The
Company strives for continuous improvement through benchmarking studies
and other appropriate methodologies. Your Company has established and
is maintaining an Integrated Management System; based on OHSAS-
18001:2007, ISO- 14001:2004,ISO-9001:2008 and Process Safety Management
(PSM) and guidelines of British Safety Council. The township at Gadepan
is also OHSAS-18001 & ISO-14001 certified.
(a) Health & Hygiene
Health assessment and occupational disease monitoring of employees and
associates is done through regular periodic medical examinations. The
Health Centre at Gadepan provides its services round the clock to
employees, their families, contractor work force and villagers in the
vicinity of the plants. Specialist doctors like child specialist, Eye
specialist, dental surgeon, Gynaecologist, ENT surgeon visit regularly
at Health Centre. The up-gradation of the Health Centre by addition of
new equipment is a continuous process. Health and hygiene awareness
campaigns were regularly held for employees through experts in various
fields. Pulse polio vaccination, regular immunization programme to new
born and swine flu vaccination drives were organised from time to time.
(b) Safety Management
A strong occupational health and safety management system is in place
in your Company to ensure occupational health and safety of employees,
contractor workforce as well as equipment and machinery. Further, your
Company has implemented, in its operations at Gadepan, Process Safety
Management System (PSM) developed by Occupational Safety and Health
Administration (OSHA) for proactive identification, assessment &
control of hazards. Effective implementation of the safety system is
ensured through hazard identification, risk assessment and mitigation
procedures, strong updated safety work permit system, etc.
The extensive trainings and drills were conducted by internal and
external experts on rescue, work at height, working inside confined
space, fire-fighting, emergency handling, electrical safety, material
handling, road safety, use of Breathing Air sets, etc. To encourage
safety awareness and involvement among employees and contractor
workforce, scheme of "Near-Miss" & "Make-to Good" reporting is in
place. Further, under the system of Pro-active safety observation, any
one observing an unsafe act/ condition may immediately interact with
and get the same corrected.
The concept of Behaviour Based Safety (BBS) for safety improvement in
Urea bagging plant is working satisfactorily and noticeable improvement
has been observed in work culture. The concept of BBS was introduced in
the Single Super Phosphate (SSP) plant also. As a part of safety
improvement initiatives, a Safety portal - Uttam Suraksha Setu has been
developed and implemented during the year. This has enabled online
reporting, management and monitoring of safety incidents and records.
Your Company has a well-defined "Onsite Disaster Management Plan" and
MARG (Mutual Aid and Response Group) arrangement with neighbouring
industry. Regular mock drills, fire drills and table top drills were
conducted to verify emergency preparedness. Prompt services for fire
fighting were provided to villages surrounding Gadepan plants. Various
fire-fighting and emergency handling equipment have been added to
further improve the capability.
(c) Environment Management
Environment protection is one of the top priorities of your Company and
a strong Environment Management System is in place. Extensive
environmental monitoring is carried out to assess pollution risk to all
personnel working directly or indirectly with us and residing in
surrounding areas and immediate corrective and preventive measures are
taken. Online monitoring system for effluent and emissions are being
installed.
The conservation of natural resources is a priority area for your
Company. The measures like Rain Water Harvesting, Ground Water
Recharging, Energy Conservation, etc. are some of the efforts
continuously made by your Company for this purpose. Your Company
continues to follow the 3R concept (Reduce, Re-use and Re-cycle) for
waste management. Almost 100% condensate is recycled back to system.
Your company has adopted best practices to manage solid / hazardous
waste disposal after proper categorization. Use of polythene bags are
strictly prohibited in Gadepan campus.
The Company's Gadepan complex made a positive change in Ecology due to
development of a dense green belt with thousands of trees & shrubs with
fruits and flowers in an area of about 153 hectares. Regular
plantations are done in the campus. This has provided habitat to many
species of birds. Only treated waste water is used in maintaining the
green belt through irrigation network spread all over the complex.
(d) Quality Management
Your company is ISO 9001:2008 certified and proper attention is
accorded to maintain quality of end product and processes. The quality
assurance is ensured at all stages of manufacturing processes,
maintenance and support services. Quality is continually improved by:
"determining and taking care of internal and external customer
requirements, future needs and expectations". Quality reviews are
regularly conducted and feedback from end users - farmers is accorded
high value.
(e) Health, Safety, Environment, Quality (HSEQ) Audits and Reviews
HSEQ system is continually improved by conducting periodic audits by
teams of trained internal auditors and reputed external agencies. The
better practices of other organisations are adapted as per our own
requirements.
(f) Achievements
Your Company regularly participates in national and international
benchmarking surveys and awards for independent assessment and
opportunity for continual improvement. Your Company has received
following prestigious awards during the year under review:
* National Award for prevention of Pollution for the year 2010-11 under
the Fertiliser category from Govt. of India, Ministry of Environment
and Forests.
* Certificate of appreciation from National Safety Council of India
(Safety awards 2013) for the year 2010-2012.
* Environmental Protection Award (Winner) in the Nitrogenous Fertiliser
Plants Category for the year 2013-14 from Fertiliser Association of
India.
* Rajasthan Energy Conservation Award (RECA - 2014) from Department of
Energy, Govt. of Rajasthan.
8. Corporate Social Responsibility (CSR)
Your Company strives to make difference in the lives of people with a
special focus on neighbouring areas. Your Company has identified and
implemented various CSR programmes / Projects which made perceptible
positive impact mainly in the area of education and general awareness.
The CSR programmes / projects of the Company are implemented directly,
through KK Birla Memorial Society as well as in collaboration with
other established and reputed Non-Government Organisations. The major
highlights of the CSR projects/ Programmes of the Company during the
Financial Year 2014-15 are as under:
a) School Education: The Company has adopted 32 Government Schools in
22 villages of District Kota in the vicinity of its plants at Gadepan.
Intervention in school education is being carried out through two
agencies namely Pratham Education Foundation and Kumar Classes for
improving the education level of students. The education standards in
Rajasthan are lower than the national average and that in Company's CSR
area is substantially lower than the average standard of Rajasthan.
After your Company's intervention, an impact assessment was carried out
in March 2015. Good improvement has been observed in learning levels of
students at all levels in 32 schools in last three quarters vis-a-vis
baseline survey. As a pilot project, Computer education has been
introduced in 10 schools to introduce digital literacy in Government
Schools. The Company also provided free of charge school furniture,
stationary, school bags, shoes, woollens, etc. in the adopted schools.
Major challenges faced in this intervention are (a) making government
teachers accountable; and (b) availability of good private teachers, in
particular the female teachers for Balwadi Centres.
b) Technical Education: Your Company has adopted 2 Industrial Training
Institutes (ITIs) at Sangod and Sultanpur in Kota district of
Rajasthan. ITI Sangod was taken over 2 years back and has made very
good progress in terms of number of courses offered, student enrolment
and campus placement of the students. Almost 100% eligible students of
ITI, Sangod were placed with reputed companies. ITI Sultanpur was
adopted during the year 2014-15. We have built necessary
infrastructure, bought equipment and sought fresh affiliation approval
from Central Government for the existing courses as well as
introduction of new courses. Apart from the ITIs, the company is
running 2 vocational training centres to train about 400 youths
annually on the lines of Skill India Mission.
c) Development of Infrastructure: The Company has carried out following
infrastructure development projects:
i) Renovation of newly adopted 6 Government schools.
ii) Construction of Girls toilets in 34 Secondary and Senior Secondary
Government Schools in Sultanpur Block.
iii) Construction of 125 individual toilets in adjoining villages.
iv) Construction of pavements, drainage and roads in collaboration with
MNREGA schemes.
d) Health Care: The Company provides healthcare free of charge in
adjoining 23 villages of Kota district and 5 villages in Mussoorie in
collaboration with Manorama Devi Birla Charitable Trust.
e) Soil Health: The Company is running Soil Health Laboratories at
Agra and Kota apart from mobile vans, with an annual capacity of 50,000
samples of soil and water.
f) Disaster Relief: The Company has carried out relief work in Jammu &
Kashmir through an NGO - Pragya International.
As part of its CSR programmes, the Company has also taken various
initiatives under Swachh Bharat Mission, Gramin Swarojgar Yojana, etc.
The Company received various recognitions and awards for its CSR
activities like ASSOCHAM- CSR Excellence Award, Think Media CSR Award
etc. Further, the Manager (CSR) was selected amongst 50 talented CSR
leaders by world CSR congress.
The composition of Corporate Social Responsibility Committee is given
in the Corporate Governance Report. The details of the development and
implementation of the Corporate Social Responsibility Policy and Annual
Report on CSR activities as prescribed under Section 135 of the
Companies Act, 2013 and the Companies (Corporate Social Responsibility
Policy) Rules, 2014 is annexed herewith as Annexure "E".
For the purpose of Section 135 of the Companies Act, 2013, the amount
equivalent to 2% of the average net profits of the Company made during
the immediately preceding three financial years works out to Rs. 9.10
crore. As against this, the Company spent Rs. 8.36 crore on CSR
projects / programs. Due to the low monetary value of individual
projects in villages, the mobilization of resources was extremely
challenging in terms of availability of trained manpower and
contractors to complete the projects. Hence, it was not able to spend
the balance amount.
9. Directors and Key Managerial Personnel
(i) Directors
The Board consists of eight directors - seven non-executive directors
including four independent directors and a Managing Director. Mr. Saroj
Kumar Poddar (DIN 0008654) is due for retirement at the forthcoming
Annual General Meeting and has offered himself for re-appointment.
Mr. R.N. Bansal (DIN 00270908), Independent Director retired at the
last Annual General Meeting of the Company. Further, M/s. Marco P.A.
Wadia (DIN 00244357), Kashi Nath Memani (DIN 00020696), Dipankar Basu
(DIN 00009653) and Ms. Radha Singh (DIN 02227854) were appointed in
that meeting as Independent Directors for a term of 3 consecutive
years.
Mr. Dipankar Basu submitted his resignation from the Board of Directors
with effect from February 3, 2015. Mr. Basu was associated with the
Company for 18 years and the Company immensely benefitted from his rich
knowledge and experience. The Board expresses its sincere gratitude and
appreciation of the outstanding contribution made by Mr. Basu during
his tenure as a Director of the Company.
The Board of Directors, on the recommendation of the Nomination and
Remuneration Committee, had appointed Mr. Aditya Narayan (DIN
00012084) as an Additional Director of the Company in the category of
Independent Director with effect from April 1, 2015. In pursuance of
Section 149 of the Companies Act, 2013, the Board is recommending the
appointment of Mr. Aditya Narayan as an Independent Director of the
Company with effect from 1st April, 2015, to hold office upto the
Annual general Meeting of the Company to be held in the Year 2018.
Mr. Aditya Narayan is not a relative (as defined under the Companies
Act, 2013 and Rules thereunder) of any director of the Company.
The Board of Directors had re-appointed Mr. Anil Kapoor (DIN 00032299)
as Managing Director of the Company for a period of 2 years with effect
from February 16, 2015 and the Board commends the re-appointment of Mr.
Anil Kapoor for approval of the shareholders.
During the year, the Managing Director has not received any commission
or remuneration from any subsidiary of the Company.
All the Independent Directors have submitted declarations that they
meet the criteria of independence as provided under Section 149 of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Board met seven times during the Financial Year 2014-15.
Other information on the directors and the Board Meetings is provided
in the Corporate Governance Report annexed to this Report as Annexure
"B".
(ii) Key Managerial Personnel
Pursuant to the provisions of the Companies Act, 2013, the Board
appointed Mr. Abhay Baijal as the Chief Financial Officer of the
Company and designated him Key Managerial Personnel in such capacity
with effect from April 1, 2014. The Board has also designated Mr. Anil
Kapoor, Managing Director and Mr. Multan Singh Rathore, Vice President
 Legal, Corporate Communication and Secretary as Key Managerial
Personnel, with effect from April 1,2014. Mr. M.S Rathore will cease to
be Secretary of the Company with effect from May 01, 2015. The Board
has appointed Mr. Rajveer Singh as Secretary of the Company from the
same date.
10. Internal Financial Controls
The Company has policies and procedures for ensuring the orderly and
efficient conduct of its business including adherence to Company's
policies, the safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness of the accounting
records and the timely preparation of reliable financial information.
The details of internal control system are given in the Management
Discussion and Analysis Report attached hereto as Annexure "A".
11. Remuneration Policy
The Remuneration Policy of the Company including criterion for
determining qualifications, positive attributes, independence of
Directors and other matters as prescribed under Section 178 of the
Companies Act and clause 49 of the listing agreement is annexed to this
Report as Annexure "F"
12. Disclosures under the Companies Act, 2013 and Rules thereunder
a) Your Company has not issued any shares during the Financial Year
2014-15.
b) No significant and material orders have been passed by the
regulators or courts or tribunals impacting the going concern status
and company's operations in future.
c) All Related Party Transactions entered during the year were in
ordinary course of business and on arm's length basis. No material
Related Party Transaction (transaction exceeding ten percent of the
annual consolidated turnover as per last audited financial statements),
was entered during the year by the Company.
Accordingly, disclosure of Related Party Transactions as required under
section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not
applicable.
d) The extract of annual return is attached to this Report as Annexure
"G"
e) The following information is given in the Corporate Governance
Report attached to this Report as Annexure"B".
i. The Performance evaluation of the Board, the Committees of the
Board, Chairperson and the individual Directors;
ii. The Composition of Audit Committee; and
iii. The details of establishment of Vigil Mechanism.
f) The particulars of loans and guarantees given and investments made
under Section 186 of the Companies Act, 2013 are given in the Notes to
the Financial Statements.
13. Directors Responsibility Statement
Your Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b) the Directors 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 March 31, 2015 and of the profit and loss of the
Company for the year ended March 31,2015;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
d) the Directors have prepared the annual accounts on a going concern
basis;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
14. Auditors
The Notes on Financial Statements read with the Auditors' Reports are
self-explanatory and therefore, do not call for any further comments or
explanations.
M/s. S. R. Batliboi & Co. LLP, Statutory Auditors (Registration No.
301003E) and M/s. Singhi & Co., Chartered Accountants (Registration No.
302049E) Branch Auditors of Shipping Business of the Company were
re-appointed from the conclusion of 29th Annual General Meeting (AGM)
of the Company till the conclusion of 31st AGM of the Company to be
held in the year 2016. Your Directors are seeking ratification of the
appointment of M/s. S.R. Batliboi & Co. LLP, Statutory Auditors and
M/s. Singhi & Co., Branch Auditors of Shipping Business of the Company
from the conclusion of the ensuing 30th AGM of the Company till the
conclusion of 31st AGM of the Company.
The Board of Directors of the Company appointed M/s. K.G. Goyal &
Associates, Cost Accountants for conducting audit of cost accounts of
the Company, as applicable, for the financial year 2014-15. As required
under the Companies Act, 2013 and Rules framed thereunder, your
directors are seeking ratification of the members for the remuneration
payable to M/s K.G. Goyal & Associates, Cost Accountants.
15. 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 Board of Directors of the Company has
appointed M/s. RMG & Associates, Practicing Company Secretaries for
conducting secretarial audit of the Company for the financial year
2014-15. The Secretarial Audit Report issued by the aforesaid
Secretarial Auditors is annexed herewith as Annexure "H".
There is no qualification, reservation, observation, disclaimer or
adverse remark in the Secretarial Audit Report which may require
explanation from the Directors.
16. Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The Company continuously endeavours to make its plants energy efficient
and reviews various options to conserve energy on regular basis. The
energy conservation is of paramount importance for sustainable business
and it also results into saving of natural and financial resources. The
Company has five double hull Aframax Tankers and these ships are more
energy efficient as compared to the old vessels. The requisite
information with regard to conservation of energy, technology
absorption and foreign exchange earnings and outgo in terms of the
Companies (Accounts) Rules, 2014 is set out in Annexure "I" attached
hereto.
17. Risk Management
Your Company has developed and implemented a Risk Management Policy.
The Company has constituted Risk Management Committee which
periodically reviews all risks, finalise the risk document and monitors
various risks of the Company including the risks, if any, which may
threaten the existence of the Company. The composition and terms of
reference of the Risk Management Committee are given in the Corporate
Governance Report.
The risk document containing Key and Non-Key risks including way
forward for mitigation thereof, as approved by the Risk Management
Committee, is also circulated to the Audit Committee and the Board of
Directors for their review periodically.
18. fixed Deposits
Your Company has discontinued accepting new deposits with effect from
July 1, 2008. As on March 31,2015, fixed deposit amount of Rs. 133,871
pertaining to 4 depositors remained unpaid / unclaimed despite regular
reminders to the concerned depositors. In addition to this, a sum of
Rs. 38,735 towards interest on deposits is lying unpaid / unclaimed
with the Company. Your Company has not defaulted in repayment of
deposits or payment of interest during the year. The Company has not
accepted deposits from the public falling within the ambit of Section
73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014.
19. Particulars of employees
The human resource is one of the most important assets of the Company
which has played pivotal role in its performance and growth. Your
Company has very healthy work environment matched with adequate
compensation packages which enables it to attract and retain high
calibre employees. Information required to be disclosed in pursuance of
Section 197 of the Companies Act, 2013, read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014,
forms part of this Report and is attached hereto as Annexure "J".
20. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option
Scheme 2010 ("ESOS 2010") on August 27, 2010 for issue and allotment of
options exercisable into not more than 41,62,000 equity shares of face
value of Rs. 10/- each to eligible employees and Managing Director of
the Company. Each option when exercised would be converted into one
fully paid up equity share of Rs. 10 of the Company. The ESOS 2010 is
administered by the Nomination and Remuneration Committee of the Board
of Directors of the Company. The disclosure in respect of ESOS 2010 is
given in Annexure "K" attached hereto.
21. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, Rules
thereunder, listing agreement with the Stock Exchanges and the
applicable Accounting Standards, the Company has prepared Consolidated
Financial Statements. The Audited Consolidated Financial Statement
alongwith Auditors' Report and the Statement containing salient
features of financial statements of subsidiaries and joint venture
(Form AOC - 1) forms part of the Annual Report.
22. Investor Service Centre
The In-house Investor Service Centre of your Company located at New
Delhi, provides prompt service to the investors. The Company takes
various pro-active measures for investor satisfaction like timely
reminders to investors about new corporate benefits, undelivered
shares, unclaimed benefits, etc.
The equity shares of your Company are listed at National Stock Exchange
of India Limited and BSE Limited. The Company has paid annual listing
fees to these Stock Exchanges for the Financial Year 2015-16.
The members are requested to refer to general shareholders' information
given in Corporate Governance Report appended hereto.
23. Acknowledgements
Your Directors wish to place on record their appreciation of the
support and co-operation received from the Department of Fertilisers,
Government of India, State Governments, Domestic and International
Financial Institutions & Banks and other stakeholders. Your Directors
also convey their sincere appreciation of the commitment, hard work and
devotion of every employee of the Company which has enabled the Company
to achieve sustained performance.
For and on behalf of the Board of Directors
Place: New Delhi S. K. Poddar
Date: April 30, 2015 Chairman
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the 29th Annual Report on
the business and operations of the Company together with audited
accounts for the financial year ended March 31, 2014.
1. Financial Results and Appropriations
(Rs. in crore)
Particulars 2013-14 2012-13
(a) Turnover (excluding excise duty) 7976.42 7337.48
(b) Gross Profit after Finance Cost
but before Exceptional Items,
Depreciation and Tax 576.23 666.81
(c) Depreciation / Amortization 230.31 222.04
(d) Profit before Exceptional Items
and Tax 345.92 444.77
(e) Exceptional Items - (11.96)
(f) Profit before Tax 345.92 456.73
(g) Provision for Current Tax 40.14 121.07
(h) Provision for Deferred Tax 2.71 30.05
(i) Profit after Tax 303.07 305.61
(j) Balance of Profit Brought Forward 1229.01 1065.92
(k) Profit available for Appropriation 1532.08 1371.53
(l) Reversal of Dividend on
Equity Shares held by CFCL
Employees Welfare Trust (Trust) 0.87 -
(m) Appropriations:
- General Reserve 50.00 50.00
- Proposed Dividend on Equity Shares 79.08 79.08
- Tax on Dividend 13.44 13.44
- Proposed Dividend on
Equity Shares held by Trust (0.43) -
(n) Balance Carried Forward to
Balance Sheet 1390.86 1229.01
2. Operations:
The Company has three business segments viz. Fertiliser, Shipping and
Textile with Fertiliser being the largest amongst them. The Fertiliser
Division comprises of manufacturing of Urea and Single Super Phosphate
(SSP) and trading of fertilisers and other agri-inputs. The Company has
registered an increase in the turnover of Own Manufacture Fertilisers
mainly due to increase in prices of Natural Gas, depreciation in value
of Indian Rupee vis-Ã -vis US$ (as the Natural Gas prices are
denominated in US$) and increase in sales volume of Urea. There was
decrease in turnover from Trading segment mainly due to reduction in
prices of traded fertilisers and lower sales of traded SSP and
pesticides. The Shipping business continues to under- perform. The
turnover of Shipping Division is higher mainly because of revenue from
in-chartered ships and foreign exchange rate variations. The Textile
business has performed better in comparison to the previous year with
higher turnover and increase in profitability.
The Fertiliser Business faced challenges on various fronts during the
year under review. The higher inventories of phosphatic fertilisers in
the market had dampening effect on sales of traded fertilisers. The
un-favorable policy of Urea pricing in respect of production beyond
re-assessed capacity has forced the Company to restrict production of
Urea. During last few years, the Government of India has resorted to
under-provisioning for fertiliser subsidy in the union budget. This has
resulted into long delays in payment of subsidy to the fertiliser
companies thereby substantially increasing industry''s interest burden.
The Shipping business continues to be under stress with freight rates
and asset prices struggling at low levels. The signs of recovery were
visible in January 2014 but the freight rates have again come down. The
sustainable recovery in the shipping industry is likely to take some
more time.
The performance of Textile business remained satisfactory with signs of
stress during the later part of the Year. The Textile Business was able
to achieve slightly better sales and profitability in comparison to the
previous year.
The detailed information on all the three business segments of the
Company and the respective industries are given in the Management
Discussion and Analysis Report attached as Annexure "G" to this report.
3. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10
each (Previous Year  Rs. 1.90 per equity share) for the financial year
ended March 31, 2014. The total outgo on this account will be Rs. 92.52
crore including dividend distribution tax.
4. ''Corporate Governance Report'' and Code of Conduct
The Company is committed to maintain highest standards of Corporate
Governance and strives to improve the corporate governance standards.
Corporate Governance Report for the Financial Year 2013-14 is attached
as Annexure "D". The declaration of the Managing Director confirming
compliance with the ''Code of Conduct and Ethics'' is enclosed as
Annexure "E" and Auditors'' Certificate confirming compliance with the
conditions of Corporate Governance is enclosed as Annexure "F".
5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID)
IMACID is a joint venture of your Company with two other partners i.e.
Tata Chemicals Limited and OCP, Morocco. Each of the three partners
hold equal stake in the joint venture (i.e. 33.33% each). IMACID is
engaged in the manufacture of phosphoric acid (P2O5) in Morocco.
During the calendar year 2013, IMACID produced 368,294 MT of P2O5
against a design capacity of 430,000 MT of P2O5. The sales during the
year 2013 were 351,480 MT of P2O5 against the previous year sales of
254,919 MT of P2O5 and 54,436 MT of DAP (equivalent of 25,421 MT of
P2O5 tolled through OCP). The plant was shut down from March 22, 2013
to May 7, 2013 due to adverse market conditions.
During the year 2013, IMACID achieved revenue of Moroccan Dirham (MAD)
2135.72 million (Rs. 1471.35 crore) against revenue of MAD 2264.13
million (Rs. 1388.86 crore) achieved during the year 2012. The profit
after tax of IMACID was MAD 83.15 million (Rs. 57.28 Crore) during the
year 2013 as against MAD 9.26 million (Rs. 5.68 crore) in the previous
year.
IMACID achieved production and sales of 62,192 MT and 74,768 MT
respectively of P2O5 with operating income of MAD 308.85 Million (Rs.
229.80 crore) during January  March 2014 quarter.
6. Subsidiaries
(i) Chambal Infrastructure Ventures Limited and its Subsidiaries
Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned
subsidiary of your Company. CIVL was set up to pursue the business
opportunities in Power Sector. CIVL had established two down-stream
wholly owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited
and Chambal Energy (Orissa) Limited for setting up power projects in
the states of Chhattisgarh and Odisha, respectively. CIVL has
identified suitable site for its project in Odisha and necessary
approvals in this regard were being pursued. There was no activity
during the year for power project in Chhattisgarh.
(ii) CFCL Overseas Limited, Cayman Islands and its Subsidiaries
CFCL Overseas Limited is a wholly owned subsidiary of your Company and
a holding entity for software business. CFCL Technologies Limited, the
flagship Company which controls the entire software business, is a
subsidiary of CFCL Overseas Limited. CFCL Technologies operates
business through its step-down subsidiaries mainly in USA and India.
The software business continued its focus on conservation of resources,
cost optimization and making necessary investments to turnaround the
business. The Software Business generated EBITDA of USD 4.98 million in
calendar year 2013. Revenue of Software business saw a marginal
decrease, from USD 78.20 million in 2012 to USD 74.80 million in 2013,
driven by weak origination market.
The software business as a whole incurred a net loss of USD 5.90
million during the year 2013 as against net loss of USD 18.10 million
incurred in the year 2012.
(iii) India Steamship Pte. Limited, Singapore and its Subsidiary
India Steamship Pte. Limited, Singapore is a wholly owned subsidiary of
your Company mainly into chartering business. There was no business
activity in this entity during the year. The Board of Directors of
this company declared dividend of USD 3.25 per share amounting to USD
3,509,876 during the year, out of accumulated profits.
India Steamship International FZE, UAE is a wholly owned subsidiary of
India Steamship Pte. Limited Singapore. There was no business activity
in this entity during the year under review.
(iv) India Steamship Limited, India (ISL)
ISL is a wholly owned subsidiary of your Company. During the year, the
issued and subscribed capital of the Company was reduced to Rs.
25,00,000/- (Rupees Twenty Five Lac only) divided into 2,50,000 (Two
Lac Fifty Thousand) fully paid up equity shares of Rs. 10/- each from
Rs. 51,05,00,000 (Rupees Fifty One Crore Five Lac only) divided into
50,000 (fifty thousand) equity shares of Rs. 10/- each fully paid up,
4,10,00,000 (Four Crore Ten Lac) partly paid up equity shares of Rs.
10/- each {Rs. 0.50 per share paid up} and 1,00,00,000 (One Crore)
non-cumulative redeemable partly paid preference shares of Rs. 10/-
each {Re. 1/- per share paid up} vide order dated November 28, 2013
passed by Hon''ble High Court of Rajasthan at Jaipur.
There was no business activity in ISL during the year under review.
Exemption: The Government of India vide its circular dated February 8,
2011 granted general exemption to the companies from attaching with
Annual Report, the copies of the Balance Sheet, Statement of Profit and
Loss, Board of Directors'' Report and Auditor''s Report of its
subsidiaries. Accordingly, the Board approved non-attachment of
aforesaid documents of subsidiaries with the Annual Report of the
Company. The Consolidated Financial Statements presented by the Company
include the financial information of its subsidiaries, as applicable.
The Company will make available the Annual Accounts of its subsidiaries
along with relative detailed information upon request by investors of
the Company or its subsidiaries. The Annual Accounts of the
subsidiaries will be available for inspection by any shareholder at the
corporate offices of your Company and respective subsidiaries during
office hours.
7. Health, Safety and Environmental Protection
Your Company gives high priority to Health, Safety and Environment
protection and operates with the motto of ''Safety First''. This aspect
is reflected in the day to day operations of the Company. The senior
management of the Company continuously monitors the progress and
performance of the Company on the parameters of Health, Safety and
Environment Protection. The Company strives for continuous improvement
through benchmarking studies and other appropriate methodologies. The
efforts are always on to deeply engrain the safety aspects in the
people involved in the operations of the Company. Your Company has
established and is maintaining an Integrated Management System at
Gadepan; based on OHSAS-18001:2007, ISO-14001:2004, ISO-9001:2008. The
township at Gadepan is also OHSAS-18001 & ISO-14001 certified.
(a) Health & Hygiene
The health assessment and occupational disease monitoring of employees
and associates is done through regular periodic medical examinations.
A well equipped occupational health centre in the campus at Gadepan
works round the clock to provide Health Services to employees, their
families, contractor work force and villagers in the vicinity of the
plants. New medical equipment and services are added to continuously
upgrade the facilities at health centre.
Necessary training was imparted to the employees and workers to enhance
their awareness towards health related matters. Some of our employees
are certified first-aiders.
(b) Safety Management
A strong occupational  health and safety management system
OHSAS-18001:2007 is in place in your Company in Fertiliser Division at
Gadepan to ensure occupational health & safety of employees, contractor
workforce as well as equipment and machinery.
Further, your Company has implemented, in its operations at Gadepan,
Process Safety Management System developed by Occupational Safety &
Health Administration (OSHA) for proactive identification, assessment &
control of hazards.
To maintain and improve upon the well established safety systems,
extensive trainings were conducted by internal & external experts on
rescue, work at height, working inside confined space, fire fighting &
emergency handling, electrical safety, material handling, road safety,
etc.
As a new initiative, contractors'' safety committee has been formed
under chairmanship of maintenance head for further increasing their
involvement and improvement in safety compliance and ownership.
The concept of Behavior Based Safety (BBS), introduced last year for
safety improvement in the bagging plant is working satisfactorily
through selected BBS Champions; which include representatives from
employees and contractors'' staff. Noticeable improvement in work
culture is visible such as reporting of observations for safety
improvement, reduction in unsafe acts & conditions and injuries.
Various safety projects have been undertaken to improve safety system
of SSP plant at Gadepan. A unique initiative of providing automated
machine guards in moving machinery was undertaken to ensure safe
operations.
We have a well established safety reward system for encouraging
employees and contractors'' staff for achieving safety excellence. The
Company gave rewards for safe million man-hours, safe shutdown,
reduction of injuries in bagging, best near miss reporting, best safety
performance by a department, etc.
Your company is associated with international and national safety
institutions of repute such as National Safety Council of US, British
Safety Council, International Fertiliser Association, National Safety
Council of India and other Govt. bodies. Safety month, National Safety
Day, Road Safety Week, Fire Service Day & World Environment Day, etc.,
campaigns were organized involving employees, their families and
contractors'' staff at Gadepan.
School children and staff were introduced to fire fighting & emergency
handling equipments and procedure at Fire Station. As a special drive
towards improvement in road safety, film shows and discussion by
experts were organised for township residents. Environment safety
workshop and fire fighting demo was organised for ITI Sangod students
at ITI Sangod.
Emergency handling: Your Company has a well-defined "Onsite Disaster
Management Plan". Regular mock drills & fire drills were conducted to
verify the emergency preparedness. Prompt services for fire fighting
were provided to surrounding villages. The on-site emergency plan and
Mutual Aid & Response Group document has been thoroughly revised this
year.
(c) Environment Management
i. Environment Protection - Environment protection is the top priority
of the management. A strong Environment Management System ISO-
14001:2004 is in place in Urea and Ammonia production activities and
the Township at Gadepan. Extensive environmental monitoring is carried
out to assess pollution risk to all personnel working directly or
indirectly with us or residing in surrounding areas and necessary
corrective & preventive actions are taken.
ii. Sustainable Development  Your company is totally committed to
sustainable development and has undertaken various environment
improvement programmes to conserve natural and other resources viz.
Rain Water Harvesting, Ground Water Recharging, Energy Conservation
Measures, Pollution Control, Use of Solar Energy, etc. Few initiatives
taken by your Company are installation of LED street lights, variable
frequency drives, upgradation of synthesis gas compressor, installation
of ammonia product heater, etc.
iii. Waste Management  Your Company continues to follow the 3R concept
(Reduce, Re-use and Re-cycle) for waste management. Almost 100%
condensate is recycled back to the system. Your Company has adopted
best practices to manage solid / hazardous waste disposal after proper
categorization. Recyclable waste is disposed off and saleable items are
sold to approved recyclers. Use of polythene bags is strictly
prohibited in the Gadepan campus.
iv. Green belt Development Your Company''s complex at Gadepan is
experiencing a positive change in Ecology due to development of a dense
green belt/ forest with thousands of trees & shrubs in an area of about
153 hectares. This has provided habitat to many species of birds which
includes large number of peacocks. Only treated waste water is used in
maintaining green belt through a 65 kilometer long irrigation network
spread all over the complex.
v. Water conservation Your Company continuously works on various water
optimization measures as our area is water scarce. Water audits and
studies have been conducted through internal and external experts to
explore more avenues of water conservation. Kalisindh water river
mapping has been done for studying intake water quality. Special
efforts have been made in optimization of water consumption at Gadepan.
The specific consumption of water is 4.98 cubic meters per MT of Urea
this year against the water consumption norms of 8.0 cubic meters per
MT of Urea for fertiliser industry.
(d) Quality Management
Your Company is ISO 9001:2008 certified and adequate attention is
accorded to maintain quality of end product and processes. To enhance
customer satisfaction quality assurance is ensured at all stages of
manufacturing processes and maintenance & support services. Quality is
continually improved by determining and taking care of internal and
external customer requirements, future needs and expectations. Regular
quality reviews are conducted and feedback from end-users is valued
high as they are pillars for quality improvement and sustenance.
(e) Health, Safety, Environment & Quality (HSEQ) Audits and Reviews
HSEQ system is continually improved by conducting Hazards & Risk
assessments, periodic audits by teams of trained internal auditors and
external agencies of repute. Learning visits to other good performing
organizations were conducted and their better practices were adapted as
per our own requirements. To strengthen the audit, various internal
audits were conducted on systems such as ammonia storage, fire water
pump house, safety showers, first-aid boxes, pull chords, etc.
(f) Achievements
Your Company regularly participates in national and international
benchmarking surveys and awards for independent assessment and
opportunity for continual improvement. Your Company has received
following prestigious awards during the year under review:
- 1st prize (Platinum) in Large Size Category (FICCI Safety
Systems Excellence Awards for Manufacturing 2013)
- Certificate of appreciation from National Safety Council of India for
Occupational Safety & Health for 2009- 2011 ("National Safety Council
of India 2012" Safety Awards)
- Certificate of appreciation from Associated Chambers of Commerce and
Industry of India for Corporate Social Responsibility (ASSOCHAM CSR
Excellence Awards 2013-14)
8. Corporate Social Responsibility (CSR)
Your Company is committed in improving the quality of life of people
with a special focus on neighboring areas. Your Company has taken
number of initiatives for the community development in consultation
with local administration at the village, block and district levels.
Your Company has also formed an NGO Â KK Birla Memorial Society to
undertake CSR activities, in particular the Public-Private-Partnership
(PPP) Schemes.
The Company has undertaken various CSR initiatives during the year
under review, brief details of some of which are given below:
a) Education
CFCL is extending quality education to children from rural community by
providing admission to Chambal Fertilisers DAV School. More than 50%
students in this school are from surrounding rural community.
Your Company has adopted 24 primary and upper primary government
schools of nearby 22 villages under PPP Scheme of Government of
Rajasthan. Your Company completed renovation of Government schools and
construction of girls'' toilets in each school and Stationary, school
bags, note books and sweaters were provided to around 2000 students.
The Company also organized sports, drawing and cultural competitions to
motivate these children and prizes were given to them. Your Company is
adopting another 5 Secondary & Senior Secondary and 3 Primary schools
to take care of entire school education in its CSR project area.
A reputed NGO has been engaged in improving learning level of school
children. The aim is to provide quality education to school children in
partnership with Sarva Shiksha Abhiyan and Rastriya Madhyamik Shiksha
Abhiyan of Government of India. The Company gave financial assistance
for a few under-privileged girl students and for purchase of Genset for
a school for blind children.
b) Technical Education
Your Company had adopted Government Industrial Training Institute (ITI)
 Sangod in 2010-11 under PPP scheme. After complete renovation of the
building and introduction of 4 new trades, the ITI has established
itself as one of the top ITIs in Rajasthan under the guidance of your
Company. The institute has been able to achieve 100% placement of the
students in last 2 years. Encouraged by the success, your Company has
adopted another ITI at Sultanpur (Rajasthan).
c) Vocational Education
Your Company has set up a vocational training center at Gadepan and
Kundanpur villages to empower unemployed rural youth specially women.
During this year, around 120 women were trained in ''Tailoring &
Stitching Course'' and ''Beautician Course''.
d) Community Health Care
The Company operates a mobile Health Care Unit in 23 surrounding
villages and provides free medical check up and medicines to people at
their doorsteps. Ambulance facilities are also provided to community
round-the-clock for taking patients to Kota hospitals in emergency
situations, thus benefiting over 300 cases.
During the year, around 15,451 people were treated for different
ailments. The community also avails the services of specialists in
various fields such as pediatrics, gynecology, skin, dental, eye, etc.
during their visits and free camps organized for them. Over 3,550
patients benefited during such visits and camps.
The Company has contributed Rs. 30 lac to Manorama Devi Birla
Charitable Trust to support their community healthcare initiatives in
Uttarakhand.
e) Rural Infrastructure
The Company has constructed pavement roads in Pachara, Motikuan,
Bamori, Cheensa, Palaitha, Gadepan Ki Jhopariyan, Sarola, etc. villages
to improve quality of life of rural folks. Pavement road and drain
facility construction was completed in entire Gadepan village under PPP
scheme.
The Company alongwith its employees provided relief by way of
constructing 32 green houses, 16 toilets and 10 water storage tanks
with filtration units in 4 villages of Chamoli district in Uttarakhand.
9. Disclosure of Particulars
The Company strives to make the plants as energy efficient as possible
and reviews various options to conserve energy on regular basis. The
improvement in energy efficiency not only helps in environment
protection but it also adds to the bottom-line of the Company. The
requisite information with regard to conservation of energy, technology
absorption and foreign exchange earnings and outgo in terms of the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is set out in Annexure "A" attached hereto.
Information required to be furnished in Form A is not applicable to
shipping industry. The Company has 5 double hull Aframax Tankers and
these ships are more energy efficient as compared to the old vessels.
The Shipping Division has no information to furnish in Form B regarding
technology absorption.
10. Investor Service Centre
The In-house Investor Service Centre of your Company located at New
Delhi, provides prompt service to the investors. The Company takes
various pro-active measures for investor satisfaction like timely
reminders to investors about new corporate benefits, undelivered
shares, unclaimed benefits, etc.
The equity shares of your Company are listed at National Stock Exchange
of India Limited and BSE Limited. The Company has paid annual listing
fees to these Stock Exchanges for the Financial Year 2014-15.
The members are requested to refer to general shareholders'' information
given in Corporate Governance Report appended to this report.
11. Fixed Deposits
Your Company has discontinued accepting new deposits with effect from
July 1, 2008. As on March 31, 2014, your Company had 4 depositors with
fixed deposits of Rs. 1.45 lac, who did not claim their Fixed Deposit
amount despite being reminded regularly.
12.Employees Stock Option Scheme
The members of the Company had approved CFCL Employees
Stock Option Scheme 2010 ("ESOS 2010") on August 27, 2010 for issue and
allotment of options exercisable into not more than 41,62,000 equity
shares of face value of Rs. 10/- each to eligible employees and
Managing Director of the Company. Each option when exercised would be
converted into one fully paid up equity share of Rs. 10 of the Company.
The ESOS 2010 is administered by the Compensation Committee of the
Board of Directors of the Company. Disclosure pursuant to the
provisions of the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 is given in Annexure - "B".
13.Personnel
Your Company recognizes the contribution of its highly motivated human
resource in its performance and growth. Your Company has very healthy
work environment matched with adequate compensation packages which
enables it to attract and retain high caliber employees. Information in
accordance with section 217(2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules, 1975, forms part of
this Report and is attached hereto as Annexure "C".
14.Directors
The Board consists of nine directors - eight non-executive directors
and a Managing Director. Three directors namely M/s. R.N. Bansal, Marco
Wadia and C.S. Nopany are due for retirement by rotation at the
forthcoming Annual General Meeting. M/s. Marco Wadia and C.S. Nopany
are eligible and have offered themselves for re-appointment. In
pursuance of Section 149 of the Companies Act, 2013, the Board is
recommending appointment of M/s. Marco Wadia, Dipankar Basu, Kashi Nath
Memani and Ms. Radha Singh as Independent Directors of the Company to
hold office for 3 (three) consecutive years for a term upto the
conclusion of the Annual General Meeting of the Company to be held in
the calendar year 2017. The Directors proposed to be appointed /
re-appointed are not relatives (as defined under the Companies Act,
2013 and Rules thereunder) inter-se or of any other director of the
Company.
Mr. R.N. Bansal has expressed his unwillingness for re-appointment. Mr.
Bansal has been associated with the Company for last 18 years and the
Company immensely benefitted from his rich knowledge and experience.
The Board expresses its sincere gratitude and appreciation of the
contribution made by Mr. Bansal as a Director of the Company.
Other information on the directors is provided in Corporate Governance
Report annexed to this Report as Annexure "D".
15.Auditors
The Notes on Financial Statements read with the Auditors'' Reports are
self explanatory and therefore, do not call for any further comments or
explanations.
M/s. S. R. Batliboi & Co. LLP, Statutory Auditors and M/s. Singhi &
Co., Branch Auditors of Shipping Business of the Company, are retiring
at the conclusion of the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. Your director are
seeking the re-appointment of the Statutory Auditors and Branch
Auditors from the conclusion of ensuing 29th Annual General Meeting
(AGM) of the Company till the conclusion of 31st AGM of the Company.
The Board of Directors of the Company appointed M/s. K.G. Goyal &
Associates, Cost Accountants for conducting audit of cost records of
the Company for the financial year 2013-14. The Company has filed with
the Ministry of Corporate Affairs (MCA), Government of India, the Cost
Audit Report and Compliance Report for the Financial Year 2012-13 for
the Fertilizer and Textile Divisions of the Company on September 18,
2013 as against the last date of filing on September 30, 2013.
16. Directors Responsibility Statement
Your Directors hereby report:
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relating to material departures;
b) that the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2014 and of the profit of the Company
for the year ended March 31, 2014;
c) that the Directors had 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;
d) that the Directors have prepared the annual accounts on a going
concern basis; and
e) that the Company has adequate internal systems and controls in place
to ensure compliance of laws applicable to the Company.
17. Consolidated Financial Statements
In accordance with ''Accounting Standard 21 Â Consolidated Financial
Statements'', the consolidated financial statements form part of this
Report & Accounts. These consolidated financial statements also
incorporate the ''Accounting Standard 27 Â Financial Reporting of
interest in Joint Ventures issued by the Institute of Chartered
Accountants of India. The consolidated financial statements have been
prepared on the basis of audited financial statements received from
subsidiaries and joint venture entity.
18.Acknowledgements
Your Directors wish to place on record their appreciation of the
assistance and co-operation received from the Department of
Fertilisers, Government of India, State Governments, Domestic and
International Financial Institutions & Banks and other stakeholders,
whose continued support and co-operation has been instrumental in
enabling the Company to achieve its goals. Your Directors also convey
their sincere appreciation of the commitment, hard work and devotion of
every employee of the Company which has enabled the Company to achieve
sustained performance.
By order of the Board
Place: New Delhi S. K. Poddar
Date : May 09, 2014 Chairman
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting the 28th Annual Report on
the business and operations of the Company together with audited
accounts for the financial year ended March 31, 2013.
1. Financial Results and Appropriations
(Rs. in crore)
Particulars 2012-13 2011-12
(a) Turnover (excluding excise duty) 7337.48 6455.24
(b) Gross Profit after Finance Cost
but before Exceptional Items,
Depreciation and Tax 666.81 821.71
(c) Depreciation / Amortization 222.04 262.08
(d) Profit before Exceptional
Items and Tax 444.77 559.63
(e) Exceptional Items (11.96)
(f) Profit before Tax 456.73 559.63
(g) Provision for Current Tax 121.07 127.48
(h) Provision for Deferred Tax 30.05 184.86
(i) Profit after Tax 305.61 247.29
(j) Balance of Profit Brought Forward 1065.92 960.54
(k) Profit available for Appropriation 1371.53 1207.83
(l) Appropriations:
- General Reserve 50.00 50.00
- Proposed Dividend on Equity Shares 79.08 79.08
- Tax on Dividend 13.44 12.83
(m) Balance Carried Forward to Balance
Sheet 1229.01 1065.92
2. Operations:
The Company has three business segments viz. Fertilizer, Shipping and
Textile with Fertilizer being the largest amongst them. The Fertilizer
Division comprises of manufacturing of Urea and Single Super Phosphate
(SSP) and trading of fertilizers and other agri- inputs. This division
has registered a robust overall growth during the year under review.
The Shipping business continues to be under stress and signs of
recovery are not yet visible. The Textile business has improved its
performance from second quarter of the Financial Year 2012-13 and
achieved encouraging results.
The Company has put renewed focus on trading activity during last few
years to fully leverage its goodwill and brand image in the market.
This strategy has borne fruits with an excellent performance on revenue
and profitability fronts from the trading activity in Fertilizer
business. The SSP unit at Gadepan commenced production in second half
of the year.
The worldwide Shipping business continues to remain sluggish with
freight rates on the softer side due to continuing global recession and
oversupply of tonnage. The time charter activity has also remained
sluggish due to downturn in the market. This has adversely impacted the
performance of the Shipping business in general. The Company sold one
of its ageing vessels during the year and presently operates 5 (five)
Aframax vessels, mostly for international trade.
The performance of Textile business at the beginning of the Financial
Year 2012-13 was under pressure. However, it has picked up momentum
from second quarter onwards and achieved excellent results during the
year under review. The performance was supported mainly by good demand
and better realizations from cotton yarn.
The detailed information on all the three business segments of the
Company and the respective industries are given in the
Management Discussion and Analysis Report attached as Annexure "G" to
this report.
3. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10
each, same as in the previous year. The total outgo on this account
will be Rs. 92.52 crore including dividend distribution tax.
4. ''Corporate Governance Report'' and Code of Conduct
Your Directors continue to strive for further improvement in corporate
governance standards and are committed for adhering good corporate
governance practices. Corporate Governance Report for the Financial
Year 2012-13 is attached as Annexure "D". Declaration of the Managing
Director confirming compliance with the ''Code of Conduct and Ethics'' is
enclosed as Annexure "E" and Auditors'' Certificate confirming
compliance with the conditions of Corporate Governance is enclosed as
Annexure "F".
5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID) Your
Company has 33.33% stake in IMACID with two other equal partners - Tata
Chemicals Limited and OCP, Morocco. IMACID is engaged in the
manufacture of phosphoric acid (P2O5) in Morocco.
During the year 2012, IMACID produced 252,907 MT of P2O5 against the
previous year production of 4,29,622 MT. Sales during 2012 were 254,919
MT of P2O5 and 54,436 MT of DAP (equivalent to 25,421 MT of P2O5,
tolled through OCP) against the previous year sales of 412,950 MT of
(P2O5).
The production and sales were substantially lower because of lower
demand resulting into substantial reduction in revenue and
profitability of IMACID. During 2012, IMACID achieved revenue of MAD
2264.13 million (Rs. 1388.86 crore) against revenue of MAD 3325 million
(Rs. 2096.33 crore) achieved during the year 2011. The company earned a
profit after tax of MAD 9.26 million (Rs. 5.68 crore) during the year
2012 as against MAD 366.49 million (Rs. 231.06 crore) in the year 2011.
IMACID achieved production and sales of 77,168 MT and 50,443 MT
respectively of P2O5 with operating income of MAD 448.59 million (Rs.
274 crore) during the period January - March 2013. You may be aware
that IMACID supplies acid mainly to India, where there was an
oversupply of phosphatic fertiliser. Hence the plant was shutdown due
to adverse market conditions. The company is utilizing this opportunity
to carry out repairs to plant and equipment. The plant operations will
commence soon.
6. Subsidiaries
(i) Chambal Infrastructure Ventures Limited and its Subsidiaries
Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned
subsidiary of your Company to venture into Power Business. CIVL had
established two down stream wholly owned subsidiaries viz. Chambal
Energy (Chhattisgarh) Limited and Chambal Energy (Orissa) Limited for
setting up power projects in the states of Chhattisgarh and Odisha,
respectively. CIVL has identified suitable site for its project in
Odisha and necessary approvals in this regard were being pursued. There
was no activity during the year in power project in Chhattisgarh.
(ii) CFCL Overseas Limited, Cayman Islands and its Subsidiaries
CFCL Overseas Limited is a wholly owned subsidiary of your Company and
a holding entity for software business. CFCL
Technologies Limited, the flagship Company which controls the entire
software business, is a subsidiary of CFCL Overseas Limited. CFCL
Technologies operates business through its step down subsidiaries
mainly in USA and India.
The year 2012 was a year of consolidation for software business with
revamp of leadership team including hiring a new CEO, making necessary
investments to turnaround the business and putting the building blocks
in place to steer the organization towards growth and profitability.
The results of the aforesaid measures are beginning to bear fruit and
the software business has added many new clients and successfully
renegotiated a couple of existing loss making contracts. Revenue of
Software business dropped from USD 92.85 million in 2011 to USD 78.20
million in 2012, primarily due to loss of one big client which filed
for bankruptcy and general volume reduction in the Industry. The
Software Business continued to make significant strides with renewed
focus on operational efficiency, cost cutting, organization building
and consolidation. It has been able to re-price successfully some
significant loss making accounts and turned these accounts profitable.
CFCL Technologies Limited and its subsidiaries follow the
January-December Financial Year. The software business as a whole
incurred a net loss of USD 18.11 million during the year 2012 as
against net loss of USD 19.98 million incurred in the year 2011.
(iii) India Steamship Pte. Limited, Singapore and its Subsidiary India
Steamship Pte. Limited, Singapore operates through in- chartered
vessels. During the year, India Steamship, Singapore had limited
operations due to sluggish trend in the international shipping markets.
It has entered into an agreement with Navig8 Inc., Marshall Islands to
share the profit/ loss of a vessel which operated for part of the year.
India Steamship International FZE, UAE is a wholly owned subsidiary of
India Steamship Pte. Limited, Singapore. There was no business activity
in this entity during the year under review.
During the year 2012-13, India Steamship Pte. Limited, Singapore earned
a revenue of USD 1.26 million and made a profit of USD 0.3 million.
(iv) India Steamship Limited, India (ISL)
ISL is a wholly owned subsidiary of your Company. During the year,
there was no business activity in ISL.
Exemption: The Government of India vide its circular dated February 8,
2011 granted general exemption to the companies from attaching with
Annual Report, the copies of the Balance Sheet, Statement of Profit and
Loss, Board of Directors'' Report and Auditor''s Report of its
subsidiaries. The Consolidated Financial Statements presented by the
Company include the financial information of its subsidiaries, as
applicable. The Company will make available the Annual Accounts of its
subsidiaries along with relative detailed information upon request by
investors of the Company or its subsidiaries. The Annual Accounts of
the subsidiaries will be available for inspection by any shareholder at
the corporate offices of your Company and respective subsidiaries.
7. Health, Safety and Environmental Protection
Your Company is committed to maintain high standards of Health, Safety
and Environment protection by conducting all its operations in a
proactive manner. Your Company ensures that these aspects are embedded
in day to day activities and receive utmost importance and priority.
With this objective, your Company has established and is maintaining an
Integrated Management System based on OHSAS-18001:2007, ISO-14001:2004,
ISO- 9001:2008 and Process Safety Management (PSM) system in Gadepan.
The township at Gadepan is also OHSAS-18001 & ISO-14001 certified.
(a) Health & Hygiene
Your Company accords highest priority to health & hygiene of its
employees and associates. Health assessment and occupational disease
monitoring of employees and associates is done through periodic medical
examination by a doctor who is trained in Occupational Health. Surveys,
assessments and trainings are regular features and the plant and
processes are continuously upgraded to improve work place and health
standards.
The medical centre at Gadepan works round the clock to provide Health
Services to employees, associated contractor work force, their families
and villagers in the vicinity of the plants. New equipments and
services are added to continuously upgrade the health care. Many
officers of the Company have been imparted training on first aid and
occupational health.
(b) Safety Management
A strong occupational - health and safety management system
OHSAS-18001:2007 is in place in your Company in Fertiliser Division to
ensure safety of employees, contractor workforce as well as equipment
and machinery. Although not mandatory, your Company has implemented
Process Safety Management (PSM) System developed by Occupational Safety
& Health Administration (OSHA, USA) in its operations for proactive
identification, assessment and control of hazards. Process incidents
were reviewed as per PSM guidelines and trainings and audits were
conducted for overall improvement.
Internal and external expert faculties conducted extensive trainings on
rescue, fire fighting & emergency handling, electrical safety, material
handling, road safety etc. to maintain and improve upon the well
established safety system. E- learning on different safety topics has
been initiated for executives to strengthen further safety trainings.
The workers of associated contractors were involved in safety
promotional activities & trainings to improve safety work culture and
bring reduction in injuries.
During shutdown maintenance, extensive safety trainings under close
supervisions were conducted by external experts. Personal Protective
Equipments (handgloves, dust mask, ear plugs etc.) were provided free
of cost to all contract workers.
An overall safety improvement project has been undertaken by your
Company for bagging plant in association with a consultant. The concept
of Behavior Based Safety (BBS) was introduced last year and is working
satisfactorily through selected BBS Champions, which include
representatives from employees and contractors'' staff. The efforts have
shown improvement in work culture including reduction in unsafe acts
and injuries.
Your Company is associated with world class safety institutions like
National Safety Council of USA, British Safety Council, International
Fertiliser Association, etc. In association with National Safety
Council of India, National Safety Day, Road Safety Week, Fire Service
Day & World Environment Day campaigns were organised involving
employees, their families & contractors'' staff. Safety awareness
materials are regularly distributed to employees, their families and
contractor workers.
The scheme of "Near- Miss" & "Make-to Good" reporting is in place to
encourage safety awareness among employees and contractor workforce.
All near misses, minor injuries & incidents were reviewed; analyzed and
corrective actions were timely taken. The Company has a well
established safety reward system for encouraging employees and
contractors'' staff for achieving various safety excellences.
Your Company has a well-defined "Onsite Disaster Management Plan".
Regular mock drills and fire drills were conducted to check the
emergency preparedness. Visits and consultations were done in near by
industries to learn from each other and improve. Prompt services for
fire fighting were provided to surrounding villages.
(c) Environment Management
Environment protection is one of the top priorities of your Company. A
strong Environment Management System ISO- 14001:2004 is in place in
production facilities as well as the Township at Gadepan to ensure
environment protection, health & safety of employees, their families
and contractor workforce. Extensive environmental monitoring is
carried out to assess pollution risk to all personnel working directly
or indirectly with us or residing in surrounding areas and necessary
corrective & preventive actions are accordingly taken. Some of the
steps taken in this direction are given below.
(i) Sustainable Development - Your Company is committed to sustainable
development and has undertaken various environment improvement
programmes such as Rain Water Harvesting, Ground Water Recharging,
Energy Conservation Measures, Pollution Control, Use of Solar Energy,
etc., to conserve natural resources.
(ii) Waste Management - Your Company continues to follow the 3R concept
(Reduce, Re-use and Re-cycle) for waste management. Almost 100%
condensates are recycled back to system. Your Company has adopted best
practices to manage solid / hazardous waste disposal after proper
categorization. Segregation of waste is ensured at source & separate
bins have been created for collection of various categories of waste.
Horticulture and domestic wastes are converted to manure and used in
the green belt. Recyclable waste is disposed to recyclers and all
saleable items are sold to approved recyclers. The use of polythene
bags is strictly prohibited in the Gadepan campus for many years.
(iii) Green Belt Development- Your Company''s Gadepan complex is
experiencing a positive change in Ecology due to development of a dense
green belt / forest with thousands of trees & shrubs in an area of
about 153 hectares. This has provided habitat to many species of birds
which includes more than 700 peacocks. Only treated waste water is used
in maintaining green belt through a 65 kilometer long irrigation
network spread all over the complex.
(iv) Water Conservation - Your Company continuously works on various
water optimization measures. Water audits and studies have been
conducted through experts to explore more avenues of water
conservation. Special efforts have been made in optimization of cooling
water, fire water network, drinking water & de-mineralised water. The
specific consumption of water was 5.01 cubic meters per MT of Urea this
year against the water consumption norms of 8.0 cubic meters per MT of
urea for fertiliser industry.
(d) Quality Management
Your Company is ISO 9001:2008 certified and adequate attention is
accorded to maintain quality of end product and processes. To enhance
customer satisfaction, quality assurance is ensured at all stages of
manufacturing processes, maintenance and support services. Quality is
continually improved by determining and taking care of internal and
external customer expectations, future needs, etc.
(e) Health, Safety, Environment & Quality (HSEQ) Audits and Reviews
HSEQ system is continually improved by conducting Hazards & Risk
assessments, periodic audits by teams of trained internal auditors and
external agencies of repute. Surprise visits are made to the plant and
canteen to ensure highest standard of housekeeping & hygiene. Safety
systems of ammonia storage, ammonia feed pump areas and carbamate pump
area have been upgraded based on the audit recommendations. ''Fitness
for Service'' inspection for critical piping is under progress. All our
Regional Marketing Offices in Fertiliser Division have been audited and
staff has been trained to improve safety culture in the marketing team.
HSEQ system performance is regularly reviewed at various levels to
ensure its effectiveness and continual improvement.
(f) Achievements
Your company regularly participates in national and international
benchmarking surveys for independent assessment which provides us an
opportunity for continual improvement. Your company has received
following prestigious awards during the year under review:
- "Environment Protection award" in continuation for three years;
2011-12, 2010-11 and 2009-10 from Fertilizer Association of India
(FAI).
- "National Award for Excellence in Water Management 2012, Water
Efficient Unit" from Confederation of Indian Industries (CII) under the
category "Within the Fence".
8. Corporate Social Responsibility (CSR)
Your Company is committed towards the developement of neighboring areas
for improving the quality of life. The Company has taken a number of
initiatives for the community development in consultation with local
administration at the village, block and district levels.
In order to initiate and sustain meaningful actions in this regard,
your Company has full spectrum Corporate Social Responsibility (CSR)
program under the umbrella of "Uttam Roshani". Your company has formed
an NGO - KK Birla Memorial Society to undertake various CSR activities.
The "Uttam Roshani" program is designed as a participatory planning
process to involve stakeholders and create their ownership for
sustainable development of the area.
Under this Program, the thrust is on Health, Education and
Infrastructure. Your Company has taken following initiatives on CSR
front:
(a) Sanitation
To ensure sanitation among rural population in the vicinity of its
plants, your Company has initiated a project to improve sanitary
practices through awareness campaigns and construction of toilets. Your
company has constructed around 800 individual toilets for Below the
Poverty Lines (BPL) families. The project was completed in Financial
Year 2012-13. Awareness about good sanitary habits is spread by
regularly organizing Information, Education & Communication (IEC)
activities on health and sanitation programmes in nearby villages/
schools.
(b) Community Health Care
The Company operates a mobile Health Care Unit in 23 villages
surrounding Gadepan. A doctor and nursing assistant provide free
medical check up and medicines to people at their doorstep.
During the year, over 30,000 people were treated for different
ailments. The Medical Center in Gadepan campus provides free health
service to local populace. Your company regularly organizes free
medical camps for the community to avail the services of visiting
specialists in various fields like pediatrics, gynecology, skin,
dental, eye and ENT. Around 2600 patients benefited under this program
during the year.
Ambulance facilities are also provided to community round the clock for
taking patients to Kota hospitals in emergency. During this year,
around 230 cases were helped through ambulance facility.
CFCL Ladies Club organizes a blood donation camp annually in
association with Kota Blood Bank Society. The Company''s employees and
their families have been actively participating in this initiative and
159 units blood were donated during this year.
(c) Primary & Upper Primary Education
Your Company is extending quality education to children from community
through Chambal Fertilisers DAV School. Over 47 % students in this
school are from surrounding community.
Your Company has adopted 24 primary & upper primary government schools
of nearby 22 villages under Public Private Partnership (PPP) Scheme of
Government of Rajasthan. During the year, your Company renovated 17
government schools and construction work is in progress in remaining 7
schools. Stationary, schools bags, note books, sweaters, etc. were
provided to around 1850 students studying in these 24 schools. Library
in each school is being established. To facilitate girl students, your
Company has constructed new toilets for girls in 23 government schools.
The Company in partnership with ''Sarva Shiksha Abhiyan'' - a Government
Body, ensured construction of boundary wall & rooms in these schools.
In order to facilitate school drop out girls, the Company in
partnership with IIMPACT (an NGO) has established 15 learning centers
for over 400 drop out girls in surrounding villages and another 12
centres will be established in next 2- 3 months. 7 remedial learning
centers for boys have been established to facilitate weak and drop out
boys.
(d) Technical Education
Your Company had adopted Government Industrial Training Institutes
(ITI) - at Sangod (Rajasthan) during the Financial Year 2010-11 in
order to provide technical training to rural youth. The building of ITI
- Sangod was renovated and new equipment and computers were installed
for providing the training. A new block of building is under
construction.
During the year, 4 new trades were introduced during the year after
taking necessary approval from National Council for Vocational Training
thus increasing the total trades to 7. The student strength has
increased from around 100 to 280. We helped ITI last year in placing
94 students with some of the blue-chip companies.
(e) Vocational Education
Your Company has set up a vocational training center at Gadepan village
to empower unemployed rural youth. During this year, 3 batches of
tailoring & stitching courses were organized wherein 75 women from
nearby villages were trained. It is planned to open new trades to
facilitate more rural youths in the next year.
(f) Drinking Water & Rain Water Harvesting
Livelihood and health of community greatly depends on availability of
adequate quality and quantity of drinking water. Chambal has helped in
construction of Hand-pumps and tube-wells in surrounding villages.
(g) Rural Infrastructure
Your Company has been contributing towards rural infrastructure
development by construction of school rooms, kharanja roads (stone
pavement) with drain, gravel link roads, boundary wall, culvert, nallah
etc. as per the need of the community. This year, your Company has
constructed pavement roads in 3 villages in addition to construction of
boundary walls, crematoriums, cement-concrete roads and a community
center. Some of these works were carried out in participatory mode with
Gram Panchayats.
(h) Agriculture & Veterinary Services
Agriculture and livestock development forms the backbone of rural
livelihood and during times of stress, livestock becomes an alternate
source of revenue for the farmers. Farmers at the grassroots'' level
are largely unaware about the latest developments in the field of
agriculture and animal husbandry. Recognizing this gap, your Company
decided to enhance the awareness levels of farmers and started Uttam
Krishi Clinics. The Clinic is mainly providing Agriculture Consultancy
by experts, free soil testing and capacity building of farmers by
conducting training programmes for new and improved techniques in the
field of agriculture and animal husbandry.
Your Company regularly organizes veterinary camps for vaccination and
treatment of animal health related problems, in collaboration with
Veterinary Department, Government of Rajasthan.
(i) Reporting on triple bottom line performance
With the objective of assessing its Corporate Sustainability
performance, the Company has been publishing annually A Sustainability
Report on its triple bottom line performance since Financial Year
2009-10. The report is externally assured by Ernst & Young Private
Limited.
9. Disclosure of Particulars
Your Company believes that improvement is a journey with new milestones
to be achieved on continuous basis. The Company makes continuous
efforts to make the plants as energy efficient as possible and reviews
various schemes to conserve energy on regular basis. The requisite
information with regard to conservation of energy, technology
absorption and foreign exchange earnings and outgo in terms of the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is set out in Annexure "A" attached hereto.
Information required to be furnished in Form A is not applicable to
shipping industry. However, it is ensured that every measure is taken
to save and conserve energy at all stages of operation of the vessels
as well as in on-shore office. The Company has 5 double hull Aframax
Tankers and these ships are more energy efficient as compared to the
old vessels. The Shipping Division has no information to furnish in
Form B regarding technology absorption.
10. Investor Service Centre
The In-house Investor Service Centre of your Company located at New
Delhi, continues to provide prompt investor service through quick
resolution of investor grievances. The motto of ''high investor
satisfaction'' is being pursued through pro-active actions like reaching
out to investors regularly, timely reminders to investors about new
corporate benefits, undelivered shares, unclaimed benefits, etc.
The equity shares of your Company are listed at National Stock Exchange
of India Limited and BSE Limited. The Company has paid annual listing
fees to these Stock Exchanges for the Financial Year 2013-14.
The members are requested to refer to general shareholders'' information
given in Corporate Governance Report appended to this report.
11. Fixed Deposits
Your Company has discontinued accepting new deposits with effect from
July 1, 2008. As on March 31, 2013, your Company had 10 depositors with
fixed deposits of Rs. 3.03 lac, who did not claim their Fixed Deposit
amount despite being reminded regularly.
12. Employee Stock Option Scheme
The members of the Company had approved Employee Stock Option Scheme
2010 ("ESOS 2010") on August 27, 2010 for issue and allotment of
options exercisable into not more than 41,62,000 equity shares of face
value of Rs. 10/- each to eligible employees and Managing Director of
the Company. Each option when exercised would be converted into one
fully paid up equity share of Rs. 10 of the Company. The ESOS 2010 is
administered by the Compensation Committee of the Board of Directors of
the Company. Disclosure pursuant to the provisions of the Securities
and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 is given in Annexure - "B".
13. Personnel
People are the most valuable assets of the Company. The Company
continuously strives to encourage merit, healthy relations and the
pursuit of excellence for the employees. Your Company has strategic and
efficient recruitment and HR management process which enables it to
attract and retain high caliber employees. Information in accordance
with section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, forms part of this
Report and is attached hereto as Annexure "C".
14. Directors
The Board has eight non-executive directors and a Managing Director.
Three directors namely M/s. S.K. Poddar, S.S. Bhartia and K.N. Memani
are due for retirement by rotation at the forthcoming Annual General
Meeting. These retiring directors are eligible and have offered
themselves for re-appointment and they are not related to any other
directors of the Company.
Other information on the directors is provided in Corporate Governance
Report annexed to this Report as Annexure "D".
15. Auditors
The Notes on Financial Statements read with the Auditors'' Reports are
self explanatory and therefore, do not call for any further comments or
explanations.
The Company has received intimation that M/s. S.R. Batliboi & Co. has
been converted to be a Limited Liability Partnership with effect from
April 1, 2013 and is now known as S.R. Batliboi & Co. LLP. M/s. S. R.
Batliboi & Co. LLP, Statutory Auditors and M/s. Singhi & Co., Branch
Auditors of Shipping Business of the Company, are retiring at the
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. The above re-appointments, if
made, will be in accordance with the provisions of section 224 (1B) of
the Companies Act, 1956.
The Board of Directors of the Company appointed M/s. K.G. Goyal &
Associates, Cost Accountants for conducting audit of cost accounts of
the fertilizer and textile divisions of the Company for the financial
year 2012-13. The Company has filed with the Ministry of Corporate
Affairs (MCA), Government of India, the Cost Audit Report and
Compliance Report for the Financial Year 2011-12 for the Fertilizer and
Textile Divisions of the Company on January 11, 2013 and December 26,
2012 respectively as against the last date of filing on February 28,
2013.
16. Directors Responsibility Statement Your Directors hereby report:
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relative to material departures;
b) that the Directors 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 March 31, 2013 and of the profit of the
Company for the year ended March 31, 2013;
c) that the Directors 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;
d) that the Directors have prepared the annual accounts on a going
concern basis; and
e) that the Company has adequate internal systems and controls in place
to ensure compliance of laws applicable to the Company.
17. Consolidated Financial Statements
In accordance with ''Accounting Standard 21 - Consolidated Financial
Statements'', the consolidated financial statements form part of this
Report & Accounts. These consolidated financial statements also
incorporate the ''Accounting Standard 27 - Financial Reporting of
interest in Joint Ventures'' issued by the Institute of Chartered
Accountants of India. The consolidated financial statements have been
prepared on the basis of audited financial statements received from
subsidiaries and joint venture entity.
18. Acknowledgements
Your Directors wish to place on record their appreciation of the
assistance and co-operation received from the Department of
Fertilisers, Government of India, State Governments, domestic and
International Financial Institutions & Banks and other stakeholders,
whose continued support and co-operation has been instrumental in
enabling the Company to achieve its goals. Your Directors also wish to
place on record their sincere appreciation of the commitment, hard work
and devotion of every employee of the Company which has enabled the
Company to achieve sustained performance.
By order of the Board
Place : New Delhi S. K. Poddar
Date : April 30, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the 27th Annual Report on
the business and operations of the Company together with audited
accounts for the financial year ended March 31, 2012.
1. Financial Results and Appropriations
(Rs. in crore)
Particulars 2011-12 2010-11
(a) Turnover (excluding excise duty) 6455.13 4647.43
(b) Gross Profit after Finance Cost
but before Exceptional Items,
Depreciation and Tax 821.71 704.38
(c) Depreciation / Amortization 262.08 267.95
(d) Profit before Exceptional
Items and Tax 559.63 436.43
(e) Exceptional items - 4.37
(f) Profit before Tax 559.63 440.80
(g) Provision for Current Tax 127.48 159.93
(h) Provision for Deferred Tax 184.86 (44.31)
(i) Profit after Tax 247.29 325.18
(j) Balance of Profit Brought Forward 960.54 759.65
(k) Transferred from Debenture
Redemption Reserve - 3.12
(l) Profit available for Appropriation 1207.83 1087.95
(m) Appropriations:
- Tonnage Tax Reserve - 0.50
- General Reserve 50.00 35.00
- Proposed Dividend on Equity Shares 79.08 79.08
- Tax on Dividend 12.83 12.83
(n) Balance Carried Forward to
Balance Sheet 1065.92 960.54
2. Operations:
The financial year under review was a year of opportunities coupled
with challenges. The performance of the Fertiliser Division of the
Company was commendable both in terms of profitability and revenue.
However, the Shipping and Textile Divisions have suffered due to
overall dismal market scenario.
The Company has achieved highest ever production and sales of Urea.
Similar uptrend was observed in volumes and profitability from the
trading activity. The Company has expanded its market reach by setting
up its marketing office at Aurangabad which will cater to Maharashtra
market.
The Shipping Business has seen one of the worst years with bunker rates
increasing sharply and asset and freight rates falling substantially.
The time charter activity has also remained sluggish due to downturn in
the market. This has severely impacted the performance of the Shipping
business. The Company has six vessels (5 double hull and one single
hull aframax tankers). The Company plans to dispose off the single hull
vessel which is more than 23 year old.
During the year, the Shipping Division of the Company has opted out of
Tonnage Tax Scheme under the Income Tax Act, 1961 and will be assessed
under the normal tax regime w.e.f. April 01, 2011. Consequently, the
Company has ascertained deferred tax liability on the difference
between the written down value of the fixed assets pertaining to the
Shipping Division as per books of accounts and the Income Tax Act, 1961
as on April 1, 2011 amounting to Rs.184.21crore which has been
accounted for during the year. This non cash accounting charge has
impacted the net profit of the Company during the Financial Year
2011-12
The Textile Division has faced high volatility in prices of raw
material and yarn, movement of both the prices not being in tandem. The
export markets have also remained sluggish during the year under
review. All these factors have affected the performance of the Textile
Division adversely.
The detailed information on all the three business segments of the
Company and the respective industries are given in the Management
Discussion and Analysis Report attached as Annexure "G" to this report.
3. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10
each (Previous Year - Rs. 1.90 per equity share). The total outgo on
this account will be Rs. 91.91 crore including dividend distribution
tax.
4. 'Corporate Governance Report' and Code of Conduct Your Directors
confirm their ongoing commitment for adhering good corporate governance
practices. Corporate Governance Report is attached as Annexure "E".
Auditors' Certificate confirming compliance with the conditions of
Corporate Governance is enclosed as Annexure "D" and Declaration of the
Managing Director confirming compliance with the 'Code of Conduct and
Ethics' is enclosed as Annexure "F".
5. Joint Venture
Indo Maroc Phosphore S. A., Morocco (IMACID)
IMACID is a joint-venture of your Company established in Morocco. The
Company has a 33.33% shareholding, together with two other equal
partners - Tata Chemicals Limited and OCP, Morocco. IMACID is engaged
in the manufacture of phosphoric acid (P2O5) which it exports to India
primarily to Tata Chemicals Ltd and Zuari Industries Ltd for
manufacture of granulated DAP and NPK fertilizers.
During 2011, the Company witnessed the highest ever production of
429,622 MT of P2O5 against a design capacity of 430,000 MT P2O5 . Sales
during the year 2011 were 4,12,950 Mt of P2O5 against the previous year
sales of 355,977 MT. During the year 2011, IMACID achieved revenue of
MAD 3325 million (Rs. 2096.33 crore) against revenue of MAD 2284.07
million (Rs. 1246.69crore) achieved during the year 2010. IMACID earned
profit after tax of MAD 366.49million (Rs. 231.06 Crore) during the
year 2011 as against MAD 181.86 million (Rs. 99.26 crore) in the year
2010.
Strong financial performance and cash reserves facilitated payout of
MAD 450 million (Rs.277.70 crore) as a special Dividend to its
shareholders in March 2012 apart from dividend of MAD 62 million (Rs.
38.26 crore) paid during the Year 2011.
However, the plant has been shutdown from January 2012 onwards (except
operations for some period in February 2012) due to adverse market
conditions for its product. This opportunity was utilized to carry out
crucial repairs to plant and equipment. The plant operations continue
to remain suspended and shall start once the market conditions improve.
6. Subsidiaries
(i) Chambal Infrastructure Ventures Limited and its Subsidiaries
Chambal Infrastructure Ventures Limited ("CIVL") was incorporated by
your Company to venture into Power business. CIVL had established two
down stream wholly owned subsidiaries viz. Chambal Energy
(Chhattisgarh) Limited and Chambal Energy (Orissa) Limited for setting
up power projects in the states of Chhattisgarh and Odisha,
respectively. CIVL is in the process of identifying suitable land
parcels for its project in Odisha and matter is being pursued with the
concerned authorities. There was not much progress in its power project
endeavors in the state of Chhattisgarh.
(ii) CFCL Overseas Limited, Cayman Islands and its Subsidiaries
CFCL Overseas Limited is a wholly owned subsidiary of your Company and
a holding entity for software business. CFCL Technologies Limited, a
main entity which controls the entire software business, is a
subsidiary of CFCL Overseas Limited. CFCL Technologies controls its
software business through down stream subsidiaries mainly in USA and
India.
The year 2011 was a year of consolidation for software business in
achieving a significant stabilization of the operating margin and
profitability. Software business made significant interventions and has
successfully contained losses in the business from first three quarters
of the year 2011. Revenue of Software business dropped from USD 128.65
million in 2010 to USD 92.85 million in 2011, primarily attributed to
the decision to consciously terminate pure onshore accounts that had
significantly depressed operating margins. The Software Business
continued to make significant strides with continued focus on
operational efficiency, cost cutting, organization building and
consolidation which have enabled the Company to turn EBITDA positive
from July - September quarter of 2011 onwards.
CFCL Technologies and its subsidiaries follow the January to December
Financial Year. The software business as a whole incurred a net loss of
USD 19.98 million during the year 2011 as against net loss of USD 26.28
million incurred in the year 2010.
(iii) India Steamship Pte. Limited, Singapore and its Subsidiary
India Steamship, Singapore does not own any vessel and operates through
in-chartered vessels. During the year, the international shipping
markets remained subdued forcing India Steamship, Singapore to contain
its operations. The company operated an in-chartered vessel during
first few months of the year 2011-12 and did not hire any vessel
thereafter. India Steamship International FZE, UAE was incorporated
during the year as a 100% subsidiary of India Steamship, Singapore at
Hamriyah, Sharjah, UAE where tax regulation is liberal. The new entity
has not yet commenced its operation.
During the year 2011-12, India Steamship, Singapore have earned a
revenue of USD 2.89 million and incurred a loss (after tax) of USD 0.24
million.
(iv) India Steamship Limited, India (ISL)
ISL has been incorporated on April 01, 2011 as subsidiary of your
Company. During the year, there was not much activity in ISL.
Exemption: The Government of India vide its circular dated February 08,
2011 granted general exemption to the companies from attaching with
Annual Report, the copies of the Balance Sheet, Profit and Loss
Account, Board of Directors' Report and Auditor's Report of its
subsidiaries. The Consolidated Financial Statements presented by the
Company include the financial information of its subsidiaries, as
applicable. The Company will make available the Annual Accounts of its
subsidiaries along with relative detailed information upon request by
investors of the Company or its subsidiaries. The Annual Accounts of
the subsidiaries will be available for inspection by any shareholder at
the corporate office of your Company and respective subsidiaries.
7. Health, Safety and Environmental Protection
Health, Safety and Environmental protection has been given utmost
priority since inception of your Company. With the objective of
maintaining the highest Health, Safety, Environmental & Quality (HSEQ)
standards, your Company has established and is maintaining an
Integrated Management System (for Occupational HSEQ) based on OHSAS-
18001:2007, ISO-14001:2004, ISO-9001:2008 and Process Safety Management
system. The year 2011-12 was an accident free year. Your Company has
achieved 9.03 million man hours (654 days) accident free working.
(a) Health & Hygiene
Your Company accords highest priority to health & hygiene of its
employees and associates. Health assessment and occupational disease
monitoring of employees and associates is done through periodic medical
examinations. The Company's medical officer who is additionally
trained in Occupational Health conducts a survey to properly assess the
needs and appropriate proactive actions are taken.
A well equipped medical centre in the campus at Gadepan works round the
clock to provide Health Services to employees, associated contractor
work force, their families and villagers in the vicinity of the plants.
New equipment and services are added to continuously upgrade the health
care. The plant and processes are continuously upgraded to improve work
place and health standards.
Necessary training was imparted to the employees and workers to enhance
their awareness towards health related matters. Some of our employees
are certified first-aiders. Many officers of the Company have been
imparted fast track emergency response training on first aid and
occupational health.
(b) Safety Management
A strong occupational-health and safety management system
OHSAS-18001:2007 is in place in your Company to ensure safety of
employees, contractor workforce as well as equipment and machinery. The
township at Gadepan is also OHSAS-18001:2007 certified. Your Company
has implemented Process Safety Management System (PSM) developed by
Occupational Safety & Health Administration,
USA (OSHA) in its operation for proactive identification, assessment &
control of hazards. PSM is not mandatory but was adopted by your
Company to fulfill its quest for highest safety standards in its
operations. Process incidents were reviewed as per PSM guidelines and
trainings and audits were conducted for overall improvement.
In order to keep its safety system agile and updated, extensive
trainings were conducted by internal & external expert faculties on
rescue, fire fighting & emergency handling, electrical safety, material
handling, road safety, etc.
The scheme of "Near- Miss" & "Make-to-Good" reporting is in place in
your Company which not only creates awareness among the workforce but
also gives an opportunity to identify and correct possible safety
concerns. The safety reward system has been reviewed and widened
during the year to further strengthen the safety culture in the
Company. To improve safety work culture and bring reduction in injuries
more and more workers of associated contractors were involved in safety
promotional activities & trainings.
As a special drive, a safety improvement project has been undertaken by
your Company for bagging plant in association with a consultant. The
concept of Behavior Based Safety (BBS) has been introduced and is
working satisfactorily through selected BBS Champions. During shutdown
maintenance, extensive safety trainings and supervisions were conducted
by associating experts. Personal Protective Equipments (handgloves,
dust mask, ear plugs, etc) were provided free to all contract workers.
Various initiatives were taken by your Company towards overall safety
improvement, such as adding new safety & emergency handling equipments,
additional safety procedures, visitors' safety film, screening of
Environment, Health and Safety (EHS) documentary for township
residents, pictorial booklet depicting dos & don't for bagging plant,
fire alarm system upgradation, etc.
Your Company has a well-defined "Onsite Disaster Management Plan". The
flip chart defining roles & responsibilities of key personnel was
reviewed, revised & updated during the year. Regular mock drills & fire
drills were conducted to check the emergency preparedness. The Company
executives regularly visit near-by companies and consultations are held
with them to share information and learn from each other's experience
and improve.
(c) Environment Management
Environment protection is a top priority for the Company management.
The urea & ammonia production activities and the township at Gadepan is
ISO-14001:2004 certified. Extensive environmental monitoring is
carried out to ensure effective environment management. The endeavors
of the Company for environment protection are as under:
(i) Sustainable Development - Your Company is totally committed to
sustainable development and has completed various environment related
programmes like Rain Water Harvesting, Ground Water Recharging, Energy
Conservation measures, Pollution Control, Use of Solar Energy, etc.
(ii) Waste Management - Your Company continues to follow the 3R concept
(Reduce, Re-use and Re-cycle) for waste management. Almost 100%
condensates are recycled back to system. Treated waste water is used
for maintaining green belt through a 65 kilometer long irrigation
network spread all over the complex.
Your Company has adopted best practices to manage solid/ hazardous
waste disposal after proper categorization. Segregation of waste is
ensured at source and separate bins have been created for collection of
various categories of waste. Horticulture & domestic waste is converted
to manure & used in the green belt. Recyclable waste is disposed to
recyclers and all saleable items are sold to approved recyclers. Use of
polythene bags is strictly prohibited in the Gadepan campus for many
years.
(iii) Green belt- The area surrounding Gadepan complex is experiencing
a positive change in Ecology due to development of a dense green belt /
forest inclusive of around 2.0 lac trees in an area of about 212
hectares. This has provided habitat to more than 100 species of birds
which includes more than 700 peacocks.
(iv) Water conservation-Your Company continuously works on various
water optimization measures as our area is water scarce. Water audits
and studies have been conducted through experts to explore more avenues
of water conservation. Special efforts have been made in optimization
of cooling water, fire water network, drinking water & de-mineralised
water. The trend of consumption shows a continual improvement with the
specific consumption of water at 4.82 cubic meters per MT of urea this
year, as against 4.92 cubic meters per MT of urea during 2010-11, which
is one of the best in the fertiliser industry. Water consumption norms
for fertiliser industry is 8.0 cubic meters per MT of urea.
(d) Quality Management
Your Company is ISO 9001:2008 certified and adequate attention is
accorded by your Company to maintain quality of end product and
processes. Stringent monitoring of defined parameters of quality is
ensured.
(e) Health, Safety, Environment & Quality (HSEQ) Audits Teams of
trained internal auditors regularly conduct HSEQ audits with special
emphasis on health & hygiene, house keeping, safety, environment and
quality. HSEQ systems are periodically audited by various external
agencies of repute in line with your management approach of continual
improvement. Surprise visits are conducted to plant and canteen to
ensure highest standard of housekeeping & hygiene. Ammonia Storage
safety systems have been upgraded based on review by the designer and
Risk based Inspection is under progress. To extend and improve safety
culture among our marketing team, all our Regional Marketing Offices
have been audited during the year and staff has been trained on safety.
(f) Achievements
Your Company regularly participates in awards and national &
international benchmarking surveys for independent assessment which in
turn provides an opportunity for improvement. Your Company has received
following prestigious awards during the year under review:
- "Environment Protection award" for the year 2010-11 and 2009-10
from Fertiliser Association of India (FAI).
- "National Award for Excellence in Water Management 2011" from
Confederation of Indian Industries (CII) under the category "Beyond the
Fence".
- "National Award for Excellence in Energy Management"-2011 from CII.
- Rajasthan Energy Conservation Award 2011.
- Special commendation, Golden Peacock Award for Sustainability-2011.
8. Corporate Social Responsibility (CSR)
Your Company is committed towards the development of neighboring areas
for improving the quality of life. To initiate and sustain meaningful
actions in this regard, your Company has formed KK Birla Memorial
Society to consolidate all Corporate Social Responsibility (CSR)
activities. The Company has taken number of initiatives for the
community development in consultation with local administration at the
village, block and district levels.
The Company's CSR program is designed as per participatory planning
process to involve stakeholders for sustainable development of the
area. The focus of the Program is on formation and livelihood trainings
of SHGs (Self Help Groups), Health & Hygiene, Human Health Care,
Sanitation, Farmers education on Agriculture & animal husbandry,
Livestock vaccination & breed improvement etc. Your Company has taken
following initiative under the program:
(a) Sanitation
Your Company has initiated a project to improve sanitary practices
through awareness campaigns and construction of toilets. Your Company
has constructed 313 individual toilets for Below the Poverty Line
families last year and another 402 toilets were constructed this year.
Your Company has also constructed 1 0 girls' toilets in 1 0 Government
schools.
(b) Community Health Care
The Company operates a mobile Health Care Unit manned by a doctor and
nursing assistant in 14 surrounding villages. Ambulance facilities are
also provided to community round the clock for taking patients to Kota
hospitals in emergency situations. During this year, 222 such cases
were attended through ambulance facility.
During the year, 34,741 people were treated for different diseases. The
Medical Center in Gadepan campus provides free service to people from
surrounding areas. The Company regularly organizes free medical camps
by inviting specialists for attending various ailments and 2862
patients benefited during the year under this program.
(c) Education
The Company is extending quality education to children from contiguous
villages through Chambal Fertilisers DAV School (CFDAV). Over 47%
students in this school are from such villages. During the year, CFDAV
was upgraded to class 10th standard and got affiliated with Central
Board of Secondary Education (CBSE).
Your Company has recently adopted 24 primary & upper primary government
schools of nearby 22 villages under Public Private Partnership Scheme
of Government of Rajasthan. This initiative shall extend quality
education to more children and shall endeavour to check drop out rates
especially among girls.
Your Company adopted Government Industrial Training Institutes (ITI) at
Sangod during 2010-11. The Management of the ITI is run by the Company
and nearly 100 students were placed with the corporates after
completion of their ITI course. The company is upgrading the
infrastructure of the ITI and it is planning to start 4 new courses
from the academic year 2012-13.
(d) Rural Infrastructure
The Company has developed rural infrastructure by constructing pavement
roads, drains, school boundary walls, community centers, crematoriums
in Karadia, Simliya, Ballabhpura Gadepan, Ballabhpura, Bambhori and
Kalarewa villages.
(e) Reporting on triple bottom line performance
With the aim to assess its Corporate Sustainability performance and
initiatives, the Company had commenced reporting, annually, on its
triple bottom line performance from Financial Year 2009-10. The Company
has published A sustainability report for the financial year 2010- 11
in accordance with Global Reporting Initiative (GRI) guidelines. The
sustainability report is externally assured by Ernst & Young Private
Limited. The report gives a bird's eye view on Sustainability
performance of the Company and also offers an opportunity to assess and
improve its sustainability initiatives.
9. Disclosure of Particulars
Your Company believes that improvement is a journey with new milestones
to be achieved on continuous basis. The Company makes continuous
efforts to make the plants as energy efficient as possible and reviews
various schemes to conserve energy on regular basis. The requisite
information with regard to conservation of energy, technology
absorption and foreign exchange earnings and outgo in terms of the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is set out in Annexure "A" attached hereto.
Information required to be furnished in Form A is not applicable to
shipping industry. However, it is ensured that every measure is taken
to save and conserve energy at all stages of operation of the vessels
as well as in shore office. The Company has 6 Aframax Tankers out of
which 5 are double hull and these ships are more energy efficient as
compared to the old vessels. The Shipping Division has no information
to furnish in Form B regarding technology absorption.
10. Investor Service Centre
The In-house Investor Service Centre of your Company located at New
Delhi, continues to provide prompt investor service through quick
resolution of investor grievances. The motto of 'high investor
satisfaction' is being pursued through pro-active actions like reaching
out to investors regularly, timely reminders to investors about new
corporate benefits, undelivered shares, unclaimed benefits, etc.
The equity shares of your Company are listed at National Stock
Exchange of India Limited and BSE Limited. The Company has paid annual
listing fees to these Stock Exchanges for the year 2012-13.
The members are requested to refer to general shareholders' information
given in Corporate Governance Report appended to this report.
11. Fixed Deposits
Your Company has discontinued accepting new deposits with effect from
July 1, 2008. As on March 31, 2012, your Company had 21 depositors with
fixed deposits of Rs. 5.73 lac, who have not claimed their Fixed
Deposit amount despite being reminded regularly.
12. Employee Stock Option Scheme
The members of the Company had approved Employee Stock Option Scheme
2010 ("ESOS 2010") on August 27, 2010 for issue and allotment of
options exercisable into not more than 41,62,000 equity shares of face
value of Rs. 10/- each to eligible employees and Managing Director of
the Company. Each option when exercised would be converted into one
fully paid up equity share of Rs. 10 of the Company. The ESOS 2010 is
administered by the Compensation Committee of the Board of Directors of
the Company. Disclosure pursuant to the provisions of the Securities
and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 is given in Annexure - "B".
13. Personnel
Information in accordance with Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report and is attached hereto as Annexure "C".
14. Directors
The Board has eight non-executive directors and a Managing Director.
Two directors namely M/s. Dipankar Basu and C.S. Nopany are due for
retirement by rotation at the forthcoming Annual General Meeting. M/s.
Dipankar Basu and C.S. Nopany are eligible and have offered themselves
for re-appointment. Ms. Radha Singh is also retiring at the
forthcoming Annual General Meeting of the Company. These directors are
not related to any other directors of the Company.
The Company has received a notice in writing together with requisite
deposit from a member proposing the appointment of Ms. Radha Singh as a
Director of the Company, liable to retire by rotation.
Other information on the directors is provided in Corporate Governance
Report annexed to this Report as Annexure "E".
15. Auditors
The Notes on Accounts read with the Auditors' Reports are self
explanatory and therefore, do not call for any further comments or
explanations.
M/s. S. R. Batliboi & Co., Statutory Auditors and M/s. Singhi & Co.,
Branch Auditors of Shipping Business of the Company, are retiring at
the conclusion of the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. The above
re-appointments, if made, will be in accordance with the provisions of
Section 224 (1B) of the Companies Act, 1956.
The Board of Directors of the Company appointed M/s. K.G. Goyal &
Associates, Cost Accountants for conducting audit of cost accounts of
the Fertiliser Division of the Company for the financial year 2010-11
and 2011-12. The Company has filed the Cost Audit Report for the
financial year 2010-11 with the Ministry of Corporate Affairs,
Government of India on September 1, 2011 as against the last date of
filing on September 27, 2011.
16. Directors Responsibility Statement Your Directors hereby report:
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relative to material departures;
b) that the Directors 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 March 31, 2012 and of the profit of the
Company for the year ended March 31, 2012;
c) that the Directors 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;
d) that the Directors have prepared the annual accounts on a going
concern basis; and
e) that the Company has adequate internal systems and controls in place
to ensure compliance of laws applicable to the Company.
17. Consolidated Financial Statements
In accordance with 'Accounting Standard 21 - Consolidated Financial
Statements', the consolidated financial statements form part of this
Report & Accounts. These consolidated financial statements also
incorporate the 'Accounting Standard 27 - Financial Reporting of
interest in Joint Ventures' issued by the Institute of Chartered
Accountants of India. The consolidated financial statements have been
prepared on the basis of audited financial statements received from
subsidiaries and joint venture entity.
18. Acknowledgements
Your Directors wish to place on record their appreciation of the
assistance and co-operation received from the Department of
Fertilisers, Government of India, State Governments, domestic and
International Financial Institutions & Banks and other stakeholders,
whose continued support and co-operation has been instrumental in
enabling the Company to achieve its goals. Your Directors also wish to
place on record their sincere appreciation of the unstinted devotion,
hard work and commitment of every employee of the Company.
By order of the Board
Place : New Delhi S. K. Poddar
Date : May 12, 2012 Chairman
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the 26th Annual Report
together with audited accounts for the financial year ended March 31,
2011.
1. Financial Results and Appropriations
(Rs. in crore)
Particulars 2010-11 2009-10
(a) Turnover (excluding excise duty) 4646.40 3574.50
(b) Gross Profit after Interest but
before Exceptional Items, Depreciation
and Tax 704.38 612.06
(c) Depreciation / Amortization 267.95 257.62
(d) Profit before Exceptional
Items and Tax 436.43 354.44
(e) Exceptional items 4.37 4.37
(f) Profit before Tax 440.80 358.81
(g) Provision for Current Tax 159.21 129.62
(h) Provision for Deferred Tax (44.31) (20.49)
(i) Provision for Tonnage Tax 0.72 0.63
(j) Profit after Tax 325.18 249.05
(k) Balance of Profit Brought Forward 759.65 628.43
(l) Transferred from Debenture 3.12 3.13
Redemption Reserve
(m) Profit available for Appropriation 1087.95 880.61
(n) Appropriations:
- Tonnage Tax Reserve 0.50 3.75
- General Reserve 35.00 25.00
- Proposed Dividend on Equity Shares 79.08 79.08
- Tax on Dividend 12.83 13.13
(o) Balance Carried Forward to Balance
Sheet 960.54 759.65
2. Dividend
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10
each (Previous Year à Rs. 1.90 per equity share). The total outgo on
this account will be Rs. 91.91 crore including dividend tax.
3. Operations
The Directors are pleased to report yet another year of growth and
prosperity of your Company. The performance of the Fertiliser Business
of the Company was encouraging. Your Company achieved the highest ever
annual Urea production and sales in Gadepan-I & II plants during the
year. The Company achieved new high in trading particularly in
pesticide business. There was a substantial growth both in the revenue
and profitability from the trading activity.
The Textile Business has also fared well during the year under review.
There has been substantial increase in the top line and bottom line of
the Textile Business. The better realization has mainly contributed to
the excellent performance of this business. The Shipping Business of
the Company witnessed another challenging year. The charter rates have
reached to new lows resulting into sluggish performance of this
Business. The detailed information on all the three business segments
of the Company and the respective industries are given in the
'Management Discussion and Analysis Report' attached as Annexure "G" to
this report.
4. 'Corporate Governance Report' and Code of Conduct
Corporate Governance Report is attached as Annexure "E". Auditors'
Certificate confi rming compliance with the conditions of Corporate
Governance is enclosed as Annexure Ã"D" and Declaration of the Managing
Director confi rming compliance with the 'Code of Conduct and Ethics'
is enclosed as Annexure "F".
5. Joint Venture
Indo Maroc Phosphore S. A., Morocco (IMACID)
IMACID is three way Joint Venture of M/s. Tata Chemicals Ltd., OCP,
S.A., Morocco and your Company. The performance of IMACID during the
year - 2010 was encouraging. IMACID produced 348,158 MT of Phosphoric
Acid (P2O5) during the year 2010 as against 359,656 MT of P2O5 produced
during the year 2009. IMACID achieved sale of 355,977 MT P2O5 during
the year 2010 as against sales of 369,996 MT P2O5achieved in the year
2009. IMACID achieved revenue of MAD 2309.10 Million (Rs. 1271.71
crore) during the year 2010 as against revenue of MAD 1791.87 Million
(Rs. 1090.66 crore) achieved in the year 2009. IMACID earned profit
after tax of MAD 183.64 Million (Rs. 101.14 crore) during the year 2010
as against MAD 35.09 Million (Rs. 21.36 crore) in the year 2009.
6. Subsidiaries
(i) Chambal Infrastructure Ventures Limited and its Subsidiaries
Chambal Infrastructure Ventures Limited ("CIVL") was set up by your
Company for entering in to Power business. It had set up two wholly
owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited and
Chambal Energy (Orissa) Limited for taking up power projects in the
states of Chhattisgarh and Odisha, respectively. CIVL is pursuing
various business opportunities for setting up power projects in the
states of Odisha and Chhattisgarh. CIVL is in continuous dialogue with
the Government of Odisha for various approvals for the power project.
(ii) CFCL Overseas Limited, Cayman Islands and its Subsidiaries
CFCL Overseas Limited is wholly owned subsidiary of your Company. CFCL
Technologies Limited is the fl agship Company for software business and
also a subsidiary of CFCL Overseas Ltd. With the acquisition of Fiserv
Fulfi llment Services Inc., USA ("FFS") in 2009, the Software Business
has become one of the leading full service end-to-end mortgage services
providers in the USA mortgage markets with a full complement of
technology and knowledge process outsourcing (KPO) services. The
customers consist primarily of large and medium size mortgage banks in
the USA.
In 2010, the Software Business has deployed signifi cant efforts
towards integrating the indigenous and acquired businesses. Since the
acquisition of FFS, Software Business has successfully transitioned
customer relationships and was able to sustain and grow the revenues.
CFCL Technologies Limited and its subsidiaries follow the January to
December Financial Year. The Software Business as a whole achieved
revenue of USD 128.65 million during 2010 as against USD 36.4 Million
achieved during the 9 month period ended on December 31, 2009. The
EBITDA before exceptional and one-off items was negative at USD 5.08
million during the Year 2010. The negative EBITDA was primarily due to
the year 2010 being the fi rst year of integration of the acquired
business of FFS. The efforts are on to turn the business EBITDA
positive during the Year 2011.
(iii) India Steamship Pte. Limited, Singapore
Due to prevailing poor markets, operations in India Steamship,
Singapore have been kept at a minimum level.
Operations will be scaled up through in-chartering of vessels once the
markets are bottomed out. During the year 2010-11, India Steamship,
Singapore has earned a revenue of USD 7.10 million and incurred a loss
(after tax) of USD 0.43 million.
(iv) India Steamship Limited, India (ISL)
ISL has been incorporated on April 01, 2011 as subsidiary of your
Company. ISL is yet to commence its business.
Exemption: The Government of India vide its circular dated February 08,
2011 granted general exemption to the companies under section 212(8) of
the Companies Act, 1956 from attaching with Annual Report, the copies
of the Balance Sheet, Profit and Loss Account and other documents of
the subsidiaries. The Consolidated Financial Statements presented by
the Company include the financial information of its subsidiaries, as
applicable. The Company will make available the Annual Accounts of its
subsidiaries along with relative detailed information upon request by
investors of the Company or its subsidiaries. The Annual Accounts of
the subsidiaries will be available for inspection by any shareholder at
the corporate offi ces of your Company and respective subsidiaries.
7. Health, Safety and Environmental Protection
Health, Safety and Environmental Protection has been given utmost
priority since inception of your Company. With the objective of
maintaining the highest Health, Safety, Environmental & Quality (HSEQ)
standards, your Company has established and is maintaining an
Integrated Management System (for Occupational HSEQ) based on
OHSAS-18001:2007, ISO- 14001:2004 and ISO-9001:2008.
(a) Health & Hygiene
Your Company accords high priority to health & hygiene monitoring at
work place. Employees' health assessment and occupational disease
monitoring is done through periodical medical examinations.
A well equipped medical centre in the campus at Gadepan works round the
clock to provide Health Services to employees, contractor workforce,
their families and the villagers in the vicinity of the plants.
The plant and processes were continuously upgraded to improve work
place and health standards. Necessary training was imparted to the
employees and workers to enhance their awareness towards health related
matters. Many of our employees are certifi ed fi rst-aiders and their
knowledge was updated every month. Senior offi cials of the Company
have been imparted refresher training on fi rst aid and occupational
health.
(b) Safety Management
A strong occupational à health and safety management system is in place
to ensure safety of employees, contractor workforce as well as
equipment and machinery. The township at Gadepan is OHSAS-18001:2007 &
ISO-14001:2004 certifi ed. Although not mandatory, your Company has
also implemented Process Safety Management System (PSM) developed by
Occupational Safety & Health Administration (OSHA) of USA in its
operations for proactive identifi cation, assessment & control of
hazards. Process incidents were reviewed as per PSM guidelines and
trainings and audits were conducted for overall improvement.
To maintain and improve upon the well established safety system,
trainings were conducted by both internal & external expert faculties
on rescue, fi re fi ghting & emergency handling, electrical safety,
material handling, road safety etc. Employees were sent to reputed
institutes for specialized trainings. All senior offi cials of the
Company underwent practical training on fi re fi ghting.
To encourage safety awareness among employees and contractor workforce,
the scheme of "Near- Miss" reporting is in place. All near misses,
minor injuries and incidents were reviewed, analysed, and corrective
actions were taken. To improve safety work culture and bring reduction
in injuries Personal Protection Equipments (hand gloves, dust mask, ear
plugs, etc.) were provided free to all contract workers. New safety &
emergency handling equipments have been added and fi re alarm system
has been upgraded.
Emergency handling: Your Company has a well-defi ned Onsite Disaster
Management Plan. The plan was reviewed, revised & updated this year.
Regular mock drills were conducted to check the emergency preparedness.
Visits and consultations were done with near-by industries to learn
from each other and improve and our offi cial participated in District
Crisis Group meeting chaired by Collector, Kota district.
(c) Environment Management
(i) Sustainable Development à Your Company is totally committed to
sustainable development and has completed various environment
programmes keeping the global environment in mind, viz. Rain Water
Harvesting, Ground Water Recharging, energy conservation measures,
pollution control, use of solar energy, etc.
(ii) Waste Management à The Company continues to follow the 3R concept
(Reduce, Re-use and Re-cycle) of the effl uents being generated. More
than 98% of water used in the process is recycled water. Treated waste
water is used in maintaining green belt through a 65 kilometer long
irrigation network spread all over the Gadepan complex.
Your Company has adopted best practices to manage solid/hazardous waste
disposal after proper categorization. Segregation of waste is ensured
at source, separate bins have been created for collection of various
categories of waste. Bio-degradable waste is composted. Horticulture
waste is converted to manure. Recyclable waste is disposed off to
recyclers and all saleable items are sold to approved recyclers. Use of
polythene bags in the Gadepan campus is strictly prohibited.
(iii) Green belt and water consumption à The area surrounding Gadepan
complex is experiencing a positive change in Ecology due to development
of a dense green belt / forest inclusive of over 2.3 lac trees in an
area of about 212 hectares under a programme named "Operation Green".
This has provided habitat to more than 100 species of birds. During the
year, 700 fruit trees and 2000 other trees were planted.
Water consumption is optimized through implementation of various
conservation schemes. Special efforts have been made in cooling towers,
fi re water network, drinking water net work and de-mineralisation
water plant for optimizing water consumption. The trend of consumption
shows a continual improvement with the specifi c consumption of water
at 4.92 cubic meters per MT of urea this year, as against 5.05 cubic
meters per MT of urea during 2009- 10, which is one of the best in the
Fertilizer Industry.
(d) Quality Management
Adequate attention is accorded to maintain quality of end product and
processes. Stringent monitoring of defi ned parameters of quality is
ensured. Bulk fl ow coolers have been installed in bagging plant for
improving product quality along with increased production.
(e) Health, Safety, Environment & Quality (HSEQ) Audits
Teams of trained internal auditors regularly conduct HSEQ audits with
special emphasis on house keeping, health & hygiene, safety,
environment and quality. Surprise visits are conducted to plant and
canteen to ensure highest standard of housekeeping & hygiene.
Quantitative Risk Analysis was conducted by an external agency, Ammonia
Storage safety was reviewed by the designer and Risk based Inspection
is under progress.
(f) Achievements
Your Company regularly participates in national & international
benchmarking surveys & awards for self assessment and continual
improvement. Your Company has received following main awards during the
year under review:
- 11th Annual Greentech Environment Excellence Award 2010
- FAI Environmental Protection award 2010
- FAI award for 2nd Best Video Film 2010 - Environment
- Rajasthan Energy Conservation Award- 2010, second position
8. Corporate Social Responsibility
Your Company is committed towards the development of neighboring areas
through building rural infrastructure and improving the quality of
life. The Company has taken number of initiatives for the community
development in the vicinity of its plants at Gadepan in consultation
with local administration.
In order to initiate and sustain meaningful actions in this regard,
your Company has full spectrum Corporate Social Responsibility (CSR)
program under the umbrella of "Uttam Roshani". The "Uttam Roshani"
program is designed as per participatory planning process to involve
stakeholders for sustainable development of the area.
Under Uttam Roshani programme, focus is on formation and livelihood
trainings of SHGs (Self Help Groups), Health & Hygiene, Human Health
Care, Sanitation, Farmers Education on Agriculture & Animal Husbandry,
Livestock vaccination & breed improvement, etc. Your Company has taken
the following initiatives under this programme:
i) Sanitation à The Company has initiated a project to improve sanitary
practices through "community participation" and "people led"
programmes. The Company is constructing 715 toilets under Total
Sanitation Campaign of the Government of India, for below poverty line
families under Public Private Community Partnership model in 22
villages around the Fertiliser plants. In light of the signifi cant
gender dimension of sanitation, this project has encouraged active
involvement of women in the implementation of the program.
ii) Drinking Water & Rain Water Harvesting à The Company has helped in
construction of Hand-pumps & tube-wells in surrounding villages.
Drinking water system is constructed at Gadepan, Ballabhpura & Pachda
villages.
iii) Community Health Care à In addition to the Medical Center in
Gadepan providing free medical aid and ambulance services in case of
emergencies, the Company operates a mobile Health Care Unit in 14
villages under which a doctor and nursing assistant provide free
medical check up and medicines to people at their doorstep. The team
attended 22,382 patients during the year. In addition to this, the
Company organizes the services of visiting specialists in various fi
elds like pediatrics, gynecology, skin, dental, eye and ENT and 1591
patients benefited during the year. Further CFCL conducted a family
planning camp in consultation with Health Department, Kota at Sultanpur
in which 61 surgeries were carried out.
iv) Education - Your Company has adopted ITI, Sangod under the
Government of India's Public Private Partnership scheme for its
upgradation.
v) CFCL's Initiatives on Rural Infrastructure
CFCL has been contributing towards rural infrastructure development by
construction of School rooms, Kharanja roads (stone pavement) with
drain, gravel link roads, etc. as per need of community. Further, CFCL
has renovated/ constructed 4 crematoriums in surrounding villages by
constructing platforms and sheds.
vi) CFCL's Initiatives on Agriculture & Veterinary Services
Agriculture and livestock development forms the backbone of rural
livelihood. At the grassroots level, farmers are largely unaware about
latest developments. Recognizing this gap, your Company has set up two
Uttam Krishi Clinics (UKCs) to enhance the awareness levels of farmers
in the fi eld of agriculture & animal husbandry.
vii) Reporting on triple bottom line performance
The Company had commenced reporting on its triple bottom line
(Environment, Economic and Social Parameters) performance from FY
2009-10. The Sustainability Report of the Company is externally assured
and is in accordance with Global Reporting Initiative (GRI) guidelines.
As a recognition of various Corporate Social initiatives, your Company
received "Golden Peacock Award for Corporate Social Responsibility" for
the year 2010
Birla Textile Mills (BTM) had constructed two class rooms with verandah
in Government Middle School, Bhatouli Kalan, Himachal Pradesh. A cool
water hut was also constructed in front of factory main gate to provide
clean and cool water. BTM also organized a Free Medical Health Check-up
Camp on August 31, 2010 in the memory of former Chairman Late Dr. K. K.
Birla. The team of specialist Doctors of Orthopedic, Medicine, Skin,
E.N.T.,
Eye, Gynecology, etc. provided medical help to 500 people and also
distributed prescribed medicines to the patients.
9. Disclosure of Particulars
Your Company strives to make the plants as energy effi cient as
possible and continually reviews various schemes to conserve energy.
The requisite information with regard to conservation of energy,
technology absorption and foreign exchange earnings and outgo in terms
of the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is set out in Annexure "A" annexed hereto and
forms part hereof.
Information required to be furnished in Form A is not applicable to
shipping industry. However, it is ensured that every measure is taken
to save and conserve energy at all stages of operation of the vessels
as well as in shore offi ce. The Company has 6 Aframax Tankers out of
which 5 are double hull and these ships are more energy effi cient as
compared to the old vessels. It has no information to furnish in Form B
regarding technology absorption.
10. Investor Service Centre
The In-house Investor Service Centre of your Company located at New
Delhi, continues to provide prompt investor service through quick
resolution of investor grievances. The motto of 'high investor
satisfaction' is being pursued through pro-active actions like reaching
out to investors regularly, timely information to investors about new
corporate benefits, unclaimed benefits, etc.
The securities of your Company are listed at National Stock Exchange of
India Limited and Bombay Stock Exchange Limited. The Company has paid
annual listing fees to these Stock Exchanges for the year 2011-12.
The members are requested to refer to general shareholders' information
given in Corporate Governance Report appended to this report.
11. Fixed Deposits
Your Company has discontinued accepting new deposits with effect from
July 1, 2008. As on March 31, 2011, your Company had 61 depositors with
fi xed deposits of Rs. 16.22 lac. As on that date, 42 depositors had
not claimed their Fixed Deposit amount of Rs. 10.50 lac despite being
reminded regularly. However, 5 depositors have claimed their deposits
of Rs. 1.15 lac since then.
12. Employee Stock Option Scheme
The members of the Company in 25th Annual General Meeting held on
August 27, 2010 had approved CFCL Employees Stock Option Scheme 2010
("ESOP 2010") for grant of stock options exercisable into not more than
41,62,000 equity shares of face value of Rs. 10/- each to eligible
employees and Managing Director of the Company. Each option when
exercised would be converted into one fully paid up equity share of Rs.
10/- of the Company. The ESOS 2010 is administered by the Compensation
Committee of the Board of Directors of the Company ("Committee"). The
Committee has granted 31,50,000 stock options under ESOS 2010 to the
eligible employees and Managing Director of the Company in two tranches
during the Financial Year 2010-11. Disclosure pursuant to the
provisions of the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 is given in Annexure - "B".
The Board of Directors has decided to not to pursue the Employees Stock
Option Scheme introduced in the year 2008.
13. Personnel
Information in accordance with section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report and is attached hereto as Annexure "C".
14. Directors
The Board has nine non-executive directors and a Managing Director.
Three directors namely M/s. H. S. Bawa, R. N. Bansal and Marco Wadia
are due for retirement by rotation at the forthcoming Annual General
Meeting. M/s. R. N. Bansal and Marco Wadia are eligible and have
offered themselves for re-appointment and they are not related to any
of the directors of the Company. However, Mr. H.S. Bawa has expressed
his unwillingness for re-appointment.
Mr. H.S. Bawa is one of the founder directors and Vice Chairman of your
Company. Chambal was a brainchild of Late Dr. K.K. Birla and Mr. Bawa.
The Company has set up two world class fertilizer plants under Mr.
Bawa's leadership, making it one of the largest Urea producers in the
Country. His unstinted efforts and guidance enabled your Company to
reach to the current level. The Board expresses its sincere gratitude
and appreciation of the contribution made by Mr. Bawa during his tenure
as Director.
Other information on the directors is provided in Corporate
Governance Report annexed to this Report as Annexure "E".
15. Auditors
The Notes on Accounts read with the Auditors' Reports are self
explanatory and therefore, do not call for any further comments or
explanations.
M/s. S. R. Batliboi & Co., Statutory Auditors and M/s. Singhi & Co.,
Branch Auditors of Shipping Business of the Company (pursuant to
Section 228 of the Companies Act, 1956), are retiring at the conclusion
of the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment. The above re-appointments, if made, will
be in accordance with the provisions of section 224 (1B) of the
Companies Act, 1956.
16. Directors Responsibility Statement
Your Directors hereby report:
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relative to material departures;
b) that the Directors 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 March 31, 2011 and of the profit of
the Company for the year ended March 31, 2011;
c) that the Directors have taken proper and suffi cient 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;
d) that the Directors have prepared the annual accounts on a going
concern basis; and
e) that the Company has adequate internal systems and controls in place
to ensure compliance of laws applicable to the Company.
17. Consolidated Financial Statements
In accordance with 'Accounting Standard 21 Ã Consolidated Financial
Statements', the group accounts form part of this Report & Accounts.
These group accounts also incorporate the 'Accounting Standard 27 Ã
Financial Reporting of interest in Joint Ventures' issued by the
Institute of Chartered Accountants of India. These group accounts have
been prepared on the basis of audited financial statements received
from subsidiaries and joint venture entity.
18. Acknowledgements
Your Directors wish to place on record their appreciation of the
assistance and co-operation received from the Department of
Fertilisers, Government of India, State Governments, Financial
Institutions, Commercial Banks, Stakeholders and all others whose
continued support and co-operation has been a source of strength to the
Company enabling it to achieve its goals. Your Directors also wish to
place on record their sincere appreciation of the unstinted devotion
and commitment of every employee of the Company.
By order of the Board
New Delhi S. K. Poddar
May 10, 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 25th Annual Report
together with audited accounts for the financial year ended March 31,
2010.
1. Financial Results and Appropriations
(Rs. in crore)
Particulars 2009-10 2008-09
(a) Turnover (excluding excise duty) 3574.50 4595.54
(b) Gross Profit after Interest but before
Exceptional Items, Depreciation and Tax 612.06 535.63
(c) Depreciation/Amortization 257.62 227.14
(d) Profit before Exceptional Items and Tax 354.44 308.49
(e) Exceptional items 4.37 9.61
(f) Profit before Tax 358.81 318.10
(g) Provision for Current Tax 129.62 104.09
(h) Provision for Deferred Tax (20.49) (18.44)
(i) Fringe Benefit Tax - 1.12
(j) Provision for Tonnage Tax 0.63 0.77
(k) Profit after Tax 249.05 230.56
(l) Balance of Profit Brought Forward 628.43 516.89
(m) Transferred from Debenture 3.13 3.13
Redemption Reserve
(n) Profit available for Appropriation 880.61 750.58
(o)Appropriations:
- Tonnage Tax Reserve 3.75 9.50
- General Reserve 25.00 25.00
- Proposed Dividend on Equity Shares 79.08 74.92
- Tax on Dividend 13.13 12.73
(p) Balance Carried Forward to Balance 759.65 628.43
Sheet
2. Dividend
The Board recommends dividend @ Rs. 1.90 per equity shares of Rs. 10
each (Previous Year - Rs. 1.80 per equity share). The total outgo on
this account will be Rs. 92.21 crore including dividend tax.
3. Operations
The Company has three Businesses i.e. Fertiliser, Shipping and
Textiles. The Fertiliser Business is by far the largest among the three
businesses. The Fertiliser Business comprises of Ãown manufactured
Ureaà and trading of phosphatic and potassic fertilisers as well as
agri-inputs like seeds, pesticides, micro-nutrients, etc. The
fertiliser plants have stabilized after partial de-bottlenecking. While
Fertiliser business remained steady during 2009-10, Shipping and
Textile businesses faced severe recessionary trends although Textile
business was upbeat towards the year end. The performance of the
Company as a whole was satisfactory.
The Company added one new ship during the year. With this addition, it
has a total fleet of 6 Aframax tankers. The Shipping Business performed
well considering the severe global downturn as it had long term charter
contracts with the reputed parties for four of its ships.
The Textile Business achieved increase in revenues due to better
realizations and change in product mix during the year. The detailed
information on all business segments of the Company and the respective
industries are given in the Management Discussion and Analysis Report.
4. "Management Discussion and Analysis" and "Corporate Governance
Report"
Management Discussion and Analysis and Corporate Governance Report are
attached as Annexure à "G" and "E". Auditorsà Certificate confirming
compliance with the conditions of Corporate Governance is also enclosed
as Annexure -D.
5. Joint Ventures and Associates
(i) Indo Maroc Phosphore S. A., Morocco (IMACID)
IMACID plant remained inoperative from November 10, 2008 to March 4,
2009 due to high stock and non- remunerative sales price of Phosphoric
acid. After start-up of the plant on March 5, 2009, overall performance
of plant operation was satisfactory. During the Year 2009, production
and sales of Phosphoric Acid were 359,656 MT and 369,996 MT
respectively.
Total profit after tax was 35.09 Million MAD (Rs. 21.36 crore) in year
2009 as against MAD 250.64 Million (Rs. 142.66 crore) in the previous
year. The decrease in profit is mainly on account of lower price
realization and long plant shut down.
(ii) Zuari Investments Ltd.
Your Company has divested its entire holding in Zuari Investments Ltd.
Accordingly, Zuari Investments ceased to be an associate of your
Company.
6. Subsidiaries
(i) Chambal Infrastructure Ventures Ltd.
Chambal Infrastructure Ventures Ltd. ("CIVL") is a wholly owned
subsidiary of your Company. This subsidiary was set up for development
of Power projects. It had set up two wholly owned subsidiaries viz.
Chambal Energy (Chhattisgarh) Ltd. and Chambal Energy (Orissa) Ltd. for
taking up power projects in the states of Chhattisgarh and Orissa,
respectively. During the year, there was not much of activity in CIVL
or its subsidiaries.
(ii) CFCL Overseas Ltd., Cayman Islands
CFCL Overseas Ltd. was incorporated as a special purpose vehicle and
wholly owned subsidiary of your Company for consolidation of its entire
software business. CFCL Technologies Ltd. is the flagship Company for
software business and also a subsidiary of CFCL Overseas Ltd.
During the year, one of the subsidiaries of CFCL Technologies Ltd.,
acquired Fiserv Fulfillment Services Inc., USA ("FFS") from Fiserv Inc.
in December 2009. This acquisition is a major milestone in the software
business strategy and as a result the business has achieved minimum
critical mass in the Home Mortgage segment. The primary offerings of
FFS are Valuation Services, Title Services, Mortgage Processing and
Home Retention Services. Post acquisition of FFS, the software business
has been realigned into three segments viz., Origination, Servicing and
Technology services. The software business now provides comprehensive
end to end products & services in the mortgage industry.
The Software business as a whole earned revenues of USD 36.4 Million
and EBIDTA (before Merger & Acquisition expenses) of USD 2.7 Million
during the period April to December 2009.
(iii) India Steamship Pte. Ltd., Singapore
Due to economic downturn and very poor spot markets, operations of
India Steamship, Singapore were scaled down. In-chartering activity in
India Steamship, Singapore will be re-looked once the markets turn
favourable. During the Year 2009-10, India Steamship, Singapore has
earned a revenue of USD 4.99 Million and recorded a loss (after tax) of
USD 0.58 Million. Exemption: Your Company has received approval of the
Government of India, exempting it under section 212(8) of the Companies
Act, 1956 from attaching with its Annual Report, the copies of the
Balance Sheet, Profit and Loss Account, Board of Directorsà Report and
AuditorÃs Report of its subsidiary companies. However, pursuant to
Accounting Standard 21 issued by the Institute of Chartered Accountants
of India, Consolidated Financial Statements presented by the Company
include the financial information of its subsidiaries, as applicable.
The Company will make available the Annual Accounts of its subsidiaries
along with relative detailed information upon request by investors of
the Company or its subsidiaries. The Annual Accounts of the
subsidiaries will be available for inspection at your CompanyÃs
corporate office and that of the subsidiaries. Further, the Annual
Accounts of these entities will also be available at the ÃInvestor
Service Centreà section of your CompanyÃs website, www.
chambalfertilisers.in.
7. Environmental Protection, Health and Safety (a) Environment
Management
Your Company has established and maintained an Integrated Management
System based on OHSAS- 18001:2007, ISO-14001:2004 and ISO-9001:2000 for
Environmental, Occupational Health & Safety, and Quality, the details
of which are briefly given below: (i) Sustainable Development à Your
Company believes in sustainable development of the society in which it
operates. Accordingly, it has taken various initiatives and implemented
environment programmes such as Ground Water Recharging through Rain
Water Harvesting, Energy Conservation measures, Use of Solar Energy,
etc.
The Company engages various stakeholders in educating and sensitizing
them about the importance of sustainable environmental development.
Awareness and involvement is achieved through training and various
other programmes. (ii) Waste Management à Your Company is managing and
operating well designed programmes/treatment facilities to control
pollution. The Company continues to follow the 3R concept à Reduce,
Re-use and Re-cycle of the effluents being generated. This year, more
than 98% of the effluents in Fertiliser plants were recycled. Waste
water is being used in maintaining green belt through a 65 kilometer
long irrigation network spread all over the Gadepan complex, which in
turn helps in saving fresh water.
Your Company has adopted best methods to manage Solid/Hazardous Waste
disposal after proper categorization. Separate bins have been created
for collection of various categories of waste. In township,
segregated domestic waste is collected from each house and the
biodegradable waste is composted. Horticulture waste is converted to
manure. All saleable items are sold to approved recyclers. Use of
polythene bags in the Gadepan campus is strictly prohibited.
Similarly, Birla Textile Mills (BTM) uses waste water, after treatment,
in developing and maintaining the green belt. BTM has also installed a
Colour Removal System in effluent treatment plant for removal of colour
from the dye house effluent. (iii) Green belt and water consumption Ã
The area surrounding Gadepan complex is experiencing a positive change
in ecology due to development of a dense green belt/forest inclusive of
over 2.3 Lac trees in an area of about 213 hectares under a programme
named "Operation Green". Planting of new trees is a continuous process
at Gadepan complex. The Green belt provides habitat to more than 100
species of birds. Water consumption is optimized through
implementation of various conservation schemes. The trend of
consumption shows a continual improvement. During the year, the specifi
c consumption of water was 5.05 cubic meter per MT of urea. This is one
of the best in the Fertiliser Industry.
(b) Safety Management
Safety is an area of paramount importance in your Company. A well
defined occupational health and safety management system is in place to
ensure the safety of employees, contractor workforce as well as
equipment and machinery. The township at Gadepan is OHSAS certified.
To maintain and improve upon the well established safety system,
extensive training is conducted for the employees and contractor
workforce by internal and external faculties and employees are also
sent to well known institutes for specialized training. Training
facility has been provided at the site and a safety booklet in Hindi
has been brought out for contractor workforce in the bagging plant.
Besides establishing and maintaining Integrated Health and Safety
Management System, your Company has implemented Process Safety
Management (PSM) System developed by US Occupational Safety & Health
Administration (OSHA) in its operations. PSM is a system covering all
aspects of process risks and involves proactive identifi cation,
assessment & control of hazards in chemical industries. The system
provides a dynamic environment for continual improvement and increasing
awareness of the safety impacts of technology, personnel and management
of process hazards. Unlike USA, PSM system is not mandatory in India
but it has been adopted by the Company to focus on excellence, by
fostering continual improvement of existing systems and employee
involvement in safe operation of plants at Gadepan.
Emergency Handling
Your Company has a well-defined Onsite Disaster Management Plan & Flip
chart at Gadepan. Regular mock drills are conducted to check the
emergency preparedness inÃhouse as well as with local administration.
Mock drills have been conducted for ammonia release scenario and fire
involving naphtha. A formal "Mutual Aid Scheme" with NTPC Ã Anta is
also in place for the emergency handling.
(c) Health & Hygiene
Your Company accords high priority to hygiene monitoring at work place
and employeesà health assessment is done through periodical medical
examinations. The plant and processes are continuously upgraded to
improve work place hygiene and health standards. Necessary training is
imparted to the employees and other workers to enhance their awareness
towards health related matters. A large number of our employees are
certified first-aiders whose knowledge is updated every month.
A well equipped medical centre at Gadepan campus provides round the
clock Health Services to employees and their families, contractor
workforce and community. The CompanyÃs medical officers conduct
regular health awareness program.
Comprehensive Work Environment Monitoring is carried out in-house as
well as through external agencies on regular basis to prevent any
occupational disease.
(d) Quality Management
Adequate attention is accorded to maintain quality of end product and
processes. Stringent monitoring of defined parameters is done and
improvement opportunities are availed for continual improvement. Under
a unique initiative, an All India workshop on "Boiler Feed Water and
Steam System Management" was successfully organized at Gadepan in
association with Fertiliser Association of India.
Health, Safety, Environment & Quality (HSEQ) Audits
Teams of trained internal auditors regularly conduct HSEQ audits with
special emphasis on house keeping, health & hygiene, safety,
environment and quality. Apart from periodic internal audits, external
audits are carried out by reputed agencies like DNV & National Safety
Council of India. The gaps identified in the audits are rectified
through an action plan.
(e) Achievements
Your Company regularly participates in national and international
benchmarking surveys & awards towards self- assessment and continual
improvement. Your Company has received the following awards during the
year:
- Rajasthan Energy Conservation Award 2009;
- Best Employer 2008 for EXCELLENCE in GREEN REVOLUTION in Rajasthan
State by the Employer Association of Rajasthan;
- Golden Peacock Awards for Corporate Social Respon- sibility for the
year 2009; and
- Best Managed Siding Award - 2008-09 by West Cen- tral Railway for
Minimum average detention to rakes.
8. Corporate Social Responsibility (CSR)
Your Company is committed towards the development of areas in the
vicinity of the plants at Gadepan. Your CompanyÃs full-spectrum CSR
programme, recently branded as "Uttam Roshni", has been designed to
realize objectives of sustainable economic, social and environmental
development. The Company had engaged a professional agency - Gramin
Vikas Trust (GVT) to carry out a Need Assessment Survey of the villages
surrounding the plants at Gadepan. The areas requiring the CompanyÃs
intervention were identified and various initiatives were taken up for
the community development in consultation with local administration at
the village & block levels. The activities mainly cover construction
of Kharanja roads (stone pavement) with drains, gravel link roads,
boundary walls, culverts, tube wells, fencing and provision of hand
pumps and water storage tanks. The Company has also undertaken scheme
for improvement in Village Drainage System and construction of a
Community Center. It is proposed to build toilets for Below Poverty
Line households and supply Drinking Water under Public Private Partner
-ship model after necessary approvals from the local administration.
Your Company operates a mobile Health Care Unit namely Ã"Chambal Gramin
Arogya Sewa" in 14 surrounding villages. A team of doctors accompanied
by volunteers from "Uttam Mahila Samiti" provides free medical check up
and medicines to villagers at their doorstep. 17510 patients were given
treatment through Chambal Gramin Arogya Sewa during the year 2009-10.
The Medical Centre in Gadepan campus provides free service to sick
villagers from surrounding areas and ambulance facilities are provided
to them round the clock for taking patients to Kota in emergency.
During the year, over 2051 patients were provided health care service
at Medical Center. Villagers also avail the services of visiting
specialists for treatment. Camps for various ailments related to Eye,
Gynecology, Respiratory & Asthma and Immunization and free health check
up for students of nearby schools were organized.
Your Company believes that everyone can Ãmake a differenceà and each
individual is capable of giving something of value to society. The same
is displayed by a group of volunteers from "Uttam Mahila Samiti"
through initiatives like distribution of educational stationery,
uniforms, sweaters, shoes, computers, etc. in the schools around our
plants. Uttam Mahila Samiti also conducts drawing, painting and debate
competitions at school level from time to time.
For overall development of community, "Uttam Krishi Clinic" has been
established in the vicinity of the plants at Gadepan. This clinic
provides various services such as Soil testing, Internet, Sale of
improved seeds, Farmer training, Consultation, Demo- cum-Nursery for
educating farmers on organic farming, etc.
9. Conservation of Energy
Your Company strives to make the plants as energy efficient as possible
and continually reviews various schemes to conserve energy. The
requisite information with regard to conservation of energy, technology
absorption and foreign exchange earnings and outgo in terms of the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is set out in separate statements attached
hereto (Annexure "A" & "B") and forms part hereof.
Your Company now owns 6 Aframax tankers out of which 5 are double hull
and these ships are more energy efficient as compared to the old
vessels. Information required to be furnished in Form A is not
applicable to shipping industry. It has no information to furnish in
Form B regarding technology absorption. Total foreign exchange earning
and outgo with respect to the Shipping Division has been included in
data of entire Company in Form B.
10. Investor Service Centre
The In-house Investor Service Centre of your Company located at New
Delhi, continues to provide prompt investor service through quick
resolution of investor grievances. The motto of Ãhigh investor
satisfactionà is being pursued through pro-active actions like
reaching out to investors regularly,timely reminders to investors
about new corporate benefits,unclaimed benefits, etc.
The Securities of your Company are listed at National Stock Exchange of
India Ltd. and Bombay Stock Exchange Ltd.
The Company has paid Annual listing fees to these Stock Exchanges for
the year 2010-11.
The members are requested to refer to general shareholders information
given in Corporate Governance Report appended to this report.
11. Fixed Deposits
Your Company has discontinued accepting new deposits with effect from
July 1, 2008. As on March 31, 2010, your Company had 175 depositors
with fixed deposits of Rs. 49.21 lac. As on that date, 44 depositors
had not claimed their Fixed Deposit amount of Rs. 10.84 Lac despite
being reminded regularly. However, 3 depositors have claimed their
deposits of Rs. 0.85 Lac since then.
12. Employee Stock Option Scheme
Your Company had taken approval of members in 23rd Annual General
Meeting held on September 10, 2008 for issue and allotment of options
exercisable into not more than 41,62,000 equity shares of face value of
Rs. 10/- each to employees of the Company under Employee Stock Option
Scheme(s). However, no stock options were issued by your Company during
the year under review.
13. Personnel
Information in accordance with Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report and is attached hereto as Annexure "C".
14. Directors
The Board has nine Non-Executive directors and a Managing Director. Two
directors namely M/s. S. K. Poddar and S. S. Bhartia are due for
retirement by rotation at the forthcoming Annual General Meeting. M/s.
S. K. Poddar and S. S. Bhartia are eligible for re-appointment.
The Board of Directors had appointed Mr. K. N. Memani and Ms. Radha
Singh as Directors w.e.f July 21, 2009 and October 21, 2009,
respectively, to fill the casual vacancies caused by resignation of
M/s. M. D. Locke and A. J. A. Tauro. Mr. Memani will hold the office
until the forth coming Annual General Meeting of the Company.
The Company has received a notice in writing together with requisite
deposit from a member proposing Mr. MemaniÃs appointment as a director
of the Company, liable to retire by rotation.
Mr. A. J. A. Tauro has resigned as a director of the Company w.e.f.
October 1, 2009. The Board places on record its sincere appreciation of
the services and guidance rendered by Mr. A. J. A. Tauro during his
long association with the Company. Other information on the directors
is provided in Corporate Governance Report as annexed to this Report as
Annexure "E".
15. Auditors
The Notes on Accounts read with the Auditorsà Reports are self
explanatory and therefore, do not call for any further comments or
explanations.
M/s. S. R. Batliboi & Co., Statutory Auditors and M/s. Singhi & Co.,
Branch Auditors of Shipping Business of the Company (pursuant to
Section 228 of the Companies Act, 1956), are retiring at the conclusion
of the ensuing Annual General Meeting and being eligible, offer
themselves for re- appointment. The above re-appointments, if made,
will be in accordance with the provisions of Section 224 (1B) of the
Companies Act, 1956.
16. Directors Responsibility Statement
Your Directors hereby report:
a) that in the preparation of annual accounts, the applicable
accounting standards have been followed alongwith proper explanation
relative to material departures;
b) that the Directors have selected such accounting policies and
applied them consistently and made judgements 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 March 31, 2010 and of profit and loss
account for the period ended March 31, 2010;
c) that the Directors 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; and
d) that the Directors have prepared the annual accounts on a going
concern basis.
17. Consolidated Financial Statements
In accordance with ÃAccounting Standard 21 Ã Consolidated Financial
StatementsÃ, the group accounts form part of this Report & Accounts.
These group accounts also incorporate the ÃAccounting Standard 23 Ã
Accounting for investments in Associates in Consolidated Financial
Statementsà and also ÃAccounting Standard 27 à Financial Reporting of
interest in Joint Venturesà issued by the Institute of Chartered
Accountants of India. These group accounts have been prepared on the
basis of audited financial statements received from subsidiaries,
associate and joint venture company.
18. Acknowledgements
Your Directors wish to place on record their appreciation of the
assistance and co-operation received from the Department of
Fertilisers, Government of India, State Governments, Financial
Institutions, Commercial Banks, Stakeholders and all others whose
continued support and co-operation has been a source of strength to the
Company enabling it to achieve its goals. Your Directors also wish to
place on record their sincere appreciation of the unstinted devotion
and commitment of every employee of the Company.
By order of the Board
New Delhi S. K. Poddar
May 8, 2010 Chairman
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