Directors Report of Madras Fertilizers Ltd.
Mar 31, 2023
Your Directors have pleasure in presenting herewith the 57th Annual Report together with the Balance Sheet as at March 31, 2023 and the Statement of Profit & Loss for the year 2022-23.
SUMMARY OF FINANCIAL RESULTS
|
Rs. Cr |
||
|
Particulars |
2022-23 |
2021-22 |
|
Turnover |
3447.09 |
2302.16 |
|
Profit Before Interest, Depreciation, Exceptional items and Tax |
336.44 |
268.91 |
|
Less: Interest |
78.19 |
93.11 |
|
Less: Depreciation |
9.59 |
9.46 |
|
Less: Exceptional items |
Nil |
Nil |
|
Profit / (Loss) Before Tax |
248.66 |
166.34 |
|
Provision for Tax |
63.33 |
3.97 |
|
Profit / (Loss) After Tax |
185.33 |
162.38 |
|
Other Comprehensive Income |
33.00 |
27.46 |
|
Cash Profit / (Loss) |
258.25 |
175.80 |
The overall sales of the Company are increased by '' 1144.93 crores around 49.7% (FY 2022-23''3447.09 crores as against the FY 2021-22 '' 2302.16 crores) mainly due increase in subsidy. The Company has made profit after tax of '' 185.33 cr.
The Company has submitted a Revival Proposal to Department of Fertilizers, Government of India, for its consideration.
The Company does not propose to declare any Dividend to shareholders during the fiscal 2023.
The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(âSEBI Listing Regulationsâ) is available on the Company''s website at_www.madrasfert.co.in.
The Company has not transferred any amount to Reserve during the year.
The is no change in the paid-up share capital of the Company. The Paid-up Equity Share Capital of the Company as on March 31,2023 is '' 161.10 Crores.
HIGHLIGHTS OF PLANT PERFORMANCE
? Plant has produced 519800 MT of Neem Coated Urea and 7507 MT of NPK complex (20-20-0). The capacity Utilisation of plants are 106.8% and 2.7% for Urea and NPK Plants respectively.
? Urea production of 519800 MT is the Highest ever production since inception.(previous best 503900 MT in the FY 2021-22).
? For the second time in MFL history and in consequate years, MFL has produced Urea above the RAC (Reassessed Annual Capacity) of 486750 MT.
? Urea Specific Energy Consumption is 7.584 Gcal/MT for the year 2022-23.
? Quarterly Production of 146169 MT of Urea during Jan-Mar 2023 is the second highest production since inception (Previous Best 144763 MT during Jan-Mar 2011).
? Monthly production of 51000 MT achieved during Mar 2023 is the Best monthly production (Previous Best 50662 MT in Dec 2021).
? At the close of Mar 31,2023, 3276 days were completed without any lost time accident covering 11.01 million man-hours. (Previous best Achieved - 5.66 million manhours).
A MoU was signed with Department of Fertilizers (DoF), Government of India for the year 2022-23 on November 15, 2022 setting up targets for performance of the Company in terms of static and dynamic parameters.
MARKETING PERFORMANCEFertilizer Sales
? Achieved an All- time High sale of 5,29,879 MTs of Neem Coated Urea since revamping of Urea Plants which is 5% increase over previous year sale of 5,04,559 MTs.
? POS sale of NC Urea for the year is 5,17,118 MTs against a dispatch of 5,29,611 MTs which mean 97.64% of the product consumed during the year itself.
? Our Market share in Tamil Nadu is 27.90% which is more than One fourth of total market share of Tamilnadu and it is 8.03 % in MFL''s marketing territory of South India. (Total consumption 2022-23: 65,91,866 MTs and CPLY : 61,45,562 MT).
? Sold the entire available quantity of 7,504 MTs of Vijay 20-20-0
? Overall, Sold 5,37,383 MTs of both NPK 20-20-0 and NC Urea during the year which is 3rd best in last 16 years. Previous best is 5,46,991 MTs in 2017-18 and 5,44,928 MTS in 2013-14.
? Record movement of 5,37,117 MT which is the best in the last 9 years.
? 96.70% of products delivered to dealers directly from Railhead against the previous year movement of 94.44%.
? The Closing PoS device Inventory of Neem Coated Urea on 31.03.2023 is 25,697 MTs which is only 4.8% of the invoiced Quantity.
Bio fertilizers, Bio Pesticides & Organic Manures Sales
? Sold 22.56 MTs of Bio Fertilizers during the year 202223
? Sold 157.42 KL of Vijay Neem which is the highest in Past 15 years.
? Under âBasket Approachâ MFL sold 7836 MTs of Vijay Organic which is the highest in the past 7 years and around 15% increase over previous year sale of 6832 MTs.
? In addition to Organic Manure, Under âSwachh Bharat Missionâ, MFL continues to Market City Compost, a product from Municipality/Factory waste and sold 9608 MTs during the year.
MARKET DEVELOPMENT & AGRO-SERVICE PROGRAMMES:
MFL''s Marketing personnel have contacted 20822 farmers during the year and continuously imparted knowledge to farmers on use of eco-friendly products for soil health, soil fertility, Soil vitality and balanced fertilization (Integrated Nutrient Management). Method demonstrations and farmer seminars were organized in coordination with State/Central Agricultural extension departments.
Under corporate social responsibility to farming community, Marketing personnel had collected 3997 numbers of soil samples, got analyzed and communicated to the farmers about the micro & macro nutrient recommendations of various crops to farmers during the year.
In Pursuance to the Prime Minister''s Mission on empowering the Farmers, DoF initiated to convert the existing village/ Block/ Taluk/ Sub-dist/ District level Fertilizers Retail Shops into Pradhan Mantri Kisan Samruddhi Kendras (PMKSKs) a One Stop Shopâ wherein all Agricultural Inputs like Quality Fertilizers, Seeds & Pesticides are made available & Services like Soil/Water/ Fertilizers testing, Custom hiring of Large farm equipments, Creating awareness on various Govt schemes, Educating the farmers on improved farm technologies, weather updates, Crop Insurance etc are rendered to farming community.
In line with DOF''s initiative, MFL converted 89 numbers of Retail Shops into âPMKSKâ-â at Dist level during Oct-Nov''2022. In addition, all the Retail shops allocated to MFL at village/ Block/ Taluk/ Sub-dist level are being converted into PMKSKs for the service of farmers.
DBT Implementation
? In compliance with PAN India implementation of DBT Fertilizer, in order to sustain sales thru PoS machines, MFL is continuously educating the Wholesalers/ Retailers and farmers on the importance of PoS sales.
? âAll-time highâ Bill generation for NC Urea since inception of DBT in January 2018:
|
Bills Generated |
Neem Coated Urea |
17-17-17 |
Total |
|
Quantity |
5,17,118 MT |
7,915 MT |
5,25,033 MT |
|
Value |
3038.33 Cr. |
3.17 Cr. |
3041.50 Cr. |
VIGILANCEACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPARTMENT DURING 2022-23
Vigilance Department is headed by Chief Vigilance Officer (CVO). The CVO is assisted by a team of officers drawn from various functional departments and placed in Corporate Office at Chennai. The thrust of Team vigilance is to bring greater transparency, fairness and efficiency in all type of transactions and execution of works in the company in line with the Central Vigilance Commission''s guidelines. Thus, necessary measures are initiated to review the activities of Corporate Office, Chennai and Marketing offices situated across the South India.
Regular preventive vigilance activities such as Scrutinise, Surprise checks, Vigilance clearance for administrative decisions, enforcement of Transfer Policy and Rotation of Officers on Sensitive Posts were also carried out in close coordination with the Management. At the same time, investigation of complaints received from various sources and follow up of pending departmental action on previous investigated cases were also done with due diligence. Periodic Vigilance Reports preparation of Agreed List of Officers, List of Officers of Doubtful Integrity, The working of vigilance wing of MFL is based on a proactive, participative and focused approach. The roles and responsibilities of vigilance officers are regularly monitored and reviewed to bring the focus on systemic improvements.
As part of Preventive Vigilance, efforts are made to keep a watch on the various activities through regular inspections and surprise checks. Systemic improvements and corrective actions are suggested wherever necessary. Your Company follows the ideology that âAll officers are Vigilance Officersâ and the same is implemented in the company. Support of all officers is taken in implementation of Vigilance directives. Vigilance Department has focused on spreading awareness on rules/regulations, procedures and solicited information/ complaints from all regarding malpractices or corruption. Efforts are made to ensure speedy Redressal of the complaints. Vigilance Department has actively contributed towards e-governance by leveraging technology in all operations in MFL. Tender documents have been made more objective. Transparency in existing system of dealing with the Dealers/ Vendors has been enhanced by adopting
e-procurement and e-payment. Vigilance Department has also shepherded the organization in an era of e-clearances for issuing NOC for various purposes to the employees superannuating and visits abroad.
MFL observed Vigilance Awareness Week 2022 (VAW -2022) âCorruption free India for a developed Nationâ from October 31, 2022 to November 06, 2022.
Banners and Posters related to Vigilance Awareness were displayed at various vantage points in the company premises and all the Regional Offices situated all over South India highlighting the theme of Vigilance Awareness Week. Scrolling messages were displayed at the display Board of the Main Entrance at MFL.
The activities during the week were designed to spread Vigilance Awareness among employees and citizens. Awareness for taking e-integrity pledge was spread through SMS, display of e-banner on intranet, email etc. A link for taking e-integrity pledge on CVC website was provided on MFL website for all the stakeholders.
On Oct 31, 2022, Integrity Pledge was administered to all the employees at 1100 hours by CMD at the Company''s Administrative Building and the other employees from Plant and Regional offices took pledge at their respective work spots. A link was also provided in the Company''s web site, to facilitate Citizens and Corporates to access the CVC website for taking e-Pledge.
A Workshop through video conference on vendor awareness programme on preventive vigilance was conducted by DGM - Materials Management Shri A Madhan Mohan.
As a part of outreach campaign, a Vigilance Awareness Walk was organised inside the plant premises covering the major locations of the work. Around 60 employees have participated in the walk and posters were displayed in all the major locations of the Plant and Administrative office to increase awareness and elicit active participation of all employees of MFL within the campus.
Dealers Meet was Organised in Belgaum, Karnataka by Davanagere RO. Shri Shivangouda S Patil, Joint Director of Agriculture, Belgaum, Deputy Director of Agriculture, DDA-Belgaum, B Annilkumar Deputy General Manager - D&S, D S Deshpande - RM Davanagere, RO Davanagere officials B S Metri, Senior Dealer, Belgaum and 82 Dealers participated
in the program, The participant guests addressed on importance of Vigilance in day today transactions, eradication of corruption, guidelines to eradicate corruption, fair business practices, overcoming corruption and corruption free India. Later vigilance oath was administered.
As a part of Vigilance Awareness Campaign, Grama Sabha was Organised at Government High School, Pambukovil santhai in Tenkasi Dist, Tamilnadu ADSP - V&AC - Tenkasi district and his team of 6 Staffs, MFL ADM, MFL DM Tirunelveli, Village President & Vice president, School AHM, Teachers, MFL''s local dealer and a public of around 200 Nos. participated in the program. Special address with presentation on Vigilance awareness was given by ADSP -Tenkasi district. He also had an Interaction with public and clarified their doubts on vigilance. Later VAW 2022 pledge was taken by all the participants. The Village president thanked MFL for choosing his village for the Grama Sabha meeting. On the occasion of 75th Independence of India, 75 tree saplings were planted at School campus and a nearby PHC.
The theme for Slogan competition was âCorruption free India for a Developed Nationâ. Entries for the Slogan competition were called from Employees and also from their Wards in English, Regional Language (Tamil) and Hindi respectively.
Around 400 Emails sent to various vendors by MM on VAW 2022 Theme
Activities related to VAW 2022 were published in Newspapers in local regional languages.
A video capturing the highlights of the week was created and was uploaded in the Company''s website and the social media platforms.
A Quiz competition was conducted on for Employees at MFL Training Centre. Similarly, the same was also conducted at various Schools and Colleges located at Regional Offices. Altogether, around 485 Students participated during Vigilance Awareness Week. Similar competitions were conducted at the neighbouring nearby Schools at Manali, Chennai and also covering all the Regional Offices.
Prizes were distributed to the Winners of the Vigilance Awareness Week Competitions on Dec 01,2022 by Chairman & Managing Director.
MFL Vigilance organized a Preventive Vigilance Workshop on âPublic Procurementâ was conducted by CVO-MFL, Chennai at CPCL, Chennai. Senior Officials from CPCL participated in the Programme.
Similarly, a workshop on âPreventive Vigilance in Marketingâ was conducted at MFL, Chennai. DGM-D&S (a/c), Chief Manager-D&S (a/c), Regional Managers and Managers -Head Office of Distribution & Sales department participated in the Programme.
Integrity Pact:
Subsequent to the tenure of Shri Virupakshan Pranatharthiharan, IFS (Retd) expired on 10.07.2022, CVC vide Letter No. 018/VGL/060/516492 dated 21.06.2022 have nominated Shri Ashwani Kumar Mehta, IRS (Retd.) as IEM for a period of three years. Half Yearly Structured Meeting and Quarterly Review Meetings with Independent External Monitors (IEMs) was held thru Video Conference.
HUMAN RELATIONS AND INDUSTRIAL RELATIONSMANPOWER
The total strength of MFL as on 31.03.2023 is 469 against 508 as on 31.03.2022.
98 employees and 31 contract workers have been trained during the year 2022-23 on Technical and Life Skills.
During the year, overall Industrial Relation situation in the Company has been normal and cordial.
SC / ST EMPLOYEES WELFARE ACTIVITIES
? The Presidential Directives and various guidelines issued by the Government of India from time to time relating to the welfare of SC / ST employees are being scrupulously followed.
? '' 50,000 /- each was granted to MF SC/ST Employees Welfare Association and MF Dr.Ambedkar Employees Welfare Association for celebrating Dr. Ambedkar Jayanthi.
? To handle the grievance of SC/ST employees, the following are in existence
? SC/ST Cell
? Internal Grievance Committee (IGC) for SC and ST separately
? A Liaison Officer for SC/ST employees OBC EMPLOYEES WELFARE ACTIVITIES
? '' 50000/- was granted for celebrating Thanthai Periyar E V Ramasamy''s Birthday on 17th September 2022 in a grand manner in commemoration of National Leader.
? To handle the grievance of OBC employees, the following are in existence
? OBC Cell
? Internal Grievance Committee (IGC) for OBC employees
? A Liaison Officer for OBC employees
OFFICIAL LANUAGE IMPLEMENTATION
The target fixed by Department of Official Language for letter correspondence in Hindi and other implementation programs are being taken care of. Hindi Fortnight was celebrated at Head Office and Regional Offices. Various competitions were organized through online and prizes were distributed.
IRC is functioning in the Company under the Company Secretary to create awareness of the Company''s strength and ensuring timely communication to shareholders.
STATUTORY INFORMATIONAnnual Evaluation of Board
MFL being a Government Company, all appointments in the Board are made by the Government of India, Ministry of Chemicals and Fertilizers, Department of Fertilizers. The performance of Directors are evaluated by the Ministry of Chemicals & Fertilizers, Department of Fertilizers, Government of India. As per Government of India, Ministry of Corporate Affairs notification dated 5th June 2015, clause (e) and (p) of sub-section 3 of Section 134 of Companies Act 2013 relating to appointment, remuneration and Annual evaluation of Board on its performance are not applicable to MFL. However, the company is evaluating the performance of its Directors as per the guidelines issued by SEBI.
During the year 2022-23, 7 meetings of the Board of Directors were convened and held. The details of the meetings of the Board of Directors are given in the report on Corporate Governance, which is part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act 2013.
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197 (12) of the Companies Act 2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is stated that no employee of your Company was in receipt of remuneration in excess of the amount mentioned in Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The details of ratio of the remuneration of each director to the median remuneration of the employees of the Company and percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer and Company Secretary in the financial year as required to be disclosed in pursuant to Rule 5 (1) is provided in Annexure A.
Directors and Key Managerial Personnel
1. The Government of India as per Government Order notification No.84/3/2017-HR-I dated July 17, 2023 has appointed Shri Kishor Rungta (DIN 00231106) as Chairman & Managing Director (Additional Charge) of the Company effective from June 16 2023 or till regular incumbent joins the post or until further orders whichever is the earliest, subject to his CVC clearance and approval from DoPT (ACC)". The Board has recommended the Members to appoint him as the Chairman & Managing Director additional charge of the Company in the 57th Annual General Meeting of the Company.
2. Shri Arvind Kumar (DIN 10117759), who was appointed as a Director in the Board of Madras Fertilizers Limited as per Department of Fertilizers, Ministry of Chemicals & Fertilizers, Government of India notification F.No.95/1/2019-HR-PSU with effect from February 10, 2023, until further orders. The Board has recommended the Members to appoint him as the Director of the Company in the 57th Annual General Meeting of the Company.
3. Dr Jatin Kumar Mohanty (DIN 02660442), was appointed as Additional Director being designated as Non-official Independent Director in the Board of Madras Fertilizers Limited in its 330th Meeting of the Company held on 08th August 2023 as recommended by the Appointment Committee of the Cabinet vide
O.M.NO.20/64/2022-EO(ACC) dated 31.05.2023 and Department of Fertilizers, Ministry of Chemicals & Fertilizers, Government of India vide its notification F.No.78/2/2006-HR-PSU (pt III) with effect from the notification i.e. June 20, 2023 for a period of three years or until further orders. The Board has recommended the Members to appoint him as the Director of the Company in the 57th Annual General Meeting of the Company.
Directorsâ Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013,
your Directors hereby state that
a. in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards (Ind AS) 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 at the end of the financial year and of the profit and loss of the company for that year;
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 control to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Prevention of Sexual Harassment
Disclosures in relation to the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 have been provided in the Report on Corporate Governance report.
Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and outgo
The details of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required in pursuant to provisions of Section 134 of Companies Act 2013 are given in the Annexure - I forming part of this report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required under Listing Agreement is enclosed as Annexure - II forming part of this report.
Corporate Governance
The Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Board lays emphasis on transparency and accountability for the benefit of all stakeholders of the Company. The Report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Business Responsibility Report have been enclosed as Annexure - III and IV respectively forming part of the report.
Declaration affirming compliance with the code of conduct pursuant to the provisions of Regulation 17(5) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) is enclosed as Annexure - V forming part of this report.
Declaration by Independent Directors:
The Independent Directors have submitted their declaration to the Board that they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 25 of Listing Regulations so as to qualify as an Independent Director of the Company
As provided under Section 92 (3) of the Act, the form MGT-7 Annual Return is available in our website www.madrasfert. co.in.
a. The Comptroller & Auditor General of India shall appoint the Statutory Auditors of the Company for the year 2023-24.
b. Mrs. Aruna Prasad, Cost Accountant, has been reappointed as Cost Auditor of the Company for the year 2023-24.
c. In terms of the provisions of Section 204 of the Companies Act, 2013 and Rules framed thereunder, a Secretarial Report in the prescribed format, obtained from a Company Secretary in practice, is required to be annexed to the Board''s Report. In view thereof, your Board at its 329th meeting held on May 21, 2023 has appointed M/s. V Esaki & Associates (M.No.30353), Practicing Company Secretary, as the Secretarial Auditor of your Company. The Secretarial Auditors'' Report (Form No.MR-3) for the year 2022-23 is enclosed as Annexure - VI & VIA, forming part of this report. Further, in terms of SEBI LODR Regulations, Secretarial Compliance Report has also been obtained from M/s. Esaki & Associates for the year 2022-23.
Committees
The details pertaining to the composition of (i) Audit Committee, (ii) Nomination & Remuneration Committee, (iii) Stakeholders Relationship Committee are included in the Corporate Governance Report, which is a part of this report. The details of Corporate Social Responsibility Committee given in CSR Report attached to this report.
Public Deposit
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.
Contract or arrangement with Related Parties
The transactions entered with related parties for the year under review were on arms length basis and in the ordinary course of business. The disclosure in Form No.AOC-2 for
the transactions with related parties during the period under review is enclosed as Annexure - VII of the report. As none of the transaction is material in nature, hence no resolution is placed before the shareholder for their approval.
The Company''s Policy on Related Party Transactions is available on the Company''s website at www.madrasfert.co.in
Maintenance of Cost records and accounts:
The Company, in terms of the provisions of Section 148 (1) of the Companies Act, 2013, is required to maintain cost records. Accordingly, the Company had maintained Cost Accounts and Records for the year ended March 31, 2023.
Corporate Social Responsibility (CSR)
As per Section 135 of Companies Act, 2013, the CSR Committee of the Board consisting 3 or more directors out of which one director shall be an independent Director. The Company having 4 members of CSR Committee and the Chairman of the Committee is an Independent Director.
The Company has carried out the following CSR activities during the financial year 2022-23. The details are contained in the Annual Report on CSR activities is enclosed as Annexure - VIII forming part of this report.
Material changes and commitments
There were no material changes and commitments affecting the financial position of the company between the end of financial year March 31, 2023 and the date of the report.
Significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companyâs operations in future
There were no significant awards that have been passed by any Court or Judicial Authority against the company during the Financial Year 2022-23 impacting the going concern status and Company''s operations in future.
Internal financial control systems and their adequacy:
The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the
audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2023.
Auditorâs report and Secretarial audit report
The statutory auditor''s report and the secretarial auditor''s report do not contain any qualifications, reservations, or adverse remarks or disclaimer.
No frauds is reported by auditors under Section 143(12) of the Act other than those reportable to the Central Government.
Risk management
The Company has risk policy and implemented the risk management policy in true spirit including identification of risk elements. The boards'' opinion, may threaten the company existence, if any, provided in Management Discussion and Analysis in this report.
The Company has developed and implemented various policy, procedures and practice to mitigate the risk and threats and to achieve the objects of the Company. Some of the important policies are
1. Prompt convening of Risk Management Committee
2. Analysis of Business Continuity Plan by the Head of Departments on need basis
3. Upholding Corporate Governance Practices Certification
As required by Regulation 17(8) of the SEBI Regulation, a Certificate on the Financial Statements and Cash Flow Statement of the Company for the year ended March 31, 2022 duly signed by the Chairman & Managing Director (Additional Charge) and General Manager - Finance & Accounts (Additional Charge) was submitted to the Board of Directors at their 330th meeting held on 08th August 2023 is enclosed as Annexure - IX forming part of this report.
Certificate from Company Secretary in Practice pursuant to Clause 10 of Part C of Schedule V of SEBI (LODR) Regulations, 2015:
The Certificate dated 28.07.2023 received from M/s. V Esaki & Associates, Company Secretaries, confirming that none
of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of the Company by the Board/Ministry of Corporate Affairs or any such Statutory Authority is enclosed as Annexure X.
Vigil Mechanism
MFL is having vigil mechanism for directors and employees to report their concerns. The Directors and employees can approach Chairman Audit Committee of the Board directly and report their concern in appropriate case. The vigil mechanism and whistle blower policy is published in the website of the Company www.madrasfert.co.in.
Prevention of Insider Trading
No instances of insider trading have been reported on MFL shares till date. None of the directors and key managerial personnel is holding any shares in MFL. A code of conduct of prevention of insider trading and code for corporate disclosure is published in the website of the Company www. madrasfert.co.in.
Appreciation
Your Directors wholeheartedly place on record their appreciation for the continued and unstinted support of Department of Fertilizers, Government of India, Government of Tamilnadu, NICO, Financial Institutions, Banks, Depositors and all stakeholders during the year. It is most appropriate to mention that the Directors convey their gratitude to the Department of Fertilizers for settlement of subsidy bills on priority basis and to the dealers and farmers for their sustained support to our products. Last but not the least that your Directors also place on record their appreciation for the dedication, commitment and sincere services rendered by the employees for sustained improvements.
By order of the Board For Madras Fertilizers Limited Sd/-
Kishor Rungta Chairman & Managing Director Chennai (Additional Charge)
Aug 08,2023 (DIN : 00231106)
Mar 31, 2018
The Shareholders Madras Fertilizers Limited
The Directors have pleasure in presenting herewith the 52nd Annual Report together with the Balance Sheet as on March 31, 2018 and the Statement of Profit & Loss for the year 2017-18.
SUMMARY OF FINANCIAL RESULTS
Rs. Cr
|
Particulars |
2017-18 |
2016-17 |
|
Turnover |
1617.14 |
1394.83 |
|
Profit Before Interest, Depreciation, Exceptional items and Tax |
52.76 |
99.63 |
|
Interest |
75.39 |
73.53 |
|
Depreciation |
22.01 |
21.36 |
|
Exceptional items |
0.17 |
1.20 |
|
Other Comprehensive Income |
(17.15) |
(0.23) |
|
Profit / (Loss) Before Tax |
(61.96) |
3.31 |
|
Provision for Tax |
- |
- |
|
Profit / (Loss) After Tax |
(61.96) |
3.31 |
|
Cash Profit / (Loss) |
(39.95) |
24.67 |
The Companyâs operations for the year ended with a loss of Rs. 61.96 Cr (previous year profit Rs. 3.31 Cr - restated as per Ind AS). The total accumulated loss as of 31.3.2018 was Rs. 666.56 Cr (previous year Rs. 604.60 Cr).
SICKNESS AND REVIVAL
Due to unfavourable pricing Policies and delay in stabilization of revamped Plant, the Companyâs operations resulted in loss and the accumulated losses of the Company up to March 2009 stood at Rs. 793.93 Cr.
The Companyâs operation became profitable, thereafter, due to amendments in policies and improvement in production performance. The Companyâs operations resulted in profits to the tune of Rs. 413.21 Cr during the period from 2009-10 to 2013-14. The Company shall come out of sickness, once the draft rehabilitation scheme (DRS), proposed by the Company on 01.06.2017, based on the Study Report submitted by M/s. Projects & Development India Limited (PDIL) is approved by Department of Fertilizers, Government of India and the same is implemented.
DIVIDEND
The Company does not propose to declare any Dividend to shareholders during the fiscal 2018, as per the Companies (Declaration and Payment of Dividend) Rules, 2014, due to huge accumulated losses (Rs. 666.56 Cr) and negative networth (Rs. 492.03 Cr) as on March 31, 2018.
PLANT PERFORMANCE
Achievements in Plant Production & Performance for the Current Year (CY) 2017-18 and Corresponding Period Last Year (CPLY) :
1. Urea Production (Production: Current Year (CY) : 418898 MT and Last Year (LY) : 468438 MT)
2. I ncrease in NPK Production by 27 % (Production: CY : 62110 MT and LY: 48895 MT)
3. Urea Specific Energy consumption for the month of March 2018 and IV quarter 2018 (6.979 & 7.105 Gcal/ MT) is the lowest against the MOU targets (7.298 & 7.311 Gcal/MT)
4. Since Inception the lowest specific energy consumption of 9.339 Gcal/MT Ammonia (Design: 9.461 Gcal) & 6.787 Gcal/MT Urea (Derived design: 7.004 Gcal) were achieved on Feb 04, 2018.
5. At the close of March 31, 2018, 1450 days were completed without any lost time due to accident covering 5.61 million man-hours.
GAS CONVERSION
Feed stock conversion project from high cost Naphtha to low cost RLNG in Ammonia Plant is at an advanced stage of completion.
From MFL, placing purchase orders for major equipment procurement are completed.
Gas conversion project is in progress in MFL and we will start taking gas after commissioning of IOCL RLNG terminal at Ennore.
MFL will be signing the Gas Transmission Agreement (GTA) and Gas Supply Agreement (GSA) with M/s Indian Oil Corporation Ltd (IOCL).
MARKETING PERFORMANCE
Fertilizer Sales
- The Company has sold 4,73,038.50 MT of Vijay Neem Coated Urea as compared to previous yearâs sale of 4,35,538.75 MT.
- The market share of Vijay Neem Coated Urea in MFL marketing territory increased from 8.35% to 9.13% when compared to previous year.
- The Company also sold 73,953.55 MT of Vijay 17-17-17 as compared to previous yearâs sale of 33,406.80 MT.
- Best ever Fertilizer Sale of 5,46,992.05 MT was achieved both for Vijay Neem Coated Urea and Vijay Complex put together in recent years.
During Kharif 2017, the agricultural season was fair when compared to CPLY. During south west monsoon season, Kerala, Tamil Nadu and Karnataka received marginally higher rainfall than normal. Telangana and Andhra Pradesh received normal rainfall. However, due to erratic and uneven rainfall and long dry spells crop coverage affected. The North East Monsoon was active only in Southern and Northern districts of Tamil Nadu whereas it was less in Central Districts of Tamil Nadu and other states resulting in lesser crop coverage. The crop coverage was 82% of normal area for the entire year.
Neem Pesticides, Bio-fertilizers & Organic Manure 60.12 KL of Eco-friendly Neem Pesticides was traded during the year.
The Company has sold 83 MT of bio-fertilizers during the year.
As part of âSwachh Bharat Missionâ, the Company has sold 8620.05 MT of City Compost against DOF target of 7500 MT during the year and CPLY is 1705.88 MT. MFL stood 4th position in City Compost sales on all India Basis for the year 2017-18. Also sold 1683.60 MT of Organic Manure during the year as against 712 MT during the last year. MFL continues to promote the eco-friendly products like; Vijay Neem, City Compost and Vijay Organic. Our endeavor is to develop and sustain the eco-friendly agricultural environment.
During the year, MFL generated revenue of about Rs.2.55 Cr. by selling the By-product CO2.
MARKET DEVELOPMENT & AGRO-SERVICE PROGRAMMES:
MFLâs Marketing personnel have contacted 26782 farmers during the year and continuously imparted knowledge to farmers on use of eco-friendly products for soil health, soil fertility and vitality of soil health and balanced fertilization (Integrated Nutrient Management), by direct farmer contact, soil sample collection, demonstration method and farmer seminar in coordination with State Agricultural extension departments.
Under corporate social responsibility to farming community, Marketing personnel had collected 4357 soil samples, got analysed and communicated to the farmers about the micro & macro nutrient recommendations of various crops to farmers during the year.
In pursuance to the Prime Ministerâs Mission on empowering the Farmers vide Supportive Schemes & Education on farming techniques, MFL established âKisan Suvidha Kendraâ at Gangavathy and Shimoga in Karnataka State during the year. Services to farmers like soil sample analysis and recommendation of fertilizer dosage based on soil test report, educating the farmers on weather, crop Insurance and other improved farm technologies were offered.
MFL conducted Direct Benefit Transfer (DBT) training programs to retail dealers in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Kerala and Puducherry in order to comply with PAN India implementation to effect sales through PoS machines to farmers as part of Governmentâs Policy of passing on subsidy to the direct beneficiaries.
Being Lead Fertilizer Supplier for Andaman & Nicobar, as a special assignment, MFL trained the Depot in charge officials of Agricultural department on DBT and completed the installation and deployment of PoS machines in Andaman & Nicobar Islands during Nov 2017, despite constraints on infra-structure like poor connectivity, lukewarm response of switching over to PoS machine sales etc.
As per DOF directive, MFLâs share of 1719 PoS machines at an estimated cost of Rs.3.30Cr. has been spent, in MFL marketing territory. Order has been placed for additional 92 machines for supply to Karnataka state to comply with DOF directive.
Effective Jan 1st 2018, entire MFL marketing territory is under DBT scheme.
ISO 9001 / 14001
The Company is committed to maintain the annual Quality / Environment objectives for all the functional areas. To achieve the said objective, the Company has renewed the EMS (ISO 14001 : 2015) and QMS (ISO 9001:2008) certification with the concerned Certifying Bodies.
MEMORANDUM OF UNDERSTANDING
In respect of MOU 2018-19, having completed PreNegotiation and inter-ministerial committee meeting, the MOU has been duly signed with Government of India on 26.06.2018 detailing necessary financial and production performance parameters to be achieved for the year 2018-19.
VIGILANCE ACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPARTMENT DURING 2017-18
- Complaints received were attended and reports submitted as per Complaints Handling Policy of the Company / Central Vigilance Commission (CVC) guidelines.
- Continuously monitoring the progress of the Disciplinary Proceedings in respect of Vigilance Cases for timely completion.
- Agreed List of Suspected Officers and List of Officers of Doubtful Integrity were finalised and sent to DoF.
- CVC Guidelines / Circulars on Tenders and disciplinary proceedings and other matters as and when received were communicated to Management for necessary action.
- As per the Central Vigilance Commission, CVO had one Structured Meeting with the CMD, MFL on 25.01.2018 and pending issues were discussed and suggestions given to the Management. GM - Plant, GM - F&A, and GM - M&D (a/c) attended the said meeting.
- For all the Tenders with value more than Rs.2 lacs, e-Tendering and e-reverse auction method is being followed.
- Annual Property Returns of the Officers were scrutinized as per CVC guidelines.
- For easy reference, CVC Guidelines / Circulars on Tenders were uploaded in MFLâs Online Integrated System (OLIS).
- MFL observed Vigilance Awareness Week 2017 from October 30, 2017 to November 4, 2017 as directed by CVC. The following are the highlights:
- On October 30, 2017, Vigilance Awareness Week pledge was administered to all employees at 11.00 hours in the Administrative Building by Shri U Saravanan, Director Technical in the presence of CVO.
- On Oct 31, 2017, a Written Quiz Competition was conducted by MFL Vigilance Team for the Supervisory officials at the Training Centre. Around 15 Employees enthusiastically participated in the competition.
- On Nov 1, 2017, a Guest Lecture on âMy Vision -Corruption Free Indiaâ was organised which was delivered by Shri R Mohanraja, IRPS, Principal Chief Personnel Officer, Integral Coach Factory, Chennai. In this lecture, he dealt at length the topic of Corruption, its ill-effects and ways to counter the same. The Lecture was well received by a house full attendance in the Training Centre Auditorium of MFL.
- Essay competitions (in English & Tamil) on the same topic, viz., âMy Vision - Corruption Free Indiaâ was held for students of two neighbouring schools to create awareness and to involve the youth in Vigilance awareness.
- Prizes and Certificates were distributed to the Winners of the Vigilance Awareness Week competitions on 30.11.2017 by CMD.
HUMAN RELATIONS AND INDUSTRIAL RELATIONS
Manpower & Training
- The total strength of MFL as on 31.03.2018 is 632 as against 684 as on 31.03.2017. 257 employees have been trained during the period Apr 2017 to Mar 2018 on Technical, Soft and Life skills for the enduring benefit and development of the Organisation.
Industrial Relations
- During the year, the overall Industrial Relation situation in the Company has been normal and cordial.
SC / ST Welfare Activities
- The Presidential Directives and various guidelines issued by the Government of India from time to time relating to the welfare of SC / ST employees are being scrupulously followed. A Liaison Officer for SC / ST has been posted at DGM level to ensure implementation of Government Directives.
- Rs. 30000/- was granted for celebrating Dr. Ambedkar Jayanthi on 16th April 2018 at MFL and conducted in a grand manner in commemoration of National Leader.
Official Language Implementation
Efforts are being taken to meet the target fixed by Department of Official Language for letter correspondence in Hindi and other implementation programs. Hindi fortnight was celebrated at Head Office and Regional Offices. Various competitions were organised and prizes were distributed.
INVESTOR RELATIONS CELL (IRC)
IRC is functioning in the Company under the Chief Financial Officer (General Manager-F&A) & Company Secretary with members from various Groups to create awareness of the Companyâs strength and ensuring timely communication to shareholders.
DIRECTORS
Government of India have appointed the following GOI Nominee Director in MFL Board :-
Shri Lalsanglur, IES (DIN 08118636) Economic Advisor, Department of Fertilizers in place of Shri Dharampal, IAS (DIN 02354549), effective April 10, 2018.
The Board placed on record the valuable and outstanding contribution made by the outgoing Director Shri Dharampal, IAS, during his tenure as Director on the Board for the substantial and sustainable development of the Company.
STATUTORY INFORMATION
Annual Evaluation of Board
MFL being a Government Company, all appointments in the Board are made by the Government of India, Ministry of Chemicals and Fertilizers, Department of Fertilizers. The performance of Directors are evaluated by the Ministry of Chemicals & Fertilizers, Department of Fertilizers, Government of India. As per Government of India, Ministry of Corporate Affairs notification dated 5th June 2015, clause (e) and (p) of sub-section 3 of Section 134 of Companies Act 2013 relating to appointment, remuneration and Annual evaluation of Board on its performance are not applicable to MFL.
Meeting of the Board
During the year 2017-18, eight meetings of Board were convened and held. The details of the meetings of the Board of Directors are given in the report on Corporate Governance, which is part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act 2013.
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197 (12) of the Companies Act 2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is stated that no employee of your Company was in receipt of remuneration for any part of the year at a rate which is more than Rs. 5 lacs per month.
Directorsâ Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors hereby state that
a) i n the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards (Ind AS) had been followed along with proper explanation relating to material departures.
b) âhe 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 at the end of the financial year and of the profit and loss of the company for that year;
c) t he 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) â he directors have prepared the annual accounts on a going concern basis.
e) âhe directors have laid down internal financial control to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Energy, Technology & Foreign Exchange
The data on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 134 of Companies Act 2013 are given in the Annexure - I forming part of this report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required under Listing Agreement is enclosed as Annexure - II forming part of this report.
Corporate Governance
The Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Board lays emphasis on transparency and accountability for the benefit of all stakeholders of the Company. The Report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been enclosed as Annexure - III forming part of the report.
Code of Conduct
Declaration affirming compliance with the code of conduct pursuant to the provisions of Regulation 17(5) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) is enclosed as Annexure - IV forming part of this report.
Extract of Annual Return
As provided under Section 92 (3) of the Act, the details of extract of the Annual Return in form MGT 9 is enclosed as Annexure V forming part of this report.
Auditors
a) The Comptroller & Auditor General of India have appointed M/s J V Ramanujam & Co. (MD0377), Chartered Accountants, Chennai as Statutory Auditors of the Company for the year 2018-19.
b) Smt Aruna Prasad, Cost Accountant, has been reappointed as Cost Auditor of the Company for the year 2018-19.
c) I n terms of the provisions of Section 204 of the Companies Act, 2013 and Rules framed thereunder, a Secretarial Report in the prescribed format, obtained from a Company Secretary in practice, is required to be annexed to the Boardâs Report. In view thereof, your Board at its 301st meeting held on 28th May 2018 has appointed Mr. V Esaki, Practicing Company Secretary, as the Secretarial Auditor of your Company. The Secretarial Auditorsâ Report (Form No.MR-3) for the year 2017-18 is enclosed as Annexure - VI forming part of this report.
Audit Committee
In line with the provisions of Section 177 of the Companies Act 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 an Audit Committee of the Board has been constituted. Details of Members / Meetings of the Audit Committee are elaborated in the report on Corporate Governance. The Board has accepted all recommendations of Audit Committee.
Public Deposit
During the financial year 2017-18, the Company has not accepted any deposit from public. However, as on 31.3.2018, Rs. 7,62,054/- is lying in unclaimed matured fixed deposit account.
Contract or arrangement with Related Parties
The transactions entered with related parties for the year under review were on arms length basis and in the ordinary course of business. The disclosure in Form No.AOC-2 for the transactions with related parties during the period under review is enclosed as Annexure - VII of the report.
Corporate Social Responsibility (CSR)
The Company has constituted âCorporate Social Responsibility Committeeâ comprising of three independent directors. The Committee monitors CSR activities. The Company has carried out the following CSR activities during the financial year 2017-18:
- An amount of â.0.98 lakhs was spent towards cleaning and deepening work of pond at Kolathupalayam Village, Tondamuthur Block, Coimbatore District, Tamilnadu.
- An amount of Rs. 10,000/- was spent towards CSR activities for supplying 200 food packets to neighbouring village people who were affected by flood.
- Regular supply of potable water through pipelines from MFL to Harikrishnapuram (Manali), a neighbouring village (around 500 families) is ensured at a cost of Rs.5. 44 lakhs
The details are contained in the Annual Report on CSR activities is enclosed as Annexure - VIII forming part of this report.
Material changes and commitments
There were no material changes and commitments affecting the financial position of the company between the end of financial year (March 31, 2018) and the date of the report.
CEO/CFO Certification
As required by Regulation 17(8) of the SEBI Regulation, a Certificate on the Financial Statements and Cash Flow Statement of the Company for the year ended March 31, 2018 duly signed by the Chairman & Managing Director and General Manager (Finance & Accounts) & Company Secretary was submitted to the Board of Directors at their meeting held on May 28, 2018 is enclosed as Annexure - IX forming part of this report.
Vigil Mechanism
MFL is having vigil mechanism for directors and employees to report their concerns. The Directors and employees can approach Chairman Audit Committee of the Board directly and report their concern in appropriate case. The vigil mechanism and whistle blower policy is published in the website of the Company www.madrasfert.co.in.
Prevention of Insider Trading
No instances of insider trading have been reported on MFL shares till date. None of the directors and key managerial personnel is holding any shares in MFL. A code of conduct of prevention of insider trading and code for corporate disclosure is published in the website of the Company www.madrasfert. co.in.
APPRECIATION
Your Directors wholeheartedly place on record their appreciation for the continued and unstinted support of Department of Fertilizers, Government of India, Government of Tamilnadu, NICO, Financial Institutions, Banks, Depositors and all stakeholders during the year. It is most appropriate to mention that the Directors convey their gratitude to the Department of Fertilizers for settlement of subsidy bills on priority basis and to the dealers and farmers for their sustained support to Vijay products. Last but not the least that your Directors also place on record their appreciation for the dedication, commitment and sincere services rendered by the employees for sustained improvements.
By order of the Board
Chennai A B Khare
Aug 13, 2018 Chairman & Managing Director
Mar 31, 2016
The Shareholders Madras Fertilizers Limited
The Directors have pleasure in presenting herewith the 50th Annual Report together with the Balance Sheet as on March 31, 2016 and the Profit & Loss Statement for the year 2015-16.
S UMMARY OF FINANCIAL RESULTS ( Rs. Cr)
|
2015-16 |
2014-15 |
|
|
Turnover |
1201.64 |
1701.87 |
|
Profit Before Interest, Depreciation, DRE and Tax |
2.93 |
(33.10) |
|
Interest |
82.32 |
83.98 |
|
Depreciation |
18.15 |
17.61 |
|
Extraordinary items |
(92.00) |
Nil |
|
Profit / (Loss) Before Tax |
(189.54) |
(134.69) |
|
Provision for Tax |
Nil |
Nil |
|
Profit / (Loss) After Tax |
(189.54) |
(134.69) |
|
Cash Profit / (Loss) |
(171.39) |
(117.08) |
The Company''s operations for the year ended with a loss of Rs. 189.54 Cr (Previous Year loss Rs. 134.69 Cr). The total accumulated loss as of 31.3.2016 was Rs. 706.68 Cr. (Previous Year Rs. 517.14 Cr).
SICKNESS AND REVIVAL
As mentioned in the earlier Annual Reports, the main reasons for the continuous losses and consequent sickness were due to cost and time overrun of revamp of Ammonia and Urea Plants, delay in stabilization of revamped Plants due to Technology related issues, higher energy, poor reliability, lack of maintenance of the existing Plant for want of funds and unfavorable Pricing policies up to March 2009.
The Company''s operation became profitable, thereafter, due to amendments in policies and improvement in production performance. The Company shall come out of sickness, once the Draft Rehabilitation Scheme (DRS) is approved by DoF & BIFR and the same is implemented.
DIVIDEND
The Company does not propose to declare any Dividend to shareholders during the Fiscal 2016, as per the Companies (Declaration and Payment of Dividend) Rules, 2014, due to huge accumulated losses (Rs. 706.68 Cr) and negative net worth (Rs. 532.15 Cr) as on March 31, 2016.
PLANT PERFORMANCE
During 2015-16, Urea production was 407311 MT (83.7% capacity) with an annual specific energy consumption of 7.645 Gcal/MT. Urea production of 50,900 MT during Mar 2016 is the highest ever monthly production since inception.
Main reason for the lower production is (i) From April 17th 2015 to June 15th 2015 Plants were shut down due to GoI Policy of denying operation of fertilizer Plant on Naphtha as feed stock and (ii) From 01st December to 27th December, 2015 Plants were shut down due to heavy flooding of entire MFL complex owing to heavy rain and the letting out of water from overflowing âPuzhalâ reservoir.
On receipt of GOI approval vide DoF Notification No.12018/4/2014/ FPP dated 17th June 2015 for continuation of production using Naphtha as feedstock till gas connectivity, the Ammonia Plant re-start operations began on June 12, 2015. Ammonia and Urea production commenced at 15.30 hrs on June 15, 2015 and 00.35 hrs on June 17, 2015 respectively.
With respect to Complex Fertilizers, MFL produced 0.35 lac MT of NPK 17-17-17 during 2015-16 and the production was low due to non-availability of raw materials.
GAS CONVERSION
MFL Ammonia Plant is gas compatible with minor modifications in the Front End of the Ammonia Plant and the Basic Engineering Design Package has already been completed by M/s Haldor Topsoe A/S (HTAS), Denmark, MFL Ammonia Plant Process Licensor. The detailed engineering was carried out by M/s Projects & Development India Ltd. (PDIL).
The procurement of major equipment viz., NG fired heater, Primary Reformer Burners, NG Preheat Coil, NG fuel preheater are under tendering stage under the guidance of PDIL.
MFL has signed the Heads of Agreement (HOA) with M/s.Indian
Oil Corporation Ltd (IOCL) for Regasified Liquid Natural Gas (RLNG) supply from its proposed Ennore RLNG terminal which is expected to become operational by June 2018. Memorandum of Agreement (MOA) has been signed with IOCL for gas transportation through pipelines on 29.05.2016.
MARKETING PERFORMANCE Fertilizer Sales
The company has sold 3,27,883.50 MT of Vijay Neem Coated Urea and 27,239.65 MT of Vijay Urea totaling to 3,55,123.15 MT during 2015-16 as compared to previous year''s sale of 3,25,532.10 MT of Vijay Urea and 967 MT of Neem Coated Urea totaling to 3,26,499.10 MT. The Company also sold 34,807.30 MT of Vijay 17-17-17 as compared to previous year''s sale 74,225.60 MT. The seasonal condition by and large in South India was satisfactory except in Karnataka & Telangana States wherein the rainfall was around 70% and concentrated in isolated parts. The Market share of MFL Urea was 6% in South India during 2015-16.
Based on GOI directives MFL is producing 100%Neem Coated Urea since June 2015, for slow release of Nitrogen in the soil. Cash sales thru RTGS payment accounted for 97.90% of total sales. There has not been a single case of Bad Debt for this year also.
Neem Pesticides, Bio-fertilizers & Organic Manure 70.09 KL of Neem Pesticides valuing Rs. 152.43 lakh of Eco-friendly Neem Pesticides was traded during the year as against 113.62 KL value of Rs. 197.37 lakh for the previous year.
The Company has sold 276.76 MT of bio-fertilizers during the year as against 349 MT for the previous year.
Under basket approach, the Company has also sold 8247 MT of Organic Manure during the year in Tamil Nadu, Pondicherry, Karnataka, Andhra Pradesh, Telangana and Kerala States as against 5432.88 MT sold during the last year. The concerted promotional effort helped in increasing the volume. MFL continues to promote the eco-friendly products like; Vijay Neem and Vijay Organic. Vijay City Compost is also introduced during 2015-16. Our endeavor is to develop and sustain the eco-friendly agricultural environment.
MARKET DEVELOPMENT & AGRO-SERVICE PROGRAMS:
MFL''s Marketing personnel have contacted 31594 farmers during the year and educated them about the package and practices of cultivation of major crops, soil health techniques and optimum usage of chemical fertilizers, bio-fertilizers and Neem products to enhance soil fertility and food grains productivity for consequent growth in economy.
Under corporate social responsibility to farming community, the Marketing personnel had collected 5521 soil samples, analyzed and communicated the micro & macro nutrient recommendations of various crops to farmers during the year.
In pursuance to the Prime Minister''s Mission on empowering the Farmers vide Supportive Schemes & Education on farming techniques, MFL celebrated âWorld Soil Health Day'' in a grand manner by conducting 15 programs during Dec 5-19 2015 in entire MFL Marketing Territories.
PUBLIC DEPOSIT
There are no Public Deposits with the Company.
ISO 9001 / 14001
CMD has approved the annual Quality / Environment objectives for all the functional areas and the same has been communicated to the respective functional area for compliance during the year 2015-16.
The EMS (ISO 14001:2004) Renewal Certification valid upto 31st May 2017 was obtained from M/s Indian Register Quality Systems (IRQS), our certifying body.
The QMS (ISO 9001:2008) Renewal Certification valid upto 29th December 2016 was obtained from M/s. Indian Register Quality Systems (IRQS), our certifying body.
MEMORANDUM OF UNDERSTANDING
The Company submitted a draft MOU with Department of Fertilizers (DOF), Government of India for the year 2016-17 setting up targets for performance of the Company in terms of static and dynamic parameters. Finalization of performance parameters is underway through negotiation.
VIGILANCE
ACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPARTMENT DURING 2015-16
- Complaints received were attended and reports submitted as per Complaints Handling Policy of the Company / Central Vigilance Commission (CVC) guidelines.
- Continuously monitoring the progress of Disciplinary Proceedings in respect of vigilance cases for timely completion.
- Agreed List of suspected Officers and List of Officers of Doubtful Integrity were finalized and sent to DOF.
- CVC guidelines on Tenders and disciplinary proceedings and other matters as and when received were communicated to Management for necessary action.
- As per the Central Vigilance Commission''s requirement, CVO had one Structured meeting with the CMD, MFL (on 21.12.2015) and pending issues were discussed and suggestions given to the Management.
- In the Structured Meeting cited, CVO informed CMD about DOF''s communication dated 07.12.2015 on CVC''s Office Order dated 13.02.2012 on PIDPI resolution and emphasized the need for giving wider publicity to PIDPI provision. Consequently, MFL Management has put up on the Company''s website CVC''s resolutions on PIDPI and other guidelines in this regard from CVC / DOPT.
- For all Tenders with value more than Rs. 2 lacs, e-Tendering and e-reverse auction method is being followed.
- Annual Property Returns of Officers were scrutinized as per CVC guidelines.
- Rotation of Officers in sensitive posts effected as per CVC guidelines.
- For easy reference, CVC Guidelines / Circulars on Tenders were uploaded in MFL''s Online Integrated System (OLIS).
- MFL observed Vigilance Awareness Week 2015 from Oct. 26 to 31, 2015, as directed by CVC. The following are the highlights:
- CMD administered Vigilance Awareness pledge on Oct. 26, 2015 at 11 AM to mark the commencement of Vigilance Awareness Week 2015.
- On Oct. 26, 2015 after noon, a Guest Lecture by Shri. N. Gopalaswami, former Chief Election Commissioner of India. was organized on the topic âPreventive Vigilance''.
- Slogan contest in English, Tamil and Hindi on âPreventive Vigilanceâ was organized for the employees of MFL.
- An Essay Competition on the theme âPreventive Vigilance as a tool of Good Governanceâ was organized for MFL employees.
- A similar Essay Competition on the theme âPreventive Vigilance as a tool of Good Governanceâ was organized for the School children of two neighboring Schools. Prizes were distributed to the winners of the above competitions on Nov 18, 2015 by CMD, MFL.
- Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice visited Chennai on June 22-23, 2015 for discussions with various institutions, organizations and political parties. On June 23, 2015 the Committee held discussions on Vigilance administration in the context of Lokpal and Lokayuktha with MFL and other organizations. CMD-MFL and Shri. J. Vinayan, CVO-FACT who was nominated to represent MFL (in view of CVO''s training program) and other Senior Officials attended the Meeting.
HUMAN RELATIONS AND INDUSTRIAL RELATIONS MANPOWER & TRAINING
The total strength of MFL as on 31.03.2016 is 723 as against 693 as on 31.03.2015. 415 employees have been trained during the period Apr 2015 - Mar 2016 on Technical, Soft and Life skills for the enduring benefit and development of the Organization.
INDUSTRIAL RELATIONS
During the year, the overall Industrial Relation situation in the Company has been normal and cordial.
OFFICIAL LANGUAGE IMPLEMENTATION
MFL has been continuously exceeding the target fixed by Department of Official Language for letter correspondence in Hindi and other implementation programs. Hindi Fortnight was celebrated at Head Office and Regional Offices. Various competitions were organized and prizes were distributed.
SC / ST WELFARE ACTIVITIES
Dr Ambedkar Jayanthi was celebrated on 15th April 2015 at our Training Centre by inviting Chief Guest from outside and conducted in a grand manner.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
- During heavy floods in Chennai, on December 6, 2015, MFL conducted food camp and distributed food packets and medical kit to around 1000 people at Salaimanagar village, Manali, adjoining MFL Plant premises.
- On December 15, 2015, MFL conducted free medical camp with the help of our Occupational Health Centre Team under the guidance of Company Medical Officer which served around 500 people at Salaimangar Village, Manali, Chennai.
- Subsequently on December 25, 2015, MFL distributed around 1000 relief material packets containing 4 kgs of rice, dhoti, sari and bed sheet worth of Rs. 600 per family through the local member of Legislative Assembly in Manali area, Thiruvottiyur Assembly Constituency, Thiruvallur District.
In total, the company has incurred an amount of Rs. 8.00 lacs towards this noble cause as a part of CSR activities 2015-16.
INVESTOR RELATIONS CELL (IRC)
IRC is functioning in the Company under the Chief Financial Officer General Manager (F&A) & Company Secretary with members from various Groups to create awareness of the Company''s strength and ensuring timely communication to shareholders.
DIRECTORS
Government of India have appointed the following GOI Nominee Directors in MFL Board :-
a) Dr A K Padhee, IAS (DIN 00730620) Joint Secretary, Department of Fertilizers in place of Shri Heeralal Samariya, IAS (DIN 00054859) effective Jan 14, 2016; and
b) Shri Piyush Srivastava, IES (DIN 07266407) Economic Advisor, Department of Fertilizers in place of Rajiv Yadav, IAS, (DIN 00322778) effective Jan 14, 2016.
c) The Appointments Committee of the Cabinet (ACC) vide
O.M.No.2/13/2016-EO(ACC) dated June 06, 2016 has approved the appointments of the following Non-Official Directors on the Board of Madras Fertilizers Limited with effect from June 06, 2016 for a period of three years or until further orders, whichever is earlier.
1) Dr. Hemant A Thakore
2) CA. Sunil Vashisht
3) Shri C Ramesh
4) Smt Vanathi Srinivasan
The Board placed on record the valuable and outstanding contribution made by the outgoing Directors Shri Rajiv Yadav, IAS and Shri Heeralal Samariya, IAS during their tenure as Directors on the Board for the substantial and sustainable development of the Company.
AUDITORS
The Comptroller & Auditor General of India have appointed M/s B Thiagarajan & Co, Chartered Accountants, Chennai as Statutory Auditors of the Company for the year 2015-16.
STATUTORY INFORMATION
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197 (12) of the Companies Act 2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is stated that No employee of your Company was in receipt of remuneration for any part of the year at a rate which is more than Rs. 5 lacs per month.
Energy, Technology & Foreign Exchange
The data on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 134 of Companies Act 2013 are given in the Annexure-I forming part of this report.
Directorsâ Responsibility Statement
Directors'' Responsibility Statement as required under Section 134 of Companies Act 2013 is furnished in Annexure-II forming part of this report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required under Listing Agreement is enclosed as Annexure-III forming part of this report.
Corporate Governance
Your Company is fully compliant with the Corporate Governance guidelines, as stipulated in Securities and Exchange Board of India under Clause 49 of the Listing Agreement and also the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) . Certificate received from the Auditors of the Company regarding compliance of Corporate Governance guidelines of SEBI as required under Listing Regulatiions is enclosed as Annexure IV forming part of the report.
Code of Conduct
Declaration affirming compliance with the code of conduct pursuant to the provisions of Regulation 17(5) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) is enclosed as Annexure V forming part of this report.
Extract of Annual Return
As provided under Section 92 (3) of the Act, the details forming part of extract of the Annual Return in form MGT 9 are annexed herewith as Annexure VI.
Secretarial Audit
In terms of the provisions of Section 204 of the Companies Act, 2013 and Rules framed there under, a Secretarial Report in the prescribed format, obtained from a Company Secretary in practice, is required to be annexed to the Board''s Report. In view thereof, your Board at its meeting held on May 27, 2016 appointed Mr V Esaki, No.47 VOC Nagar, Nehru Street, Anna Nagar East, Chennai 600 102 as the Secretarial Auditor of your Company. The Secretarial Auditor''s Report for the year 2015-16 is annexed as Annexure VII.
APPRECIATION
Your Directors wholeheartedly place on record their appreciation for the continued and unstinted support of Government of India, Department of Fertilizers, Government of Tamilnadu, NICO, Financial Institutions, Banks and all stakeholders during the year. It is most appropriate to mention that the Directors convey their gratitude to the Department of Fertilizers for settlement of subsidy bills on priority basis and to the dealers and farmers for their sustained support to Vijay products. Last but not the least that your Directors also place on record their appreciation for the dedication, commitment and sincere services rendered by the employees for sustained improvements.
By order of the Board
Chennai A B Khare
August 12, 2016 Chairman & Managing Director
Mar 31, 2015
The Shareholders Madras Fertilizers Limited
The Directors have pleasure in presenting herewith the 49th Annual
Report together with the Balance Sheet as on March 31, 2015 and the
Profit & Loss Statement for the year 2014-15.
SUMMARY OF FINANCIAL RESULTS (Rs. Cr)
2014-15 2013-14
Turnover 1701.87 2593.47
Profit Before Interest, Depreciation, (33.10) 231.00
DRE and Tax
Interest 83.98 82.79
Depreciation 17.61 42.41
Extraordinary items (OTS benefit) - -
Profit/(Loss) Before Tax (134.69) 105.80
Provision for Tax - 5.76
Profit/(Loss) After Tax (134.69) 100.04
Cash Profit / (Loss) (117.08) 142.45
The Company's operations for the year ended with a loss of Rs. 134.69
Cr (Previous Year profit Rs. 100.04 Cr). The total accumulated loss as
of 31.3.2015 was Rs.517.14 Cr. (Previous YearRs. 380.72 Cr).
SICKNESS AND REVIVAL
As mentioned in the earlier Annual Reports, the main reasons for the
continuous losses and consequent sickness was due to cost and time
overrun of revamp of Ammonia and Urea Plants, delay in stabilization of
revamped Plants due to Technology related issues, higher energy, poor
reliability, lack of maintenance of the existing Plant for want of
funds and unfavorable Pricing policies up to March 2009.
The Company's operation became profitable, thereafter, due to
amendments in policies and improvement in production performance. The
Company shall come out of sickness, once the draft rehabilitation
scheme (DRS) is approved by DoF & BIFR and the same is implemented.
DIVIDEND
The Company does not propose to declare any Dividend to shareholders
during the Fiscal 2015, as per the Companies (Declaration and Payment
of Dividend) Rules, 2014, due to huge accumulated losses (Rs. 517.14
Cr) and negative net worth (Rs. 342.61 Cr) as on March 31,2015.
PLANT PERFORMANCE
During 2014-15, Urea production was 328900 MT (67.6% capacity) with an
annual specific energy consumption of 8.086 Gcal/MT. Main reason for
the lower production and a higher energy consumption is as follows.
1. CPCL Hydrogen limitation and initial technical problem while
restarting the Plant during April 2014.
2. From October 8th 2014 to January 14th 2015 plants were shut down due
to Gol policy.
During the year, GOI vide notification dated Apr 02, 2014 has directed
to close down the Naphtha based Ammonia, Urea Plants from Jul 01,2014.
However, vide notification dated Sep 03,2014 the units were permitted
to run up to September 30, 2014. Subsequently, GOI vide notification
dated Jan 07,2015 permitted to run Naphtha based Ammonia-Urea Plants
for 100 days from the date of notification and hence in MFL
Ammonia-Urea Plants, after shutdown for 3 months during Oct to Dec
2014, production was resumed during Jan 2015 and Urea Plant was run
upto Apr 16,2015.
With respect to Complex Fertilizers, MFL produced 0.74 lac MT of NPK
17:17:17 during 2014-15. Ammonia was procured from RCF for sustaining
NPK Production the quantity procured was 1767.59MT.
GAS CONVERSION
MFL Ammonia Plant is gas compatible with minor modifications in the
Front End of the Ammonia Plant and the Basic Engineering Design Package
has already been completed by M/s Haldor Topsoe A/S (HTAS), Denmark,
MFL Ammonia Plant Process Licensor. The detailed engineering is being
carried out by M/s Projects & Development India Ltd. (PDIL) and is in
the advanced stage of completion.
Tenders for the major equipment viz., NG Fired Heater, Primary Reformer
Burners, NG Preheat Coil, NG fuel preheater, Pipings & other instrument
items were floated and under technical evaluation by M/s PDIL and as
per PDIL, the project is expected to be completed by 2015.
In the meantime, MFL is exploring all the possibilities of sourcing
Natural gas either from IOCL from their proposed Ennore LNG Terminal,
which would become operational by the year 2018 or from GAIL through
KKMBPL (Kochi-Koottanad-Mangalore- Bangalore pipeline) thru a spur line
from Krishnagiri. As per GAIL, this project is likely to be implemented
by the year 2017-18.
As per MFL's Board direction, Heads of Agreement (HoA) was signed with
IOCL on September 17, 2013, for supply of Gas to MFL.
In the meantime, action has also been initiated to procure RLNG from
M/s.LNG Bharat Pvt Ltd, through Cryogenic Road Tankers from its
proposed RLNG terminal at Krishnapatnam Port which is 150 Km from MFL
Plant.
MARKETING PERFORMANCE Fertilizer Sales
Shutdown of Urea Plant for 3 month period due to GOI policy has
resulted into lower production and hence during the year, Company has
sold 4.01 lakh MT of fertilizers as compared to 5.45 lakh MT of
previous year. The seasonal condition by and large in south India was
satisfactory except in Andhra Pradesh and Telangana States wherein the
rainfall was around 65% only. The market share of MFL urea was 5.71%
in south India during 2014-15.
GOI, in order to optimise Nitrogen use efficiency, is promoting
production of Neem Coated Urea for slow release of Nitrogen in the
soil. There was a cap of 35% of production capacity for Neem Coated
Urea so far and during Jan 2015 the GOI announced removal of the cap
and 75% production capacity to produce Neem Coated Urea is made
mandatory. During the year, MFL commenced production of Neem Coated
Urea and sold 967 MT in the market and production of this value added
urea would be enhanced in the coming years per GOI directives for
optimising urea application with a vision to increase food grains
productivity towards achieving food security.
Efforts for streamlining logistics operations on cost effective basis
continued this year also and 89% of the products were directly
delivered to the dealers.
Cash sales through RTGS payment accounted for 94.5% of total sales and
99% of the cheques got realised within seven days. There has not been
a single case of Bad Debt for this year also.
Agrochemicals, Bio-fertilizers & Organic Manure Rs. 197.37 lakh of Eco
- friendly Neem based agrochemical was traded during the year as
against Rs. 194.47 lakh for previous year.
The Company has sold 349 MT of Biofertilizers during the year as
against 147 MT for the previous year. There was an increase of 137%
sales against previous year.
Under Basket Approach, the Company has also sold 5432 MT of Organic
Manure during the year in Tamil Nadu, Pondicherry, Karnataka, Andhra
Pradesh and Kerala States against 8,898 MT sold during last year. The
short fall in sales was due to the repeated purchases from farmers were
not forthcoming since this eco - friendly product is recently
introduced to enrich soil fertility and awareness has been picking up
in slow phase. - Intense promotional programmes are planned in the
coming years to promote eco - friendly products like Organic Manure,
City compost, Neem Pesticides, etc., in a larger way to develop and
sustain the eco - friendly agriculture environment.
MARKET DEVELOPMENT & AGRO-SERVICE PROGRAMS
MFL's Marketing personnel have contacted 33602 farmers during the year
and educated them about the package and practices of cultivation of
major crops, soil health techniques and optimum usage of chemical
fertilizers, bio-fertilizers and Neem products to enhance soil
fertility and food grains productivity for consequent growth in
economy.
Under corporate social responsibility to farming community, the
Marketing personnel had collected 5658 Soil samples, analysed and
communicated the micro & macro nutrient recommendations of various
crops to farmers during the year.
PUBLIC DEPOSIT
There are no Public Deposits with the Company.
ISO 9001/14001
CMD has approved the annual Quality / Environment objectives for all
the functional areas and the same has been communicated to the
respective functional area for compliance during the year 2014-15
MFL has obtained EMS (IS014001:2004) Renewal Certification for three
years effective Jun 1,2014 upto May 31,2017 from M/s Indian Register
Quality. Systems (IRQS), our certifying body 1st surveillance Audit for
QMS (ISO 9001:2008) has been conducted by IRQS on 30th October 2014 at
Head office Manali and October 28,2014 at Vellore and Bangalore
regional offices.
Internal Audit on QMS and EMS was conducted during Feb - 2015 which was
essential for conducting the Surveillance Audit which took place during
first week of April - 2015.
MEMORANDUM OF UNDERSTANDING
The Company entered into MOU with Department of Fertilizers (DOF),
Government of India for the year 2015-16 on March 30, 2015 setting up
targets for performance of the Company in terms of static and dynamic
parameters.
VIGILANCE
ACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPARTMENT DURING 2014-15
- Complaints received were attended and reports submitted as per
Complaints Handling Policy of the Company / Central Vigilance
Commission (CVC) guidelines.
- Continuously monitoring the progress of Disciplinary Proceedings in
respect of vigilance cases for timely completion.
- Agreed List of Suspected Officers and List of Officers of Doubtful
Integrity were finalised and sent to DoF.
- Annual Property Returns of Officers were scrutinized as per CVC
guidelines.
- Rotation of Officers in sensitive posts effected as per CVC
guidelines.
- Vigilance activities for the year 2014-15 were reviewed by the Board
of Directors in the 276th Meeting held on Nov. 11,2014.
- As per the Central Vigilance Commission's requirement, CVO had one
Structured Meeting with the CMD, MFL on July 1, 2014 at MFL Chennai,
and pending issues were discussed threadbare and suggestions given to
the Management.
- For easy reference, CVC Guidelines / Circulars on Tenders are made
available in MFL's Online Integrated System (OL1S).
- CVC guidelines on Tenders and disciplinary proceedings and other
matters as and when received were communicated to Management for
necessary action,
- Tenders with estimated value more than Rs.2 lacs are being published
in Central Public Procurement Portal (CPPP).
- For all Tenders with value more than Rs.5 lacs, e-Tendering method is
being followed.
- Vigilance Awareness Week (VAW) 2014 was observed between Oct 27, 2014
and Nov 1, 2014 as advised by CVC. The following are the highlights:
1. CMD administered Vigilance Awareness Pledge on October 27, 2014 at
11 a.m. to mark the commencement of VAW 2014.
2. On Oct 28,2014, a Guest Lecture was organised on the topic 'Dharma
and Vigilance' which was delivered by Shri C L Ramakrishnan, retired
IPS Officer.
3. Slogan contest in English, Hindi and Tamil on Greed and Corruption
was organised in which MFL employees participated.
4. Similarly, an Essay Competition on the theme "Combating Corruption
- Technology as an Enabler" was organised for MFL employees as well as
for the Students of two neighbouring schools.
5. In a function held on Nov 26, 2014, CMD presented Prizes and
Certificates to the Winners of the Slogan / Essay competitions held in
connection with VAW 2014 observed from Oct 27 - Nov 1,2014.
HUMAN RELATIONS AND INDUSTRIAL RELATIONS MANPOWERS TRAINING
The total strength of MFL as on 31.03.2015 is 693 as against 734 as on
31.03.2014. 436 employees have been trained during the period Apr 2014
- Mar 2015 on Technical, Soft and Life skills for the enduring benefit
and development of the Organisation.
INDUSTRIAL RELATIONS
During the year, the overall Industrial Relation situation in the
Company has been normal and cordial.
OFFICIAL LANGUAGE IMPLEMENTATION
MFL has been continuously exceeding the target fixed by Department of
Official Language for letter correspondence in Hindi and other
implementation programs. Hindi Fortnight was celebrated at Head Office
and Regional- Offices. Various competitions were organized and prizes
were distributed.
SC / ST WELFARE ACTIVITIES
The Presidential Directives and various guidelines issued by the
Government of India from time to time relating to the welfare of SC /
ST employees are being scrupulously followed. A Liaison Officer for SC
/ ST at DGM level ensures implementation of Government Directives. MFL
is constantly reviewing the vacancies reserved for SC / ST and is
taking concerted efforts to fill up those vacancies.
Lumpsum contribution of Rs. 30000/- per year for celebration of Dr.
Ambedkar's Jayanthi was sanctioned.
Two computers were provided to Thiruvottiyur Municipality High School
and three computers to Panchayat Union Primary School where downtrodden
community students are studying.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to Section 135 of the Companies Act, 2013 read with the
Companies (Corporate and Social Responsibility Policy) Rules, 2014 your
Company has updated the CSR Policy which was already approved by the
Board at the Board meeting held on 05.11.2013.
As a part of the CSR initiatives, your Company during the financial
year 2014-15 has among the other initiatives, undertaken the following
projects:
Construction of Toilet in Panchayat Union Primary School (PUPS),
Ariyalur, Puzhal Block, Thiruvallur District, Tamil Nadu, at an
estimated cost of Rs. 2.5 lacs is under progress.
Regular supply of potable water through pipelines from MFL to
Harikrishnapuram (Manali), a neighbourhood village (around 500
families) is ensured.
INVESTOR RELATIONS CELL (IRC)
IRC is functioning in the Company under the Chief Financial Officer
(General Manager-F&A) & Company Secretary with members from various
Groups to create awareness of the Company's strength and ensuring
timely communication to shareholders.
DIRECTORS
Government of India have appointed Shri Heera Lai Samariya, IAS,
Undersecretary, Department of Fertilizers, as GOI Nominee Director in
MFL Board in place of Shri K M Gupta, IES, effective April 27,2015.
The Board placed on record the valuable and outstanding contribution
made by the outgoing Director Shri K M Gupta, IES during his tenure as
Director on the Board for the substantial and sustainable development
of the Company.
AUDITORS
The Comptroller & Auditor General of India have appointed M/s B
Thiagarajan & Co, Chartered Accountants, Chennai as Statutory Auditors
of the Company for the year 2014-15.
STATUTORY INFORMATION
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197 (12) of the Companies Act
2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, it is stated that No
employee of your Company was in receipt of remuneration for any part of
the year at a rate which is more than Rs.5 iacs per month.
Energy, Technology & Foreign Exchange
The data on Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo in accordance with the provisions of
Section 134 of Companies Act 2013 are given in the Annexure-I forming
part of this report.
Directors' Responsibility Statement
Directors' Responsibility Statement as required under Section 134 of
Companies Act 2013 is furnished in Annexure-ll forming part of this
report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required under Listing
Agreement is enclosed as Annexure-lll forming part of this report.
Corporate Governance
Your Company is fully compliant with the Corporate Governance
guidelines, as laid out in Clause 49 of the Listing Agreement.
Certificate received from the Auditors of the Company regarding
compliance of Corporate Governance guidelines of SEBI as required under
Listing Agreement is enclosed as Annexure IV' forming part of the
report.
Code of Conduct
Declaration affirming compliance with the code of conduct pursuant to
clause 49 of the Listing Agreement is enclosed as Annexure V forming
part of this report.
Extract of Annual Return
As provided under Section 92 (3) of the Companies Act, 2013 the details
forming part of extract of the Annual* Return in form MGT 9 is enclosed
as Annexure VI.
Secretarial Audit
In terms of the provisions of Section 204 of the Companies Act, 2013
and Rules framed thereunder, a Secretarial Report in the prescribed
format, obtained from a Company Secretary in practice, is required to
be annexed to the Board's Report. In view thereof, your Board at its
meeting held on November 11, 2014 appointed Mr V Esaki (CP 11022),
No.47 VOC Nagar, Nehru Street, Anna Nagar East, Chennai 600 102 as the
Secretarial Auditor of your Company. The Secretarial Auditors' Report
for the fiscal 2015 is enclosed as Annexure VII.
APPRECIATION
Your Directors wholeheartedly place on record their appreciation for
the continued and unstinted support of Government of India, Department
of Fertilizers, Government of Tamilnadu, NICO, Financial Institutions,
Banks, and all stakeholders during the year. It is most appropriate to
mention that the Directors convey their gratitude to the Department of
Fertilizers for settlement of subsidy bills on priority basis and to
the dealers and farmers for their sustained support to Vijay products.
Last but not the least that your Directors also place on record their
appreciation for the dedication, commitment and sincere services
rendered by the employees for sustained improvements.
By order of the Board
Chennai Dr I Vijayakumar
August 10, 2015 Chairman & Managing Director
Mar 31, 2014
The Shareholders
Madras Fertilizers Limited
The Directors have pleasure in presenting herewith the 48th Annual
Report together with the Balance Sheet as on March 31, 2014 and the
Profit & Loss Statement for the year 2013-14.
SUMMARY OF FINANCIAL RESULTS
(Rs. Cr)
2013-14 2012-13
Turnover 2593.47 2346.29
Profit Before Interest, Depreciation, 231.00 139.78
DRE and Tax
Interest 82.79 73.61
Depreciation 42.41 41.73
Extraordinary items (OTS benefit) - -
Profit / (Loss) Before Tax 105.80 24.44
Provision for Tax 5.76 -
Profit / (Loss) After Tax 100.04 24.44
Cash Profit / (Loss) 142.45 66.17
The Company''s operations for the year ended with a Profit of Rs. 100.04
Cr (Previous Year Rs. 24.44 Cr). The total accumulated loss as of
31.3.2014 was Rs. 380.72 Cr. (Previous Year Rs. 480.76 Cr).
SICKNESS AND REVIVAL
As mentioned in the earlier Annual Reports, the main reasons for the
continuous losses and consequent sickness was due to cost and time
overrun of revamp of Ammonia and Urea Plants, delay in stabilization of
revamped Plants due to Technology related issues, higher energy, poor
reliability, lack of maintenance of the existing Plant for want of
funds and unfavorable Pricing policies up to March 2009.
The Company''s operation became Profitable, thereafter, due to
amendments in policies and improvement in production performance. The
Company shall come out of sickness, once the draft rehabilitation
scheme (DRS) is approved by DoF & BIFR and implemented.
DIVIDEND
Despite earning Profit during the year, Company could not pay Dividend
to shareholders due to huge accumulated losses (Rs..380.72 Cr) and
negative net worth (Rs..206.19 Cr) as on March 31, 2014.
PLANT PERFORMANCE
During 2013-14, Urea production has reached an all time high of 486750
MT (100% capacity) with all time low energy consumption of 7.386
Gcal/MT. Main reason for the all time best production combined with
lowest energy is the consistent run of Plants coupled with process
trimmings. It is also the outcome of Plan Schemes and preventive
maintenance jobs carried during the previous year. Further the Urea
production has crossed day''s installed capacity (1475 MT) on 284 days.
With respect to Complex fertilizers, MFL produced only 44860 MT of NPK
17-17-17 during 2013-14 compared to 100125 MT during 2012-13 due to the
following:
Under NBS Policy, the additional compensation for complex fertilizers
(17-17-17 & 20-20-0-13) by using costlier "N" from captive ammonia with
Naphtha as feed stock was given to MFL upto March 2012 only. Effective
April 2012 the same has not been given. So, MFL had to necessarily
curtail the production of NPK so as to avoid substantial loss.
In addition to that under NBS, the subsidy for the nutrients N,P,K and
S has been reduced from 1.4.2012 and again from 1.4.2013 which has
rendered the manufacture of above NPK grades unviable.
GAS CONVERSION
MFL Ammonia Plant is gas compatible with minor modifi cations in the
Front End of the Ammonia Plant and the Basic Engineering Design Package
has already been completed by M/s Haldor Topsoe A/S (HTAS), Denmark,
MFL Ammonia Plant Process Licensor. The detailed engineering is being
carried out by M/s Projects & Development India Ltd. (PDIL) and is in
the advanced stage of completion.
Tenders for the major equipment viz., NG fi red heater, Primary
Reformer Burners, NG Preheat Coil, NG fuel preheater, Pipings & other
instrument items were fl oated and under technical evaluation by M/s
PDIL and as per PDIL, the project is expected to be completed by
February 2015.
In the meantime, MFL is exploring all the possibilities of sourcing
Natural gas either from IOCL from their proposed Ennore LNG Terminal,
which would become operational by the year 2017 or from GAIL through
KKMBPL (Kochi-Koottanad-Mangalore- Bangalore pipeline) thru a spur line
from Krishnagiri. As per GAIL, this project is likely to be implemented
by the year 2017-18.
As per MFL''s Board direction, Heads of Agreement (HoA) was signed with
IOCL on September 17, 2013, for supply of Natural Gas to MFL.
MARKETING PERFORMANCE
Fertilizer Sales
During the year, Company has sold 5.45 lakh MT of fertilizers as
compared to 5.26 lakh MT last year. Considering the adverse seasonal
conditions in Tamilnadu and parts of South India as well cut-throat
competition in the market, this achievement is commendable. Out of 5.45
lakh MT of total fertilizers sold, Urea alone contributed for 5.00 lakh
MT which is the highest sales since inception (previous best V.Urea
sales is 4.99 lakh MT). The market share of MFL Urea is 8.34% in South
India during 2013-14.
Efforts for streamlining logistics operations on cost effective basis
continued this year also and 87% of the products were directly
delivered to the dealers.
Cash sales through RTGS payment accounted for 98.8% of total sales and
99% of the cheques got realised within seven days. There has not been
a single case of Bad Debt for this year also.
Agrochemicals, Bio-fertilizers & Organic Manure
Rs. 194.47 lakhs environment friendly neem based Agrochemicals were
traded during the year as against Rs. 145.93 lakhs during the last year.
The Company sold 147 MT of Bio-fertilizers during the year as against
378 MT during last year.
The Company also sold 8,898 MT of Organic Manure based on Poultry Waste
during the year as against 3,827 MT during last year in Tamil Nadu &
Karnataka.
MARKET DEVELOPMENT & AGRO-SERVICE PROGRAMS
MFL''s Marketing personnel have contacted 33611 farmers during the year
and educated them about the package and practices of cultivation of
major crops / soil health techniques and optimum usage of chemical
fertilizers, bio-fertilizers and neem products.
As a service to farming community, the Company has collected 5571 Soil
samples, analysed and sent the micro & macro nutrient recommendations
for various crops to farmers during the year.
PUBLIC DEPOSIT
There are no Public Deposits with the Company.
ISO 9001 / 14001
Renewal certifi cation audit for ISO 9001:2008 (QMS) was conducted by
IRQS during December 2-3, 2013. IRQS have renewed the QMS certifi
cation for ISO 9001:2008 for MFL for next three years and issued the
Certifi cate on 30th December 2013.
Internal Audit - 18 for QMS & EMS were conducted at Regional Offi ces
and Head Offi ce during the period from February 11 to 21, 2014.
MEMORANDUM OF UNDERSTANDING
The Company entered into MOU with Department of Fertilizers (DOF),
Government of India for the year 2014-15 on March 24, 2014 setting up
targets for performance of the Company in terms of static and dynamic
parameters.
VIGILANCE
ACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPARTMENT DURING 2013-14
- Complaints received were attended and reports submitted as per
Complaints Handling Policy of the Company / Central Vigilance
Commission (CVC) guidelines.
- Continuously monitoring the progress of Disciplinary Proceedings in
respect of vigilance cases for timely completion.
- Agreed List of suspected Offi cers and List of Offi cers of Doubtful
Integrity were fi nalised and sent to DOF.
- CVC guidelines on Tenders and disciplinary proceedings and other
matters as and when received were communicated to Management for
necessary action.
- Vigilance activities for the year 2012-13 were reviewed by the Board
of Directors in the 268th Meeting held on July 29, 2013.
- As per the Central Vigilance Commission''s requirement, CVO had two
Structured meeting with the CMD, MFL and pending issues were discussed
threadbare and suggestions given to the Management.
- CVO attended the Review Meeting convened by the Secretary, DOF on
27.08.2013 in New Delhi.
- Tenders with estimated value more than Rs. 2 lacs are being published
in Central Public Procurement Portal (CPPP).
- For all Tenders with value more than Rs. 5 lacs, e-Tendering method
is being followed.
- Annual Property Returns of Offi cers were scrutinized as per CVC
guidelines.
- Rotation of Offi cers in sensitive posts effected as per CVC
guidelines.
- For easy reference, CVC Guidelines / Circulars on Tenders were
uploaded in MFL''s Online Integrated System (OLIS).
- Vigilance Awareness Week was observed between Oct 28, 2013 and Nov 2,
2013 as advised by CVC. During the week, Guest Lectures were arranged
on the following topics :
a) "Vigilance Aspects" by Shri D P Naidu, I.R.S, CVO, CPCL on Oct 28,
2013.
b) "Promoting Good Governance - positive contribution of Vigilance" by
Shri M Dandayudhapani, I.O.F.S, Director in Armoured Vehicles Head
Quarters, Avadi (Ex-CVO, Chennai Port Trust) on Oct 29, 2013.
c) "Disciplinary Proceedings" by Shri N Murali Krishna, I.T.S., CVO,
MFL, on Oct 30, 2013.
d) "Vigilance Awareness / Participative Vigilance" by Dr C L
Ramakrishnan, I.PS (Retd.), former DGP of DVAC, Government of Tamilnadu
on Oct 31, 2013.
Besides the above programmes, Essay Competition on
"Role of Youth in Transforming India into a Corruption Free Country"
was held for the students of St Thomas Matriculation Higher Secondary
School, Manali, Chennai - 600 068. Essay / Slogan Competitions were
held for the employees of MFL. Prizes were distributed to the winners
of the above competitions on Nov 6, 2013 by CMD, MFL. Hand out
detailing the Do''s and Don''ts in Tendering was brought out during the
occasion
- Two Vigilance Offi cials attended a week long Training Program at
CBI-Academy, Ghaziabad during November 2013.
HUMAN RELATIONS AND INDUSTRIAL RELATIONS
MANPOWER & TRAINING
The total strength of MFL as on 31.03.2014 is 734 as against 773 as on
31.03.2013. 900 Nos. of Training Programs have been conducted on
behavioural & technical subjects to derive enduring benefit, during
the period from April 2013 to March 2014.
INDUSTRIAL RELATIONS
During the year, the overall Industrial Relation situation in the
Company has been normal and cordial.
OFFICIAL LANGUAGE IMPLEMENTATION
MFL has been continuously exceeding the target fixed by Department of
Offi cial Language for letter correspondence in Hindi and other
implementation programs. Hindi Fortnight was celebrated at Head Offi ce
and Regional Offi ces. Various competitions were organized and prizes
were distributed.
SC / ST WELFARE ACTIVITIES
13 SC Contract Labourers working with our existing Janitorial contract
have been appointed as Plant Attendant Trainees. On completion of 2
years of training, they will be absorbed in Grade I position. During
the fi rst year of training period, they will be paid with a
consolidated amount of Rs.15,000/- p.m and second year of training
period, they will be paid with a consolidated amount of Rs.16,500/- p.m.
GM - P&A''s position falls under SC point under direct recruitment. Per
recruitment Policy, GM - P&A was appointed and confi rmed in E8 Scale
of Pay.
Recasting of roster effective July 02, 1997 was completed during April
2013. 27 SC employees benefited due to recasting of roster, by way of
promotion / pre-ponement of promotions.
CORPORATE SOCIAL RESPONSIBILITY
MFL ensures regular supply of potable water through pipelines for
around 500 families from MFL Plant to Harikrishnapuram (Manali), a
neighbourhood village.
A contribution of Rs. 50 lac was made to Gramin Vikas Trust, Odisha
towards Relief and Rehabilitation activities in the fl ood affected
area at Odisha.
Rs. 25,000/- was contributed to Prime Minister''s Relief fund for Relief
and Rehabilitation activities in the fl ood affected area of
Uttrakhand.
A sum of Rs. 30,000/- was spent for Celebration of Dr. Ambedkar Jayanthi,
by MFL SC / ST Employees Welfare Association, MFL, Manali, Tamil Nadu.
INVESTOR RELATIONS CELL (IRC)
IRC is functioning in the Company under the Chief Financial Offi cer
(General Manager-F&A) with members from various Groups to create
awareness of the Company''s strength and ensuring timely communication
to shareholders.
DIRECTORS
Government of India have appointed the following GOI Nominee Directors
in MFL Board :- a) Shri K M Gupta, IES, Economic Advisor, Department of
Fertilizers in place of Shri V K Subburaj, IAS, effective May 01, 2014;
and
b) Shri Rajiv Yadav, IAS, Additional Secretary and Financial Advisor,
Department of Fertilizers, in place of Shri Satish Chandra, IAS,
effective July 03, 2014.
The Board placed on record the valuable and outstanding contribution
made by the outgoing Directors Shri V K Subburaj, IAS and Shri Satish
Chandra, IAS during their tenure as Directors on the Board for the
substantial and sustainable development of the Company.
AUDITORS
The Comptroller & Auditor General of India have appointed M/s B
Thiagarajan & Co, Chartered Accountants, Chennai as Statutory Auditors
of the Company for the year 2013-14.
STATUTORY INFORMATION
No employee was in receipt of remuneration for any part of the year at
a rate which is more than Rs. 5 lacs per month as provided under Section
134 of Companies Act 2013.
The data on Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo in accordance with the provisions of
Section 134 of Companies Act 2013 are given in the Annexure-I forming
part of this report.
Directors'' Responsibility Statement as required under Section 134 of
Companies Act 2013 is furnished in Annexure-II forming part of this
report.
Management Discussion and Analysis Report, as required under Listing
Agreement is enclosed as Annexure-III forming part of this report.
Certifi cate received from the Auditors of the Company regarding
compliance of Corporate Governance guidelines of SEBI as required under
Listing Agreement is enclosed as Annexure IV forming part of the
report.
Declaration affi rming compliance with the code of conduct pursuant to
clause 49 of the Listing Agreement is enclosed as Annexure V forming
part of this report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required by Section 217 (2AA) of the Companies Act, 1956 (Section
134 of Companies Act, 2013) with respect to the Directors''
Responsibility Statement it is here by confi rmed that:
- in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures
there-from;
- the Board had selected such accounting policies, consulted the
Statutory Auditors and have applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the end of
the fi nancial year and of the Profit and loss of the company for that
year;
- the Board had taken proper and suffi cient care, to the best of their
knowledge and ability, 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;
- the Board had prepared the annual accounts on a going concern basis.
- the Board had laid down internal fi nancial control to be followed by
the Company and that such internal fi nancial controls are adequate and
were operating effectively.
- the Board had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
APPRECIATION
Your Directors wholeheartedly place on record their appreciation for
the continued and unstinted support of Government of India, Department
of Fertilizers, Government of Tamilnadu, NICO, Financial Institutions,
Banks, Depositors and all stakeholders during the year. It is most
appropriate to mention that the Directors convey their gratitude to the
Department of Fertilizers for settlement of subsidy bills on priority
basis and to the dealers and farmers for their sustained support to
Vijay products. Last but not the least that your Directors also place
on record their appreciation for the dedication, commitment and sincere
services rendered by the employees for sustained improvements.
By order of the Board
Chennai Dr I Vijayakumar
July 30, 2014 Chairman & Managing Director
Mar 31, 2013
The Shareholders Madras Fertilizers Limited
The Directors have pleasure in presenting herewith the 47th Annual
Report together with the Balance Sheet as on March 31, 2013 and the
Profit & Loss Statement for the year 2012-13.
SUMMARY OF FINANCIAL RESULTS
(Rs.Cr)
2012-13 2011-12
Turnover 2346.29 2207.77
Profit Before Interest, Depreciation,
DRE and Tax 139.78 211.02
Interest 73.61 60.00
Depreciation 41.73 40.34
Extraordinary items (OTS benefit) - 1.31
Profit/(Loss) Before Tax 24.44 111.99
Provision for Tax - -
Profit/(Loss) After Tax 24.44 111.99
Cash Profit/(Loss) 66.17 152,33
The Company''s operations for the year ended with a profit of Rs. 24.44 Cr
(Previous Year Rs. 111.99 Cr). The total accumulated loss as of 31.3.2013
was Rs. 480.76 Cr (Previous year Rs. 505.20 Cr)
SICKNESS AND REVIVAL
In continuation of the last year Annual Report,
i) A fully tied up Draft Rehabilitation Scheme was submitted to
DoFandBIFR.
ii) Further hearings took place on 27.08.2012, 05.12.2012, 26.02.2013,
and 01.07.2013.
iii) Inter-ministerial comments have been received
iv) DoF is in the process of submitting a final proposal to BRPSE and
then move to Cabinet depending on BRPSE recommendations.
v) First Charge in favour of SBI in lieu of the existing second charge
on all immovable properties at Manali was approved by BIFR.
The next hearing is fixed on 18.09.2013.
REASONS FOR SICKNESS
As mentioned in earlier Annual Reports, the main reason for the
continuous losses and consequent sickness was due to the cost and time
overrun of revamp of Ammonia and Urea Plats, delay in stabilization of
revamped Plants due to Technology related issues, higher energy, poor
reliability, lack of maintenance for want of funds and unfavourable
Pricing policies upto March 2009.
Thereafter, the Company''s operations became profitable due to
amendments in policies and increased quantum of Plan loans to maintain
the Plants adequately. Once the Draft Rehabilitation Scheme is approved
and implemented, the Company shall come out of sickness.
DIVIDEND
Company could not pay dividend to the shareholders due to huge
accumulated losses and negative networth as on March 31,2013.
PLANT PERFORMANCE
During 2012-13, Urea production was 4,35,771 MT (89.5% capacity) with
an annual specific energy consumption of 7.822 Gcal/MT. Main reason for
the lower production and a higher energy consumption is that there were
two Turnarounds (TAR) viz., Apr-May 2012 and Feb- Mar 2013. During
these months, exhaustive maintenance jobs were carried out to improve
Productivity, Energy Efficiency & to address Pollution Control related
aspects. The second Turnaround during the end of the year was in fact
an advancement of the planned shutdown during Apr 2013 (FY 2013-14)
under forced circumstances - unexpected equipment problem with
potential for environment related issues. Plant has started reaping the
benefits out of the maintenance jobs carried out during the advanced
shutdown on startup from the last week of Mar 2013.
With respect to Complex Fertilizers, MFL produced 1,00,125 MT of NPK
17:17:17 during 2012-13 registering an increase of 179% over the
previous year production.
Salient Features of Plant during 2012-13
- During Annual Turnaround 2012, Ammonia Converter S 200 Catalyst along
with Basket was renewed after 21 years of service, which was a major
achievement.
- Continuous Ambient Air Quality Monitoring Station (CAAQMS)
MFL installed one CAAQMS on 17th May 2012. The parameters analyzed are
S02, NOx, PM -10, PM-2.5, 03 and CO. This is a statutory requirement
stipulated by TNPCBd.
- Demineralization Plant (DM)
The New DM Plant''s, operating system has been switched over to
Distributed Control System (DCS) as in Ammonia and Urea Plants, on 17th
May 2012
- Urea production exceeded the day''s installed capacity on 225 days
during the year.
- Turnaround during 2013
Refrigeration Compressor HP Case Seal leak and tube leaks in
Inter-stage Coolers of Syngas Compressor and Process Air Compressor and
deterioration of Cooling Water system were attended to.
Statutory Annual Inspection of Boilers were carried out in Feb 2013
availing the shutdown opportunity.
Post-Turnaround Performance
- The lowest specific energy consumption was 9.364 Gcal/ MT Ammonia
(Design: 9.461 Gcal) & 6.818 Gcal/MT Urea (Derived design: 7.004 Gcal)
on Mar 31, 2013, the average being 9.433 Gcal/MT & 6.882 Gcal/MT
respectively during Mar 26-31,2013.
GAS CONVERSION
MFL Ammonia Plant was revamped in 1997 and during that time itself, the
Plant was designed to be gas compatible with minor modifications in the
Front end of the Ammonia Plant
Feasibility Report and Basic Engineering Design Package (BEDP) has been
completed by M/s. HTAS, Denmark. Project is being executed through PDIL
(Engineering Consultant) and is expected to be completed in Jan 2014,
subject to delivery of equipment at site. Major equipment enquiry has
been floated by M/s PDIL and offers were received from the Vendors and
Technical Evaluation is in progress. The Tie-in points were identified
by PDIL & MFL
It is proposed to take up Shut down of Ammonia plant during January
2014 for execution of the project and commencement of trial production
is expected in February 2014.
MARKETING PERFORMANCE Fertilizer Sales
Company has sold 5.26 lakh MT of fertilizers during the year (previous
year 5.33 lakh MT) Considering the adverse seasonaf conditions
throughout South India, this achievement is commendable taking into
consideration of competitors sales. The market share of Urea is
maintained at 9% in South India.
Efforts for streamlining logistics operations on cost effective basis
continued this year also and 93% of the products were directly
delivered to the dealers.
Cash sales were 96.5% of total sales and 99.8% of the cheques got
realised within seven days. During this year also, there were no bad
debts.
Agrochemicals, Biofertilizers & Organic Manure
Rs. 1.46 Cr environment friendly neem based Agrochemicals were traded
during the year (previous year Rs. 1.81 Cr).
The Company sold 378 MT of Bio-fertilizers during the year (Previous
year 481 MT).
The Company also sold 3,827 MT of Organic Manure during the year
(Previous year 3,630 MT).
MARKET DEVELOPMENT & AGRO-SERVICE PROGRAMS
Marketing Department contacted 35,514 farmers during the year and
educated them about the package and.practices of cultivation of major
crops / soil health techniques and optimum usage of chemical
fertilizers, bio-fertilizers and neem pesticides.
As a service to farming community, the Company has collected 5,501 soil
samples, analysed and sent the micro & macro nutrient recommendations
for various crops to the farmers during the year.
Collection of Old Dues
An amount of Rs. 30.90 lakhs has been collected from old dishonour cases
and the Company is taking all out efforts to optimise the collection.
PUBLIC DEPOSIT
There are no Public Deposits with the Company.
ISO 9001 /14001
Second Surveillance Audit on Quality Management System (ISO 9001:2008)
was conducted during Nov 7-8, 2012 and continuance of certification has
been approved by External Agency.
First Surveillance Audit on Environment Management System (ISO
14001:2004) for which the audit was conducted during Jun 20-21,2012 and
continuance of certification has been approved by External Agency.
MEMORANDUM OF UNDERSTANDING
The Company entered into MOU with Department of Fertilizers (DOF),
Government of India for the year 2013-14 on March 21, 2013 setting up
targets for performance of the Company in terms of production, sales
and other parameters.
VIGILANCE
- Complaints received were attended and reports submitted as per
Complaints Handling Policy of the Company / CVC guidelines.
- All disciplinary proceedings in respect of vigilance cases have been
completed.
- Property Returns of Officers were scrutinized as per CVC guidelines.
- Rotation of Officers in sensitive posts effected as per CVC
guidelines.
- Dishonour of cheques by dealers and collections thereon were
monitored periodically to prevent losses to the Company.
- CVC guidelines on tenders and disciplinary proceedings and other
matters as and when received, were communicated to Management for
necessary action.
- System improvements for preventing losses were suggested to the
Management for implementation-, contributing to the Company''s revenues
- As part of Leveraging technology, MFL has already implemented the
e-Payment system by making all payments thru Electronic Clearing System
(ECS). Effective January 2013, MFL has introduced the e-Receipt system
for all Receipts from Dealers and Marketers. MFL has also commenced
e-Procurement and e-Sale operations. A separate sub-menu has been
created for Vigilance in MFL website wherein the contact details of all
the Vigilance officials have been incorporated for registering
complaints.
- Vigilance Awareness Week -with the theme of ''Transparency in Public
Procurement'' - was observed during Oct/Nov 2012. As part of this,
Vigilance arranged a guest lecture on Preventive Vigilance by Shri. N.
Sankaran, IRS, Commissioner of Income Tax, Chennai, to line Managers of
MFL. Chief Vigilance Officer had an interactive session with the top
executives on all Vigilance related matters.
- As advised by DPE on ''Corporate Governance'', a Fraud Prevention
Policy has been formulated by Vigilance Department and the same has
been duly approved by the Board of Directors and notified by MFL on
12.Q9.2012.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS Manpower & Training
The total strength of MFL as on 31,03.2013 is 773 as against 733 during
the previous year end. 250 employees have been trained on behavioral &
technical subjects to derive enduring benefit.
Industrial Relations
During the year, the overall Industrial Relation situation in the
Company has been normal and cordial.
Official Language Implementation
MFL has been continuously exceeding the target fixed by Department of
Official Language for letter correspondence in Hindi and other
implementation programs. Hindi Fortnight was celebrated at Head Office
and Regional Offices. Various competitions were organized and prizes
were distributed.
SC / ST Welfare Activities
The presidential Directives and various guidelines issued by the
Government of India relating to the welfare of SC / ST employees are
being scrupulously followed. A Liaison Officer for SC / ST at DGM level
ensures implementation of Government Directives. MFL is constantly
reviewing the vacancies reserved for SC/ST and is taking concerted
efforts to fill up those vacancies.
Recasting of post based rosters is being done by a consultant from
Integrated Training and Policy Research, New Delhi for Direct
Recruitment and Promotions carried out by the Company since July
2,1997. Report on the Recasting of rosters has been submitted by the
Committee and the implementation is under progress.
Lumpsum contribution of Rs. 30,000 per year for celebration of Dr
Ambedkar''s Jayanthi was approved. An amount of Rs.1.57 lakhs was spent
for repairing and maintenance of potable water pipelines from MFL to
Harikrishnapuram, a neighbourhood village in Manali, Tamilnadu.
CORPORATE SOCIAL RESPONSIBILITY
Serving the interests of Society by taking responsibility is an
integral job of MFL and the Comparly provided two Computers to
Thiruvottiyur Municipality High School and three Computers to Panchayat
Union Primary School during the year.
INVESTOR RELATIONS CELL (IRC)
IRC is functioning in the Company under the Chief Financial Officer,
ED-F with members from various Groups to create awareness of the
Company''s strength and ensuring timely communication to shareholders.
DIRECTORS
Government of India have appointed Shri V K Subburaj, IAS, Additional
Secretary and Financial Advisor, DOF in place of Dr V Rajagopalan, IAS,
on the Board of the Company effective May 02,2013.
The Board placed on record the valuable and outstanding contribution
made by the outgoing Director Dr V Rajagopalan, IAS during his tenure
as Director on the Board for the substantial and sustainable
development of the Company
AUDITORS
The Government of India have appointed M/s B Thiagarajan & Co.,
Chartered Accountants, Chennai as Statutory Auditors of the Company for
the year 2012-13.
STATUTORY INFORMATION
No employee was in receipt of remuneration for any part of the year at
a rate which is more than Rs. 5 lacs per month as provided under Section
217 (2A) of the Companies Act, 1956.
The data on Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo in accordance with the provisions of
Section 217 (1) (e) of the Companies Act, 1956 are given in the
Annexure-I forming part of this report.
Directors'' Responsibility Statement as required under Section 217 (2AA)
of the Companies Act, 1956 is furnished in Annexure- II forming part of
this report.
Management Discussion and Analysis Report, as required under Listing
Agreement is enclosed as Annexure-lll forming part of this report.
Certificate received from the Auditors of the Company regarding
compliance of Corporate Governance guidelines of SEBI as required under
Listing Agreement is enclosed as Annexure IV forming part of the
report.
Declaration affirming compliance with the code of conduct pursuant to
clause 49 of the Listing Agreement is enclosed as Annexure V forming
part of this report.
APPRECIATION
Your Directors wholeheartedly place on record their appreciation for
the continued and unstinted support of Government of India, Department
of Fertilizers, Government of Tamilnadu, NICO, Financial Institutions,
Banks, Depositors and all stakeholders during the year. It is most
appropriate to mention that the Directors convey their gratitude to the
Department of Fertilizers for settlement of subsidy bills on priority
basis and to the dealers and farmers for their sustained support to
Vijay products. Last but not the least that your Directors also place
on record their appreciation for the dedication, commitment and sincere
services rendered by the employees for sustained improvements.
By order of the Board
Chennai Dr IVIJAYAKUMAR
July 29,2013 Chairman & Managing Director
Mar 31, 2012
The Members of Madras Fertilizers Limited
The Directors have pleasure in presenting herewith the 46th Annual
Report together with the Balance Sheet as on March 31,2012 and the
Profit & Loss Statement for the year 2011-12.
SUMMARY OF FINANCIAL RESULTS
(Rs. Cr)
2011-12 2010-11
Turnover 2207.77 1622.83
Profit Before Interest,
Depreciation,
DRE and Tax 211.02 141.43
Interest 60.00 55.05
Depreciation 40.34 41.21
Extraordinary
items (OTS benefit) 1.31 124.69
Profit/(Loss)
Before Tax 111.99 169.86
Provision for Tax - -
Profit/(Loss)
After Tax 111.99 169.86
Cash Profit/(Loss) 152.33 211.07
The Company's operations for the year ended with a profit of Rs. 111.99
Cr (Previous Year Rs. 169.86 Cr). This is the highest ever operating
profit made in any year since inception if extraordinary items (OTS
benefit) is not taken into account. This could be possible mainly
because of 100% capacity utilisation of Urea achieved for the first
time in the history of the Company. The total accumulated loss as of
31.3.2012 was brought down to Rs. 505.20 Cr from Rs. 617.19Cr.
SICKNESS AND REVIVAL
As informed in the last year Annual Report, BIFR declared the Company
as Sick on 02.04.2009 and State Bank of India (SBI) Commercial Branch,
Chennai was appointed as Operating Agency. So far eight hearings have
taken place.
The viability proposal of MFL prepared by PDIL was examined by SBICAPS
and they prepared a Financial Revival Package based on PDIL report'
with the recommendation of three options of which write-off of GoI
outstanding principal and interest was considered to be the most
suitable option to come out of BIFR with the understanding that GoI
would recommend exemption of tax on the waiver granted. However, this
proposal was turned down by Planning Commission and other Ministries.
BIFR at its hearing held on October 22, 2011 directed SBI to submit a
fully tied up DRS considering conversion of GOI loan in to equity and
waiver of interest. Accordingly, SBI submitted the DRS to BIFR on
February 10, 2012. During the hearing held on May 7, 2012, as NICO,
co-promoter, objected for conversion of GOI loan into equity, BIFR
directed the Company to prepare a revised DRS incorporating responses
to the observations made by BIFR in its letter dated 02.05.2012.
Accordingly, the Company has prepared a Draft Rehabilitation Proposal
and forwarded the same to Operating Agency (SBI) for further review.
REASONS FOR SICKNESS
Continuous losses have arisen due to cost and time over run during
revamp of Ammonia and Urea Plants, delay in stabilization of revamped
Plants due to technology related problems, higher energy consumption,
deterioration in reliability of Plants due to poor maintenance for want
of funds and unfavourable Pricing Policies of GOI in respect of
fertilizers during April 2003 to March 2009.
The Company's operations have become profitable since 2009-10 due to
the amendment in NPS III policy w.e.f. 01.04.2009 and improvement in
production performance and it can now come out of sickness if
accumulated loss is taken care of.
DIVIDEND
Despite earning profit during the year, Company could not pay Dividend
to the shareholders due to huge accumulated losses and negative net
worth.
PLANT PERFORMANCE
The Company produced 4,86,750 MT of Urea as of March 04,2012 which is
100% of installed Capacity. The previous record was 4,78,834 MT (98.4%
cap) during the year 2010-11.
After a gap of about four years, production of Complex fertilizers
could be started initially with NPKS 20-20-0- 13.and thereafter could
switch over to the Company's flagship product of NPK 17-17-17.
NPK 'C' Train was restarted after extensive refurbishment on February
12, 2012. Thus, now two of three NPK Trains are available for
production.
Specific energy consumption of 10.369 Gcal/MT Ammonia and 7.517 Gcal/MT
Urea achieved during the year 2011-12 are the Second Best achievements
since inception.
GAS CONVERSION
In order to comply with the Directives of GOI, Company has already
initiated action for feedstock conversion from Naphtha to Natural Gas.
The Basic Engineering & Design Package (BEDP) has been received and
Detailed Engineering is in progress.
The Company's request for allocation of 1.54 MMSCMD of Natural Gas has
been forwarded by Department of Fertilizers vide their letter
NO.12012/24/2006-FFP dated 11.06.2010 to Ministry of Petroleum &
Natural Gas. The Company is now examining the following options for
sourcing gas:
i. From KG D6 field when additional production materializes and gas
pipeline is laid between Kakinada and Chennai.
ii. From IOCL's proposed LNG terminal at Ennore, expected to be
commissioned in 2015-16.
iii. From GAIL's LNG Kochi terminal, through spur line from Krishnagiri
on Kochi- Bengaluru pipeline.
iv. From Krishnapatnam Port through road/rail in cryogenic containers.
In order to proceed further on the subject, Gas Transmission Agreement
(GTA) and Gas Supply Agreement (GSA) need to be signed with one of the
above suppliers for which Department of Fertilizers has been requested
to take up the matter further with respective authorities to spell out
the modalities for executing the agreement and to fix the total landed
cost to be recognized for payment of subsidy.
MARKETING PERFORMANCE
Fertilizer Sales
During the year, Company sold a total of 5.33 lakh MT of fertilizers
compared to 4.74 lakh MT last year, which is 12.5% increase. The market
share of Urea got increased from 8% to 9% in South India.
Efforts for streamlining logistics operations continued this year also
and 97% of the products were directly delivered to the dealers.
Cash sales accounted for 99.7% of total sales. 99.6% of the cheques
realized within 7days. There has not been a single Bad Debt during this
year also.
Agrochemicals, Biofertilizers & Organic Manure
Rs. 181.10 lakhs environment friendly neem based Agrochemicals were
traded during the year as against Rs. 142.01 lakhs during the last
year, which is 27.5% higher.
The Company sold 481 MT of Bio-fertilizers during the year as against
453 MT during last year which is 6% higher.
The Company also sold 3,630 MT of Organic Manure based on Poultry Waste
during the year in Tamil Nadu & Karnataka.
Market Development and Agro-service Programs
MFL's Marketing Personnel contacted 74,503 farmers during the year and
educated them about soil health techniques and usage of
Bio-fertilizers/Neem products.
As a service to farming community, the Company collected 5,620 soil
samples, analysed and sent the nutrient recommendations for various
crops to farmers during the year.
Collection of Old Dues
An amount of Rs. 37.10 lakhs has been collected from old dishonour
cases and the Company is taking all out efforts to optimize the
collection.
PUBLIC DEPOSIT
The Company could not accept fresh deposits or renew the existing
deposits during the year due to statutory restrictions. The unclaimed
deposits as of March 31,2012 is Rs. 1.85Cr.
ISO 9001/14001
First Surveillance Audit on Quality Management System (ISO 9001:2008)
was conducted on November 9,2011 and continuance of certification has
been approved by External Agency.
The Company has obtained ISO 14001:2004 renewal certification for
Environment Management System for which the audit was conducted during
May 2- 4, 2011 and certification is valid up to May 31, 2014.
MEMORANDUM OF UNDERSTANDING
The Company entered into an MOU with Department of Fertilizers,
Government of India for the year 2012-13 on March 13, 2012 setting up
targets for performance of the Company in terms of production, sales
and other parameters.
VIGILANCE
- Complaints received were attended and reports submitted, as per
Complaints Handling Policy of the Company/CVC guidelines.
- System improvements for preventing losses were suggested to the
Management for implementation, contributing to the Company's revenues.
- All the pending investigations have been completed by Vigilance in
time. Also all disciplinary proceedings in respect of vigilance cases
have been completed.
- Property Returns of officers were scrutinized as per CVC guidelines.
- Dishonour of cheques by dealers and collection thereon was monitored
periodically to prevent losses to the Company.
- CVC guidelines on tenders and disciplinary proceedings, as and when
received, were communicated to Management for necessary action.
- As a part of Leveraging technology, all payments are being made
through Electronic Clearance System (ECS). With respect to dealer
payments towards sale proceeds, e-transfer of funds to Company is being
arranged in association with banks. With regard to
E-procurement/e-sale, sen/ice provider has been appointed.
- As Participative vigilance was the theme of Vigilance Awareness Week
observed in November 2011, dealers and farmers at village level and
Company officials were sensitized on vigilance perspectives with regard
to the services and product deliveries.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Manpower & Training
The total strength of MFL as on 31.03.2012 is 733 as against 765 during
the previous year end. 519 employees have been trained on Behavioural &
Technical subjects to derive enduring benefit.
Industrial Relations
During the year, the overall Industrial Relation situation in the
Company has been normal and cordial.
OFFICIAL LANGUAGE IMPLEMENTATION
MFL has been continuously exceeding the target fixed by Department of
Official Language for letter correspondence in Hindi and other
implementation programs. Hindi Fortnight was celebrated at Head Office
and Regional Offices. Various competitions were organized and prizes
were distributed.
SC/ST WELFARE ACTIVITIES
The presidential Directives and various guidelines issued by the
Government of India relating to the welfare of SC/ST employees are
being scrupulously followed. A Liaison Officer for SC/ST at DGM level
ensures implementation of Government Directives. MFL is constantly
reviewing the vacancies reserved for SC/ST and is taking concerted
efforts to fill up those vacancies.
Recasting of post based rosters is being done by a consultant from
Integrated Training and Policy Research, New Delhi for Direct
Recruitment and Promotions carried out by the Company since July 2,
1997. There is a good progress in the review DPC activity.
Lumpsum contribution of Rs. 30,000 per year for celebration of Dr
Ambedkar's Jayanthi was approved. To carry out development programmes
in the neighbourhood SC/ST inhabited areas, an amount of Rs. 50,000
per annum was sanctioned.
CORPORATE SOCIAL RESPONSIBILITY
Serving the interests of Society by taking responsibility is an
integral job of any PSU and your Company is committed to operate in an
economically, socially and environmentally sustainable manner. This
commitment is beyond statutory requirements and linked to the practice
of Sustainable Development.
INVESTOR RELATIONS CELL (IRC)
IRC is functioning in the Company under Chief Financial Officer, ED-F
with members from various Groups to create awareness of the Company's
strength and ensuring timely communication to shareholders.
DIRECTORS
Government of India have appointed Shri Satish Chandra, IAS, Joint
Secretary, DOF in place of Shri Sham Lal Goyal, IAS, on the Board of
the Company effective August 8, 2011.
The Board placed on record the valuable and outstanding contributions
for the substantial and sustainable development of the Company made by
the outgoing Director Shri Sham Lal Goyal, IAS during his tenure as
Director on the Board.
AUDITORS
The Government of India have appointed M/s A.V. Deven & Co., Chartered
Accountants, Chennai as Statutory Auditors of the Company for the year
2011-12.
STATUTORY INFORMATION
No employee was in receipt of remuneration for any part of the year at
a rate which is more than Rs. 5 lacs per month as provided under
Section 217 (2A) of the Companies Act, 1956.
The data on Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo in accordance with the provisions of
Section 217 (1) (e) of the Companies Act, 1956 are given in the
Annexure-I forming part of this report.
Directors' Responsibility Statement as required under Section 217 (2AA)
of the Companies Act, 1956 as amended is furnished in Annexure-II
forming part of this report.
Management Discussion and Analysis Report, as required under Listing
Agreement is enclosed as Annexure-III forming part of this report.
Certificate received from the Auditors of the Company regarding
compliance of Corporate Governance guidelines of SEBI as required under
Listing Agreement is enclosed as Annexure IV forming part of this
report.
Declaration affirming compliance with the code of conduct pursuant to
Clause 49 of the Listing Agreement is enclosed as Annexure V forming
part of this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, it is
hereby confirmed
- that in the preparation of the annual accounts for the financial year
ended March 31,2012, the applicable accounting standards had been
followed along with proper explanation relating to material departures.
- that the Board had selected such accounting policies and applied them
consistently and made judgments and estimates that were reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period.
- that the Board had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
- that the Board had prepared the annual accounts on a going concern
basis.
APPRECIATION
Your Directors wholeheartedly place on record their appreciation for
the continued and unstinted support of Government of India, Department
of Fertilizers, Government of Tamilnadu, NICO, Banks and all
stakeholders during the year. It is most appropriate to mention that
the Directors convey their gratitude to the Department of Fertilizers
for settlement of subsidy bills on priority basis and to the dealers
and farmers for their sustained support to Vijay products. Last but not
the least your Directors also place on record their appreciation for
the dedication, commitment and sincere services rendered by the
employees for sustained high production of Urea and restart of Complex
fertilizers after putting in real hard work.
By order of the Board
Dr. I VIJAYAKUMAR
Chairman & Managing Director
Chennai
July 30,2012
Mar 31, 2011
The Shareholders Madras Fertilizers Limited
The Directors have pleasure in presenting herewith the 45th Annual
Report together with the Balance Sheet as on March 31,2011 and the
Profit & Loss Account for the year 2010-11.
SUMMARY OF FINANCIAL RESULTS
(Rs. Cr)
2010-11 2009-10
Turnover 1622.83 1302.84
Profit Before Interest, Depreciation,
DRE and Tax 141.43 144.87
interest 55.05 88.45
Depreciation 41.21 41.53
Deferred Revenue Expenditure - 1.21
01.01.97 Arrears (Employees' Salary) - 6.80
Extraordinary items (OTS benefit) 124.69 -
Profit /(Loss) Before Tax 169.86 6.88
Provision for Tax - -
Profit/(Loss) After Tax 169.86 6.88
Cash Profit/(Loss) 211.07 49.62
The Company's operations for the year ended with a profit of Rs.
169.86 Cr (Previous Year Rs. 6.88 Cr) mainly on account of better
production performance and lower energy consumption in Urea operations
coupled with One Time Settlement benefit from Financial Institutions.
The total accumulated loss as of 31.3.2011 is Rs. 617.19 Cr.
REFERENCE TO BIFR AND REVIVAL PROPOSAL
Due to continued erosion of net worth, the company was declared a Sick
Industrial Company u/s 3(1 )(o) of Sick Industrial Companies (Special
Provisions) Act, 1985 in April 2009 and State Bank of India
(SBI),Commercial Branch, Chennai was appointed as an Operating
Agency(OA) for the Company.
Per BIFR direction, Company appointed Projects & Development India Ltd
(PDIL) to prepare a Rehabilitation Proposal and suggest a suitable road
map for the Company with the objective of bringing back the plant
operations on a sustainable manner by adopting a suitable technical and
financial improvement measures.
Further to the recommendations of the PDIL, the Operating' Agency(SBI)
approached their sister concern SBICAPS to evaluate the suggested
options and to submit recommendation on the financial revival package
for the submission to BIFR and DOF.
SBICAPS in their report recommended that write-off of Gol outstanding
principal and interest appears to be most suitable option for MFL to
come out of BIFR with the understanding that Gol would recommend waiver
of the tax incidence under the option.
The Financial restructuring Proposal Prepared by DOF based on the above
recommendation was circulated to the stake holder ministries. Comments
received are under consideration by the DOF.
CAUSES FOR ACCUMULATED LOSSES
The main reasons for the accumulated losses are cost and time over run
during revamp of Ammonia and Urea Plants, delay in stabilization of
revamped Plants due to technology related problems, higher energy
consumption, deterioration in reliability of Plants due to poor
maintenance for want of funds and unfavourable Pricing Policies of GOI
in respect of Nitrogenous and Complex fertilizers during the period
from April 2003 to March 2009.
ONE TIME SETTLEMENT (OTS) WTTH FINANCIAL INSTITUTION
The Company entered into One Time Settlement (OTS) with IFCI, SASF
(IDBI), LIC and IIBI for Rs. 106.31 Cr as against total dues of Rs.
231.00 Cr towards Principal and Interest as of March 31, 2010. During
the financial year 2010-11, the Company completed payments.under OTS
with Financial Institutions as per agreement. Your Company has gained
Rs. 124.69 Cr through the OTS.
DIVIDEND
Though the Company earned a profit of Rs. 169.86 Cr during the year
2010-11, Company could not pay Dividend due to accumulated losses and
negative net worth.
PLANT PERFORMANCE
There has been substantial improvement in the plant performance. At
the close of financial year 2010-11, Plant has created several records
in terms of Production and Energy efficiency, highest production and
lowest energy since inception.
- Urea monthly production of 50,530 MT (Mar 2011) is the Best, the
previous best being 50,345 MT achieved in March 2009.
- Quarterly Urea production of 1,44,763 MT (119.0% cap) is the Highest
during January - March 2011, surpassing the previous Best of 1,42,498
MT (117.1 % cap) during Oct-Dec 2010.
- Annual Urea production of 4,78,834 MT (98.4% cap) during 2010-11 is
the Highest, surpassing the previous Best of 4,73,363 MT (97.3% cap)
during 2006-2007.
- Specific energy consumption of 6.898 Gcal/MT Urea in Mar 2011 is the
Lowest energy achieved in a month, bettering the previous record of
6.964 Gcal/ MT achieved in Oct 2010.
- Specific energy consumption of 7.057 Gcal/MT Urea during Jan-Mar 2011
is the Lowest quarterly energy, bettering the previous record of 7.136
Gcal/MT achieved during Oct-Dec 2010.
- Annual Specific Energy consumption of 7.492 Gcal MT Urea is the
Lowest, the previous record being 7.769 Gcal/MT in 2004-05.
- Specific energy consumption of 9.448 Gcal/MT Ammonia in Mar 2011 is
the Lowest energy achieved in a month, breaking the previous record of
9.581 Gcal/MT achieved in Dec 2009.
- Specific energy consumption of 9.652 Gcal/MT Ammonia during Jan-Mar
2011 is the Lowest quarterly energy, bettering the best energy of 9.862
Gcal/MT achieved during Oct-Dec 2010.
- Annual Specific Energy consumption of 10.334 Gcal/ MT Ammonia is the
Lowest, the previous record being 10.411 Gcal/MT in 2004-05.
- Urea production exceeded the day's installed capacity on 239 days
during Apr 2010 - Mar 2011. This is the Best achieved surpassing
2004-05 record of 229 days.
GAS CONVERSION
As per feedstock policy of the Government of India, natural gas is the
preferred feedstock for the manufacture of urea over the other feed
stocks viz. naphtha, FO/LSHS firstly because it is clean and efficient
source of energy and secondly it is considerably cheaper and more cost
effective in terms of manufacturing cost of urea which also has direct
impact on the quantum of subsidy on urea. The policy on conversion of
existing naphtha / FO / LSHS based urea units to natural gas,
formulated in January 2004, encourages the early conversion to natural
gas/LNG.
GOI would give the highest priority for conversion of Naphtha / FO /
LSHS based fertilizer industries as and when their Plants are ready to
utilise the natural gas. Considering the above, MFL is implementing the
projects of conversion of feedstock from naphtha to natural gas. The
provision is also being kept to enable processing of both naphtha and
natural gas depending upon the availability.
Award of work has been issued to HTAS for carrying out Engineering
Design Package and the work is under process. M/s Projects &
Development India Ltd (PDIL) has been proposed to be the EPCM
contractor for this project.
The Company's request for allocation of Natural Gas has already been
forwarded by Department of Fertilizers to the Ministry of Petroleum &
Natural Gas for their consideration.
MARKETING PERFORMANCE
During the year, Company sold a total of 4.74 lakh MT of fertilizers
compared to 4.41 lakh MT last year. There was 8% increase in sales of
fertilizers over the last year and the market share of Urea is
maintained at 8% in South India.
Company continued to embark upon various policies for reduction of
marketing costs. Efforts for streamlining logistics operations
continued this year also and 98% of the products were directly
delivered to the dealers.
Rationalisation of territories and Regions was another area of cost
saving. There has been a manpower reduction of 5%.
Marketing Team put up a creditable performance in sales realization by
making 98% cash sales. 99% of the cheques realized within 7days.
Further, it goes to their credit that there has not been a single Bad
Debt for this year also.
AGROCHEMICALS & BIOFERTILIZERS
Company continued to market environment friendly Neem based
Agrochemicals. A total of Rs. 1.39 Cr of Agrochemicals was traded
during the year 2010-11 as against Rs. 1.42 Cr last year.
MFL sold 453 MT of Bio-fertilizers during 2010-11 as against 435 MT in
2009-10, which is 4% increase over the last year sales.
MARKET DEVELOPMENT AND AGRO-SERVICE PROGRAMS
MFL continued its tradition of conducting informative and educational
programs for the farmers and dealers in terms of Corporate Social
Responsibility.
During 2010-11,64 promotional programs were conducted benefiting 22,492
farmers. MFL continued to have demos on bio-fertilizers, follow up on
soil tests results with farmers and participation in Government
exhibitions etc., SC/ST dealers, who now form 27% of our total dealer
strength of 5,920.
COLLECTION OF OLD DISHONOURS
An amount of Rs. 33.45 lakhs has been collected from old dishonour
cases as detailed below:
Region Rs. Lakhs
Cuddapah 20.55
Bangalore 12.60
Trichy 0.30
PUBLIC DEPOSIT
The Company has not accepted fresh deposits or renewed the existing
deposits during the Financial Year 2010-11. The total deposit,
including unclaimed, as of March 31,2011 is Rs. 7.82Cr.
ISO 9001/14001
MFL has revisited the Quality Policy for ISO 9001 - 2008. standards
and amended per MFL requirements after obtaining approval from CMD. The
revised policy has been exhibited throughout the Company and made
available to the interested parties and stakeholders through company
website with effect from 24.05.2010.
MFL has obtained ISO 9001:2008 certification on Quality Management
System which has been upgraded from ISO 9001 - 2000 version and it is
valid up to December 29,2013.
MEMORANDUM OF UNDERSTANDING
The Company entered into MOU with Department of Fertilizers (DOF),
Government of India for the year 2011 -12 on March 25,2011 setting up
targets for performance of the Company in terms of production, sales
and other parameters.
VIGILANCE
Preventive vigilance is the main theme of the Vigilance Department. The
stress is on transparency and accountability in the working of the
company. Leveraging technology for corporate governance was the
highlight of the Vigilance activities during the year. File tracking
system and displaying the status of payment to contractors / vendors on
Company's website on a monthly basis have been introduced by the
Management at the instance of the Vigilance. Vigilance has ensured that
a Complaint Handling Policy has been put in place by the Management for
receipt, processing and disposal of all complaints in line with the
directive of the Central Vigilance Commission (CVC).
Besides providing the Management necessary guidelines in various areas
particularly tendering based on extant CVC guidelines, Vigilance has
also conducted workshops on vigilance aspects for line managers. Almost
all the pending investigations have been completed by the Vigilance and
all pending disciplinary proceedings pursued with the Management for
completion.
In addition to the above, Vigilance Awareness Week has been observed,
property returns of employees were scrutinized, high value contracts
were reviewed, CTE (Chief Technical Examiner) type inspections were
conducted and status of dishonour of cheques by dealers and collection
details was reviewed.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Manpower & Training
The total strength of MFL as on 31.03.2011 is 765 as against 802 for
the period ending 31.03.2010.333 employees have been trained on
Behavioural & Technical subjects.
Voluntary Retirement Scheme
Two employees have availed Voluntary Retirement Scheme during the year
2010-11. The VRS Scheme was closed effective Jan 24,2011.
INDUSTRIAL RELATIONS
During the year 2010-11, the overall Industrial Relation situation in
the Company has been normal and cordial.
OFFICIAL LANGUAGE IMPLEMENTATION
MFL has been continuously exceeding the target fixed by Department of
Official Language for letter correspondence in Hindi and other
implementation programs.
Hindi Fortnight was celebrated at Head Office and Regional Offices.
Various competitions were organized and prizes were distributed to the
winners.
SC / ST WELFARE ACTIVITIES
The presidential Directives and various guidelines issued by the
Government of India relating to the welfare of SC/ST were scrupulously
followed during the year. A separate Liaison Officer for SC/ST at DGM
Level, nominated for this purpose ensures implementation of Government
Directives. MFL is constantly reviewing the vacancies reserved for
SC/ST and taking concerted efforts to fill up such vacancies.
Recasting of Post Based Rosters is being done by Shri S M Gupta from
Integrated Training and Policy Research, New Delhi for Direct
Recruitment and Promotions carried out by the Company since July
2,1997.
CORPORATE SOCIAL RESPONSIBILITY
Your Company considers Corporate Social Responsibility as one of the
pivotal functions to accelerate the process of over all sustainable
development and more significant contribution for the uplrftment of
society.
During the year, an amount of Rs. 15 lakhs was spent on Mahali
Municipality for construction for Water Storage Supply tank - and
Compound Wall around the same.
Also a sum of Rs. 1 lakh was donated to ANUSARAN, a Charitable
Institution at New Delhi which is a Shelter Centre for destitute women
and works for women's empowerment in our country.
INVESTOR RELATIONS CELL (IRC)
Company created IRC headed by the Chief Finance Officer(ED-F) with
members from various groups of Company to create awareness of the
Company's strengths and ensuring timely communication to all
shareholders.
DIRECTORS
Government of India have appointed Shri Sham Lal Goyal, IAS, Joint
Secretary, DOF in place of Shri Satish Chandra, IAS, on the Board of
the Company effective November 3, 2010.
The Board placed on record the valuable and outstanding contributions
for the substantial and sustainable development of the Company made by
the outgoing Director Shri Satish Chandra, IAS during his tenure as
Director on the Board.
AUDITORS
The Government of India have appointed M/s. A. V. Deven & Co.,
Chartered Accountants, Chennai as Statutory Auditors of the Company for
the year 2010-11.
STATUTORY INFORMATION
No employee was in receipt of remuneration for any part of the year at
a rate which is more than Rs. 5 lacs per month as provided under
Section 217 (2A) of the Companies Act, 1956.
The data on Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo in accordance with the provisions of
Section 217 (1) (e) of the Companies Act, 1956 are given in the
Annexure-I forming part of this report.
Directors' Responsibility Statement as required under Section 217 (2AA)
of the Companies Act, 1956 as amended is furnished in Annexure-II
forming part of this report.
Management Discussion and Analysis Report, as required under Listing
Agreement is enclosed as Annexure-lll forming part of this report.
Certificate received from the Auditors of the Company regarding
compliance of Corporate Governance guidelines of SEBI as required under
Listing Agreement is enclosed as Annexure- IV forming part of this
report.
Declaration affirming compliance with the code of conduct pursuant to
clause 49 of the Listing Agreement is enclosed as Annexure V forming
part of this report.
APPRECIATION
Your Directors wish to place on record their appreciation for the
continued unstinted support of Government of India, Department of
Fertilizers, Government of Tamilnadu, NICO, Financial Institutions,
Banks, Depositors and all stakeholders during the year. Your Directors
further convey their gratitude to the Department of Fertilizers for the
settlement of subsidy bills on priority basis and to the dealers and
farmers for their sustained support to the Vijay products. Your
Directors also place on record their appreciation for the dedication,
commitment and sincere services rendered by all employees for sustained
high production in the difficult times.
By order of the Board
Satish Chandra
Chairman & Managing Director
Chennai
29.07.2011
Mar 31, 2010
The Directors have pleasure in presenting herewith the 44th Annual
Report together with the Balance Sheet as onMarch 31,2010 and the
Profit & Loss Account for the year 2009-10.
SUMMARY OF FINANCIAL RESULTS
(Rs. inCr)
2009-10 2008-09
Turnover 1302.84 1123.59
Profit Before Interest,
Depreciation, DRE and Tax 144.87 (8.39)
Interest 88.45 92.62
Depreciation 41.53 41.63
Deferred Revenue Expenditure 1.21 2.57
01.01.97 Arrears (Employees
Salary) 6.80 -
Profit / (Loss) Before Tax 6.88 (145.21)
Provision for Tax - 0.17
Profit/(Loss) After Tax 6.88 (145.38)
Cash Profit / (Loss) 49.62 (101.18)
The Companys operations for the year ended with a profit of Rs.6.88 Cr
against loss of Rs.145.38 Cr in the previous year mainly on account of
implementation of New Pricing Scheme (NPS)-Stage III amendment by GOI
restricting the reduction in fixed cost to 10% for 2009-10. The total
accumulated loss as of 31.3.2010 is Rs.787.05 Cr.
REFERENCE TO BIFR
Consequent on total erosion of net worth, the BIFR has registered the
Company as Case No. 501/2007. It has declared MFL as a Sick Company
under the provision of Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA) in its meeting held on 2.4.2009 and appointed State
Bank of India (SBI), Commercial Branch, 232 N.S.C Bose
Road, Chennai 600 001 as Operating Agency (OA) to prepare a Draft
Rehabilitation Scheme (DRS) for the Company. BIFR held hearings on
15.10.2009, 12.1.2010 and 22.3.2010. GOI Nominee Directors attended the
meeting held on 22.3.2010 and expressed the view that DOF is keen on
revival of the Company. On the advice of DOF, M/s Project & Development
India Ltd (PDIL) was appointed to undertake a study on rehabilitation
proposal for the Company. Accordingly, PDIL submitted its report on
Viability Proposal on MFL and the same was forwarded to DOF after
obtaining approval from Board. The proposal is under active
consideration of GOI for revival of your Company. However, Bl FR
advised the Company to submit its Viability Proposal at the earliest.
CAUSES FOR ACCUMULATED LOSSES
The main reasons for the recurring losses from 2003-04 and the sickness
of the Company are due to cost over run during the revamp of Ammonia
and Urea Plants, delay in stabilization of revamped Plants due to
technology related problems, high energy consumption and changes in the
Pricing Policies of DOF.
Introduction of NPS of Urea from 1.4.2003 had a deleterious effect on
the Company as there was an inherent under recovery of about Rs 1995 /
MT under New Pricing Scheme (NPS) Stage I and II which has increased to
Rs 3991/MT during Stage - III (w.e.f. 1.10.2006) due to withdrawal of
outlier benefit. Based on Deloitte Report, the DOF has restricted the
reduction in fixed cost in respect of Urea to 10% for 2009-10.
Also, the Price Concession Scheme (PCS) for complex fertilizers
applicable from 1.4.2002 did not adequately compensate the Company for
cost of N in its flagship product NPK 17-17-17.
The Company does not have adequate funds to procure raw materials for
production of complex fertilizers. NPK capacity utilization has
drastically fallen from 51% in 2003- 04 to 40% in 2004-05 to 4% in
2007-08 and "Nil" in 2008-09.
However, the Company has started manufacture of NPKS 20-20-0-13 for
Indian Potash Limited on tolling basis from March 2010 and produced
7,335 MT during the month.
GOING CONCERN CONCEPT
As future operations do not suggest there would be reduction of debts,
increase in flow of revenue and improvement in net worth, your
Statutory Auditors have qualified that the Company should not have
compiled the accounts on Going Concern basis in their Audit Report for
2009-10.
Whereas the Company accounts for the year 2009-10 was audited by C&AG
of India and have cleared the Accounts with NIL comments for the
fifth consecutive year.
REVISED PROPOSAL FOR RESTRUCTURING
As per the directives of Department of Fertilizers (DOF), PDIL was
engaged in July 09 to undertake a project study of the Company and
prepare a Viability study report for making the operations sustainable.
The report submitted by PDIL suggesting short term measures, long term
measures and financial restructuring are given below:
- Conversion of GOI loan portion of Rs 293.80 Cr as on 31.3.2009 to
equity.
- Continuation of special dispensation in pricing mechanism under New
Pricing Scheme Stage III
(NPS III) beyond 31.3.2010 and up to the
conversion of Natural Gas.
- Cash induction of Rs 346.54 Cr by amendment in NPS III from 1.10.2006
to 31.3.2009.
- Waiver of GOI loan interest amounting to Rs 123.09 Cr as on 31.3.2009
along with penal
interest.
- Release of Rs 376.84 Cr through Plan Loan for implementation of the
Capital Schemes from 2009-10 to 2013-14.
- initiate proposal for purchase of NICO shares by GOI.
Based on the report of PDIL, DOF is in the process of finalizing the
revised restructuring proposal for submission to BRPSE and BIFR to bail
out the Company from sickness.
ONE TIME SETTLEMENT (OTS) WITH FINANCIAL INSTITUTION
The Company entered into One Time Settlement (OTS) with IFCI Ltd for
Rs.44.06 Cr as against Rs.91.57 Cr of Principal and Interest as of
March 31, 2010. Company made an upfront payment of Rs.20 Cr on
31.03.2010 and balance Rs.24.06 Cr will be paid in monthly installments
commencing . July to December 2010. Your Company gained Rs.47.51 Cr
through the OTS.
DIVIDEND
Though the Company earned a profit of Rs.6.88 Crores during the year
2009-10, Company could not pay Dividend due to accumulated losses.
PLANT PERFORMANCE
- Urea production exceeded the days installed capacity of 1475 MT on
207 days and 436100 MT of Urea produced during the year is the 4th best
since revamp. Also, Urea production of 49261 MT during Dec 2009 is the
3rd best record.
- Specific Energy consumption of 7.834 Gcal/MT of Urea is the 3rt
lowest since revamp.
- Ammonia energy of 9.5372 Gcal/MT and Urea energy of 6.9452 Gcal/MT on
December 30, 2009 are the lowest ever since revamp.
- Specific Energy consumption of 9.581 Gcal/MT of Ammonia during Dec
2009 is the lowest since inception surpassing the previous record of
9.715 Gcal/MT in December 2004.
- Specific Energy consumption of 6.974 Gcal/MT of Urea in Dec 2009 is
the lowest since inception
"surpassing the earlier record of 7.199 Gcal/MT in August 2008 and
below the derived design energy of 7.004 Gcal/MT of Urea for a full
month.
NPK A train was restarted after 3 years and production of NPKS
complex 20-20-0-13 commenced on March 8,2010 for M/s Indian Potash
Limited on tolling basis. During March 2010,7335 MT of complex
fertilizer was produced.
GAS CONVERSION
MFL Ammonia Plant with minor modifications is compatible to use Natural
Gas and the Feedstock conversion can be completed in about 12 months
time. The requirement of CNG will be 1.54 MMSCMD (Cal. Value 8600
Kcal/SM3) and the requirement may go up to 2.5 MMSCMD. MFLs
requirement of 1.54 MMSCMD of Natural Gas has been forwarded by
Department of Fertilizers to Ministry of Petroleum & Natural Gas for
allocation.
M/s Gas Authority of India Limited (GAIL) has come up with an offer to
supply RLNG to your Company at Market Driven Prices, by laying a
dedicated branch line (250 km long) from Krishnagiri to Chennai on its
Kochi - Kanjironkode - Bangalore / Mangalore pipeline. Similarly, M/s
Indian Oil Corporation Ltd (IOCL) evinced interest in supplying LNG to
your Company through the Ennore Satellite Port Terminal and requested
the Company to sign HoA and initiate action on the subject. lOCLs LNG
terminal at Ennore is expected to be ready in 2014-15.
MARKETING PERFORMANCE
Agricultural situation was extremely favourable during the year also in
view of the widespread rains received throughout our marketing
territories. The demand for products were continued to be high and
products were sold in good quantities. During the year, Company sold a
total of 4.41 lakh MT of fertilizers compared to 4.15 lakh MT last
year. There was an increase of 6% in sale of fertilizers over the last
year.
During this year, 4.34 lakh MT of Urea was made available for sale as
against 4.15 lakh MT during last year, which is 5% increase over CPLY
sales, whereas market share of Urea is maintained at 8% in South India.
Company continued to embark upon various policies for reduction of
marketing costs. Efforts for streamlining logistics operations
continued this year also and 99% of the products were directly
delivered to the dealers whereas it was only 96% during the CPLY.
Rationalisation of territories & regions and manpower reduction was
another area of cost saving. There has been a manpower reduction of 4%.
Marketing Team put up a creditable performance in sales realization by
making 98% cash sales. 95% of the cheques realized within 7 days.
Further, it goes to their credit that there has not been a single bad
debt during this year also.
AGROCHEMICALS, BIO-FERTILIZERS AND CARBON-DI-OXIDE
Company continued to market environment friendly neem based
Agrochemicals. A total of Rs.1.42 Crof Agrochemicals were traded during
the year 2009-10 as against the CPLY of Rs.1.34Cr.
MFL sold 435 MT of Bio-fertilizers during 2009-10 as against 463 MT in
the previous year.
Company has sold Carbon-di-oxide valuing Rs.3.30 Cr during the year
2009-10 against Rs.2.37 Cr during the last year.
PUBLIC DEPOSIT
The Company had approached the Ministry of Corporate Affairs (MCA),
Govt, of India vide application dated 25.2.2009 for extending the
exemption for a further period of 2 years from 01.04.2009 to accept /
renew deposits up to Rs.61.09 Cr under the Companies Act, 1956, which
was approved only oh 30.04.2010 with a validity up to 31.3.2010.
Hence, the Company could not accept fresh deposits or renew the
existing deposits during the Financial Year 2009-10. The total deposit,
including unclaimed, as of March 31,2010 is Rs.8.66 Cr against the
eligible limit of Rs.61.09 Cr.
ISO 9001 /14001
Internal Quality Audit - VIII & IX for ISO 9001 (Quality Management
System) & ISO 14001 (Environmental
Management System) had been conducted between April 20 - 23, 2009 and
September 23 - 30, 2009 respectively.
CMD approved Quality Objectives (9001 - 2000) and Environmental
Objectives (14001-2004) for the year 2009-10 had been communicated to
all the Functional Areas for implementation.
A Core Group has been formed by CMD for preparing ISO 9001:2008 Apex
Manual / QCPs in the respective Functional Areas for renewal
certification which is due by November 2010.
MEMORANDUM OF UNDERSTANDING
The Company entered into MOU with DOF, GOI for the year 2010-11 on
March 15, 2010 setting out Targets for Performance of the Company in
terms of Production, Sales and other parameters.
VIGILANCE
Preventive vigilance with a stress on adherence to the set rules and
procedures and transparency & accountability, is the main objective of
the Vigilance Department. Direction / guidance is provided to the
Management based on the Circulars / Guidelines received from the
Central Vigilance Commission from time to time.
In compliance with the recommendations of the Central Vigilance
Commission, the following activities were completed during the year.
- Complaints received were attended and reports submitted
- Vigilance Awareness Week observed
- Property returns of Officers scrutinized
- Outstanding from dealers due to dishonour of cheques monitored
- Implementation of Leveraging Technology / Amendment to Service
Policies and Purchase Manual pursued
- Monitoring implementation of Leveraging technology
- High Value Contracts reviewed
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Manpower & Training
The total strength of MFL as on 31.03.2010 is 802 as against 847 for
the period ending 31.03.2009. 494 employees have been trained on
Behavioural & Technical subjects and 214 employees have been re-trained
on the above subjects during the year 2009-10.
Voluntary Retirement Scheme
Two Employees availed Voluntary Retirement Scheme during 2009-10. The
Company plans to reduce the manpower further during the current year
through rationalization in all the Functional Groups, except Plant,
where shortage of manpower has been severe.
INDUSTRIAL RELATIONS
During the year 2009-10, the overall Industrial Relation situation in
the Company has been normal and cordial.
OFFICIAL LANGUAGE IMPLEMENTATION
MFL has been continuously exceeding the target fixed by Department of
Official Language for letter correspondence in Hindi and other
implementation programmes.
Hindi Fortnight was celebrated during September 2009 at Head Office and
Regional Offices. Various competitions were organized and prizes were
distributed to the winners.
Two batches of Spoken Hindi Classes were conducted during the period
April to July 2009 and January to March 2010.
The First Sub-Committee of the Committee of Parliament on Official
Language carried out its Inspection at MFL on Oct 29, 2009 and reviewed
the implementation of Official Language.
SC/ST WELFARE ACTIVITIES
The Presidential Directives and various guidelines issued by the
Government of India relating to the welfare of SCs / STs were
scrupulously followed during the year. A Liaison Officer nominated for
this purpose ensures implementation of Government Directives.
As of 31.03.2010, the number of employees belonging to SC/ST category
is 190, which constitutes around 23.69% of the total strength of the
employees as could be seen from the table furnished below:
Group Total SC Employees ST Employees
Employees Number % Number %
A&B
Statutory
Requirement 15.00 7.50
C&D
(GrltoV) 321 107 33.33 1 0.31
Statutory
Requirement 19.00 1.00
Presently, MFL is in the process of downsizing its existing manpower
through VRS. However, MFL has been constantly reviewing the vacancies
reserved for SC/ST, and taking concerted efforts to fill up such
vacancies.
DIRECTORS
Government of India have appointed Dr V Rajagopalan, IAS, Additional
Secretary & Financial Advisor, DOF in place of Shri Sudhir Bhargava,
IAS, on the Board of the Company effective May 3, 2010.
The Board placed on record the valuable and outstanding contributions
for the substantial development of the Company made by the outgoing
Director Shri Sudhir Bhargava, IAS during his tenure as Director on the
Board.
AUDITORS
The Government of India have appointed M/s Venkatram & Co., Chartered
Accountants, Chennai as Statutory Auditors of the Company for the year
2009-10.
STATUTORY INFORMATION
No employee was in receipt of remuneration for any part of the year at
a rate which is more than Rs 2 lacs permonth as provided under Section
217 (2A) of the Companies Act, 1956.
The data on Conservation of Energy, Technology Absorption. and Foreign
Exchange Earnings and Outgo in accordance with the provisions of
Section 217 (1) (e) of the Companies Act, 1956 are given in the
Annexure-I forming part of this report.
Directors Responsibility Statement as required under Section 217 (2AA)
of the Companies Act, 1956 as amended is furnished in Annexure-ll
forming part of this report.
Management Discussion and Analysis Report, as required under Listing
Agreement is enclosed as Annexure-ll! forming part of this report.
Certificate received from the Auditors of the Company regarding
compliance of Corporate Governance guidelines of SEBI as required under
Listing Agreement is enclosed as Annexure-IV forming part of this
report.
Declaration affirming compliance with the code of conduct pursuant to
clause 49 of the Listing Agreement is enclosed as Annexure V forming
part of this report.
APPRECIATION
Your Directors wish to place on record their appreciation for the
continued unstinted support of Government of India, Department of
Fertilizers, Government of Tamilnadu, NICO, Financial Institutions,
Banks, Depositors and all stakeholders during the year. Your Directors
further convey their gratitude to the Department of Fertilizers for the
settlement of subsidy bills on priority basis and to the dealers and
farmers for their sustained support to the Vijay products. Your
Directors also place on record their appreciation for the dedication,
commitment and sincere services rendered by all employees, in the most
difficult times.
By order of the Board
Chennai M Sagar Mathews
19.05.2010 Chairman & Managing Director
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