Directors Report of Rashtriya Chemicals & Fertilizers Ltd.
Mar 31, 2023
DIRECTORSâ REPORT
Dear Members,
The Directors of your Company have pleasure in presenting
this 45th Annual Report on the working of your Company
together with the Audited Financial Statements for the
year ended March 31, 2023.
|
Particulars |
2022-23 |
2021-22 |
|
Total Income (Net) |
21594.84 |
12948.62 |
|
Total Operating Cost |
19978.35 |
11822.90 |
|
Operational Profit |
1616.49 |
1125.72 |
|
Depreciation/Impairment |
212.12 |
183.55 |
|
Finance Cost |
223.86 |
125.89 |
|
Profit before exceptional items |
1180.51 |
816.28 |
|
Net Exceptional Items (income) |
(93.47) |
(127.63) |
|
Profit before Tax |
1273.98 |
943.91 |
|
Provision for Tax (including |
306.83 |
239.55 |
|
Net Profit |
967.15 |
704.36 |
|
Retained Earnings |
||
|
Add / (less): Re-measurement |
(35.76) |
(9.19) |
|
Less: Dividend Paid (Previous |
226.19 |
172.68 |
|
Less: Balance Transferred to / |
705.20 |
522.49 |
During the year, the major factors improving your
Companyâs profitability before tax are as under:
a. Higher margins of Industrial products and Complex
Fertilizers contributed to higher profitability.
b. Better energy efficiencies at Thal Unit improved Urea
margins.
c. Reduction in interest rates as well as lower working
capital requirement resulted in reduction in Finance
costs.
MEMORANDUM OF UNDERSTANDING WITH
GOVERNMENT OF INDIA
Your Company has been entering into a Memorandum
of Understanding (MoU) with the Ministry of Chemicals &
Fertilizers, Government of India, setting the performance
parameters and targets every year. Your Company has
secured "Very Goodâ rating for the year 2021-22.
The performance rating for 2022-23 MoU is yet to be
finalised by the Government and the Company expects to
achieve "Very Goodâ ratings this year.
Although your Company has lined up a number of capex
programmes which will entail substantial expenditure,
considering the consistent profits being made by the
Company and based on the Companyâs performance, your
Directors are pleased to recommend a final Dividend of
'' 3.70 per equity share of '' 10/- each for the financial year
2022-23. Your Board had earlier approved payment of
interim dividend of '' 1.60 per equity share of '' 10/- each for
the financial year 2022-23, at its meeting held on November
29, 2022 and same was paid on December 27, 2022. The
total dividend for the financial year 2022-23 amounts to
'' 5.30 per equity share (Previous year '' 3.85 per equity
share), and would involve a total cash outflow of '' 292.39
Crore consisting '' 88.27 crore as interim dividend and
'' 204.12 crore as final dividend ('' 137.92 Crore in the previous
year). The final dividend pay-out is subject to the approval of
members at the ensuing Annual General Meeting.
APPROPRIATION TO GENERAL RESERVES
Your Company earned a net Profit after Tax of '' 967.15 Crore
('' 704.36 Crore in the previous year). Re-measurement of
defined benefit plans resulted in loss of '' 35.76 crore
(previous year '' 9.19 crore). The dividend pay-out pertaining
to financial year 2021-22 was '' 137.92 Crore ('' 98.20 Crore
pertaining to financial year 2020-21) and interim dividend
pertaining to financial year 2022-23 was '' 88.27 Crore
('' 74.48 Crore pertaining to financial year 2021-22).The
balance amount of '' 705.20 Crore ('' 522.49 Crore in the
previous year 2020-21) was transferred to General Reserves.
UPGRADATION OF NAVRATNA STATUS
Your Company has been accorded the âNAVRATNAâ CPSE
status by the Government of India on August 29, 2023
which provides greater autonomy and enhanced financial
delegation to the Board of Directors. Your Company
is the first PSU in fertilizer sector to be elevated to
NAVRATNA Category. This recognition is a testament to
RCF teamâs (Past & present) dedication and commitment
to the chemicals & fertilizers Sector. With the coveted
NAVRATNA status, your Company further commits itself
towards playing a more decisive and significant role in our
countryâs growth and prosperity.
As in the past, your Company has won many awards
during the year 2022-23, some of which are as under:
Trombay Unit
⢠"22nd Annual Greentech Environment Award 2022â
for outstanding achievements in "Environment
Protectionâ category.
⢠FICCI Award-2022 for Sustainability-Excellence in
Safety in Chemical Sector.
⢠Greentech EHS Best Practice International Award
2023 under EHS best Practices Category.
⢠3rd prize in 17th state level Energy Conservation Award
(MEDA) in Industry General Category.
⢠National Safety Council of India awards 2022
(Appreciation Certificate) in recognition for good
performance in OSH during 2019-2021.
Thai Unit
⢠"Certificate of Meritâ from NSC India in Safety
Seminar organized by NSC-India
⢠Growcare Occupational Health and Safety Award
2022
⢠Greentech Effective EHS Culture award
⢠Merit Certificate in NSC I seminar
⢠HWP Thal received 3rd Prize in NSC I seminar
Others:
⢠Governance Now 9th Edition PSU Award in category
"Technology initiative in Vigilance in PSUs
During the year, the unit produced 18.80 lakh MT of Urea
compared to 18.59 lakh MT produced during the previous
year. In terms of nutrients in the fertilisers, the unit
produced 8.65 lakh MT of N during the year, compared to
8.55 lakh MT during previous year.
Trombay Unit
The Trombay Unit produced 3.16 lakh MT of Urea & 6.43
lakh MT of Suphala 15:15:15 during the year compared to
3.26 lakh MT of Urea & 5.71 lakh MT of Suphala 15:15:15
produced during the previous year. In terms of Nutrient
values, the unit produced 2.42 lakh MT of N, 0.96 lakh MT
of P2O5 and 0.96 lakh MT of K2O during the year compared
to 2.36 lakh MT of N, 0.86 lakh MT of P O and 0.86 lakh
MT of K2O respectively during the previous year.
Your Company produces industrial chemicals at both its
units. During the year, your Company produced approx.
5.79 lakh MT of various major industrial chemical products
as against approx. 6.52 lakh MT during the previous year.
Your Company produces, amongst others, Ammonium
Nitrate Melt, Ammonia, Ammonium Bicarbonate, Dilute
Nitric Acid 58%, Conc. Nitric Acid 98%, Strong Nitric Acid,
(72% & 68%), Methyl Amines (Mono, Di, Tri), Sulphuric
Acid, Argon, Nitrogen, Dimethyl Acetamide, Phosphoric
Acid 27%, Sodium Nitrate / Nitrite, Refrigerant Ammonia,
Water, Methanol, Gypsum, Chalk etc.
MARKETING PERFORMANCE
FERTILIZER DIVISION
Your Company achieved sales volume of 33.14 lakh MT
during the year 2022-23 as compared to 30.80 lakh MT
during the previous year. Your Company sold 22.09 lakh MT
of Urea, 6.10 lakh MT of Suphala 15:15:15, 0.05 Lakh MT of
Suphala 10:26:26, 4.47 lakh MT of other bought out products
i.e. DAP, MOP, Imp NPK etc. , 0.38 lakh MT of tie products and
0. 05 Lakh MT of value added products as compared to 22.08
lakh MT of Urea, 5.87 lakh MT of Suphala 15:15:15, 2.31 lakh
MT of other bought out products i.e. DAP, MOP, Imp. NPK
etc. 0.49 lakh MT of tie products and 0.05 Lakh MT of value
added products during the previous year. The Total sale of
manufactured fertilizers (Urea & NPK) during 2022-23 was
28.23 lakh MT as against 27.95 lakh MT during the previous
year. Sales of manufactured fertilizers registered growth of
1 % over previous year.
Your Company sold 4.47 LMT Imported fertilizers products
1. e. DAP, MOP and Imp NPK etc. as compared to 2.31 LMT
during previous year. Sales of imported fertilizers registered
growth of 94 % over previous year.
The sale of Biola picked up momentum during the year.
Biola sale registered growth of 13 % touching 151 KL during
the year as against 134 KL in the previous year. The sale
of manufactured water soluble fertilizers under the brand
name âSujalaâ touched 4247 MT during the year as against
5056 MT sold in the previous year. Other products such as
Microla, pH balancer, Silica and OGS also registered healthy
volumes during the year.
During the year, your Company has achieved the following
milestones:
> Highest ever sale of 33.14 LMT of fertilizers, which is an
increase of 8 % over last year. This is highest sale after
2015-16.
> Sold 4.47 LMT of imported products, which is an
increase of 94% over last year.
> Highest ever sale of 6.10 LMT of Indigenous 15:15:15.
> Highest ever sale of 2.98 LMT of Imported DAP.
> Highest ever sale of 1.20 LMT of Imported 20:20:0:13.
> First time the Company has sold PDM and PROM
under tie-up and sold 8,764 MTs & 2,982 MTs
respectively.
> Highest ever sale of 151 KL of Biola which is highest
sold quantity in last 10 years. Last yearâs sale was
134 KL
Industrial Products Division has achieved the highest ever
sales turnover of '' 3406.03 Crore as against '' 2424.73
Crore during the previous year. Your Company has registered
increase in sales of IPD products and better realisation due
to lower RLNG prices and resultant reduction in cost of
production coupled with increasing demand and focussed
marketing strategies. Sales of Ammonium Nitrate Melt,
Dimethyl Acetamide, Sulphuric Acid, STP Water, Argon,
Refrigerant Ammonia, Nitrogen, Phosphoric Acid 27% &
Chalk was increased during the year.
During the year, your Company has achieved the following:
1. Highest ever sale of AN melt of 1,75,694 MT.
2. Highest ever sale of Refrigerant Ammonia of 1,046 MT.
3. Highest ever sale of Phosphoric Acid 5,175 MT.
Considering the nature of products manufactured by your
Company and indigenous demand, the scope for export
is very limited. However, your Company successfully
popularized its Ammonium Bicarbonate (ABC) brand in the
overseas market through third party export. During financial
year 2022-23, your Company has done third party export of
Ammonium Bicarbonate (ABC) under âMRUDULAâ brand to
the tune of '' 70.97 lakh as against '' 59.26 lakh during the
previous year.
IMPORT OF UREA ON GOVERNMENT ACCOUNT
⢠Your Company has been designated as State Trading
Enterprise (STE) in October, 2019 for Import of Urea
on Government Account. Based on the instructions of
Department of Fertilizers (DoF), RCF imported approx.
25.26 lakh MT quantity of Urea through issue of total
Two (2 Global tenders during the year 2022-23.)
⢠DOF has also assigned RCF the responsibility for
execution of Urea imports under Long term Agreement
(LTA) between M/s. OQ Trading & Govt. of India (DOF)
w.e.f. February 2022 onwards for a period of 3 years
(till January 2025), for a Quantity of 10 lakh MT /- 10%
per annum on FOB basis. Accordingly in FY 2022-23,
Twenty Three (23) Urea shipments have been shipped
from OQ Trading Ltd. under this LTA, with a total
quantity of approx. 10.01 Lakh MT.
⢠In order to cater to the emergent Fertilizer requirement
by Sri Lanka, based on the instructions of DOF, RCF
supplied approx. 65,000 MT of Urea to M/s. Colombo
Chemicals & Fertilizers Ltd. (CCFL), Sri lanka in two
shipments during the month of July & August 2022,
under Short term line of Credit of USD 55 MN provided
by Govt. of India to Govt. of Sri Lanka in order to avert
the Fertilizer shortage crisis in Sri Lanka.
⢠An MOU was signed between Govt. of India & Govt.
of Nepal on 28.02.22, wherein it has been decided
that Govt. of India will supply Urea & DAP (Fertilizers)
to Nepal for next five years period under the G2G
Agreement. Further RCF has been nominated as the
State Trading Enterprise (STE) by DOF for execution of
this MOU on behalf of Govt. of India and accordingly
based on this MOU a separate financial Agreement
was signed on 18.07.22 by RCF & M/s. Krishi Samagri
Company Limited (KSCL)-Nepal who is the nominated
agency by Govt. of Nepal. Under this agreement and
as per the initial requirement provided by M/s. KSCL-
Nepal, the first shipment of 30,593.30 MT Bagged Urea
have already been delivered to KSCL, Nepal at their
three designated warehouses in Biratnagar, Birgunj &
Bhairahawa located in Nepal.
Under âAtmanirbhar Bharat Abhiyanâ, following initiatives
are taken by your Company:
⢠Increased Complex Fertilizer (NPK 15:15:15)
Production:
Your Company has enhanced the production of Suphala
NPK (15:15:15) by installation of additional spherodizer
and associated system. During FY 2022-23, highest
ever production (6.382 Lakh MT) of Suphala (15:15:15)
was achieved.
⢠Optimizing production of Industrial Chemicals:
Your Company is manufacturing various Industrial
Chemical products having high brand values. Plants
manufacturing industrial chemical products like
Ammonium Nitrate, Ammonium Bicarbonate, Nitric
Acid, Concentrated Nitric acid and Sulphuric acid are
operated at optimum level to meet the market demand.
⢠Setting up New AN Melt Plant:
In order, to meet the growing power need of the country,
enhancement in domestic production of AN melt is
very important. Therefore, your Company is setting¬
up new AN Melt plant of 425 MTPD at RCF Trombay
unit with latest and energy efficient technology. The
additional production from this AN melt project shall be
substituting the existing imports, leading to improved
availability of Coal to the power plants and hence in
turn shall ensure power security to the common people.
⢠Setting up Liquid Nano Urea plant:
Your Company is setting-up liquid Nano Urea plant of
75 KL per day at RCF Trombay unit using indigenous
technology, developed by M/s IFFCO. Nano Urea
is expected to be more efficient as compared to
conventional Urea.
⢠Setting up new NPK Fertilizer plant at Thal:
In order to increase domestic supply of DAP/NPK
fertilizer, your Company is exploring possibility of setting
up NPK Fertilizer of 1200 MTPD (in terms of DAP) plant
at Thal subject to economic viability.
AGRICULTURE EXTENSION ACTIVITIES
RCF has undertaken several agriculture extension activities
so as to educate the farmers on efficient use of agro-inputs
and provided know-how on improved and scientific methods
of cultivation contributing to increase in their farm yield.
Some of the services so undertaken during the year are as
under:
1. Soil Sample Analysis: 48,689 number of NPK and
13,718 number of Micro-nutrient analysis have been
done and Soil Health Cards distributed.
2. Kisan Suvidha Kendras: 100 Kisan Suvidha Kendras
were operated at different districts of Maharashtra
& Karnataka for educating & imparting Agricultural
extension services to the farmers at the field level,
3. Farmer Training Centres are operational at Thal and
Nagpur for imparting residential training to farmers.
A total of 44 programs were undertaken benefitting
2979 farmers during the year.
4. RCF Kisan Care Toll Free service 1800-22-3044 was
operated for imparting Agricultural information to
the farming community.
5. RCF Sheti Patrika: 7.20 lakh copies of RCF Sheti
Patrika (Marathi edition) covering the relevant
subjects pertaining to Agriculture and allied fields
were printed & distributed to farmers.
6. Doordarshan: RCF sponsored and promoted popular
TV programs like Krishi Samruddhichi Gurukilli for
sharing of Agriculture Knowledge and RCF Suphala
DD Sahyadri Krishi Sanman Puraskar for motivating
farmers.
7. Social Media: Information has been shared
through Social Media (WhatsApp, Facebook,
Twitter, Instagram, and You Tube) with handle @
rcfkisanmanch.
8. Agricultural Extension Services: 3218 Field
Demonstrations, 209 Soil Testing Days, 460 Farmersâ
Meetings, 55 Krishi Melas, 10 Veterinary Camp/Rural
Sports, 58 Exhibitions, etc. were organized for the
benefit of the farmers.
9. Adoption of Villages for Promotion of City Compost:
6 villages from Maharashtra & Karnataka were
selected for promotion of City Compost.
MATERIAL CHANGES AND COMMITMENT
AFFECTING FINANCIAL POSITION OF THE
COMPANY
In the matter of Arbitration between Rashtriya Chemicals
and Fertilizers Limited ("the Claimantâ) and Thermax
Limited, ("Contractor/ Respondentâ) regarding recovery
of damages, losses, etc. for breakdown of two Gas Turbo
Generator (GTGs), an award has been passed by an
Arbitral Tribunal consisting of Sole Arbitrator on June 5,
2023. The Sole Arbitrator has passed an Award in favor of
RCF (Claimant) and directed the Contractor (Respondent)
to repair and reinstate both the GTGs at companyâs plant
at their own cost and expenses under the defect liability
clause. The Arbitrator has also allowed the Companyâs
claim on additional expenditure incurred on power and
directed the Contractor to pay '' 173. 72 Crores with
interest @ 10% from the date of claim and a sum of '' 95
Lakhs as arbitration cost to the Company.
Pursuant to Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has framed a Risk
Management Policy for risk assessment and minimization
procedures. The Risk Management Policy developed with
the objective of having a balanced approach towards
business plan and mitigating the associated risks, is
in place. The system identifies better management
practices to ensure greater degree of confidence amongst
various stakeholders and facilitates good Corporate
Governance practice. All risks associated with Operations,
Environment, Finance, Marketing, Human Resource,
Legal, Information Technology Security, Projects etc.,
are continuously monitored. The degree of impact of the
perceived risks is further graded into high, medium and
low and the probability of the occurrence of each risk is
also classified into Unlikely and likely. In order to mitigate
losses arising out of such perceived risks, appropriate
procedures are being adopted to contain the risks. Also
the practices adopted during emergencies, including
the communication system and mode of disseminating
information are periodically reviewed and updated to
minimize the impact on the Company. Quarterly report in
respect of the same is presented to the Board.
The Board of Directors had constituted Risk Management
Committee to identify elements of risk in different areas
of operations and to develop policy for actions associated
to mitigate the risks. The Committee on timely basis
informs the Board of Directors about risk assessment
and minimization procedures which in the opinion of the
Committee may threaten the existence of the Company.
The details of Risk Management Committee are included
in the Corporate Governance Report.
MAJOR EXPANSION AND DIVERSIFICATIONS
The status of major projects undertaken by your Company
is as under:
PROJECTS UNDER IMPLEMENTATION
Trombay Ammonia V Plant Revamp (KBR Scheme):
Ammonia-V revamp project is being implemented as a part
of energy improvement schemes to meet the new energy
norms for Trombay Unit. The estimated project cost is
'' 101.88 Crore. The Basic Engineering is being done by
M/s KBR and Detail Engineering is being done by PDIL.
The scheme is envisaged to result in energy saving of 0.25
Gcal/MT of Ammonia. Expected project completion is by
April 2024.
New AN Melt Plant at Trombay:
Your Company is setting-up new AN Melt plant of 425
MTPD at RCF Trombay unit with latest and energy efficient
technology. The work order for execution of the project on
LSTK basis is awarded to M/s Larsen & Toubro Limited. The
estimated Project Cost is '' 187 Crore. Site work is in progress.
The project is scheduled to be completed by Sept. 2024.
ETP up-gradation at Thai:
Upgrading the existing Effluent Treatment Plant for treating
10,000 M3/day effluent to ensure the quality of treated
effluent as against discharge to sea is recycled for reuse in
plant. In 1st phase, around 5000 m3/day treated water will be
recycled. Estimated cost of 1st Phase is '' 66.72 Crore. Work
Order has been issued to M/s Ion Exchange Ltd.
In 2nd phase, balance effluent will be recycled, to achieve
"Zero Liquid Dischargeâ goal. Action for 2nd Phase has been
initiated. Detailed Feasibility Report (DFR) under preparation
by Consultant.
Nano Urea plant:
Nanotechnology is an emerging field with potential to provide
efficient nutrient management. Nano Urea is expected to
reduce the use of Urea. RCF is setting up Nano Urea Plant
of 75 KL per day capacity at Trombay based on IFFCO
Technology. As a part of getting Environment Clearance,
Public Consultation was held on 02.03.2023. The estimated
Project Cost is '' 238 Crore.
PROJECTS UNDER CONSIDERATION
Setting up new NPK Fertilizer plant at Thai
RCF is exploring possibility of setting up NPK Fertilizer plant
at Thal subject to its economic viability. Administrative
approval from DoF has been received. PDIL has been lined
up for preparation of Detailed Feasibility Report (DFR)
and Environment Impact Assessment (EIA) report for
Environment Clearance. As a part of getting Environment
Clearance, Public Consultation and Form-II for EC was
submitted on MOEF&CCâs Parivesh portal on 03.05.2023.
Tender for selection of LSTK Contractor has been floated.
The estimated Project Cost is '' 914.58 Crore including taxes,
duties and working capital
Zero Liquid Discharge scheme at Trombay
RCF is exploring the possibility of setting up Zero Effluent
Discharge (ZED) plant to treat the effluent generated and to
recover & recycle the water in the process at Trombay unit. The
objective of the scheme is to achieve Zero Liquid Discharge
(ZLD) for RCF Trombay. Detailed Feasibility Report (DFR)
received from Consultant. Estimated Project cost is '' 99.78
Crore. Project is expected to be completed by Sept. 2025.
Briquette Fired Boiler at RCF Thal
With an aim to produce low cost steam, RCF is setting up
Briquette Fired Boiler at RCF Thal. The low cost steam shall
help in reducing the variable cost of chemicals. Work Order is
awarded to M/s Forbesvyncke Pvt. Ltd. The estimated project
Capital Cost is '' 25.7 Crore plus taxes as applicable.
JOINT VENTURE PROJECTS
Coal Based Fertilizer Plant at Talcher:
Your Company, along with Coal India Limited (CIL), Gas
Authority of India Limited (GAIL) and Fertilizer Corporation of
India Limited (FCIL), is setting-up a Coal Gasification based
fertilizer complex, comprising of 2200 MTPD Ammonia plant
and 3850 MTPD Urea plant, at FCIL, Talcher, Odisha. Land
and certain facilities needed for the project are provided by
FCIL. The project will utilize state-of-the-art Coal Gasification
Technology from M/s Air Liquid Products (erstwhile M/s Shell
Eastern). A joint venture company âTalcher Fertilizers Limitedâ
has been incorporated for establishing and operating Coal
Gasification based Fertilizer complex.
The project is of strategic importance for the country as it
aims to make breakthrough for an alternative source of
feedstock in the form of abundantly available coal from
domestic sources in place of natural gas. Success of this
project is expected to be a game changer and shall pave a
way forward to the production of chemicals and fertilizers
from coal leading to lesser RLNG imports. It will also help
in meeting much needed Urea production capacity for the
eastern part of the Country.
The estimated Project capital cost is approx. '' 17,080.69
(±10%) Crore (RCF share is '' 2,169.67 (±10%) Crore).
M/s Wuhuan Engineering, China has been engaged as
LSTK contractor for Coal Gasification and Ammonia/Urea
packages of the project valuing approx. '' 8000 Crore. Site
activities are in progress. The commissioning of the project is
scheduled to be completed by September 2024.
SUBSIDIARY AND OTHER JOINT VENTURE
COMPANIES
A separate statement containing the salient features
of financial statements of all the joint ventures of your
Company forms part of consolidated financial statements
in compliance with Section 129 and other applicable
provisions, if any, of the Companies Act, 2013. The financial
statements of the joint ventures and related information are
available for inspection by the members electronically up to
the date of the Annual General Meeting (AGM) as required
under Section 136 of the Companies Act, 2013. Any member
seeking to inspect such documents are requested to write
to the Company at [email protected].
The financial statements including the consolidated financial
statements and all other documents required to be attached
to this report have been uploaded on the website of your
Company (www.rcfltd.com).
FACT-RCF Building Products Ltd. (FRBL), Kochi
Your Company has formed a Joint Venture Company with
Fertilizers and Chemicals Travancore Limited (FACT) by
incorporating FACT-RCF Building Products Ltd. to set up a
Rapidwall project at Kochi. Both your Company and FACT
have 50:50 equity holding in the Company. Production has
been suspended owing to expected takeover of the Plant
& Machinery by the ARC. The company is undertaking only
project management services at present.
The audited financial statements of FRBL as at March
31,2023 reported loss of '' 7.90 Crore, thus resulting in
accumulated loss of '' 216.89 Crore.
Urvarak Videsh Limited (UVL)
Urvarak Videsh Limited (UVL) was incorporated on 18th
July, 2008 as Special Purpose Vehicle (SPV) with equity
participation of Rashtriya Chemicals and Fertilizers
Limited(RCF), National Fertilizers Limited (NFL) and Krishak
Bharti Co-operative Limited (KRIBHCO) with the object of
setting up joint venture in India and abroad for manufacturing,
mining, long term tie ups for Nitrogenous, Phosphatic and
Potassic Fertilizers and fertilizer raw materials including
exploring the possibility of making investments and
rendering Consultancy services, etc. The company explored
many alternatives to take up various projects but the same
did not fructify due to want of funds as UVL business
objective requires heavy capital investment. As the company
could not take up any business, the Board of UVL has
decided to declare the company as a Dormant company
for the time being in terms of the provision of section 455 of
the Companies Act, 2013 as the keeping the status of the
company as active was not serving any purpose.
The Audited financial statements of UVL as at March
31, 2023 reported loss of '' 58,500/-, thus resulting in
accumulated loss of '' 0.49 Crore.
Talcher Fertilizers Limited (TFL)
Your Company has formed a Joint Venture company, with
Coal India Limited (CIL), GAIL (India) Limited (GAIL) and
Fertilizer Corporation of India Limited (FCIL), with the name
Talcher Fertilizers Limited for revival of FCILâs fertilizer unit
at Talcher by establishing and operating coal gasification
based fertilizer complex. Equity participation of RCF, CIL
and GAIL is 31.85 % each and that of FCIL is 4.45%. The
company is yet to start its operations.
During the year, your Company has infused '' Nil Crore in TFL.
The audited financial statements of the said Company as at
March,31 2023 reported a loss of '' 2.52 Crore, thus reducing
in accumulated loss to '' 24.66 Crore.
Consolidated Financial Statement
The Consolidated Financial Statement of your Company has
been prepared by taking into consideration Joint Venture
Companies i.e. FACT-RCF Building Products Limited, Urvarak
Videsh Limited and Talcher Fertilizers Limited.
The Consolidated financial statements have been prepared
under equity method along with Companyâs standalone
financial statements.
SUMMARY OF FINANCIAL PERFORMANCE
|
Particulars |
2022-23 |
2021-22 |
|
Total Income (Net) |
21594.84 |
12948.62 |
|
Total Operating Expenses |
19978.35 |
11822.90 |
|
Operational Profit |
1616.49 |
1125.72 |
|
Depreciation/Impairment |
212.12 |
183.55 |
|
Finance Cost |
223.86 |
125.89 |
|
Share /(loss) of Associates/JVs |
(0.84) |
(1.97) |
|
Profit before Exceptional Item |
1179.67 |
814.31 |
|
Exceptional Item (income) / |
(93.47) |
(127.63) |
|
Profit before Tax |
1273.14 |
941.94 |
|
Provision for Tax (including |
306.83 |
239.55 |
|
Net Profit after tax |
966.31 |
702.39 |
Your Company has taken up several Research and
Development (R & D) projects, some of which are for
commercial scale design and engineering. They are as
under:
Vipula- Suspension NPK Fertilizer
Vipula - a new innovative Suspension NPK Fertilizer with
NPK 10:10:10 was launched on 6th May, 2022 at the hands
of Honourable Union State Minister for Chemical and
Fertilizers Shri Bhagwanth Khuba in presence of C&MD
and other Senior Managers of RCF. Product in suspension
form is formulated for ease of application. The suspension
fertilizers consist of insoluble solid active ingredients
dispersed (normally at high concentration) in water.
Suspension concentrates have shown a rapid development
in the past, mainly due to their several benefits such as
no dust, no problem of toxicity or flammability due to
solvents and good efficiency due to the smaller particle
size. It is also in low packaging volume.
Shubhada - Multi-Micro Nutrient Fertilizer:
Addressing âHidden Hungerâ
Shubhada a Micronutrient Mixture Fertilizer contains various
nutrients and controls physiological disorders and nutrient
deficiencies. It promotes essential plant processes and
growth, which translates into nutrient-rich food for animals
and humans, improves absorption and utilization of other
nutrients applied to the soil, increases yield and ensures
better quality. The plant operations were commenced on
17th December 2022.
Polyhouse: Precision Agriculture
Polyhouse is a type of greenhouse where specialized
polythene sheet is used as a covering material under
which the crops can be grown in partially or fully controlled
climatic conditions. It protects the crops from wind, rain,
radiation, precipitation and other climatic factors. It creates
microclimate surrounding the crops that help in maximum
growth regarding production and quality. With a maximum
level of automation, the number of manual activities,
dependency on labor and overall labor cost can be drastically
reduced.
Hydroponics is a method of growing plants in a water
based, nutrient rich solution without soil. It is fast becoming
a popular around the world due to its more sustainable
approach than the usual growing methods - soil cultivation.
In view of the above, a polyhouse cum hydroponic unit of
around one acre is being constructed at opposite to ETP
plant. The unit will be helpful for testing new agro products
on different crops round the year irrespective of the season
and weather conditions.
The hydroponics facility (Polyhouse) is ready for conducting
trials.
Organic fertilizer: PROM
PROM is a phosphate-rich organic manure that improves the
physical, chemical, and biological properties of the soil and
increases crop production. It improves the resistance power of
crops against various diseases. It can be used for all cereals,
pulses, vegetables, fruits, and flowers for all plants Flowers,
vegetables or crops. It Increases availability of nutrients in
soil and plant. CO2 is released during decomposition and
helps to reduce the alkalinity of the soil. The organic manure
ensures availability of phosphate for the next crop unlike
DAP (Diammonium Phosphate) that has to be applied for
every crop. Use of organic manure reduces the soil demand
for phosphate. PROM can cut down subsidy outflow on DAP.
Phosphate rich organic manure (PROM) has been formulated
successfully and this meets all the norms of Fertilizer
(Control) Order (FCO), 1985 (Amended July,2021). In view
of the national vision of "Atmanirbhar Bharatâ and to meet
the growing domestic demand for organic fertilizers RCF is
setting up a new 18000 MTPA PROM plant having latest
environment friendly technology.
Sulphur Coated Urea (SCU): Urea Gold
Rising concerns about over eutrophication, stringent
regulations and penalties on conventional fertilizers. Around
50-70% of added urea is lost to the environment. Use of
sulphur coating on urea can help in slow release of nitrogen
and contribute to improved nitrogen use efficiency.
Sulphur as a plant nutrient has been neglected for long
in fertilizer pricing and policy. In 2003, the Government
recognized the place of sulphur in sulphur fertilizers and the
sulphur content was included in the product specifications
for all S-containing materials included sulphates of
micronutrients.
The R&D Department through in-house innovations has
successfully formulated Sulphur Coated Urea (SCU) named
as Urea Gold. The SCU is registered in FCO as per the gazette
dated 16th Aug 2013.
Urea Gold addresses the most important issue of nutrient
use efficiency (NUE) of urea. The NUE of urea is about
30%. The use of Sulphur coating on urea results in providing
the most important secondary nutrient to the crops added
with slow release of nitrogen with improved nitrogen use
efficiency. Urea Gold reduces nitrogen leaching in flooded
rice and wheat fields. The application of slow release of
fertilizers can potentially decrease fertilizer use by 20 to 30
percent of the recommended rate of a conventional fertilizer
while obtaining the same yield. The plant will be ready by
July 2023.
More with less: Nano fertilizer
Low cost, eco-friendly and sustainable means of achieving
agricultural intensification and improving productivity can be
adopted by use of Nano fertilizer. It enhances the availability
and use of vital soil nutrients. R&D has developed Nano urea,
Nano NPK and Nano DAP at Lab scale. Toxicological studies
of Nano Urea conducted at Indian Institute of Toxicological
Research (IITR), Lucknow showed no toxic effect on any live
organism.
In order to test the efficacy of Nano urea, field trials are
being conducted at various Indian Council of Agricultural
Research (ICAR) Institutes or State Agricultural Universities
(SAUs) at ten different locations. Final results are expected
by December 2023.
Expansion of value added products (VAP): Expanding
horizon
Balanced nutrient management works on the 4R concept:
The right fertilizer, right rate of usage, right time and right
place of application. The aim is to shift focus on micronutrients
that are sometimes more important than primary nutrients.
Through its aim of feeding the crop and not the soil, balanced
nutrient management considers nutrient reserve of the soil,
nutrient removal by crop, targeted yield, the economics of
fertilizers and profitability, farmersâ investment ability, agro¬
techniques, soil moisture regime, soil physical environment
and adverse soil conditions such as salinity, alkalinity and
acidity.
Utilization of VAP can fulfil the concept of balanced
or integrated nutrient management. RCF is already
manufacturing, value added products (VAP) such as Bio¬
fertilizers, Micronutrient fertilizers, pH Balancer, Bio stimulants
and Silicon fertilizers which are gaining significance in the
market. The demand for these products are increasing year
on year basis. The present installed capacity is not sufficient
to cater the increased market demand.
Seeing the increasing demand of various products, a new
manufacturing setup with higher capacity for production
of various VAPs is being installed at Trombay unit. The
installation, supply and commissioning of manufacturing
unit is expected to be completed by December 2023.
New product Development
The R&D of your Company is working on various innovative
products viz. suspension fertilizer/ liquid fertilizer to address
the changing scenario.
a) Nano fertilizers
Nano Micronutrients, Nano Sulphur, Nano Potash etc.
have been developed at R&D. These newly developed
Nano fertilizer are being tested for its stability. Pot
culture studies of the same are being conducted at In¬
house Agriculture field as well as in Polyhouse. After
successful trial results same will be commercialized.
In future, research work on different range of nano
fertilizers will be undertaken.
b) Suspension fertilizer
Suspension fertilizers are defined as liquid fertilizers in
which nutrients are present in an amount exceeding
their solubility. They are completely dissolved in water
and contain components insoluble in a dispersed
form. The fertilizer salt crystals are kept in solution
by a stabilizing agent that swells in the solution to
form a viscosity-increasing gel, thereby preventing
the sedimentation process of these particles.
Major advantages suspension fertilizers are:
a) combine benefits of liquid and solid fertilizers, b) high
concentration of nutrients maintaining in liquid form,
c) Nutrient concentration is similar to the solid fertilizers.
In view of the above, following suspension fertilizers are
being developed and tested for their quality.
a) NK 6:0:18 with CaO (5%), MgO (2%) and B (0.5¬
0.8%) (suspension)
b) Calcium Nitrate (10%N & CaO 15%) Fortified
with MgO (2%)
c) NPK 11:11:8 fortified with Zinc (0.7%) and Boron
(0.5-0.7%)
d) NPK 8:8:8 fortified with trace elements
e) N:P:K 10:26:26/ NPK 24:24:0 /NPK 28:28:0/NPK
12:32:16
f) Multi-nutrient grades: Grade with primary¬
secondary and micro-nutrients.
c) Crop specific 100% Water Soluble fertilizers
Crop specific 100% water soluble grades are prepared
for:
a) Grapes: 15:28:6, 6:34:17, 6:0:37:16 (N:P:K:S) are
formulated which are suitable for various growth
stages to enhance the yield and fruit quality.
b) Tomato: Grades are formulated for various
growth stages.
c) Onion: Grades are formulated for various growth
stages.
d) Cotton: Grade is formulated to manage the
reddening of cotton leaves.
d) Secondary nutrient Fertilizer
Recently, the deficiency of secondary nutrients (Ca,
Mg, S) has been reported to be wide spread in Indian
soils. These are now emerging as most limiting
factor in enhancing crop productivity. Hence, State
Agriculture Department has notified a new secondary
nutrient fertilizer grade i.e. Ca:Mg:S :: 6:2:4 in powder
or granular form.
Above grade is developed in powder form as well
as in granular form. Granular product can be
manufactured in PROM facility.
e) Liquid Fertilizers
The following liquid grades are developed by R&D
which are being testes for their stability.
a) Chelated Zinc as Zinc Glycine 6.80%
b) Chelated Calcium as Calcium Glycine 6.0%
c) Chelated Boron as Boron Glycine 5.0%
d) N:P:K 8:8:8
e) Conc. Liquid Calcium: 11%
Collaborative Research: MoU with Indian Council of
Agricultural Research (ICAR) Institutes and State
Agricultural Universities (SAUs)
Collaboration with Indian Council of Agricultural
Research (ICAR) Institutes and State Agricultural
Universities (SAUs) was done for carrying out field trials
of Nano Urea, Nano DAP, Nano NPK and Geola - Bio
fertiliser product. These trials will support immensely
for marketing of newly developed products.
MOU has been signed between RCF & Central Coffee
Research Institute, (CCRI), Coffee Board of India,
Karnataka from 2021-2023 for "Evaluation of RCF
Chalk on different cropsâ. Report showed encouraging
yield results.
Promotional field trials: Seeing is believing
"Seeing is believingâ concept helps a customer to adopt
the new products. The demonstration helps the farmers
to have know how of the new products. Promotional field
trials (PFT) help to convince the growers by comparing the
new product with their traditional product and practices.
Government of India is also pushing for achieving
sustainability in agriculture and rural areas across the
nation through the adoption of Integrated Nutrient
Management (INM).
In order to help farming a community and maximizing
agricultural yield, RCF has developed balanced nutrient
package for Pomegranate, Onion, Sugarcane, Coconut,
Mango, Cotton, Banana, Grapes and for many vegetables
crops. It helps in fulfilling sustainable approach to
resource usage than the usual growing methods or over
use of fertilizers.
In the recent past RCF had conducted numerous PFTs on
farmerâs field in various states either in the form of Front
Line Demonstrations (FLDs) and or Result demonstrations
(RDs). RCFs Marketing person are agricultural backgrounds
and qualifications which have the advantage for making
ease understanding the new concept of Agriculture to the
Indian farmers.
Presently, to popularize RCFs new and existing products
among farmers, multiple promotional field trials are being
conducted at Konkan (Ratnagiri and Sindhudurg) and
central Maharashtra (Nashik) region on crops like Mango,
Cashew, Coconut and Onion. Around 1200 trees have been
undertaken for product demonstrations in Konkan region.
ENVIRONMENT MANAGEMENT AND
POLLUTION CONTROL
Your Company is committed to ensuring clean environment,
beyond satisfying all stipulated requirements laid down
by the statutory authorities, meeting the expectation of
stake holders around its operating units.
Your Company has established ISO 14001 compliant
Environment Management System (EMS) along with Safety
Management System (ISO 45001), Quality Management
System (ISO 9001), and Energy Management System
(ISO 50001). Certification for IFA Protect & Sustain
Product Stewardship System of international standard
for Safety, environment and product security at its both
the manufacturing units. The Management Systems are
constantly upgraded, periodic audits and Management
Review conducted to ensure compliance and continual
improvement. Apart from Stack monitors, which continuously
monitor the emissions, four fixed ambient air quality
monitoring stations are in place, at both Trombay and Thal,
to monitor ammonia, NOx, SO2, Particulate matter (PM10 &
PM2.5) & metrological parameters. These monitoring units
are connected to MPCB and CPCB servers for continuous
monitoring online data of air quality, effluent parameters.
At both unit, Third party monitoring for stack, ambient air
quality (Dust, Ammonia, NOx, SO2) and ETP overflow (as
per consent parameters) is being done by MoEFCC approved
laboratory once in a month. As you are aware RCF uses
clean fuel to reduce the Green House Gas emission, efforts
are taken to minimize emissions with Reduce, Recycle &
Reuse schemes.
The Effluent Treatment plants (ETP) at Trombay and Thal
unit have ensured that the environment in and around the
operating units are fully protected. Environmental safety
of neighbours around operating units are taken care.
Various schemes with state of the art technologies and
modernization schemes are implanted to reduce energy
consumption and wastages. As a proactive measure, RCF
Trombay unit has two nos. of Sewage treatment Plants to
treat sewage of Mumbai city & use the purified water after
treatment for industrial purpose, thereby saving equivalent
quantity of potable water for consumption by Mumbaikars.
At Trombay unit, Sludge generated in Effluent Treatment
Plant, Sulphur Sludge Generated in Sulphuric Acid plant and
waste streams of effluents from complex fertilizer plants are
recycled back in the processes. 3- R strategy (Reduce, Reuse
and Recycle) is employed by way of recycling the sludge
generated in ETP, Sulphur sludge generated in Sulphuric
Acid Plant is used in Suphala plant for recovery of nutrients.
At Thal Unit, ETP Up gradation Project is in progress and
expected to be completed by August 2023. After completion
of this project, 5,300 M3/day will be used for industrial use
from recycleling 9,000 M3/day effluent using state of art
technology. It will reduce burden on fresh water resources.
The integrated Effluent Treatment Plant in both Units
ensures that the effluent discharged from the factory meets
the statutory requirements laid down by the State Pollution
Control Board.
Trombay and Thal units have taken up a massive
plantation drive in factory premises, in residential colony
and surrounding areas.
For increasing awareness regarding environment and
safety, public awareness campaign programmes are
arranged by Trombay and Thal units by providing
demonstrations to local youth, college and school students,
housing societis, Panchayat offices, ladies club members
and household members in the adjoining localities.
As per International Fertilizer Association (IFA), RCFâs safety
benchmarking rating is 19 out of 61 participating fertiliser
companies for calender year 2021.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As part of its initiatives under "Corporate Social
Responsibilityâ, your Company has undertaken several
projects in the areas of rural development, promoting
health care, Nutrition and education aimed for the benefit
of needy and for general good of the society. These projects
are in accordance with Schedule VII of the Companies Act,
2013 and the Companyâs CSR Policy. The report on CSR
activities as required under the Companies (Corporate Social
Responsibility Policy) Rules, 2014, is annexed as Annexure
-I, and forms an integral part of this report. During the year,
your Company has spent '' 11.93 Crore including '' 0.49
Crore set off for succeeding financial year on CSR activities.
The activities, in brief, are as under:
Medical Equipment to District Civil Hospital, Alibag
RCF company has provided the medical equipment to
the civil hospital such as Phaco Emulsification Machine,
OCT Machine, Surgical Microscope, Fully Auto Horz
Sterilizer, Vert Double Drum Sterilizer Ortho Operation
Table, Electronic Operation Table, Instrument Cabinet for
OT, ABG Machine, Tourniquet Machine, Anesthesia Work
Station, Attendant Revolving stool for Hospital, Standard
Medical Stethoscope, Blood Pressure Apparatus.
Supply of drinking water to the villages
RCF has been providing drinking water for last 25 years
to seven villages around Thal unit through pipelines laid
down from the water reservoir in the unit. More than
20,000 residents of the villages got benefited of the
scheme.
The villages of Thal, Navgaon, Vaishet, Tudal, Boris-Gunjis,
Bhal, which are under RCF, Thal factory, are being supplied
with drinking water by RCF.
Nearly 20,000 families are getting the benefit of this
scheme. The bill for this water supplied by MIDC is paid
by RCF Company.
Garbage Vans to Villages:
Under the Swachhta Abhiyaan, the RCF Thal has given
E-garbage carts to the Gram Panchayats in the factory
area and other remote areas. During the years RCF has
been covered all grampanchayats i.e. Navgaon, Kurul,
Jirad, Awas, Mule, Mann villages. These vehicles are
provided to them as per their request.
Medical Camps: RCF has been arranged free health check¬
up, Eye and dental check- up and distribution of free
medicines in the vicinity of Chembur. We have organised
more than 15 health camp in the surrounding area with
the help of local NGOs.
Medicines to Civil Hospital for HIV patients: RCF has
supply the required medicines to HIV department of
district civil hospital undr this initivitive. These medicines
are distributed free of cost as per the need of the patient
who cannot afford to buy these medicines. RCF is a proud
contributor in AIDS Control Mission of Nation.
Medical equipment to Primary Healthcare centre: RCF has
provided medical equipments to 9 sub centers of Primary
Healthcare centre Dhokawade under CSR. All sub-centres
are under Primary Healthcare center Dhokawade, Taluka
Alibag, District Raigad provide free medical services to
locals:
Ambulance to needy: RCF has provided financial assistance
for procurement of ambulance for providing free services in
Roha Taluka, Raigad, and Sindurdurg Distirict. This facility
will be used as a transportation mode for the sick and injured
people located at a distance to get them to hospital
Rural Development- Repairing of Roads:
RCF has completed road repairing work of local villages in
the vicinity of RCF Thal unit under CSR. The Company has
repaired local Roads from Thal Navagaon Road, Boris Gunjis
and local Road from Chondhi naka to Kihim bus stand road
under the rural development for for good transportation of
villagers.
Financial Assistance for furniture of paediatric ward:
RCF Ltd. has provided financial assistance to Central
Railway Women âs Welfare Foundation by giving financial
assistance for Dr. Babasaheb Ambedkar memorial hospital,
Byculla, Mumbai which caters to patient of Central Rly and
all Zones of Indian Railway along with CGHS Beneficiaries
and general public. The fund is utilized for the purchase of
Hospital Furniture for use in Pediatric ICU & Pediatric Ward.
Construction of Toilet block and drinking water facilities
to school : RCF has assist to Shikshan Prasarak Mandal,
Kurundwad a well-known educational institution working in
the field of Education from the last 97 years for the building
of Toilet and Providing Fresh drinking water facility in the
school of Kurundwad, District Kolhapur, Maharashtra.
Children are the gems of the future and RCF believes that
every child are special and needed to be treated with
empathy and love.
Women Empowerment:
RCF has provided financial assistance to Asmita Mahila
Mandal for distribution of mini flour mills and sewing
machines to the underprivileged women of slums in Chembur.
This will help these women to learn their livelihood and
support their family. Medical Camps for Women and girls
about the menstrual hygiene through nirtyanjali Ngo.
Finnancial assistance for the installation of sanitary pad
manufacturing unit at Koraon block, U.P
Aspirational District (Washim)
Government of India has issued guideline to CPSEs related
to utilization of CSR funds in a focussed manner towards
national priorities by adopting a theme based approach.
As per the DPE guidelines common theme identified for
the year 2022-23 was Health Care & Nutrition.
RCF has selected Washim Dist. which is one of the
Aspirational district in Maharashtra and implemented
following schemes:
1. Skill development programme for youth:
RCF has joined hands with OSSF which is working in
the field of education, and skill development activities
all over India.
This skill development program will focus on Basic
skills of soft skills, computer and communication
aspects and exposure to domestic and international
market. The sole objective of this initiative is to make
educated youth ready for employment
2. Education to secondary students:
RCF has supported the project âAnandoâ at Washim
District, Maharashtra. Under this project Anando, LOLT
supports underprivileged rural children to complete their
secondary education (7th to 10th standard). It promotes
importance of secondary education of rural children to
empower them.
EFFECTIVE IMPLEMENTATION OF PUBLIC
PROCUREMENT POLICY FOR MICRO AND
SMALL ENTERPRISES (MSEs)
Government of India, Ministry of Micro, Small and Medium
Enterprises, vide order dated 23rd March, 2012, notified
the public procurement policy in respect of procurement
of goods and services produced and provided by Micro,
Small and Medium Enterprises and further amended it
on 9th November 2018 vide Government of lndia Gazette
Notification S.O. 5670(E) dated 9th November, 2018.
With amendment in Public procurement policy for Micro
& Small Enterprises (MSEs) order, 2012 vide GoI Gazette
Notification S.O. 5670(E) dated 9th November, 2018, the
percentage target of procurement of goods and services by
Government Departments/CPSEs from MSEs is increased
from 20% to at least 25% along with the provision of
minimum 3% reservation for Women owned MSEs within
this 25% reservation. This amendment is made applicable
from 9th Nov 2018. Due to the very nature of operations
of our Company, the procurement targets could not be
achieved in the year 2022-23.
With the efforts taken by the Company, the procurement
from MSEs, cost of the items procured through MSEs at
both Trombay and Thal units is '' 608.49 Crore out of the
total procurement cost of '' 1515.45 Crore (excluding raw
material, gas, water, electricity, catalysts, proprietary items
etc.) which works out to be 40.15 %. The procurement from
MSEs owned by SC/ST Entrepreneurs is '' 4.13 Crore which
is 0.27 % and procurement from women owned MSEs is
'' 7.16 Crore which is 0.47 % of the total procurement of the
year 2022-23. The percentage procurement is calculated
excluding Raw materials, gas, water, electricity, catalyst and
proprietary items which cannot be procured from MSEs.
Your Company has taken up several Sustainable development
activities including the following:
New Sewage Treatment plant
Your Company is running Two Sewage Treatment Plants
(STPs) at Trombay Unit with each plant having capacity to
treat around 22.75 Million Litres per Day (MLD) of sewage
received from MCGM which otherwise would have been
drained in to the sea after preliminary treatment. The STP
plants treat waste sewage generated in the city and convert
it into treated water. Both plants together generate about 30
MLD of treated water which is being used in our plants as
process water. A part of treated water generated is supplied
to M/s BPCL. Both STP plants of Your Company are of great
value to residents of Mumbai and Society at large besides
improving reliability of operations of RCF Trombay Unit.
During the year 2022-23, about 8780.12 MLD of treated
water was generated at both STP plants.
Solar Power Plant
As part of achieving ecologically sustainable growth, Your
Company has forayed into solar power generation. Your
Company has set up a 2 MWp ground mounted Photovoltaic
Solar power plant in Trombay Unit. In addition to this, Your
Company has commissioned solar rooftop facilities at Thal
and Trombay with an aggregate capacity of 2.17 MWp. The
power generated is used for captive consumption, thereby
reducing your Companyâs power import to the equivalent
extent.
The green power generated by solar plants replaces the
conventional power generated through burning of fossil fuels
leading to reduction in overall Greenhouse gas emissions.
At RCF, during the year 2022-23, 4,217 MWh of solar power
was generated. Also, during the year 2022-23, 1,852 no of
Solar Renewable Energy Certificates (RECs) were generated.
Vigilance Department is headed by Shri Sameer Rastogi (IFS-
1988), who holds the charge of Chief Vigilance Officer of the
Company. He leads a team of officers drawn from various
functional departments and placed in Corporate Office
at Mumbai and at RCF Thal Unit. Vigilance Department is
committed 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 Commissionâs
guidelines.
As part of Preventive Vigilance, efforts are made to keep
a watch on the various activities of Corporate Office,
Trombay Unit, Thal Unit and Marketing offices situated
across the country through regular inspections and surprise
checks. Systemic improvements and corrective actions
are suggested wherever necessary. The ideology that
"All officers are Vigilance Officersâ 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.
Preventive Vigilance Training Program based on CVCâs
âNaitikâ approach is imparted by in house faculties to
Management Trainees, Junior and Middle Level Managers.
Vigilance Departmentâs Online Grievance Management
Portal is implemented for lodging of complaints. Efforts are
made to ensure their speedy Redressal.
Vigilance department has been front-runner in identifying
the advantages of leveraging technology and automation
in procurement, recruitment and service delivery etc. Some
of the initiatives for promoting transparency and ensuring
well-informed decisions by making use of technology for
improving compliance are:
> Contract compliance Data in SAP system.
> Program developed and implemented in Intranet
website for display of list of work orders/ Contracts
expiring in next 4 months .
> Facility developed and implemented to display
circulars on RCF Parivar App.
> Upgradation in Medical Bill reimbursement system.
As a recognition of Vigilance Departmentâs efforts, your
Company won the Governance Now 9th Edition PSU Award
in the category "Technology initiative in Vigilance in PSUsâ
during the awards ceremony held on 16th February, 2023
at New Delhi.
Precursor campaign to Vigilance Awareness Week (VAW)-
2022 was conducted during the period 16th August to
15th November, 2022 that focused on Housekeeping and
preventive vigilance activities like Property management,
Management of Assets, Record keeping, etc. VAW-2022
was observed from 31st October to 6th November, 2022
during which employees, family members, school and
college children, farmers, dealers, vendors participated
wholeheartedly in various events such as Street play,
Slogan, Poster-making and Quiz competitions. The details
of activities conducted during VAW-2022 are as follows:
Vigilance Awareness Week (VAW) - 2022
In accordance with the instructions contained in CVCâS
Circular No.022/VGL/029 dated 08.09.2022, the Vigilance
Awareness Week 2022, was observed in Rashtriya Chemicals
and Fertilizers Limited from 31.10.2022 to 06.11.2022 in
both its manufacturing units located at Trombay and Thal.
The week was also observed in various Marketing Offices
located throughout the country in line with the theme for this
year, "Corruption free India for a Developed Nationâ.
An emphasis was laid on cultivating the virtue of integrity
and honesty in personal and professional lives and the
importance of moral and ethical values for growth of the
organization and the nation as a whole. In this connection
following programmes were organized involving different
stakeholders of the company:
s Administration of Integrity Pledge : Around 968
Employees from 35 offices located in Trombay & Thal
unit and marketing offices spread over 18 cities in
12 states participated. Employees, vendors, dealers
were encouraged to take e-integrity pledge.
s Distribution of Badges / Banners : Badges (1200 Nos.)
were distributed among Employees, Vendors, and
Dealers etc. to increase Vigilance awareness. 27 nos.
Banners were displayed at both factory premises,
at major marketing offices & residential colonies for
better outreach to citizens.
s Guest lecture by eminent speaker : Lecture was
organized for RCF employees at Trombay on
02.11.2022 and at Thal on 03.11.2023 and marketing
department officers joined online simultaneously
on VAW-2022 theme "Corruption free India for a
developed Nationâ. Mr. Anand Kulkarni, a renowned
life-coach explained the participants how to self-
introspect about independent Nation and include
responsibilities and self-managed behavior of citizens
towards a self-reliant and vigilant nation. Total 147
employees attended the lecture.
s Involvement of Employees & stakeholders : Awareness
Walkathon, Elocution, Slogan, Quiz and Street Play
competitions were organized for employees and their
family members.
s Involvement of Dealers/Actual users, Retailers and
Farmers : Online Quiz competitions were organized
for Fertilizer dealers/ retailers and farmers, IPD
dealers and users. More than 300 farmers and
dealers participated in this quiz competitions.
s Involvement of school / college children : 178 entries
were received in Essay competition and 112 entries
were received in Poster competition organized for
school students from class 5 to 10, and 14 college
students participated in Blog Writing competition
organized for college students from class 11 onwards.
s Organized Dealers Meet : A Dealers Meet was
organized on 04.11.2022 at Krishi Vigyan Kendra,
Rajgurunagar based on VAW 2022 theme i.e.
"Corruption free India for a developed nationâ with an
aim to spread awareness and apprise the dealers on
how to get benefits from the transparent procedures
of RCF and its marketing network.
s Organized âAwareness Gram Sabhaâ : RCF arranged
"Awareness Gram Sabhaâ at Kalus, Taluka-Khed ,
District- Pune on 04.11.2022 to sensitize citizen on
the ill effects of Corruption.
s Felicitation Program : Winners of all competitions in
each category were felicitated at Corporate office-
Priyadarshini, Mumbai in presence of CMD, RCF, CVO,
Directors and senior officials. All out station winners
joined the Felicitation function on e-platform from
their respective locations i.e. Thal, Beed, Bhandara
and Nagpur
MANAGEMENT DISCUSSION AND ANALYSIS
REPORT
Management Discussion and Analysis report for the year
under regulations 34(2)(e) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, highlighting
the industry structure and developments, opportunities and
threats, future outlook, risk and concerns etc. is annexed as
Annexure II and form an integral part of this report.
Your Company has not accepted any deposits, within the
meaning of section 73 of the Companies Act, 2013, read
with the Companies (Acceptance of Deposits) Rules, 2014.
Your Company has fully endeavoured to implement the
provisions of Official Language Act, 1963 and the policy
of the Government. Publicity material and literature for
employees and farmers are made available in Hindi and
other regional languages.
a. STATUTORY AUDITORS AND THEIR REPORT
The Comptroller and Auditor General of India (CAG) has
appointed, M/s M. M. Nissim & Co LLP (Firm Registration
Number: 107122W / W100672) and M/s. Gokhale &
Sathe (Firm Registration Number: 103264W) as Joint
Statutory Auditors of your Company for the financial
year 2022-23. The Auditors would be retiring at the
conclusion of the Forty Fifth Annual General Meeting.
There are no qualifications, reservations or adverse
remarks made by Statutory Auditors, in their report.
The Statutory Auditors for the financial year 2023¬
24 will be appointed by the CAG. However, their
remuneration is required to be fixed at the AGM by the
members.
b. COST AUDITORS AND THEIR REPORT
Your Directors, on the recommendation of Audit
Committee, has appointed M/s K.G. Goyal & Associates,
Cost Accountants (Registration No. FRN000024),as
Cost Auditor to audit the cost accounts of the Company
for the year 2023-24 on a remuneration of '' 2.50 lakh
excluding applicable taxes. As required under the
Companies Act, 2013, the remuneration payable to cost
Auditor is required to be placed before the members
in a general meeting for their ratification. Accordingly,
a resolution seeking Membersâ approval for the
remuneration payable to M/s K.G. Goyal & Associates
as Cost Auditor forms part of the notice convening the
Annual General Meeting for their ratification.
The Companies (Cost Records and Audit) Rules, 2014
and amendments thereof, the Company is required to
maintain cost accounting records in respect of certain
specified products and accordingly such accounts and
records are made and maintained in the prescribed
manner. Further, the cost accounting records maintained
by the Company are required to be audited.
During the year, the Company filed the Cost Audit
Report for the financial year 2021-22 with the Ministry
of Corporate Affairs within the prescribed time limit.
c. SECRETARIAL AUDITOR AND THEIR REPORT
Pursuant to the provisions of Section 204 of the
Companies Act, 2013 and the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, the Company has appointed M/s. Bhandari and
Associates, a firm of Company Secretaries in Practice
(C.P. No. 366) to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report is annexed as
Annexure III and forms an integral part of this Report.
EXPLANATION OR COMMENTS BY THE BOARD
ON SECRETARIAL AUDIT REPORT
M/s. Bhandari and Associates, Practising Company
Secretaries, Secretarial Auditor of the Company has
made the following observations in their Secretarial
Audit Report:
a) The Board of Directors comprised of Eight Directors,
constituting of Three Executive Directors (including
the Chairman & Managing Director); Two Nominee
Directors (non-executive) and Three Independent
Directors including Independent Woman Director.
As per Regulation 17(1) of the Listing Regulations
and DPE Guidelines on Corporate Governance for
Central Public Sector Enterprises, the Chairman
being an Executive Director, at least half of
the Board of Directors should be comprised of
Independent Directors.
b) The Nomination and Remuneration Committee
(NRC) comprised of Two Directors constituting
of One Independent Director and One Nominee
Director (non-executive) for the period from
August 12, 2022 upto September 27, 2022. As
per Regulation 19(1)(a) of the Listing Regulations
and section 178 of the Act, the committee shall
comprise of at least three directors and as per
Regulation 19(1)(c) of the Listing Regulations,
at least two-thirds of the Directors shall be
Independent Directors. Thus, the listed entity
did not have three Directors in NRC and further,
two-thirds of the Directors were not Independent
Directors for the aforesaid period.
c) The Company has conducted the 4th Risk
Management Committee (RMC) meeting on March
05, 2022 and 5th RMC meeting on September
27, 2022 i.e., at a gap of 206 days between two
consecutive meetings. As per Regulation 21 of
the Listing Regulations, the meetings of the RMC
shall be conducted in such a manner that on a
continuous basis, not more than one hundred
and eighty days shall elapse between any two
consecutive meetings. Thus, the gap between two
consecutive meetings of the RMC was beyond the
prescribed timelines.
d) The Company has submitted the disclosure of
related party transactions for half year ended
March 31, 2022 to the Stock Exchanges on June 06,
2022 and has intimated the disclosure of financial
results on May 27, 2022. However, being an equity
and high value debt listed entity, the disclosure of
related party transactions was required to be given
along with the disclosure of financial results. Thus,
the disclosure was given beyond the timelines
specified under Regulation 23(9) of the Listing
Regulations.
Explanations on observations made by
Secretarial Auditors in seriatim are as under:
a. Your Company is a Central Public Sector
Undertaking under the Administrative control of the
Ministry of Chemicals and Fertilizers, Department
of Fertilizer, Government of India and its Directors
on the Board are nominated / appointed by the
President of India. The Company is continuously
pursuing with the Government of India for the
appointment of requisite number of Independent
Directors on the Board in order to comply with
the provisions of the SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015.
b. Shri Kashee Nath Akela, who is member of
Nomination and Remuneration Committee ceased
to be Independent Director of the Company on
August 12, 2022. Subsequently, Nomination and
Remuneration Committee was reconstituted by
the Board of Directors on September 27, 2022 in
line with Regulation 19 of SEBI Listing Regulations.
Further, Nomination and Remuneration Committee
did not meet during period from 12.08.2022 to
27.09.2022
c. There has been inadvertent lapse in the timeline
for conducting the Risk Management Committee
meeting. Going forward company will adhere to
the statutory timelines
d. Since the comments made by Secretarial Auditor
are in the nature of factual statement, Company
does not have any comments to offer on the same.
d. SECRETARIAL STANDARDS
During the year 2022-23, your Company has complied
with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.
SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS
There are no significant and material orders passed by the
Regulators/Courts/Tribunals that would impact the going
concern status of the Company and its future operations.
There was no instance of fraud during the year under
review, which required the Auditors to report to the Audit
Committee and / or Board under Section 143(12) of the
Act and the rules made there under.
INSOLVENCY AND BANKRUPTCY CODE
There are no applications made or any proceedings
pending under the Insolvency and Bankruptcy Code, 2016
(31 of 2016) during the year.
ONETIME SETTLEMENT WITH ANY BANK OR
FINANCIAL INSTITUTION
As no settlement has taken place with any of the Bank or
Financial Institution during the financial year, therefore, no
disclosure or reporting is required in respect of the details
of difference between amount of the valuation done at
the time of one time settlement and the valuation done
while taking loan from the Banks or Financial Institutions.
BANKS AND FINANCIAL INSTITUTIONS
Your Company is prompt in making the payment of interest
and repayment of loans to the financial institutions /
banks. During the COVID-19 Pandemic period, it has not
availed any moratorium on any of its payments to the
institutions. Banks and Financial Institutions continue their
unstinted support in all aspects and the Board records its
appreciation for the same.
DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to
the information and explanations obtained by them,
your Directors make the following statement in terms of
section 134(3) (c) of the Companies Act, 2013:
i] that in the preparation of the annual accounts for the
year ended March 31, 2023, the applicable accounting
standards have been followed along with proper
explanation relating to material departures, if any;
ii] the Directors had selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the
Company as at March 31, 2023 and of the profit of the
Company for the year ended on that date;
iii] that the Directors have taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud
and other irregularities;
iv] the annual accounts have been prepared on a going
concern basis;
v] that the Directors had laid down internal financial
controls to be followed by the Company and that such
internal financial controls are adequate and were
operating effectively; and
vi] that the Directors had devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems were adequate and operating
effectively.
As per SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a separate section on
Corporate Governance practices followed by the Company,
together with a certificate of Compliance from the Practising
Company Secretary forms an integral part of this report.
COMPLIANCE OF CORPORATE GOVERNANCE
GUIDELINES ISSUED BY DEPARTMENT OF
PUBLIC ENTERPRISES
DPE, Government of India, has laid down certain
parameters for the purpose of grading the CPSEs on the
basis of their compliance with guidelines on Corporate
Governance and this report needs to be submitted to the
Government on quarterly/annual basis. Your Company
has been complying with the Guidelines on Corporate
Governance for CPSEs laid down by DPE and regularly
submits reports to the Government. DPE issued âExcellent
Ratingâ to your Company for the year 2021-22.
INTERNAL FINANCIAL CONTROL OVER
FINANCIAL REPORTING
Your Companyâs internal financial control over financial
reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles. Your Companyâs internal financial
control over financial reporting includes those policies
and procedures that:
(1) pertains to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the
Company;
(2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of
financial statements in accordance with generally
accepted accounting principles, and that receipts and
expenditures of the company are being made only in
accordance with authorizations of Management and
Directors of the Company; and
(3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use,
or disposition of the Companyâs assets that could
have a material effect on the financial statements.
The following are Key Managerial Personnel of the
Company as on March 31, 2023 :
1. Shri S. C. Mudgerikar [DIN 03498847], Chairman &
Managing Director
2. Ms Nazhat J. Shaikh [DIN 07348075], Director
(Finance) & CFO
3. Shri Milind M. Deo [08715250], Director (Technical)
4. Shri K. U. Thankachen [DIN 06946476], Director
(Marketing) (upto 31.07.2022)
5. Shri Jai Bhagwan Sharma [FCS 5030], Company
Secretary
CHANGES IN THE BOARD OF DIRECTORS
Shri Satendra Singh [DIN 05195060] has been appointed
as Government Nominee Director on the Board of the
Company w.e.f. July 20, 2022.
Shri K. U. Thankachen [DIN 06946476], ceased to be
Director (Marketing) on the Board of the Company w.e.f.
July 31, 2022 (Closure of business hours).
Shri Kashee Nath Akela (DIN 09410361) ceased to be
Independent Director with effect from August 12, 2022.
Shri Satendra Singh [DIN 05195060] ceased to be
Government Nominee Director on the Board of the
Company w.e.f. October 19, 2022.
Ms Aparna S. Sharma (DIN 07798544) ceased to be
Government Nominee Director w.e.f. November 13, 2022.
Ms Aneeta C. Meshram (DIN: 09781436) appointed
as Government Nominee Director on the Board of the
Company w.e.f. November 13, 2022.
Shri Sanjay Rastogi (DIN 07722405) appointed as
Government Nominee Director on the Board of the
Company w.e.f. February 21, 2023.
Smt. Shashi Bala Bharti (DIN 08770477) ceased to be
Independent Director with effect from June 25, 2023.
The Board has placed on record their appreciation of the
Directors who have ceased to be members of the Board
for the valuable contribution made and the guidance /
suggestion provided by them which has greatly benefited
the Company.
As per Section 152 of the Companies Act, 2013, Ms Aneeta
C. Meshram (DIN: 09781436) and Shri Sanjay Rastogi
(DIN 07722405), Directors retire by rotation at the ensuing
Annual General Meeting and being eligible, offer themselves
for reappointment.
FAMILIARISATION PROGRAMMES FOR
INDEPENDENT DIRECTORS
The Companyâs Independent Directors are eminent
professionals with several decades of experience in banking
and financial services, technology, finance, governance
and management areas and are fully conversant and
familiar with the business of the Company.
The Company has an ongoing familiarisation programmes
for all Independent Directors with regard to their roles,
duties, rights, responsibilities in the Company, nature of
the industry in which the Company operates, the business
model of the Company, etc.
All the Independent Directors of the Company have
registered their names in the Independent Directors
Databank as required under the Act and the Rules referred
therein. The Independent Directors are also required to
take up an online proficiency self assessment test within
two years from the date of inclusion of their name in the
Independent Directors databank, unless exempted from
such requirement, under the Act and the Rules referred
therein.
Board opined that Independent Directors of the Company
has made significant participation and contribution,
commitment, effective deployment of knowledge and
expertise, integrity and maintenance of confidentiality
and independence of behaviour and judgement.
All Independent Directors of the company have given
declaration confirming that they meet the criteria of
independence as prescribed under Section 149(6) of the
Companies Act, 2013 and Regulation 16(1) (b) of Securities
and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The Companyâs Board has the following committees:
i. Audit Committee
ii. Stakeholders Relationship Committee
iii. Share Transfer Committee
iv. Nomination and Remuneration Committee
v. Committee on Corporate Social Responsibility (CSR)
vi. Empowered Committee for Procurement
vii. Risk Management Committee
viii. Empowered Committee for Procurement of Urea on
Govt. Account
ix. Debenture Allotment Committee
The details of the committees along with their composition,
number of meetings held and attendance of each Director
at the meetings are provided in the Corporate Governance
Report.
COMPANYâS POLICY ON DIRECTORâS
APPOINTMENT AND RELATED DISCLOSURES
As per notification dated June 5, 2015 issued by Ministry
of Corporate Affairs, provision of section 134(3) (e) of the
Companies Act, 2013 regarding disclosure of its policy
on Directorâs appointment and remuneration including
criteria for determining qualifications, positive attributes,
independence of a Director and other matter provided
under sub- section (3) of section 178 of the Companies
Act, 2013 are not applicable to a Government Company.
Your Company being a Government Company, the above
provisions are not applicable to it.
Similarly, section 197 of the Companies Act, 2013 requiring
disclosure of ratio of the remuneration of each director
to the median employeeâs remuneration and other such
details including the name and other particulars of every
employee of the Company, who if employed throughout/
part of the financial year, was in receipt of remuneration
in excess of the limits set out in the rules, are not
provided in terms of section 197(12) read with rule 5(1)
(2) of the Companies(Appointment and Remuneration of
Managerial Personnel) Rules, 2014, being not applicable
to a Government company as per notification dated June
5, 2015 issued by Ministry of Corporate Affairs.
Fourteen (14) Board Meetings were held during the year.
The details of the Board Meetings held during the financial
year 2022-23 are provided in the Corporate Governance
Report.
Section 134(3) (p) of the Companies Act, 2013 requires
the Company to disclose the manner in which formal
annual evaluation has been made by the Board of its own
performance and that of its committees and individual
Directors. As per notification dated June 5, 2015 issued by
Ministry of Corporate Affairs, provision of section 134(3) (p) of
the Companies Act, 2013 shall not apply in case Directors are
evaluated by the Ministry which is administratively in charge
of the Company, as per its own evaluation methodology. Your
Company, being a Government Company, the performance
evaluation is carried out by the Administrative Ministry
(Ministry of Chemicals & Fertilizers), Government of India, as
per applicable Government Guidelines.
Your Company has evaluated the performance of the
Independent Directors for the year 2022-23 as per
regulation 17(1) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
PARTICULARS OF LOANS GIVEN, INVESTMENT
MADE, GUARANTEES GIVEN AND SECURITIES
PROVIDED
Particulars of Loans given, Investments made, Guarantees
given and Securities provided along with the purpose for
which the loan or guarantee or security is proposed to be
utilized by the recipient are provided in the notes to the
financial statements.
CREDIT RATINGS
The Credit rating assigned by Rating Agencies for the
various debt instruments of the Corporation is provided in
the Corporate Governance Report.
PARTICULARS OF EMPLOYEES
During the year under review, none of employees of the
Company had drawn remuneration in excess of the limits
prescribed under section 134(3) (c) of the Companies Act,
2013 read with Companies (Appointment of Managerial
Personnel) Rules, 2014.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The details of Vigil Mechanism/Whistle Blower Policy are
provided in Corporate Governance Report.
RELATED PARTY TRANSACTIONS
All contracts/arrangement/transactions entered by the
Company during the financial year with related parties
were in the ordinary course of business and on armâs
length basis. There are no materially significant related
party transactions made by the Company with Promoters,
Directors, Key Managerial Personnel or other designated
persons which may have a potential conflict with the
interest of the Company at large.
All Related Party Transactions are placed before the
Audit Committee and also before the Board for approval.
None of the Directors has any pecuniary relationships or
transactions vis-a-vis the Company.
The details of the investment in equity made by the
Company as on March 31, 2023 is as under:
INTER CORPORATE DEPOSIT
In connection with one time settlement entered into with
Dena Dank, the Company had paid total '' 51 crore ('' 12 crore
during the year 2017-18 and '' 39 crore during the year 2018¬
19) to Dena Bank as one time settlement which includes an
amount of '' 25.50 crore being the share of The Fertilisers
and Chemicals Travancore Limited (FACT), the joint venture
partner in FRBL. This amount is shown as interest bearing
inter corporate deposit given. FACT shall repay the same in
five annual equal instalments commencing from December
2020. FACT has made payment of Three installment total
amounting of '' 15.30 crore out of the total 5 installments as
per agreement.
DISCLOSURE UNDER THE SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL)
ACT, 2013
Your Company has in place a Policy on Prevention,
Prohibition and Redressal of Sexual Harassment of
Women at Workplace in line with the requirements of
the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013. The
Internal Complaints Committee (ICC) has been set up to
redress complaints received regarding sexual harassment.
During the year, one complaint of Sexual Harassment
of Women at Workplace was received by the internal
complaints committee formed by your Company under the
Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. During the year,
committee disposed of Two (2) complaints (out of two
complaints, one complaint was pertaining to the previous
year) of Sexual Harassment of Women at Workplace.
RIGHT TO INFORMATION (RTI)
In order to promote transparency and accountability,
an appropriate mechanism has been set up across
the Company in line with the provisions of the Right to
Information Act, 2005. Your Company has nominated
CPIO/ACPIOs/ Appellate Authorities at its units/offices
across the Company to provide information to citizens
under the provisions of the RTI Act.
During the year under review, your Company has received
195 RTI applications out of which 173 have been replied.
ENERGY CONSERVATION, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology
absorption and foreign exchange earnings and outgo
stipulated under Section 134(3) (m) of the Companies Act,
2013 read with Rule 8 of The Companies (Accounts) Rules,
2014, is annexed to this Report as Annexure IV and form an
integral part of this report.
Pursuant to Section 92(3) of the Companies Act, 2013
read with Section 134(3)(a) of the Companies Act, 2013,
the Annual Return in Form MGT 7 as on March 31, 2023 is
available on the Companyâs website on www.rcfltd.com/
investerrelations/agm-1
INVESTOR EDUCATION & PROTECTION FUND
(IEPF)
The details of unpaid / unclaimed dividend and shares
transferred to the IEPF in compliance with the provisions of
the Companies Act, 2013 has been provided in the Corporate
Governance Report.
BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORT
Pursuant to Regulation 34 (2) (f) of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the
Business Responsibility Report initiatives taken from an
environmental, social and governance prospective in the
prescribed format is available as a separate section of the
Annual Report and forms an integral part of this report.
Business Responsibility Report is also available on the
Companyâs website www.rcfltd.com.
Your Directors wish to gratefully acknowledge the valuable
guidance and continued support extended by Government
of India and in particular, the Department of Fertilizers and
the Office of Fertilizer Industry Co-ordination Committee
(FICC), Railways, DPE, Members of MOU Task force, and
other Central Government Departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude,
the help and unstinted support from the Government of
Maharashtra and other State Governments, MSEB, MIDC,
various Media, Municipal Authorities, Maharashtra Pollution
Control Board, Factory Inspectorate and IBR, Bankers to your
Company, Financial Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence
posed, unstinted support and suggestions made to the Board
by the esteemed Share Owners of the Company. The Board
also wishes to place on record the positive suggestions and
guidance provided by the Statutory Auditors, Cost Auditors,
the Office of the Principal Director of Commercial Audit and
Secretarial Auditor.
Last but not the least, your Directors take pleasure in placing
on record their deep appreciation of the excellent contribution
made by the employees of your Company at all levels,
without which your Company would not have achieved such
good performance.
[S. C. Mudgerikar]
Chairman & Managing Director
Place: Mumbai
Date: September 14, 2023
Mar 31, 2022
*The figures for the corresponding previous periods have been restated owing to receipt of EAC opinion/ regrouped wherever necessary, to make them comparable.
During the year, the major factors improving your Companyâs profitability before tax are as under:
a. Higher margins of Industrial products contributed to higher profitability.
b. Better energy efficiencies at Trombay and Thai Unit improved Urea margins. High pool rates along with higher IPP prices as compared to previous year helped in achieving positive contribution for production Beyond RAC at Thal unit.
c. Owing to settlement of dispute with GAIL under the Administrative Mechanism for Resolution of CPSEs
The Directors of your Company have pleasure in presenting this 44th Annual Report on the working of your Company together with the Audited Financial Statements for the year ended March 31, 2022.
|
'' Crore |
||
|
Particulars |
2021-22 |
2020-21* |
|
Total Income (Net) |
12948.62 |
8407.79 |
|
Total Operating Cost |
11822.90 |
7529.69 |
|
Operational Profit |
1125.72 |
878.10 |
|
Depreciation/Impairment |
183.55 |
175.26 |
|
Finance Cost |
125.89 |
179.57 |
|
Profit before exceptional items |
816.28 |
523.27 |
|
Net Exceptional Items (income) / Expense |
(127.63) |
(4.71) |
|
Profit before Tax |
943.91 |
527.98 |
|
Provision for Tax (including deferred Tax liability/ Asset) |
239.55 |
146.04 |
|
Net Profit |
704.36 |
381.92 |
|
Retained Earnings Add / (less): Re-measurement of Defined Benefit Plan |
(9.19) |
(2.84) |
|
Less: Dividend Paid (Previous Financial Year) |
172.68 |
222.88 |
|
Less: Balance Transferred to / ( from ) General Reserve |
522.49 |
156.22 |
Disputes (AMRCD), Company after making the payment of '' 87.17 crore for price differential towards the use of APM/Domestic gas for non-fertilizer/ non-urea operations and '' 19.65 crore towards gas transportation charges, has derecognized and reversed the excess provision of '' 127.35 crore.
d. Reduction in interest rates as well as lower working capital requirement resulted in reduction in Finance costs.
MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA
Your Company has been entering into a Memorandum of Understanding (MoU) with the Ministry of Chemicals & Fertilizers, Government of India, setting the performance parameters and targets every year. Your Company has secured âVery Goodâ rating for the year 2020-21.
The performance rating for 2021-22 MoU is yet to be finalised by the Government and the Company expects to achieve âVery Goodâ ratings this year.
Although your Company has lined up a number of capex programmes which will entail substantial expenditure, considering the consistent profits being made by the Company and based on the Companyâs performance, your Directors are pleased to recommend a final Dividend of '' 2.50 per equity share of '' 10/- each for the financial year 2021-22. Your Board had earlier approved payment of interim dividend of ''1.35 per equity share of Rs.10/- each for the financial year 2021-22, at its meeting held on November 10, 2021 and same was paid on December 6, 2021. The total dividend for the financial year 2021-22 amounts to '' 3 .85 per equity share (Previous year ''2.98 per equity share), and would involve a total cash outflow of '' 212.40 Crore consisting '' 74.48 crore as interim dividend and ''137.92 crore as final dividend ('' 164.40 Crore in the previous year). The final dividend pay-out is subject to the approval of members at the ensuing Annual General Meeting.
APPROPRIATION TO GENERAL RESERVES
Your Company earned a net Profit after Tax of '' 704.36 Crore ('' 384.07 Crore in the previous year). Re-measurement of defined benefit plans resulted in loss of '' 9.19 crore (previous year '' 2.84 crore). The dividend pay-out pertaining to financial year 202021 was '' 98.20 Crore ('' 156.68 Crore pertaining to financial year 2019-20) and interim dividend pertaining to financial year 2021-22 was '' 74.48 Crore ('' 66.20 Crore pertaining to financial year 2020-21).The balance amount of '' 522.49 Crore ('' 156.22 Crore in the previous year 2020-21) was transferred to General Reserves.
As in the past, your Company has won many awards during the
year 2021-22, some of which are as under:
⢠Shri S. C. Mudgerikar, CMD awarded PSU CMD leadership award in month of July 2021.
⢠Greentech Effective Safety Culture Award 2021 in month of July 21.
⢠Greentech Energy Conservation Awards 2021 in month of July 21.
⢠Golden Peacock Award 2021 for Energy Efficiency from Institute of Directors, New Delhi for best performance in Fertilizer sector in the month of October 21.
⢠â20th Annual Greentech Environment Award 2021â by Greentech Foundation for outstanding achievements in Environment Protectionâ category in the month of October 21.
⢠FAI Award 2020-21 for Promotion and Marketing of Micronutrients in the month of October 21.
⢠FAI Award 2020-21 for Production, Promotion and Marketing of Bio fertilizers in the month of October 21.
⢠MEDA ââCertificate of Excellenceââ Award 2020-21 for Energy Conservation & Management.
⢠â20th Annual Greentech Foundation Safety Award 2021â for outstanding achievements in âSafety Excellenceâ in the month of January 22.
⢠FAI Award (Certificate of Excellence) for Best Production Performance in Complex Fertilizers consecutively for three years.
⢠Fertilizer Association of India Special Award for coming first for fourth consecutive year in âFAI Award for Excellence in Safetyâ in 2020-21.
⢠Greentech Award for âEffective Safety Cultureâ Award 2021.
⢠Merit Certificate in Indian Chemical Council (ICC) -Health and Safety Awards 2020
⢠Gold Award for Excellence in Occupational Health and Safety from Growcare India Award.
⢠20th Annual Greentech Safety Award
⢠Certificate of Appreciation in Safety Award 2021 from National Safety Council - India
Greentech Corporate Governance Award 2021 for Excellence in
Corporate Governance 2021
During the year, the unit produced 18.59 lakh MT of Urea compared to 19.12 lakh MT produced during the previous year. In terms of nutrients in the fertilisers, the unit produced 8.55lakh MT of N during the year, compared to 8.80 lakh MT during previous year.
The Trombay Unit produced 3.26 lakh MT of Urea & 5.71 lakh MT of Suphala 15:15:15 during the year compared to 3.38 lakh MT of Urea & 5.37 lakh MT of Suphala 15:15:15 produced during the previous year. In terms of Nutrient values, the unit produced 2.36 lakh MT of N, 0.86 lakh MT of P2O5 and 0.86 lakh MT of K2O during the year compared to 2.36 lakh MT of N, 0.81 lakh MT of P2O5 and 0.81 lakh MT of K2O respectively during the previous year.
Your Company produces industrial chemicals at both its units. During the year, your Company produced approx. 6.52 lakh MT of various major Industrial Chemical Products as against approx.4.28 lakh MT during the previous year. Your Company produces, amongst others, AN Melt, Ammonia, ABC, DNA, Conc. Nitric Acid, SNA,( 72% & 68%), SSA, WSA, Argon , Sodium Nitrate / Nitrite, Refrigerant Ammonia, Water, Methanol, Gypsum, MMA, Dimethyl Formamide, etc.
MARKETING PERFORMANCE FERTILIZER DIVISION
Your Company achieved sales volume of 30.80 lakh MT during 2021-22 as compared to 31.42 lakh MT during the previous year. Your Company sold 22.08 lakh MT of Urea, 5.87 lakh MT of Suphala 15:15:15, 0.49 lakh MT of City Compost and 2.31 lakh MT of other bought out products i.e. DAP, MOP, Imp NPK etc. as compared to 22.62 lakh MT of Urea, 5.43 lakh MT of Suphala 15:15:15, 0.51 lakh MT of City Compost and 2.80 lakh MT of other bought out products i.e. DAP, MOP, Imp. NPK etc. during the previous year. The Total sale of manufactured fertilizers (Urea & NPK) during 2021-22 was 27.95 lakh MT as against 28.05 lakh MT during the previous year. Sales of manufactured fertilizers registered reduction of 0.34% over previous year due to production constraints.
Your Company sold 2.79 LMT Imported and traded products i.e. DAP, MOP, Imp NPK, City compost etc. as compared to 3.31 LMT during previous year.
The sale of value added products such as Microla picked up momentum during the year. Microla sale registered growth of 18.02% touching 410 KL during the year as against 347.40 KL in the previous year. Combined sale of manufactured and imported water soluble fertilizers under the brand name âSujalaâ touched 5056 MT during the year as against 7100 MT sold in the previous year. Other products such as Biola, pH balancer, Silica and OGS also registered healthy volumes during the year.
During the year, your Company has achieved the following:
* Highest ever sale of 6.39 lakh MT of Suphala-15 (Indigenous Imported)
* Highest ever sale of 410 KL of Microla
* First time marketed Imported NPK 15:15:15 grade and sold 0.52 lakh MT.
Industrial Products Division has achieved the highest ever sales turnover of '' 2423.90 Crore as against '' 1138.48 Crore during the previous year. Your Company has registered increase in sales of IPD products about 113% and better realisation due to lower RLNG prices and resultant reduction in cost of production coupled with increasing demand and focussed marketing strategies. Sales of SNA 68% & 72%, Ammonia, STP Water, TMA, Formic Acid was increased during the year.
During the year, your Company has achieved the following:
* Highest ever sale of AN Melt of 1.619 LMT.
* Highest ever sale of Ammonia of 1.73 LMT
* Highest ever sale of ABC (Mrudula) of 0.32 LMT
Considering the nature of products manufactured by your Company and indigenous demand, the scope for export is very limited. However, your Company successfully popularized its Ammonium Bicarbonate (ABC) brand in the overseas market through third party export. During financial year 2021-22, your Company has done third party export of Ammonium Bicarbonate (ABC) under âMRUDULAâ brand to the tune of '' 59.26 lakh as against '' 62.78 lakh during the previous year.
IMPORT OF UREA ON GOVERNMENT ACCOUNT
Your Company has been designated as State Trading Enterprise (STE) in October 2019 for Import of Urea on Government Account. Based on the instructions of Department of Fertilizers (DoF), your Company imported approx. 45.41 lakh MT quantity of Urea at approx. '' 19,087 Crore through issue of total six (6 Global tenders during the year 2021-22.
Under âAtmanirbhar Bharat, your Company has restarted Phosphoric Acid Plant at Trombay. Your Company has achieved the highest ever sale of AN Melt Plant. Setting up new AN Melt Plant, NPK Fertilizers Plant & Concentrated Nitric Acid Plant have been proposed. Sale of high volume products like Ammonia, AN(Melt) & DNA will facilitate improvement in turnover as well as profitability.
AGRICULTURE EXTENSION ACTIVITIES
Your Company has undertaken several agriculture extension
activities so as to educate the farmers on efficient use of agroinputs and provided know-how on improved and scientific methods of cultivation contributing to increase in their farm yield. Some of the services so undertaken during the year are as under:
1. Soil Sample Analysis: 42,592 number of NPK and 5,522 number of Micro-nutrient analysis have been done and Soil Health Cards distributed.
2. Kisan Suvidha Kendras: 100 Kisan Suvidha Kendras were operated at different districts of Maharashtra & Karnataka for educating & imparting Agricultural extension services to the farmers at the field level,
3. Farmer Training Centres are operational at Thal and Nagpur for imparting residential training to farmers. A total of 58 programs were undertaken benefitting 1972 farmers during the year.
4. RCF Kisan Care Toll Free service 1800-22-3044 was
operated for imparting Agricultural information to the farming community.
5. RCF Sheti Patrika: 6.00 lakh copies of RCF Sheti Patrika (Marathi edition) covering the relevant subjects pertaining to Agriculture and allied fields were distributed to farmers.
6. Doordarshan: RCF sponsored and promoted popular TV programs like Krishi Samruddhichi Gurukilli for sharing of Agriculture Knowledge and RCF Suphala DD Sahyadri Krishi Sanman Puraskar for motivating farmers.
7. Social Media: Information has been shared through Social Media (WhatsApp, Facebook, Twitter, Instagram, and You Tube) with handle @rcfkisanmanch.
8. Agricultural Extension Services: 1633 Field
Demonstrations, 235 Soil Testing Days, 528 Farmersâ Meetings, 52 Krishi Melas, 17 Veterinary Camp/Rural Sports, 23 Exhibitions, etc. were organized for the benefit of the farmers.
9. Awareness Campaign on Covid-19: Video Film was made for creating awareness amongst farmers about Covid- 19.
10. Adoption of Villages for Promotion of City Compost: 10
villages from Maharashtra, Karnataka, Gujarat & Rajasthan were selected for promotion of City Compost.
11. Azadi Ka Amrit Mahotsav & Completion of 5 Years of DBT in Fertilizer: Nation is observing Azadi Ka Amrit Mahotsav to commemorate 75 years of Independence. As per the guidelines of Department of Fertilizers, Government of India, Azadi Ka Amrit Mahotsav programme was conducted in Maharashtra through webinar in coordination with Maharashtra State Agriculture Department, Krishi Vigyan Kendra & Agriculture universities to observe Fertilizer Application Awareness programme to promote balanced and sustainable use of fertilizers with focus on climate zone, soil analysis, application of different type of
fertilizers, methodology of application, new technologies, measuring crop yield vis-a-vis fertilizers usage etc.
12. Launching of Educational Video: 1 farmersâ training video on âGeolaâ (Bio-fertilizer) was launched.
13. Product Literatures in seven languages were printed and distributed to farmers pan India.
COVID 19 PANDEMIC IMPACT ANALYSIS
For the year March 31, 2022, your Company has assessed the situation of COVID 19 pandemic impact and anticipates adverse impact in delay in commissioning of projects and restrictions in movement of personnel from foreign countries / within India required for the project. However, results for the year ended March 31, 2022 have not been impacted.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes have occurred as at the end of the financial year to which the balance sheet of the Company relates and the date of this report.
RISK MANAGEMENT
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has framed a Risk Management Policy for risk assessment and minimization procedures. The Risk Management Policy developed with the objective of having a balanced approach towards business plan and mitigating the associated risks, is in place. The system identifies better management practices to ensure greater degree of confidence amongst various stakeholders and facilitates good Corporate Governance practice. All risks associated with Operations, Environment, Finance, Marketing, Human Resource, Legal, Information Technology Security, Projects etc., are continuously monitored. The degree of impact of the perceived risks is further graded into high, medium and low and the probability of the occurrence of each risk is also classified into Unlikely and likely. In order to mitigate losses arising out of such perceived risks, appropriate procedures are being adopted to contain the risks. Also the practices adopted during emergencies, including the communication system and mode of disseminating information are periodically reviewed and updated to minimize the impact on the Company. Quarterly report in respect of the same is presented to the Board.
The Board of Directors had constituted Risk Management Committee to identify elements of risk in different areas of operations and to develop policy for actions associated to mitigate the risks. The Committee on timely basis informs the Board of Directors about risk assessment and minimization procedures which in the opinion of the Committee may threaten the existence of the Company. The details of Risk Management Committee are included in the Corporate Governance Report.
MAJOR EXPANSION AND DIVERSIFICATIONS
The status of major projects undertaken by your Company is as under:
Schedule of projects under implementation is being hampered because of restrictions due to COVID-19 pandemic.
Gas Turbine at Trombay:
To address the challenge in wake of recently notified stringent energy norms for Urea, Your Company is implementing various energy reduction projects. One of these project is installation of Gas Turbines Generator (GTG) of 2 x 25 MW along with Heat Recovery Steam Generator (HRSG) of 2 x 65 MTPH capacity, at Trombay. This project aims to reduce the specific energy consumption in Ammonia and Urea Plants at Trombay. Work has been awarded to M/s Thermax on 18.04.2018 for implementing the project on LSTK basis. Estimated project capital cost is about '' 427 Crore. Excepted Energy Saving is 0.30 Gcal/MT of Urea. Performance Guarantee Test (PGT) is completed in Oct. 2021 and the balance punch points are under closure.
Trombay Ammonia V Plant Revamp (KBR Scheme):
Ammonia-V revamp project is being implemented as a part of energy improvement schemes to meet the new energy norms for Trombay Unit. The estimated project cost is '' 72.75 Crore. The Basic Engineering is being done by KBR, USA and Detail Engineering is being done by PDIL. The scheme is envisaged to result in energy saving of 0.25 Gcal/MT of Ammonia. Expected project completion is by Oct. 2023.
New AN Melt Plant at Trombay:
Your Company intends to set-up new AN Melt plant of425 MTPD at RCF Trombay unit with latest and energy efficient technology. Tender was issued for lining up LSTK Contractor and preferred Bidder has been identified. Ministry of Environment, Forest and Climate Change (MoEFCC) has granted the Environment Clearance for the proposed project. The estimated Project Cost is '' 187 Crore.
Setting up new NPK Fertilizer plant at Thal
RCF is exploring possibility of setting up NPK Fertilizer plant at Thal. Administrative approval from DoF has been received. PDIL has prepared Techno Economic Feasibility Report (TEFR). PDIL has been lined up for preparation of Detailed Feasibility Report (DFR) and Environment Impact Assessment (EIA) report for Environment Clearance. Tender is floated for selecting LSTK Contractor. The estimated Project Cost is ''914.58 Crore.
Liquid Nano Urea plant:
GoI aims to âreduce the use of chemical fertilizersâ in the country. Nanotechnology is an emerging field with potential to provide efficient nutrient management as compared to existing
fertilizer management practices. Nano Urea is expected to reduce the use of Urea by up to around 50% and being an ecofriendly product will protect the health of soil. M/s IFFCO has developed a technology for manufacture of Nano Urea. Your Company intends to set-up Liquid Nano Urea plant of 75 KL per day capacity and has signed an agreement with M/s IFFCO for supplying technology. Consultants have been appointed for carrying out Environment Impact Assessment (EIA) study and for preparation of Techno-economic feasibility report (TEFR) of the project. The estimated project capital cost is about '' 150 Crore.
New CNA Plant at RCF Trombay:
Your Company is exploring the feasibility of setting-up New Concentrated Nitric Acid (CNA) plant based on Magnesium Nitrate process at RCF, Trombay. PDIL has been appointed as a Consultant for preparation of Detailed Feasibility Report (DFR) and Environment Impact Assessment (EIA) report for Environment Clearance. Estimated Project Cost is about '' 100 Crore.
Zero Liquid Discharge scheme at Trombay
RCF is exploring the possibility of setting up Zero Effluent Discharge (ZED) plant to treat the effluent generated and to recover & recycle the water in the process at Trombay unit. The objective of the scheme is to achieve âZero Effluent Discharge (ZED) or Zero Liquid Discharge (ZLD)â for RCF Trombay. The zero liquid effluent discharge projects consists of treatment of the various liquid effluent streams generated in the various plants at Trombay unit and converting the effluents in the raw water which shall be used in the process so that there shall be zero (liquid) effluent discharge. Draft DFR is received from consultant and same under review.
Water Soluble Fertilizer Plant at RCF Thal:
Your Company is exploring the feasibility of setting-up Water Soluble Fertilizer (WSF) manufacturing plant at RCF Thal unit. Five WSF grades namely Mono Ammonium Phosphate (12-610), Mono Potassium Phosphate (0-52-34), Potassium Nitrate (130-45), Potassium Sulphate (0-0-50) and Calcium Nitrate (15.50-0-19) of 10,000 MTPA capacity each are being considered. A consultant is appointed for preparation of Techno-Economic Feasibility Report (TEFR).
ETP up-gradation at Thal:
Upgradation of ETP for treating 9,000 M3/day effluent at an estimated cost of '' 71.48 Crore is being undertaken. Benefit of the project will be for better environment management on sustained basis through recycling of treated effluent as a raw water to the tune of 5,250 M3/day from RCF Thal factory. Work Order has been issued to M/s Ion Exchange Ltd and scheme will be completed by Nov. 2022.
Coal Based Fertilizer Plant at Talcher:
Your Company, along with Coal India Limited (CIL), Gas Authority of India Limited (GAIL) and Fertilizer Corporation of India Limited (FCIL), is setting-up a Coal Gasification based fertilizer complex, comprising of 2200 MTPD Ammonia plant and 3850 MTPD Urea plant, at FCIL, Talcher, Odisha. Land and certain facilities needed for the project are provided by FCIL. The project will utilize state-of-the-art Coal Gasification Technology from M/s Air Liquid Products (erstwhile M/s Shell Eastern). A joint venture company âTalcher Fertilizers Limitedâ has been incorporated for establishing and operating Coal Gasification based Fertilizer complex.
The estimated Project capital cost is approx.'' 13,277 Crore (RCF share is '' 1,184 Crore). M/s Wuhuan Engineering, China has been engaged as LSTK contractor for Coal Gasification and Ammonia/Urea packages of the project valuing approx. '' 8000 Crore. Site activities are in progress.
The commissioning of the project is scheduled to be completed by September 2024.
The project is of strategic importance for the country as it aims to make breakthrough for an alternative source of feedstock in the form of abundantly available coal from domestic sources in place of natural gas. Success of this project is expected to be a game changer and shall pave a way forward to the production of chemicals and fertilizers from coal leading to lesser RLNG imports. It will also help in meeting much needed Urea production capacity for the eastern part of the Country.
Revival of Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) - Namrup Unit:
The revival of BVFCL Namrup Unit is proposed to be carried out by JV of NFL (28%), Oil India Ltd. (18%), RCF (17%), BVFCL (11%) and Govt. of Assam (26%).
The proposed project entails setting up a Urea plant with an annual capacity of 1.27 Million MT. The estimated Project Cost is about '' 7628 Crore. The feasibility study for the project is being carried out by PDIL.
SUBSIDIARY AND OTHER JOINT VENTURE COMPANIES
A separate statement containing the salient features of financial statements of all the joint ventures of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the joint ventures and related information are available for inspection by the members electronically up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member seeking to inspect such documents are requested to write to the Company at investorcommunucations@ rcfltd.com . The financial statements including the consolidated financial statements and all other documents required to be attached to this report have been uploaded on the website of your Company (www.rcfltd.com).
JOINT VENTURE COMPANYFACT-RCF Building Products Ltd. (FRBL), Kochi
Your Company has formed a Joint Venture Company with Fertilizers and Chemicals Travancore Limited (FACT) by incorporating FACT-RCF Building Products Ltd. to set up a Rapidwall project at Kochi. Both your Company and FACT have 50:50 equity holding in the Company. Production has been suspended owing to expected takeover of the Plant & Machinery by the ARC. The company is undertaking only project management services at present.
The audited financial statements of FRBL as at March 31,2022 reported loss of '' 8.58 Crore, thus resulting in accumulated loss of '' 208.16 Crore.
Urvarak Videsh Limited (UVL) was incorporated on 18th July, 2008 as Special Purpose Vehicle (SPV) with equity participation of Rashtriya Chemicals and Fertilizers Limited(RCF), National Fertilizers Limited (NFL) and Krishak Bharti Co-operative Limited (KRIBHCO) with the object of setting up joint venture in India and abroad for manufacturing, mining, long term tie ups for Nitrogenous, Phosphatic and Potassic Fertilizers and fertilizer raw materials including exploring the possibility of making investments and rendering Consultancy services, etc. The company explored many alternatives to take up various projects but the same did not fructify due to want of funds as UVL business objective requires heavy capital investment. As the company could not take up any business, the Board of UVL has decided to declare the company as a Dormant company for the time being in terms of the provision of section 455 of the Companies Act, 2013 as the keeping the status of the company as active was not serving any purpose.
The Audited financial statements of UVL as at March 31, 2022 reported loss of '' 65,088/-, thus resulting in accumulated loss of '' 0.49 Crore.
Talcher Fertilizers Limited (TFL)
Your Company has formed a Joint Venture company, with Coal India Limited (CIL), GAIL (India) Limited (GAIL) and Fertilizer Corporation of India Limited (FCIL), with the name Talcher Fertilizers Limited for revival of FCILâs fertilizer unit at Talcher by establishing and operating coal gasification based fertilizer complex. Equity participation of RCF, CIL and GAIL is 31.85 % each and that of FCIL is 4.45%. The company is yet to start its operations.
During the year, the your Company has infused '' 270 Crore in TFL.
The unaudited financial statements of the said Company as at March,31 2022 reported a profit of '' 6.98 Crore, thus reducing in accumulated loss to '' 22.14 Crore.
Consolidated Financial Statement
The Consolidated Financial Statement of your Company has
been prepared by taking into consideration Joint Venture Companies i.e. FACT-RCF Building Products Limited, Urvarak Videsh Limited and Talcher Fertilizers Limited.
The Consolidated financial statements have been prepared under equity method along with Companyâs standalone financial statements.
SUMMARY OF FINANCIAL PERFORMANCE
|
'' Crore |
||
|
Particulars |
2021-22 |
2020-21* |
|
Total Income (Net) |
12948.62 |
8407.79 |
|
Total Operating Expenses |
11822.90 |
7529.69 |
|
Operational Profit |
1125.72 |
878.10 |
|
Depreciation/Impairment |
183.55 |
175.26 |
|
Finance Cost |
125.89 |
179.57 |
|
Share /(loss) of Associates/JVs |
(1.97) |
2.13 |
|
Profit/ (Loss) before Exceptional Item |
814.31 |
525.40 |
|
Exceptional Item (income) / Expense |
(127.63) |
(4.71) |
|
Profit/ (Loss) before Tax |
941.94 |
530.11 |
|
Provision for Tax (including deferred Tax liability/ Asset) |
239.55 |
146.04 |
|
Net Profit / (loss) after tax |
702.39 |
384.07 |
*The figures for the corresponding previous periods have been restated owing to receipt of EAC opinion / regrouped wherever necessary, to make them comparable.
Your Company has taken up several Research and Development (R & D) projects, some of which are for commercial scale design and engineering. They are as under:
Geola: A Smart and Green Biofertiliser
It is a revolutionary Smart and Green Biofertiliser product with NPK bacterial consortia. This product has been developed for the first time in India at Research and Development division, Rashtriya Chemicals and Fertilizers Limited, Mumbai, Maharashtra. The new product is in powder form which contains Nitrogen fixing, Phosphate solubilizing and Potassium mobilizing bacteria in dormant condition. These bacteria through their activities partially fulfil the nutrient requirements of the crops as well as provide plant growth regulators like gibberellic acid, auxins, cytokinins in small quantities.
The uniqueness of the product is its complete solubility along with the pouch. The product is zero plastic and hence completely eco-friendly. Geola has a shelf life of two years and is easy to handle and use. The product is in a miniscule packing system for ease of transport, storage and application. One packet of 5 gm is sufficient for one-acre area. Transportation would be easier and
economical, as one pouch would be equivalent to one litre bottle of liquid Biofertiliser. It enhances crop yield by 10-15 %.
âGeolaâ product was successfully launched at the hands of Honâble Minister of Chemicals and Fertilizers Dr. Mansukh Bhai Mandaviya Ji along with Honâble CMD Shri. S. C. Mudgerikar on 10th Sept 2021 at Department of Chemicals and Fertilizers, New Delhi.
Florola: A gardening kit for urban population
Urban gardening is the practice of cultivating, processing, and distributing food in or around urban areas. Growers face difficulties to get resources for cultivation or agriculture inputs, especially in metro cities. Urban agriculture programs can help local communities in both, an economic way and in a social way. They allow for people to have more immediate connection to their food, as well as a help to stimulate local economy.
In view of above, an urban kit was formulated and designed by R&D. The kit contains a pot, seeds, ready to use pot mix, gravels and fertilizer liquid spray bottles. The product is available at affordable prices to help individuals and organizations to become a part of the green movement. This is an initiative, to switch from the conventional products to more ecofriendly recycled options for daily use as well as gifting.
âFlorolaâ was launched at the hands of Honâble Minister Dr. Mansukh Bhai Mandaviya Ji on 19th February 2022.
More with less: Nano fertilizer
Low cost, eco-friendly and sustainable means of achieving agricultural intensification and improving productivity can be adopted by use of Nano fertilizer. It enhances the availability and use of vital soil nutrients. R&D has developed Nano urea, Nano Sulphur, Nano Hydroxyapatite, Nano calcium, Nano Micronutrients and Nano DAP at Lab scale. Toxicological studies of Nano Urea are being conducted at Indian Institute of Toxicological Research (IITR), Lucknow. The results are expected by October 2022. In house field trials of Nano Urea have shown encouraging results on crop yield and quality.
Collaborative Research: MoU with Agricultural Research Institute and State Agricultural Universities (SAUs)
Collaboration with State Agricultural Universities (SAUs) viz. Tamil Nadu Agricultural University, Madurai (TN) and University of Agricultural Sciences (UAS), Raichur (KA) was done for carrying out field trials of Geola - Biofertiliser product. The interim results showed encouraging output in yield and quality of fruits of Tomatoes. These trials will support immensely for marketing of product âGeolaâ.
MOU has been signed between RCF & Central Coffee Research Institute, (CCRI), Coffee Board of India, Karnataka from 20212023 for âEvaluation of RCF Chalk on different cropsâ. First season field trial report has been received and the results are encouraging.
Suspension fertilizer: The concentrated formulation
With an aim to double the farmerâs income, reduce nutrient losses to environment and target precision agriculture, an innovative suspension fertilizer âVIPULAâ NPK 10:10:10 has been formulated in house lab.
Efficient use of nutrients in the fertilizer sector is the basis of green economy to produce more food while reducing environmental pollution.
The product has been tested successfully at various State Agricultural University and Indian Council of Agricultural Research Institutes. âVIPULAâ is suitable for all crops and various agro climatic regions.
The liquid concentrate form of âVIPULAâ ensures better availability and utilization of nutrients by the plants. It is a homogenous formulation which can be applied either through soil drenching, drip irrigation and foliar spray.
A yield increase to an extent of 30 % in Wheat and 21 % in Rice crop has been observed. The benefit cost ratio of the âVIPULAâ is around 2.5. The product is schedulded to be launched during 2022-23.
PROM: Promoting Organic fertilizer
âPhosphate Rich Organic Manureâ- PROM is produced by cocomposting of rock phosphate and is an efficient way of adding phosphorus to soil as compared to chemical fertilizers. The product is a suitable source of nutrient for organic farming and improves the physical, chemical and biological properties of the soil and increases crop production. PROM enhances the activity of beneficial microorganisms in soil and helps in humus formation.
Union Minister of Health & Family Welfare and Chemical and Fertilizers Dr. Mansukh Bhai Mandaviya Ji laid the foundation stone at Trombay unit for PROM project on 19th Feb 2022. Minister of State for Health and Family Welfare Dr. Bharati Pravin Pawar was also present at the occasion.
RCF is planning to install an organic fertilizer manufacturing system of minimum 2 MT/Hour capacity in RCFâs Trombay unit in the year 2022-23.
Multi-Micro Nutrient Fertilizer: Addressing âHidden Hungerâ
Multi-Micro Nutrient Fertilizer has been developed, formulated and tested in field trials experiments in 40 districts of Maharashtra state. It addresses the much critical hidden hunger or deficiency of micro nutrients like Zn, Fe, B, Cu and Mn in crops. The product is suitable for all agricultural crops like cereals, pulses, vegetables, fruits, cash crops etc.
For commercialisation of product, a new plant of 5 MTPD capacity is being installed at Trombay unit. The commercial production is scheduled to commence during 2022-23
ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL
Your Company is committed to ensuring clean environment, beyond satisfying all stipulated requirements laid down by the statutory authorities, meeting the expectation of stake holders around its operating units.
Your Company has established ISO 14001 compliant Environment Management System (EMS) along with Safety Management System (ISO 45001), Quality Management System (ISO 9001), and Energy Management System (ISO 50001). Certification for IFA Protect & Sustain Product Stewardship System of international standard for Safety, environment and product security at its both the manufacturing units. The Management Systems are constantly upgraded, periodic audits and Management Review conducted to ensure compliance and continual improvement. Apart from Stack monitors which continuously monitor the emissions, four fixed ambient air quality monitoring stations are in place at both Trombay and Thal, to monitor ammonia, NOx, SO2, Particulate matter (PM10 & PM2.5) & metrological parameters. At Thal, In March 2022, two additional air monitoring stations are commissioned to strengthen ambient air monitoring capabilities. Air monitoring station of both units are connected to MPCB and CPCB servers for continuous monitoring online data of stack and effluent parameters. At RCF Trombay and Thal, Third party monitoring for stack, ambient air quality (Dust, Ammonia, NOx, SO2) and ETP overflow (as per consent parameters) is being done by MoEFCC approved laboratory once in a month. As you are aware, RCF uses clean fuel to reduce the Green House Gas emission, efforts are taken to minimize emissions with Reduce, Recycle, Reuse schemes.
The Effluent Treatment plants (ETP) at Trombay and Thal unit have ensured that the environment in and around the operating units are fully protected. Environmental safety of neighbors around operating units are taken care. Various schemes with state of the art technologies and modernization schemes are implanted to reduce energy consumption and wastages. As a proactive measure, RCF Trombay unit has two nos. of Sewage treatment Plants to treat sewage of Mumbai city & use the purified water after treatment for industrial purpose, thereby saving equivalent quantity of potable water for consumption by Mumbaikars.
Sludge generated in Effluent Treatment Plant, Sulphur Sludge Generated in Sulphuric Acid plant and waste streams of effluents from complex fertilizer plants are recycled back in the processes. 3-R strategy (Reduce, Reuse and Recycle) is employed by way of recycling the sludge generated in ETP, Sulphur sludge generated in Sulphuric Acid Plant is used in Suphala plant for recovery of nutrients.
The integrated Effluent Treatment Plant in both Units ensures that effluent discharged from the factory meets the statutory requirements laid down by the Pollution Control Board.
Trombay and Thal units have taken up a massive plantation
drive in factory premises, in residential colony and surrounding areas.
For increasing awareness regarding environment and safety, public awareness campaign programmes are arranged by Trombay and Thal units by providing demonstrations to local youth, college & school students, housing societis, Panchayat offices, ladies club members and household members in the adjoining localities by maintaining COVID-19 guidelines.
The Safety benchmarking rating of RCF as per International Fertiliser Association (IFA) is 20 out of 69 companies.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As part of its initiatives under âCorporate Social Responsibility, your Company has undertaken several projects in the areas of rural development, promoting health care, Nutrition and education aimed for the benefit of needy and for general good of the society. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companyâs CSR Policy. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed as Annexure -I, and forms an integral part of this report. During the year, your Company has spent '' 7.48 Crore including '' 0.50 Crore set off for succeeding financial year on CSR activities. The activities, in brief, are as under:
a. Medical Grade Oxygen Plants: your Company has provided financial assistance for installation of Medical Grade Oxygen Plants at Thal, Mumbai and Siddharthnage, UP Considering the requirement of Medical Grade Oxygen in COVID -19 pandemic.
b. Supply of drinking water to the villages: Your Company has been providing drinking water for last 25 years to seven villages around Thal unit through pipelines laid down from the water reservoir in the unit. More than 26,000 residents of the villages got benefited of the scheme.
c. Covid Vaccination at Trombay & Thal : Your company has provided free Covid vaccination centre at RCF Trombay as well as Thal unit. Under this activity financial assistance for expenditure towards setting up of infrastructure and hiring of manpower was provided by RCF. This facility was available for all residence nearby Chembur and Thal.
d. Livelihood enhancement projects: Your Company has supplied paddy, fruit saplings and free fertilizers to needy villagers near Thal Unit.
e. Rural Development- Road Repairing: Your company has undertaken the repair of local Roads from Thal Navagaon Road , Boris Gunjis and local Road from Chondhi naka to Kihim bus stand road under the rural development.
f. Garbage Vans to Villages: Your Company has provided 4 Garbage Vans to Gram Panchayats one each in Raigad District.
g. Financial Assistance to National Association for the
Blind, India (NAB) : Your Company has provided financial assistance to NAB for in-house manufacture of white cane under skill development programme. We provided financial assistance for purchase of raw material of the white cane.
h. Women Empowerment: Your Company has distributed multipurpose machines to Mahila Bachat Gats at Thal villages for empowering them financially independent. This will help these women to earn for their livelihood and support their families.
i. Furniture to School: You company has provided furniture to Schools located in Alibag, Raigad district to promote education. All the students studying in these schools are from rural area and children of farmers.
j. Medical Camp: Your company has conducted 12 medical check and eyecheck up camps nearby Chembur, Mumbai for the needy patients. Through these camps the basic medicines and glasses has been provided free to the patients.
k. Phacoemulsification System for cataract surgery: your company has assisted the Lion Health Foundation for purchase of Phacoemulsification System for cataract surgery. It has benefitted for patients nearby Thal Unit, Raigad.
l. Free OPD for needy Patients: Your company has provided financial support to Sushrut Hospital for operating the Free OPD and dispensing free medicines for needy patients visited to that hospital.
m. Aspirational District (Osmanabad) :
Your company has spent of '' 51.49 lakhs for Aspirational district in:
1. installation of oxygen plant at Siddharthnagar, UP
2. to Conduct skill development programme in Osmanabad district , Maharashtra for college students.
CPSE CONCLAVE âVISION 2022â
The Department of Public Enterprises (DPE) has embarked on a collaborative exercise for re-defining the role and functioning of Central Public Sector Enterprises (CPSEs) in the context of challenges and expectations emerging from broad vision of âNew India-2022â. This exercise had culminated in the CPSE Conclave âNew India - Vision 2022â held on 9th April, 2018 at Vigyan Bhavan, New Delhi which was addressed by Honâble Prime Minister.
In line with the directions given by Honâble Prime Minister at the Conclave, DPE has prepared Broad Framework of Action Plan comprising of Objectives, Actionable Points, Metric and Responsibility and have circulated the same amongst all CPSEs for developing Company specific actionable points and targets to be achieved by 2022-23.
In line with above, your Company has prepared the Company specific actionable points with targets and has been working on achieving the same. The actionable points are pertaining to
contribution towards minimizing the import bill of the Country, promotion of R&D activities, Alignment of CSR activities with national priorities, handholding of MSEs, skill India movement, sharing best practices & infrastructure, supporting start-ups, reduction in wasteful expenditure, increasing geo-strategic reach of a Company.
The status of each and every actionable point is reviewed by management on every fortnight basis and the Board of Directors on quarterly basis. The status is also updated on âDRISHTIâ dashboard every month.
EFFECTIVE IMPLEMENTATION OF PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES (MSEs)
Government of India, Ministry of Micro, Small and Medium Enterprises, vide order dated 23rd March, 2012, notified the public procurement policy in respect of procurement of goods and services produced and provided by Micro, Small and Medium Enterprises and further amended it on 9th November 2018 vide Government of lndia Gazette Notification S.O. 5670(E) dated 9th November, 2018.
With amendment in Public procurement policy for Micro & Small Enterprises (MSEs) order, 2012 vide GoI Gazette Notification S.O. 5670(E) dated 9th November, 2018, the percentage target of procurement of goods and services by Government Departments/CPSEs from MSEs is increased from 20% to at least 25% along with the provision of minimum 3% reservation for Women owned MSEs within this 25% reservation. This amendment is made applicable from 9th Nov 2018. Due to the very nature of operations of our Company, the procurement targets could not be achieved in the year 2021-22.
With the efforts taken by the company, the procurement from MSEs, cost of the items procured through MSEs at both Trombay and Thal units is '' 316.09 Crore out of the total procurement cost of '' 960.61Crore (excluding raw material, gas, water, electricity, catalysts, proprietary items etc.) which works out to be 32.90%. The procurement from MSEs owned by SC/ST Entrepreneurs is '' 4.99 Crore which is 0.52% and procurement from women owned MSEs is '' 5.82 Crore which is 0.61% of the total procurement of the year 2021-22. The percentage procurement is calculated excluding Raw materials, gas, water, electricity, catalyst and proprietary items which cannot be procured from MSEs.
Your Company has taken up several Sustainable development activities including the following:
New Sewage Treatment plant
Your Company is running Two Sewage Treatment Plants (STPs) at Trombay Unit with each plant having capacity to treat around 22.75 Million Litres per Day (MLD) of sewage received from MCGM which otherwise would have been drained in to the sea after preliminary treatment. The STP plants treat waste sewage
e-governance by leveraging technology in all operations in RCF. 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 like gratuity and visits abroad. Emphasis is also given on strict implementation of Integrity Pact as per the CVC guidelines.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis report for the year under regulations 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, highlighting the industry structure and developments, opportunities and threats, future outlook, risk and concerns etc. is annexed as Annexure II and form an integral part of this report.
PUBLIC DEPOSIT
Your Company has not accepted any deposits, within the meaning of section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.
OFFICIAL LANGUAGE POLICY
Your Company has fully endeavoured to implement the provisions of Official Language Act, 1963 and the policy of the Government. Publicity material and literature for employees and farmers are made available in Hindi and other regional languages.
AUDITORS
a. STATUTORY AUDITORS AND THEIR REPORT
The Comptroller and Auditor General of India (CAG) has appointed, M/s M. M. Nissim & Co LLP (Firm Registration Number 107122W / W100672) and M/s. Gokhale & Sathe (Firm Registration Number 103264W ) as Joint Statutory Auditors of your Company for the financial year 2021-22. The Auditors would be retiring at the conclusion of the Forty Four Annual General Meeting.
There are no qualifications, reservations or adverse remarks made by Statutory Auditors, in their report.
The Statutory Auditors for the financial year 202223 will be appointed by the CAG. However, their remuneration is required to be fixed at the AGM by the members.
b. COST AUDITORS AND THEIR REPORT
Your Directors, on the recommendation of Audit Committee, has appointed M/s. Dhananjay V Joshi & Associates ,Cost Accountants (FRN No.000030), Mumbai as Cost Auditor to audit the cost accounts
generated in the city and convert it into treated water. Both plants together generate about 30 MLD of treated water which is being used in our plants as process water. A part of treated water generated is supplied to M/s BPCL. Both STP plants of Your Company are of great value to residents of Mumbai and Society at large besides improving reliability of operations of RCF Trombay Unit.
During the year 2021-22, about 88,23,973 M3 of treated water was generated at both STP plants.
Solar Power Plant
As part of achieving ecologically sustainable growth, Your Company has forayed into solar power generation. Your Company has set up a 2 MWp ground mounted Photovoltaic Solar power plant in Trombay Unit in January 2016. In addition to this, Your Company has commissioned solar rooftop facilities at Thal and Trombay with an aggregate capacity of 2.17 MWp. The power generated is used for captive consumption, thereby reducing your Companyâs power import to the equivalent extent.
The green power generated by solar plants replaces the conventional power generated through burning of fossil fuels leading to reduction in overall Greenhouse gas emissions.
At RCF, during the year 2021-22, 4,531 MWh of solar power and 2212 no of Solar Renewable Energy Certificates (RECs) were generated.
Vigilance Department is headed by Shri Sameer Rastogi, Indian Forest Service, who holds the charge of Chief Vigilance Officer of the Company. He is assisted by a team of officers drawn from various functional departments and placed in Corporate Office at Mumbai and at RCF Thal Unit. 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 Commissionâs guidelines. Thus, necessary measures are initiated to review the activities of Corporate Office, Trombay Unit, Thal Unit and Marketing offices situated across the country.
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. The ideology that âAll officers are Vigilance Officersâ 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. Preventive Vigilance Training Program is imparted by in house faculties to Management Trainees and Middle Level Managers. Vigilance Department has an online Grievance Management Portal for lodging the complaints. Efforts are made to ensure speedy Redressal of the complaints.
Vigilance Department has actively contributed towards
of the Company for the year 2022-23 on a remuneration of '' 2.00 lakh excluding applicable taxes. As required under the Companies Act, 2013, the remuneration payable to cost Auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking Membersâ approval for the remuneration payable to M/s. Dhananjay V Joshi & Associates as Cost Auditor forms part of the notice convening the Annual General Meeting for their ratification.
The Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Company is required to maintain cost accounting records in respect of certain specified products and accordingly such accounts and records are made and maintained in the prescribed manner. Further, the cost accounting records maintained by the Company are required to be audited.
During the year, the Company filed the Cost Audit Report for the financial year 2020-21 with the Ministry of Corporate Affairs within the prescribed time limit.
c. SECRETARIAL AUDITOR AND THEIR REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Bhandari and Associates, a firm of Company Secretaries in Practice (C.P. No. 366) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure III and forms an integral part of this Report.
EXPLANATION OR COMMENTS BY THE BOARD ON SECRETARIAL AUDIT REPORT
M/s. Bhandari and Associates, Practising Company
Secretaries, Secretarial Auditor of the Company has made
the following observations in their Secretarial Audit Report:
a. The Board of Directors comprised of nine Directors, constituting of four Executive Directors (including the Chairman & Managing Director); one Nominee Director (non-executive) and four Independent Directors including Independent Woman Director. As per Regulation 17(1) of the Listing Regulations and DPE Guidelines on Corporate Governance for Central Public Sector Enterprises, the Chairman being an Executive Director, at least half of the Board of Directors should be comprised of Independent Directors. Thus, the Company did not have the requisite number of Independent Directors on its Board.
b. The Stakeholders Relationship Committee (SRC) comprised of two directors (including one Independent
Director) for the period December 01, 2021 to March 06, 2022 and it comprised of one director (executive director) from March 07, 2022 to March 29, 2022. As per Regulation 20(2A) of the Listing Regulations, at-least three directors with at least one being an independent director, shall be members of the Committee. Thus, the Company did not have requisite number of Directors in the SRC for the said periods.
c. The Corporate Social Responsibility Committee (CSR) comprised of two directors (including one Independent Director) for the period December 01, 2021 to March 06, 2022 and it comprised of one Director (nominee director) for the period March 07, 2022 to March 29, 2022. As per the act, the committee should be comprised of at least three directors, out of which at least one director shall be an independent director. Thus, the constitution of the CSR Committee was not as per the provisions of the Act for the said periods.
d. The Company has intimated the disclosure of related party transactions for half year ended September 30, 2021 as required under Regulation 23(9) of the Listing Regulations on December 08, 2021 and it has disclosed financial results on November 10, 2021. However, being an equity and high value debt listed entity, the disclosure of related party transactions was required to be given along with the disclosure of financial results. Thus, the disclosure was given beyond the timelines specified under Regulation 23(9) of the Listing Regulations.
e. The Company has fixed the record date for payment of interest on Debentures having ISIN INE027A07012 as July 16, 2021 and the same was intimated to stock exchange(s) on July 12, 2021. Thus, the intimation of record date was not given at least seven working days in advance as required under Regulation 60 of the Listing Regulations.
f. The Company has appointed the Chief Financial Officer (CFO), Key Managerial Personnel of the Company on January 04, 2022 and the same was intimated to the stock exchange(s) on January 07, 2022. Thus, the Company has not intimated the appointment of CFO within twenty-four hours of occurrence of event as required under Regulation 30 of the Listing Regulations.
Explanations on observations made by Secretarial Auditors in seriatim are as under:
a. Your Company is a Central Public Sector Undertaking under the Administrative control of the Ministry of Chemicals and Fertilizers, Department of Fertilizer, Government of India and its Directors on the Board are nominated / appointed by the President of India. The Company is continuously pursuing with the Government of India for the appointment of requisite number of Independent Directors on the Board in order to comply with the provisions of the SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015.
b. Dr. Shambhu Kumar, who is Chairperson of Stakeholders Relationship Committee ceased to be Independent Director of the Company on completion of his term on March 7, 2022. Subsequently, Stakeholders Relationship Committee was reconstituted by the Board of Directors on March 30, 2022 in line with Regulation 20 of SEBI Listing Regulations. Further, Stakeholders Relationship Committee did not meet during period on 07.03.2022 to 29.03.2022.
c. Shri Umesh Dongre, who is member of CSR Committee & Prof. Anil Kumar Singh, who is Chairperson of CSR Committee ceased to be Directors on the Board w.e.f. December 1, 2021 & March 7, 2022 respectively. Subsequently, CSR Committee was reconstituted by the Board of Directors on March 30, 2022 in line with Section 135 of the Companies Act, 2013. Further, CSR Committee did not meet during period on 01.12.2021 to 29.03.2022.
d.e. & f. Since the comments made by Secretarial Auditor are in the nature of factual statement, Company does not have any comments to offer on the same.
During the year 2021-22, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.
There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.
INSOLVENCY AND BANKRUPTCY CODE
There are no applications made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.
ONETIME SETTLEMENT WITH ANY BANK OR FINANCIAL INSTITUTION
As no settlement has taken place with any of the Bank or Financial Institution during the financial year, therefore, no disclosure or reporting is required in respect of the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
BANKS AND FINANCIAL INSTITUTIONS
Your Company is prompt in making the payment of interest and repayment of loans to the financial institutions / banks. During the COVID-19 Pandemic period, it has not availed any moratorium on any of its payments to the institutions. Banks and Financial Institutions continue their unstinted support in all aspects and the Board records its appreciation for the same.
DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of section 134(3) (c) of the Companies Act, 2013:
i. that in the preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year ended on that date;
iii. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts have been prepared on a going concern basis;
v. that the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
vi. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE GOVERNANCE
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate of Compliance from the Practising Company Secretary forms an integral part of this report.
COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OF PUBLIC ENTERPRISES
DPE, Government of India, has laid down certain parameters for the purpose of grading the CPSEs on the basis of their compliance with guidelines on Corporate Governance and this report needs to be submitted to the Government on quarterly/ annual basis. Your Company has been complying with the
Guidelines on Corporate Governance for CPSEs laid down by DPE and regularly submits reports to the Government. DPE issued âExcellent Ratingâ to your Company for the year 2020-21.
INTERNAL FINANCIAL CONTROL OVER FINANCIAL REPORTING
Your Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Your Companyâs internal financial control over financial reporting includes those policies and procedures that:
1. pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of Management and Directors of the Company; and
3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
The following are Key Managerial Personnel of the Company as on 31.03.2022:
1. Shri S. C. Mudgerikar [DIN 03498847], Chairman & Managing Director
2. Shri Sudhir D. Panadore [DIN 07933191], Director (Technical) (Upto 31.05.2021)
3. Shri Umesh Dongre [DIN 08039073], Director (Finance) & CFO (upto 30.11.2021)
4. Shri K. U. Thankachen [DIN 06946476], Director (Marketing)
5. Ms Nazhat J. Shaikh [DIN 07348075], Director (Finance) & CFO (from 01.12.2021)
6. Shri Milind M. Deo [08715250], Director (Technical) (from 27.12.2021)
7. Shri Jai Bhagwan Sharma [FCS 5030], Company Secretary
CHANGES IN THE BOARD OF DIRECTORS
Shri Umesh Dongre, [DIN 08039073], ceases to be Director (Finance) & CFO on the Board on his superannuation on November 30, 2021 (Closure of Business hours).
Shri Chandra Bhushan Pandey (DIN 09407412) has been
appointed as an Independent Director of the Company w.e.f. November 29, 2021.
Ms Nazhat J. Shaikh, [DIN 07348075], has been appointed as Director (Finance) of the Company w.e.f. December 1, 2021.
Shri Kashee Nath Akela (DIN 09410361) has been appointed as an Independent Director of the Company w.e.f. December 1, 2021.
Shri Milind M. Deo, [DIN 08715250], has been appointed as Director (Technical) of the Company w.e.f. December 27, 2021.
Shri Gopinathan Nair Anilkumar (DIN 09447818) has been appointed as an Independent Director of the Company w.e.f. December 27, 2021.
Ms Nazhat J. Shaikh, [DIN 07348075], has been appointed as CFO of the Company w.e.f. January 4, 2022.
Ms Alka Tiwari (DIN 03502306) ceased to be Government Nominee Director w.e.f. January 15, 2022.
Prof Anil Kumar Singh (DIN 08382601) ceased to be Independent Director w.e.f. March 07, 2022.
Dr. Shambhu Kumar (DIN 07368172) ceased to be Independent Director w.e.f. March 07, 2022.
Shri Satendra Singh (DIN 05195060) appointed as Government Nominee Director w.e.f. July 20, 2022
Ms Aneeta C. Meshram (DIN: 09781436) appointed as Government Nominee Director w.e.f. November 13, 2022
Ms Aparna S. Sharma (DIN 07798544) ceased to be Government Nominee Director w.e.f. November 13, 2022.
Shri Kashee Nath Akela (DIN 09410361) ceased to be Independent Director with effect from August 12, 2022.
Shri Satendra Singh (DIN: 05195060) ceased to be Government Nominee Director w.e.f. October 19, 2022.
The Board has placed on record their appreciation of the Directors who have ceased to be members of the Board for the valuable contribution made and the guidance / suggestion provided by them which has greatly benefited the company.
As per Section 152 of the Companies Act, 2013, Ms Nazhat J. Shaikh [DIN: 07348075] and Shri Milind M. Deo (DIN 08715250), Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.
FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Companyâs independent directors are eminent professionals with several decades of experience in banking and financial services, technology, finance, governance and management areas and are fully conversant and familiar with the business of the Company.
The Company has an ongoing familiarisation programmes for all Independent directors with regard to their roles, duties, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company, etc.
All the Independent Directors of the Company have registered their names in the Independent Directors Databank as required under the Act and the Rules referred therein. The Independent Directors are also required to take up an online proficiency self assessment test within two years from the date of inclusion of their name in the Independent Directors databank, unless exempted from such requirement, under the Act and the Rules referred therein.
Board opined that Independent Directors of the Company has made significant participation and contribution, commitment, effective deployment of knowledge and expertise, integrity and maintenance of confidentiality and independence of behaviour and judgement.
All independent Directors of the company have given declaration confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Companyâs Board has the following committees:
i. Audit Committee
ii. Stakeholders Relationship Committee
iii. Share Transfer Committee
iv. Nomination and Remuneration Committee
v. Committee on Corporate Social Responsibility (CSR)
vi. Empowered Committee for Procurement.
vii. Risk Management Committee
viii. Empowered Committee for Procurement of Urea on Govt. Account
ix. Debenture Allotment Committee
The details of the committees along with their composition, number of meetings held and attendance of each director at the meetings are provided in the Corporate Governance Report.
COMPANYâS POLICY ON DIRECTORâS APPOINTMENT AND RELATED DISCLOSURES
As per notification dated June 5, 2015 issued by Ministry of Corporate Affairs, provision of section 134(3) (e) of the Companies Act, 2013 regarding disclosure of its policy on Directorâs appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matter provided under sub- section (3) of
section 178 of the Companies Act, 2013 are not applicable to a Government company.
Your Company being a Government company, the above provisions are not applicable to it.
Similarly, section 197 of the Companies Act, 2013 requiring disclosure of ratio of the remuneration of each director to the median employeeâs remuneration and other such details including the name and other particulars of every employee of the company, who if employed throughout/part of the financial year, was in receipt of remuneration in excess of the limits set out in the rules, are not provided in terms of section 197(12) read with rule 5( 1)(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014, being not applicable to a Government company as per notification dated June 5, 2015 issued by Ministry of Corporate Affairs.
Sixteen (16) Board Meetings were held during the year. The details of the Board Meetings held during the financial year 2021-22 are provided in the Corporate Governance Report.
Section 134(3) (p) of the Companies Act, 2013 requires the Company to disclose the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual Directors. As per notification dated June 5, 2015 issued by Ministry of Corporate Affairs, provision of section 134(3) (p) of the Companies Act, 2013 shall not apply in case Directors are evaluated by the Ministry which is administratively in charge of the Company, as per its own evaluation methodology. Your Company, being a Government Company, the performance evaluation is carried out by the Administrative Ministry (Ministry of Chemicals & Fertilizers), Government of India, as per applicable Government Guidelines.
Your Company has evaluated the performance ofthe Independent Directors for the year 2021-22 as per regulation 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
PARTICULARS OF LOANS GIVEN,INVESTMENT MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of Loans given, Investments made, Guarantees given and Securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to the financial statements.
The Credit rating assigned by Rating Agencies for the various debt instruments of the Corporation is provided in the Corporate Governance Report.
PARTICULARS OF EMPLOYEES
During the year under review, none of employees of the Company had drawn remuneration in excess of the limits prescribed under section 134(3) (c) of the Companies Act, 2013 read with Companies (Appointment of Managerial Personnel) Rules, 2014.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The details of Vigil Mechanism/Whistle Blower Policy are provided in Corporate Governance Report.
RELATED PARTY TRANSACTIONS
All contracts/arrangement/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee and also before the Board for approval. None of the Directors has any pecuniary relationships or transactions vis-avis the Company.
The details of the investment in equity made by the Company as on 31st March, 2022 is as under:
|
'' Crore |
||
|
1 |
FACT-RCF Building Products Limited |
32.87 * |
|
2 |
Urvarak Videsh Limited |
0.18 * |
|
3 |
Talchar Fertilizers Limited |
805.48 |
|
Total |
838.53 |
|
* Company has made full provision towards the value of investment.
The details of transactions with related parties are provided in the accompanying financial statements. There are no transactions to be reported in Form AOC-2.
INTER CORPORATE DEPOSIT
In connection with one time settlement entered into with Dena Dank, the Company had paid total '' 51 crore ('' 12 crore during the year 2017-18 and '' 39 crore during the year 2018-19) to Dena Bank as one time settlement which includes an amount of '' 25.50 crore being the share of The Fertilisers and Chemicals Travancore Limited (FACT), the joint venture partner in FRBL. This amount is shown as interest bearing inter corporate deposit given. FACT shall repay the same in five annual equal instalments commencing from December 2020. FACT has made payment of Two installment total amounting of '' 10.20 crore out of the total 5 installments in the month of December 2020 and December 2021 as per agreement.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.The Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.
During the year, two complaints of Sexual Harassment of Women at Workplace were received by the internal complaints committee formed by your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Both the Complaints have been resolved by the Committee.
RIGHT TO INFORMATION (RTI)
In order to promote transparency and accountability, an appropriate mechanism has been set up across the Company in line with the provisions of the Right to Information Act, 2005. Your Company has nominated CPIO/ACPIOs/ Appellate Authorities at its units/offices across the Company to provide information to citizens under the provisions of the RTI Act.
During the year under review, your Company has received 259 RTI applications out of which 211 have been resolved.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed to this Report as Annexure IV and form an integral part of this report.
ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act, 2013 read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return in Form MGT 7 as on March 31, 2022 is available on the Companyâs website on www.rcfltd.com/investerrelations/agm-1
ISSUE OF NON CONVERTIBLE DEBENTURES (NCDS) BONDS ON PRIVATE PLACEMENT BASIS
During the year, your Company has allotted 3,000, Listed, Unsecured, Rated, Redeemable, Taxable, Non-Convertible Bonds in the nature of Debentures (NCDs) of face value of '' 10,00,000/- ((Rupees Ten Lakh only) each, aggregating to '' 300 crore (Rupees Three Hundred Crore only) on private placement basis for cash at par, in dematerialized form (ISIN:
INE027A08010), through BSE Electronic Book Platform (EBP) on January 31, 2022 .
The NCDs are for a tenure of Three years, carrying interest @ 6.59% p.a. payable annually. NCDs are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), on the Whole Sale Debt Market (WDM) Segment. The Company has appointed M/s SBICAP Trustee Company Limited as Debenture Trustee for the said debt securities.
INVESTOR EDUCATION & PROTECTION FUND (IEPF)
The details of unpaid / unclaimed dividend and shares transferred to the IEPF in compliance with the provisions of the Companies Act, 2013 has been provided in the Corporate Governance Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 (2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report initiatives taken from an environmental, social and governance prospective in the prescribed format is available as a separate section of the Annual Report and forms an integral part of this report. Business Responsibility Report is also available on the Companyâs website www.rcfltd.com.
ACKNOWLEDGMENT
Your Directors wish to gratefully acknowledge the valuable guidance and continued support extended by Government of India and in particular, the Department of Fertilizers and the Office of Fertilizer Industry Co-ordination Committee (FICC),
Railways, DPE, Members of MOU Task force, and other Central Government Departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude, the help and unstinted support from the Government of Maharashtra and other State Governments, MSEB, MIDC, various Media, Municipal Authorities, Maharashtra Pollution Control Board, Factory Inspectorate and IBR, Bankers to your Company, Financial Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence posed, unstinted support and suggestions made to the Board by the esteemed Share Owners of the Company. The Board also wishes to place on record the positive suggestions and guidance provided by the Statutory Auditors, Cost Auditors, the Office of the Principal Director of Commercial Audit and Secretarial Auditor.
Last but not the least, your Directors take pleasure in placing on record their deep appreciation of the excellent contribution made by the employees of your Company at all levels, without which your Company would not have achieved such good performance.
[S. C. Mudgerikar] Chairman & Managing Director
Place: Mumbai
Date: November 14, .2022
Mar 31, 2018
DIRECTORSâ REPORT
Dear Members,
The Directors of your Company have pleasure in presenting this 40th Annual Report on the working of your Company together with the Audited Accounts for the year ended 31st March, 2018.
FINANCIAL PERFORMANCE
Rs, Crore
|
Particulars |
2017-18 |
2016-17 |
|
Total Revenue |
7379.87 |
7291.15 |
|
Total Operating Cost |
7051.90 |
6807.34 |
|
Operational Profit |
327.97 |
483.81 |
|
Depreciation/Impairment |
137.04 |
141.10 |
|
Finance Cost |
62.59 |
93.98 |
|
Profit before exceptional items |
128.34 |
248.73 |
|
Exceptional Items |
0.12 |
0.00 |
|
Profit before Tax |
128.22 |
248.73 |
|
Provision for Tax (including deferred Tax liability/ Asset) |
49.42 |
69.47 |
|
Net Profit |
78.80 |
179.26 |
|
Retained Earnings |
||
|
Less: Dividend Paid (Previous Financial Year) |
60.69 |
60.69 |
|
Less :Dividend Distribution Tax |
12.35 |
12.35 |
|
Add: Re-measurement of Defined Benefit Plan |
(8.57) |
0.79 |
|
Less: Balance Transferred to / (from) General Reserve |
(2.81) |
107.01 |
The major factors contributing to the reduction in your
Companyâs profitability before tax are as under:
a. Your Company has crossed the reassessed level of production of 17.07 LMT in respect of Thal Urea, however falling IPP of Urea has impacted the operating Margins of production of Urea beyond Reassessed capacity.
b. Recognition of provision towards wage revision along with increase in retirement obligations on accounts of increase in gratuity limit as per statutory requirements.
c. Threat from cheaper imports impacted margins of Industrial Products adversely.
MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA
Your Company has been entering into a Memorandum of Understanding (MoU) with the Ministry of Chemicals & Fertilizers, Government of India, setting the performance parameters and targets every year. Your Company has consistently maintained âExcellentâ MoU performance rating over the years. Despite Company achieving higher production and better energy efficiency, it could secure âGoodâ rating for the year 2016-17 which was mainly on account on certain financial targets which stood impacted owing to reasons beyond Companyâs control.
The performance rating for 2017-18 MoU is yet to be finalised by the Government.
DIVIDEND
Although your Company has lined up a number of capex programmes which will entail substantial expenditure, considering the consistent profits being made by the Company, your Directors have recommended a dividend of Rs, 0.60 (i.e. 6%) per equity share (Previous year Rs,1.10 per equity share) for the financial year 2017-18. The total outgo on this account works out to Rs,39.91 Crore (Rs, 73.04 Crore in the previous year) including dividend distribution tax and education cess. The dividend payout is subject to the approval of members at the ensuing Annual General Meeting.
APPROPRIATION TO GENERAL RESERVES
Your Company earned a net Profit after Tax of Rs, 78.80 Crore (Rs,179.26 Crore in the previous year). The dividend payout along with Tax and education cess pertaining to FY 201617 was Rs,73.04 Crore (Rs,73.04 Crore in the FY 2015-16). The balance amount of Rs,(2.81) Crore C107.01 Crore in the previous year 2016-17) was transferred to / ( from) General Reserves.
AWARDS WON
As in the past, your Company has won many awards during the year 2017-18, some of which are as under:
Trombay unit
- FICCI Award for âEfficiency in Water Usage in Chemical Sectorâ for the year 2016-17.
- Certificate of Merit for âICC Award for Excellence in Energy Conservation and Managementâ for the year 2015-16.
- â2nd Prizeâ in Chemical Sector from Maharashtra Energy Development Agency (MEDA) for the year
2016-17.
- âCertificate of Merit Awardâ for the year 2016-17 for Corporate Fair Business Practices (CFBP) in large enterprises sector organized by Jamnalal Bajaj Institute of Management.
- Mr. Suhas D. Kadam, Sr. Fire Operator has been awarded Chhatrapati Shivaji Award for the year 2014-15 for Kabaddi Sports Coach by Government of Maharashtra in February 2018.
- In 28th National Meet of WIPS at Guwahati, Dr. (Mrs) Utpala K. Baviskar, Sr Manager (R&D) has been awarded first Prize for âBest Woman Employee (Executive)â for the year 2017 by Forum of Women in Public sector (under the aegis of SCOPE) by Honourable Chief Minister of Assam, Shri. Sarbananda Sonowal on 12th February 2018.
- In 28th National Meet of WIPS at Guwahati, Smt. Rajshri Kadam, Executive Operator (Environment Cell) has been awarded first Prize for âBest Woman Employee (Non-Executives)â for the year 2017 by Forum of Women in Public sector (under the aegis of SCOPE) by Honourable Chief Minister of Assam, Shri. Sarbananda Sonowal on 12th February 2018.
- Won various awards at the horticulture exhibition held by Brihan Mumbai Municipal Corporation in February 2018 as indicated below:
¦ First prize for tree plantation below 100 trees category at Type-I RCF colony.
¦ First prize for tree plantation above 100 trees category inside RCF factory.
¦ First prize in Traffic Island Garden category for best Garden maintained at Panjarapol .
¦ Second Prize for Best Garden Maintained in above 3000 sq. meter category at TDP VIP Road inside RCF Factory.
¦ Consolation Prize for on the spot Landscape category.
Thal Unit
- Green leaf award of International Fertiliser Association 2017 for âExcellence in safety Health and Environmentâ.
- Highest achiever award in Energy savings for PAT Cycle-I by Bureau of Energy Efficiency(BEE) .
- First prize in 12th state level award for âState level Excellence in Energy Conservation & Managementâ for the year 2016-2017 from Maharashtra Energy Development Agency (MEDA), Govt. of Maharashtra.
- Five star green rating from Maharashtra Pollution Control Board (MPCB) for air quality for second consecutive year.
- First prize for âBest plant performance awardâ amongst all Heavy Water Plants (HWP) for the year
2017.
- National Safety Council (NSC) Award for Longest Accident free days for the year 2017
- National Safety Council (NSC) Award to HWP, Thal for ZERO accident for the year 2017.âMaharashtra Icon Award 2017â by Social trust â Always Helping Handâ.
- Third prize for â Excellence in the Suggestion Schemeâ in INSAAN National convention.
- Shri P.R.Kamat, DGM (HWP) has been awarded â Merit Awardâ for Best Evaluator Contest in INSAAN National convention,.
- First prize by Brihanmumbai Municipal Corporation for âVegetables Grown in Containerâ during exhibition for Saplings,Fruits and Vegetables grown in container.
- First prize by Thane Municipal Corporation for â Vegetables Grown in Containerâ during exhibition for Saplings,Fruits and Vegetables grown in container.
In addition to the above, your Company has won following
Award:
- Vigilance Department in RCF has received an âAward of Excellence for 2017â for best case study by Honâble Shri K. V. Chowdary, Central Vigilance Commissioner at the Annual function of Vigilance Study Circle, Mumbai.
OFFER FOR SALE BY THE GOVERNMENT OF INDIA TO THE PUBLIC
During the year, Government India has made Offer for Sale of 2,75,84,405 equity shares of the Company, representing 5% of the total share capital of the Company in line with the directive of SEBI to maintain all time at least 25% of minimum public shareholding.
Consequent upon sale of 2,75,84,405 Equity Shares by Government of India, the equity holding of Government of India in your company stands reduced to 75% of paid up capital from 80%.
OPERATIONAL RESULTS: Production: Fertilizers:
Your Company produced 29.80 lakh MT of fertilizers ( 25.02 lakh MT of Urea and 4.78 lakh MT of Suphala 15:15:15 ) during the year as against 30.17 lakh MT of fertilizers ( 25.52 lakh MT of Urea and 4.65 lakh MT of Suphala 15:15:15) produced during the previous year. In terms of nutrients, your Company produced 12.23 lakh MT of Nitrogen (N), 0.72 lakh MT of Phosphate (P2O5) and 0.72 lakh M T of Potassium (K2O) during the year as compared to 12.44 lakh MT of Nitrogen (N), 0.70 lakh MT of Phosphate (P2O5) and 0.70 lakh M T of Potassium (K2O) during the previous year.
MARKETING PERFORMANCE Fertilizer Division:
Your Company achieved sales volume of 30.64 lakh MT during 2017-18 as compared to 31.87 lakh MT during the previous year. Your Company sold 25.10 lakh MT of Urea, 4.68 lakh MT of Suphala 15:15:15, 0.03 lakh MT of Suphala 20:20:0 and 0.83 lakh MT of other bought out products such as DAP, MOP etc., compared to 25.63 lakh MT of Urea,
4.76 lakh MT of Suphala 15:15:15, 0.05 lakh MT of Suphala 20:20:0 and 1.43 lakh MT of other bought out products during the previous year. The Total sale of manufactured fertilizers during 2017-18 was 29.81 lakh MT as against 30.44 lakh MT during the previous year.
Sales of manufactured fertilizers registered reduction of 2.07% over previous year owing to poor agro-climatic conditions and glut of fertilizers in the market.
Industrial Products Division:
Industrial Products Division achieved sales turnover of ''878 Crore as against ''919 Crore during the previous year. Owing to depressed sales realizations of IPD products and higher cost of operations on account of increase in gas prices, production of some products like Methanol, Nitrate/ Nitrite and Methylamines at Trombay and DMF and Formic Acid at Thal were suspended, which had an adverse impact on the profitability of IPD products.
Exports:
Considering the nature of products manufactured by your Company and indigenous demand, the scope for export is very limited. High cost of production is the main restraining factor for venturing in the international market, as it renders our products unviable compared to lower cost of imports of similar products. However, your Company has been successful in popularizing our ABC brand in the overseas market through third party export. During financial year 2017-18, your Company has done third party export of ABC to the tune of '' 41.06 lakh as against ''37.74 lakh during the previous year.
RISK MANAGEMENT
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has framed a Risk Management Policy for risk assessment and minimization procedures. The Risk Management Policy developed with the objective of having a balanced approach towards business plan and mitigating the associated risks, is in place. The system identifies better management practices to ensure greater degree of confidence amongst various stakeholders and facilitates good Corporate Governance practice. All risks associated with Operations, Environment, Finance, Marketing, Human Resource, Legal, Information Technology Security, Projects etc., are continuously monitored. The degree of impact of the perceived risks is further graded into high, medium and low and the probability of the occurrence of each risk is also classified on regular basis. In order to mitigate losses arising out of such perceived risks, appropriate procedures are being adopted to contain the risks. Also the practices adopted during emergencies, including the communication system and mode of disseminating information are periodically reviewed and updated to minimize the impact on the Company. Quarterly report in respect of the same is presented to the Board.
MAJOR EXPANSION AND DIVERSIFICATIONS:
Your Company is planning to undertake major projects as under:
Ongoing Projects Sewage Treatment Plant (STP) at Trombay
Water supply situation in Mumbai is getting more and more difficult day by day. Ensuring water availability has become critical for the smooth functioning of the Trombay unit given the competing demand for water in the city. Recognizing this, your Company is setting up another new Sewage Treatment Plant (STP) adjacent to the existing STP with a capacity to treat 22.75 Million Litres per Day (MLD) of Municipal Sewage to produce about 15 MLD of treated water. A portion of the treated water will be supplied to M/s Bharat Petroleum Corporation Ltd. (BPCL), on mutually agreed terms. Estimated project capital cost is about '' 209 Crore and work is underway. The project is expected to be commissioned by April 2019.
Gas Turbine Project at RCF Thal:
New Energy Norms have become effective for Thal Unit from 01.04.2018 which has adversely impacted the profitability of your Company. To reduce the impact on profitability due to revision in energy norms, your Company intends to further reduce the specific energy consumption in its Ammonia and Urea Plants at Thal. As a step in this direction, your Company has set-up and commissioned Gas Turbine (GT) of 2 x 25 MW along with Heat Recovery Steam Generator (HRSG) of 2 x 100 MTPH capacity in April 2018. As a part of this project, some of the steam turbine drives are replaced with motors. The estimated energy saving is 0.35 Gcal/MT of Urea and estimated project cost is ''494 Crore. Energy saving of about 0.30 Gcal/MT of Urea is expected to be achieved as result of project executed till date and rest will be achieved by March, 2020 after installation of new motor driven ARC compressor.
New Process Air Compressor at Thal:
Installation of one new higher capacity PAC-IV with GT-HRSG for energy saving is under consideration. Energy saving expected is 0.21 Gcal/MT of Urea. Project is expected to be completed by October, 2020 at an estimated cost of ''346.88 Crore.
VAM unit for Process Air Compressor at Thal:
PAC-I / II suction air chilling for energy saving shall be implemented. Energy saving is expected to be 0.009 Gcal/ MT of Urea. Project is expected to be completed in 2018-19 at estimated cost of ''13 Crore.
Revamp of CO2 compressor at Thal:
Revamping of CO2 compressors and turbines in all the three units is planned with investment of ''138 Crore. Revamping of CO2 compressor is completed for Urea 11 unit in Feb.
2018. For balance two units, revamping is expected to be completed by October, 2018. Estimated energy saving is 0.11 Gcal/MT of Urea.
VAM unit for CO2 Compressor at Thal:
Installation of VAM for CO2 compressor suction cooling at estimated cost of ''9.95 Crore has been planned. Expected energy saving is 0.009 Gcal/MT of Urea. Scheme shall be completed in 2018-19.
VFD for HP Ammonia Feed pump at Thal:
Installation of variable frequency drive on HP Ammonia feed pumps for power saving at estimated cost of Rs,6.60 Crore has been planned. Saving expected is 0.012 Gcal/MT of Urea. The project is expected to be commissioned by September 2019.
Trombay Urea-V Plant Revamp (Casale Scheme):
The revamp scheme is based on End-to-End survey conducted by M/s Casale SA, Switzerland. The project has been taken-up with following objectives:
- Reduction in specific energy consumption of Urea.
- Plant capacity: 1350 MTPD on sustained basis.
- Improving the waste water quality to Boiler Feed Water grade.
The revamp scheme is envisaged to result in energy saving of 0.19 Gcal/MT of Urea. Estimated project capital cost is about Rs,137.03 Crore and work is under execution.
Trombay Ammonia V Plant Revamp (KBR Scheme):
Your Company is implementing energy improvement schemes in Ammonia V plant at a total estimated investment of Rs,101.88 Crore. The Basic Engineering is being done by KBR, USA and Detail Engineering shall be done by PDIL, India. The scheme is envisaged to result in energy saving of 0.36 Gcal/MT of Ammonia. The project is expected to be commissioned by April 2020.
Gas Turbine at Trombay:
Your Company intends to install Gas Turbines (GT) of 2 x 25 MW ISO along with Heat Recovery Steam Generator (HRSG) of 2 x 65 MTPH capacity, with an aim to reduce the specific energy consumption in Ammonia and Urea Plants at Trombay. LoI is placed on M/s Thermax for implementing the project on LSTK basis. Site preparation activities started. Estimated project capital cost is ''427 Crore. Expected Energy Saving is 0.3 Gcal/MT of Urea and expected completion by April 2020.
Joint Venture Projects:
Coal Based Fertilizer Plant at Talcher:
Your Company, along with Coal India Limited (CIL), GAIL (India) Limited (GAIL) and Fertilizer Corporation of India Limited (FCIL), is contemplating to set up a fertilizer complex, comprising of 2200 MTPD Ammonia plant and 3850 MTPD Urea plant, at FCIL, Talcher, Odisha based on coal gasification technology. North of Arkhapal Coal mine is allotted for this project. A joint venture company âTalcher Fertilizers Limitedâ has been incorporated for establishing and operating Coal Gasification based fertilizer complex. Land and certain facilities needed for the project will be provided by FCIL. The project will utilize state-of-the-art Coal Gasification Technology from M/s Shell Eastern Pte Ltd. (Now Air Products & Chemicals Inc.).
The estimated Project capital cost excluding Coal mine development cost is approx. Rs,11611 Crore (your Companyâs equity share is Rs,1033.53 Crore).
Detail Feasibility Report based on estimate is approved by TFL Board. For the investment of this tune for your Company, the approval from CCEA (Cabinet Committee on Economic Affairs) is required. Meanwhile, Department of Expenditure has given us the permission for equity infusion of Rs,147 Cr. in the project for contributing towards critical activities. Also, Department of Fertilizers along with NITI Aayog has provided comfort letter to us for 12% post tax project IRR.
LSTK tender has been floated for Coal Gasification which is opened and is under technical scrutiny. Also LSTK tender has been floated for Ammonia-Urea plant. Tender for offsite Utilities & power plant is being floated shortly.
The project is of strategic importance for the country as it aims to make breakthrough for an alternative source of feedstock in the form of abundantly available coal from domestic sources. Success of this project is expected to be a game changer and shall pave a way forward to the production of chemicals and fertilizers from abundantly available coal resulting in less dependency on RLNG imports. It will also help in meeting much needed Urea production capacity for the eastern part of the Country.
Iran JV Project:
Your company along with Gujarat State Fertilizers Corporation (GSFC) is exploring the possibility of setting up a 1.27 million tonne Urea plant in Chabahar in Iran in Joint Venture with Iranian partner. The natural gas based project has an estimated investment of USD 1000 Million.
Algeria JV Project:
India mostly depends on imports for meeting its requirements of phosphatic fertilizers and raw material for phosphatic fertilizer industry. On the other hand Algeria is blessed with huge reserves of Rock phosphate. Therefore, both the countries intend to join hands for development of Rock phosphate mines. Your Company, along with National Fertilizers Limited (NFL), Gujarat State Fertilizers and Chemicals Limited (GSFC) and NMDC Limited (NMDC) is exploring possibility of:
- Development and beneficiation of Rock mines in Algeria; and
- Setting up Phosphoric acid/ DAP plant with buy back arrangement Estimated Project Cost is Rs,5,000 Crore. The project is currently in exploratory stage.
Namrup IV Project at Brahmaputra Valley Fertilizer Corporation Limited (BVFCL):
Department of Fertilizers (DoF) has nominated your Company for 52% equity in Namrup IV project in BVFCL, along with Oil India Ltd., Govt. of Assam and BVFCL holding 26%, 11% and 11% equity respectively in joint venture for revival of Namrup unit of Brahmaputra Valley Fertilizer Corporation Limited.
The proposed project entails setting up an Urea plant with an annual capacity of 1.27 Million MT. The estimated Project Cost is Rs,6927.51 Crore
SUBSIDIARY AND OTHER JOINT VENTURE COMPANIES
A separate statement containing the salient features of financial statements of all the joint ventures of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the joint ventures and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company. The financial statements including the consolidated financial statements and all other documents required to be attached to this report have been uploaded on the website of your Company (www.rcfltd.com).
Joint Venture Company
FACT-RCF Building Products Ltd. (FRBL), Kochi
Your Company has formed a Joint Venture Company with Fertilizers and Chemicals Travancore Limited (FACT) by incorporating FACT-RCF Building Products Ltd. to set up a Rapidwall project at Kochi. Both your Company and FACT have 50:50 equity holding in the Company. The plant is in operation. The Company is building up its customer base and is in the process of stabilising its operations by making special effort on marketing of the product. Despite the company is not reporting profits, this project has very good potential and therefore your Company would continue to support it in the coming years.
Urvarak Videsh Limited (UVL) was incorporated on 18th July, 2008 as Special Purpose Vehicle (SPV) with equity participation of Rashtriya Chemicals and Fertilizers Limited(RCF), National Fertilizers Limited (NFL) and Krishak Bharti Co-operative Limited (KRIBHCO) with the object of setting up joint venture in India and abroad for manufacturing, mining, long term tie ups for Nitrogenous, Phosphatic and Potassic Fertilizers and fertilizer raw materials including exploring the possibility of making investments and rendering Consultancy services, etc. The company explored many alternatives to take up various projects but the same did not fructify due to want of funds as UVL business objective requires heavy capital investment. As the company could not take up any business, the Board of UVL has decided to declare the company as a Dormant company for the time being in terms of the provision of section 455 of the Companies Act, 2013 as the keeping the status of the company as active was not serving any purpose. As and when proper opportunities arise in future, business activities can be started by the company by reverting its status as active company.
Talcher Fertilizers Limited (TFL)
Your Company has formed a Joint Venture company, with Coal India Limited (CIL), GAIL (India) Limited (GAIL) and Fertilizer Corporation of India Limited (FCIL), with the name Talcher Fertilizers Limited for revival of FCILâs fertilizer unit at Talcher by establishing and operating coal gasification based fertilizer complex. The equity participation of RCF, CIL and GAIL is 29.67% each and that of FCIL is 10.99%. The company is yet to start its operations.
During the year, the your Company has infused Rs,5 Crore in TFL.
Consolidated Financial Statement
The Consolidated Financial Statement of your Company has been prepared by taking into consideration Joint Venture Companies i.e. FACT-RCF Building Products Limited, Urvarak Videsh Limited and Talcher Fertilizers Limited.
The Consolidated financial statements have been prepared under equity method along with Companyâs standalone financial statements.
Rs,Crore
|
Particulars |
2017-18 |
2016-17 |
|
Total Revenue |
7379.87 |
7291.15 |
|
Total Operating Expenses |
7051.90 |
6807.34 |
|
Operational Profit |
327.97 |
483.81 |
|
Depreciation/Impairment |
137.04 |
141.10 |
|
Finance Cost |
62.59 |
93.98 |
|
Share /(loss) of Associates/JVs |
0.02 |
(0.01) |
|
Profit/ (Loss) before tax |
128.36 |
248.72 |
|
Exceptional Item |
0.12 |
0 |
|
Provision for Tax (including deferred Tax liability/ Asset) |
49.42 |
69.47 |
|
Net Profit / (loss) after tax |
78.82 |
179.25 |
RESEARCH AND DEVELOPMENT
Your Company has taken up several Research and Development (R & D) projects, some of which are for commercial scale design and engineering. They are as under:
More from Less-Nanofertilizers
With this theme the nanofertilizer research is progressing at a good pace at R&D department. Many trials were conducted with nanofertilizers in the in-house field, farmers field and at Research Institutes. The effects of these experiments are supporting for commercialization of these fertilizers.
Concrete efforts were done for the development of Nanoorganic fertilizers with biologically synthesized nanoparticles. This formulation will be applied for patent by the year 2020.
Trials are being conducted at Indian council of Agriculture Research (ICAR) institute -Indian Agriculture Research Institute (IARI), Pusa, New Delhi on wheat and paddy cropping system. The trial will be conducted for a period of two years i.e. till June, 2019.
A paper on âImpact of Nitrophosphate-Nanoparticle composites on Spinach growth and nutrient use efficiencyâ was presented at âNanotech Franceâ at Paris, France by R&D Scientist in June 2017.
Soil health management and Balanced Nutrition
Training programmes were conducted by R&D for farmers in various parts of Maharashtra state. Farmers field demonstration were undertaken during these programs.
Field trials were conducted at Islampur District Satara, on soybean crop. The effective use of package of nutrients and the importance of soil testing was demonstrated. Similar trials were conducted at Nasik on rose and grapes, Solapur on Pomegranate, Pune on wheat and onion. Explicit effect of package of nutrients was seen on the crop productivity in all the trials.
The outcome of the studies conducted on Pomegrnate crop growth and yield in Solapur district of Maharashtra, was published in Indian Journal of Agriculture Research. The paper was entitled âStudy on nutrient package for pomegranate (Puncia granatum L)â.
Wealth from Waste - Composting
With the initiatives of Government of India and also the norms of State Government for solid waste management, composting is being carried out by R&D unit. Biodegradable waste material is being converted to good quality compost.
This compost is being internally utilized by the horticulture departments for various gardens at your Company.
During the year 2017-18, 61 MT of quantity of compost was prepared successfully.
ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL
Your Company is committed to ensuring clean environment, beyond satisfying all stipulated requirements laid down by the statutory authorities, around its operating units.
Your Company has established ISO 14001 compliant Environment Management System (EMS) and IFA Protect & Sustain Product Stewardship System of international standard for environment protection, Safety and product security at its both the manufacturing units covering aspects of products in Agriculture farm and end users. The Systems are constantly upgraded and regular internal audits and Management Reviews are carried out to ensure compliance and continuously improve the system. Apart from Stack monitors, which continuously monitor the emissions, four fixed ambient air quality monitoring stations are in place, at both Trombay and Thal, to monitor ammonia, NOx, SO2, Particulate matter (PM10 & PM2.5) & metrological parameters. Both units of RCF are connected to MPCB and CPCB servers for continuous on line data of stack and effluent parameters.
The Effluent Treatment plants at Trombay and Thal have ensured that the environment in and around the operating units are fully protected. Environmental safety of neighbors around operating units are taken care. Various schemes with state of the art technologies and modernization schemes are implanted to reduce energy consumption and wastages of the scarce natural resources. The waste streams from the plants are recycled/ reused for useful purpose.
Sludge generated in Effluent Treatment Plant, Sulphur Sludge Generated in Sulphuric Acid plant, waste streams of effluents from complex fertilizer plants are recycled back in the processes. 3-R strategy (Reduce, Reuse and Recycle) is employed by way of recycling the sludge generated in ETP, Sulphur sludge generated in Sulphuric Acid Plant is used in Suphala plant for recovery of nutrients.
The integrated Effluent Treatment Plant in Operating Units ensures that effluent discharged from the factory meets the statutory requirements laid down by the Pollution Control Board.
Trombay and Thal units have taken up a massive plantation drive in factory premises, in residential colony and surrounding areas and together planted 4315 numbers of trees in the year 2017-18.
For increasing awareness regarding environment and safety, public awareness campaign programmes are arranged by Trombay and Thal units by providing demonstrations to local youth, college and school students and household members in the adjoining localities.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As part of its initiatives under âCorporate Social Responsibilityâ, the Company has undertaken several projects in the areas of rural development, promoting health care and education aimed for the benefit of needy and for general good of the society. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companyâs CSR policy. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-I and forms an integral part of this report. During the year, your Company has spent ''7.79 Crore on CSR activities. The activities, in brief, are as under:
Education:
a. Schools
Your Company supports schools, at its both the units, which impart education in Marathi, Hindi and English medium to students from Nursery to 10th Standard. Your Company undertakes the upkeep, maintenance and bears the deficit expenditure incurred by the schools, located in Companyâs residential colonies, which are run by reputed Educational Institutions.
b. Scholarship to meritorious students
Your Company offers a number of scholarships to students of SC / ST/ OBC communities for pursuing studies. Lodging, Boarding and Education expenses of selected students at Shivaji Military school, Pune is borne by your Company under this scheme. Your Company is also providing scholarship to 110 SC / ST students of drought affected area of Marathwada (Maharashtra).
c. Supply of Mid-Day Meal
Your Company is supplying nutritious Mid-Day Meal to needy children studying in twenty five unaided schools, in and around Trombay area. The scheme is implemented through an NGO, âISKCON Food Relief Foundationâ which supplies good and healthy meal to the children on behalf of RCF. In all, 8404 students are availing the benefit of this nutritious mid-day meal.
d. Programme for underprivileged Children
Your Company has adopted the âKhel Khel Meinâ programme of Wockhardt Foundation for under privileged children of age group between 5 to 12 years, by setting up six centres of edu-recreation with parallel learning in slums of Vashi Naka area, near Trombay unit.
e. RCF SUPER-30 programme
Your Company, in association with Centre for Social Responsibility and Leadership (CSRL), has established a unit of Abhayanand Super 30 in Mumbai where 30 underprivileged talented students of Maharashtra state are provided free residential coaching for 11 months to enable them to get admission in IIT / NIT and other premier engineering colleges. This year, 24 students were successful in the JEE mains examination.
f. Distribution of Navneet Guide
Your Company has distributed 1350 sets of Navneet Guides to 10th Standard students in the schools in slum area around Trombay Unit and rural area around Thal Unit.
Supply of drinking water to the villages
Your Company has been providing drinking water for last 23 years to seven villages around Thal unit through pipelines laid down from the water reservoir in the unit and spent about '' 38.56 lakh on this account during the year. More than 15,700 residents of the villages got benefited of the scheme.
Community Medical Facility- Running of Mobile Medical Van
Your Company in collaboration with Wockhardt Foundation, is running mobile medical van at Thal, Alibagh and Chembur, Mumbai. Total three such medical vans (one at Chembur and two at Thal) were running during 2017-18. At Thal, on an average seven villages are covered in weekly cycles by a Mobile van and patients are benefitted from free medical services including supply of medicines. Through this facility, ailments like Malaria, Hepatitis, Dengue, Typhoid, Diabetes etc., are treated on regular basis. The Medical Van is accompanied with one MBBS doctor and one assistant. One medical van attends to approximately 25,000 patients per annum.
Construction of Bandhara
To enhance water level, your Company has provided financial assistance for construction of Bandhara at Shendurjane, Koregoan, District-Satara.
Rural Sports
Your Company has supplied sports material and organised district level Adivasi Kabbadi Tournament wherein more than 1000 Tribals participated.
Livelihood enhancement projects
Your Company has also supplied paddy, fruit saplings and free fertilizers to needy villagers near Thal.
Repair of Roads
As an infrastructure development initiative, repair of roads in and around Thal, Navgaon, Boris, Gunjis Gram Panchayat area is being done by your Company on year to year basis.
Sanitation, Public Health & Cleanliness and other CSR Projects
Your Company is maintaining Bio-toilets at gate No.2 of Trombay factory for Truck Drivers and cleaners through Wockhardt Foundation. In association with World Confederation of Warriers and Heal Foundation, Free Medical Check Up and Eye Check Up camps, Cataract operations for economically backward patients have been organized in and around Tromaby and Thal.
Your Company is also conducting various CSR projects like:- providing drinking water in School, beautification of Ashish Lake, financial assistance for the construction of ST students hostel, construction of toilets, providing medical facilities to elderly patients, construction of bore-well, providing oxygen machine to needy patients, handing over of five garbage disposable vans to Thal, establishment of
Mini Science Centre at School, construction of Bazar Shed, support to Vrudhrashram, strengthening of Thal Nagoan Creak Bridge, installation of High Mast Tower, financial assistance for AIDS documentary, renovation of community centre.
CPSE CONCLAVE
Department of Public Enterprises (DPE) has embarked on a collaborative exercise for re-defining the role and functioning of Central Public Sector Enterprises (CPSEs) in the context of challenges and expectations emerging from broad vision of âNew India-2022â. This exercise had culminated in the CPSE Conclave âNew India - Vision 2022â held on 9th April, 2018 at Vigyan Bhavan, New Delhi which was addressed by Honâble Prime Minister.
In line with the directions given by Honâble Prime Minister at the conclave, DPE has prepared broad framework of action plan comprising of objectives, actionable points, metric and responsibility and have circulated the same amongst all CPSEs for developing Company specific actionable points and targets to be achieved by 2019 (short-term) and long term (to be achieved by 2022).
In line with above, your Company has prepared the Company specific actionable points with targets and has been working on achieving the same. The actionable points are pertaining to contribution towards import substitution, minimizing the import bill of the Country, JV projects for overseas investment, contribution towards Government initiatives such as Digital India, hand-holding of MSEs, skill India movement, supporting start-ups, development of township as mini smart city, promotion of R&D activities etc.
MICRO, SMALL AND MEDIUM ENTERPRISES
Government of India, Ministry of Micro, Small and Medium Enterprises (MSMEs), vide order dated 23rd March, 2012, notified the public procurement policy in respect of procurement of goods and services produced and provided by MSMEs. As per the directive, every Central Ministry or Department or Public Sector Undertaking (PSU) shall set an annual goal of procurement from MSMEs from the Financial Year 2012-13 and onwards with the objective of achieving an overall procurement of products produced and services rendered by MSMEs to the extent of minimum of 20% of total annual procurement. All efforts are being made to procure items specified for procurement from MSMEs. Necessary provision has been made in all the tenders stating the eligibility of MSMEs to participate in the tender.
With concerted efforts, your Company has been able to achieve 23.66 % procurement from Micro and Small Enterprises (MSEs) during 2017-18, out of total procurement of Goods and Services excluding raw materials, gas, water, electricity, catalyst & proprietary items which cannot be procured from MSEs.
SUSTAINABLE DEVELOPMENT
Your Company has taken up several Sustainable development activities including the following:
New Sewage Treatment plant
Your Company is running Sewage Treatment Plant (STP) at Trombay Unit. The existing plant is based on conventional Activated Sludge Process followed by Reverse Osmosis (RO). The plant treats around 22.75 Million Litres per Day (MLD) of sewage received from MCGM which otherwise would have been drained in to the sea after required treatment. The plant generates about 15 MLD of treated water which is being used in our plants as process water. Existing STP meets about 55-60% of process requirement of our Trombay Unit.
Your Company and M/s Bharat Petroleum Corporation Limited (BPCL), are setting up a new Sewage Treatment Plant (STP) at RCF, Trombay. New Sewage Treatment Plant will be based on latest Membrane Bio-Reactor (MBR) Technology with design capacity to treat 22.75 Million Litres per Day (MLD) of Municipal Sewage to produce about 15 MLD of treated water. The treated water shall be shared by your Company and BPCL. This project is a Sustainable Development Project as it will treat waste sewage generated in the city and convert it into treated water.
When the said project will on-stream, it will generate 15 MLD of treated water for usage in plant operation in your Company and BPCL thereby saving fresh water intake to that extent which will benefit about 30,000 families in the city of Mumbai. Being sustainable development project, this project from your Company will be of great value to residents of Mumbai and Society at large besides improving reliability of operations of your Companyâs Trombay Unit.
Solar Power Plant
In its bid towards Indiaâs vision of achieving ecologically sustainable growth, your Company has already forayed into solar power generation.
Your Company has set up a 2 MWp ground mounted Photovoltaic Solar power plant within the factory premises in Trombay Unit in January 2016. The plant has generated 2990 MWh of power which was utilised for captive consumption.
In addition to above, your Company has commissioned solar rooftop facilities at Thal, Trombay & Soil Testing labs with an aggregate capacity of 1.29 MWp.
The green power generated by solar plants replaces the conventional power generated through burning of fossil fuels leading to reduction in overall Greenhouse gas emissions.
During the year 2017-18, your Company has generated 4426 MWh of solar power.
Your Company is targeting to take up many more Sustainable Development activities in the near future.
VIGILANCE
Vigilance Department is headed by Shri T.V. Reddy, IFS who holds the charge of Chief Vigilance Officer of RCF. CVO has been assisted by a team of Officers drawn from various functional departments and placed at corporate office in Mumbai and also at Thal. The activities of Vigilance department cover the Corporate Office, Trombay Unit, Thal Unit and all the Marketing Offices situated throughout the country. In line with the CVC guidelines, thrust of the Vigilance in the company is to bring greater transparency, fairness and efficiency in award of works and their execution.
Efforts are made constantly to keep watch on various activities through regular inspections and surprise checks. System improvements and corrective actions are suggested wherever necessary. The theme that âAll officers are Vigilance Officersâ is implemented in the company and alertness and support of all officers is taken in the implementation of Vigilance. Vigilance department has focused on spreading awareness on rules/ regulations, procedures and solicited information/complaints from all regarding malpractices/ corruption. The Vigilance department has a complaint handling system and an online portal for lodging complaints is available. Efforts are made to ensure speedy redressal of grievances.
During the year, Vigilance Department has actively contributed towards e-governance, by leveraging technology in all operations in RCF, in making the tender documents more transparent, enhance transparency in existing system of dealing with the Dealers/Vendors and increasing the accrued savings to the company by implementing e-procurement thereby also ensuring transparency in all procurements. Vigilance Department has also ushered in an era of e-Vigilance clearance for issuing of NOC for various purposes to the employees.
Vigilance Department conducted the Vigilance Awareness Week from 30th October to 4th November 2017 as per the CVC guidelines and involved school and college students from Mumbai & Thal which helped in spreading the Vigilance Awareness. Integrity club has been established in a Mumbai School for motivating students and the community on moral issues.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis report for the year under regulations 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), highlighting the industry structure and developments, opportunities and threats, future outlook, risk and concerns etc. is annexed as Annexure II and form an integral part of this report.
PUBLIC DEPOSIT
Your Company has not accepted any deposits, within the meaning of section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.
OFFICIAL LANGUAGE POLICY
Your Company has fully endeavoured to implement the provisions of Official Language Act, 1963 and the policy of the Government. Publicity material and literature for employees and farmers are made available in Hindi and other regional languages.
AUDITORS a. STATUTORY AUDITOR
The Comptroller and Auditor General of India (CAG) has appointed, M/s. Kalyaniwalla & Mistry LLP, (Firm Registration Number 104607W) and M/s. Chhajed & Doshi (Firm Registration Number 101794W) as Joint Statutory Auditors of your Company for the financial year 2017-18. The Auditors would be retiring at the conclusion of the Fortieth Annual General Meeting.
There are no qualifications, reservations or adverse remarks made by Statutory Auditors, in their report.
The Statutory Auditors for the financial year 201819 will be appointed by the CAG. However, their remuneration is required to be fixed at the AGM by the members.
b. COST AUDITOR
Your Directors, on the recommendation of Audit Committee, has appointed Mr. Rohit J. Vora, Cost Accountants ( Firm Registration No. 5740), Mumbai as Cost Auditors to audit the cost accounts of the Company for the year 2018-19 on a remuneration of '' 2.00 lakh excluding applicable taxes. As required under the Companies Act, 2013, the remuneration payable to cost Auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking Membersâ approval for the remuneration payable to Mr. Rohit J. Vora as Cost Auditors forms part of the notice convening the Annual General Meeting for their ratification.
c. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed
M/s. Bhandari and Associates, a firm of Company Secretaries in Practice (C.P. No. 366) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure III and forms an integral part of this Report.
EXPLANATION OR COMMENTS BY THE BOARD ON SECRETARIAL AUDIT REPORT
M/s. Bhandari and Associates, Practising Company Secretaries, Secretarial Auditor of the Company has made the following observations in their Secretarial Audit Report:
a) The Board of Directors comprises eight directors, constituting of three Executive Directors (including the Chairman & Managing Director); two Nominee Directors and three Independent Directors. As per the reg. 17(1) (b) of the Listing Regulations and clause 3.1.4 of DPE Guidelines on Corporate Governance for Central Public Sector Enterprises, the Chairman being an Executive Director, at least half of the Board of Directors should be comprised of Independent Directors. Thus, the Company does not have the requisite number of Independent Directors on its Board.
b) Performance evaluation of Independent Directors was not carried by the Board as required under regulation 17(10) of the Listing Regulations.
Explanations on observations made by Secretarial Auditors in seriatim are as under:
a. The Company is a CPSE under the administrative control of the Ministry of Chemicals and Fertilizers, DoF, Government of India and its Directors on the Board are nominated / appointed by the President of India. The Company is continuously pursuing with the Government of India for the appointment of requisite number of Independent Directors on the Board in order to comply with the provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
b. Ministry of Corporate Affairs vide notification dated 5th June, 2015 has exempted the same for Government Company under Section 134(3)(e),(p), 178(2), 3 and (4) of the Companies Act, 2013. However, the Company will ensure in future the compliance regarding the performance evaluation of Independent Directors in line with Regulation 17(10) of the Listing Regulations.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.
DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of section 134(3) (c) of the Companies Act, 2013:
i] that in the preparation of the annual accounts for the year ended March 31, 2018 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii] the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;
iii] that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv] the annual accounts have been prepared on a going concern basis;
v] that the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
vi] that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE GOVERNANCE
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate of Compliance from the Practising Company Secretary forms an integral part of this report.
COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OF PUBLIC ENTERPRISES
DPE, Government of India, has laid down certain parameters for the purpose of grading the CPSEs on the basis of their compliance with guidelines on Corporate Governance and this report needs to be submitted to the Government on quarterly/annual basis. Your Company has been complying with the Guidelines on Corporate Governance for CPSEs laid down by DPE and regularly submits reports to the Government. DPE issued âExcellent Ratingâ to your Company for the year 2016-17.
INTERNAL FINANCIAL CONTROL OVER FINANCIAL REPORTING
Your Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Your Companyâs internal financial control over financial reporting includes those policies and procedures that:
(1) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of Management and Directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Shri Umesh V. Dhatrak (DIN 07718394) has been appointed as Chairman & Managing Director of the Company w.e.f. 14th September, 2017.
Shri Sudhir D. Panadare (DIN 07933191) has been appointed as Director (Technical) of the Company w.e.f. 18th December, 2017.
Shri Umesh Dongre (DIN 08039073) has been appointed as Director (Finance) & CFO of the Company w.e.f. 9th February, 2018.
Ms. Gurveen Sidhu (DIN 08121526) has been appointed as Government Nominee Director w.e.f.18th May, 2018.
Shri Suresh Warior (DIN 06920261), Director (Finance) and CFO ceases to be Director on the Board on his superannuation on 1st December, 2017.
Shri Bharatkumar Barot (DIN 07552993), Independent Director ceased to be Director of the Company w.e.f. 24th November, 2017.
Shri Sushil Kumar Lohani (DIN 06912948) ceases to be Government Nominee Director on the Board w.e.f. 18th May, 2018.
Shri J. B. Sharma appointed as Company Secretary and Compliance Officer in place of Shri D. M. Sati w.e.f. 1st October, 2017.
The Board has placed on record appreciation of the Directors who have ceased to be members of the Board for the valuable contribution made and the guidance/suggestion provided by them which has greatly benefited the Company.
As per Section 152 of the Companies Act, Ms Alka Tiwari (DIN 03502306), Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for reappointment.
DECLARATION OF INDEPENDENCE
All Independent Directors of the Company have given declaration confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
COMMITTEES OF THE BOARD
The Companyâs Board has the following committees:
i. Audit Committee
ii. Stakeholders Relationship Committee
iii. Share Transfer Committee
iv. Nomination and Remuneration Committee
v. Committee on Corporate Social Responsibility (CSR)
vi. Empowered Committee for Procurement.
The details of the committees along with their composition, number of meetings held and attendance of each director at the meetings are provided in the Corporate Governance Report.
COMPANYâS POLICY ON DIRECTORâS APPOINTMENT AND RELATED DISCLOSURES
As per notification dated 5th June, 2015 issued by Ministry of Corporate Affairs, provision of section 134(3) (e) of the Companies Act, 2013 regarding disclosure of its policy on Directorâs appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matter provided under sub- section (3) of section 178 of the Companies Act, 2013 are not applicable to a Government company.
Your Company being a Government company, the above provisions are not applicable to it.
Similarly, section 197 of the Companies Act, 2013 requiring disclosure of ratio of the remuneration of each director to the median employeeâs remuneration and other such details including the name and other particulars of every employee of the company, who if employed throughout/part of the financial year, was in receipt of remuneration in excess of the limits set out in the rules, are not provided in terms of section 197 (12) read with rule 5 (1) (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, being not applicable to a Government company as per notification dated 5th June, 2015 issued by Ministry of Corporate Affairs.
MEETINGS OF THE BOARD
Thirteen (13) Board Meetings were held during the year. The details of the Board Meetings held during the financial year 2017-18 are provided in the Corporate Governance Report.
BOARD EVALUATION
Section 134(3) (p) of the Companies Act, 2013 requires the Company to disclose the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual Directors. As per notification dated 5thJune, 2015 issued by Ministry of corporate affairs, provision of section 134(3) (p) of the Companies Act, 2013 shall not apply in case Directors are evaluated by the Ministry which is administratively in charge of the Company, as per its own evaluation methodology. Your Company, being a Government Company, the performance evaluation is ca
Government Company, the performance evaluation is carried out by the Administrative Ministry (Ministry of Chemicals & Fertilizers), Government of India, as per applicable Government Guidelines.
PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of Loans given, Investments made, Guarantees given and Securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to the financial statements.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The details of Vigil Mechanism/Whistle Blower Policy are provided in Corporate Governance Report.
RELATED PARTY TRANSACTIONS
All contracts/arrangement/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee and also before the Board for approval. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
The details of the investment in equity made by the Company as on 31st March, 2018 is as under:
Rs, Crore
|
1 |
FACT-RCF Building Products Limited |
32.87 * |
|
2 |
Urvarak Videsh Limited |
0.18 * |
|
3 |
Talchar Fertilizers Limited |
5.02 |
|
Total |
38.07 |
* Company has made full provision towards the value of investment.
The details of transactions with related parties are provided in the accompanying financial statements. There are no transactions to be reported in Form AOC-2.
INTER CORPORATE DEPOSIT
In connection with one time settlement entered into with Dena Dank, the Company has paid Rs, 12 crore to Dena Bank as one time settlement which includes an amount of Rs, 6 crore being the share of The Fertilisers and Chemicals Travancore Limited, the joint venture partner in FRBL. This amount is shown as inter corporate deposit given.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
During the year, no complaint of Sexual Harassment was received by the internal complaint committee formed by your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules,
2014, is annexed to this Report as âAnnexure IV.â
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT- 9, as required under section 92 of the Companies
Act, 2013, is annexed as Annexure V and form an integral part of this report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 (2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report initiatives taken from an environmental, social and governance prospective in the prescribed format is available as a separate section of the Annual Report and forms an integral part of this report. Business Responsibility Report is also available on the Companyâs website www.rcfltd.com.
ACKNOWLEDGMENT
Your Directors wish to gratefully acknowledge the valuable guidance and continued support extended by Government of India and in particular, the Department of Fertilizers and the Office of Fertilizer Industry Co-ordination Committee (FICC), Railways, DPE, Members of MOU Task force, and other Central Government Departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude, the help and unstinted support from the Government of Maharashtra and other State Governments, MSEB, MIDC, various Media, Municipal Authorities, Maharashtra Pollution Control Board, Bankers to your Company, Financial Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence posed, unstinted support and suggestions made to the Board by the esteemed Share Owners of the Company. The Board also wishes to place on record the positive suggestions and guidance provided by the Statutory Auditors, Cost Auditors and the Office of the Principal Director of Commercial Audit.
Last but not the least, your Directors take pleasure in placing on record their deep appreciation of the excellent contribution made by the employees of your Company at all levels, without which your Company would not have achieved such good performance.
By order of the Board of Directors
[Umesh V. Dhatrak]
Chairman & Managing Director
Place: Mumbai
Date: 8th August, 2018
Mar 31, 2017
Dear Members,
The Directors of your Company have pleasure in presenting this 39th Annual Report on the working of your Company together with the Audited Accounts for the year ended 31st March, 2017.
1.0.0 FINANCIAL PERFORMANCE
1.1.0 SUMMARY OF FINANCIALPERFORMANCE
Rs. Crore
|
Particulars |
2016-17 |
2015-16 |
|
Total Revenue |
7291.15 |
8326.40 |
|
Total Operating Cost |
6807.34 |
7768.25 |
|
Operational Profit |
483.81 |
558.15 |
|
Depreciation/Impairment |
141.10 |
147.65 |
|
Finance Cost |
93.98 |
145.27 |
|
Profit/ (Loss) before tax |
248.73 |
265.23 |
|
Provision for Tax (including |
69.47 |
92.59 |
|
deferred Tax liability/ Asset) |
||
|
Net Profit / (loss) |
179.26 |
172.64 |
|
Retained Earnings |
||
|
Less: Dividend Paid (Previous |
60.69 |
99.30 |
|
financial year) |
||
|
Less :Dividend Distribution Tax |
12.35 |
20.22 |
|
Add: Re-measurement of |
0.79 |
2.13 |
|
Defined Benefit Plan |
||
|
Less: Balance Transferred to |
107.01 |
55.25 |
|
General Reserve |
The Company has adopted Indian Accounting Standards (Ind As) with effect from 1st April, 2015, pursuant to the notification of Companies (Indian Accounting Standards) Rules, 2015 issued by Ministry of Corporate Affairs. Accordingly, previous yearsâ figures have been restated and audited by the Joint Statutory Auditors of the Company, namely, M/s Kalyaniwalla & Mistry LLP, Chartered Accountants and M/s Chhajed & Doshi, Chartered Accountants.
The major factors contributing to the reduction in the Companyâs profitability before tax are as under:
i) Provision made during the year on sale of surplus ammonia in the ratio of 35:65 (35% to GoI).
ii) Falling IPP of Urea has impacted the operating Margins of production of Urea beyond Reassessed capacity.
iii) Price protection provision for imported MOP for the period December 2015 to September 2016 was reckoned, which impacted trading profitability.
iv) Provision made towards wage revision due from 01.01.2017 in line with Pay Revision committee recommendations.
v) Provision made during the year towards wage revision arrears effective from 01.01.2016 payable to CISF, Railway staff deployed with the Company & Contract Labour.
However the Companyâs profit after tax is marginally higher due to reversals of earlier yearâs tax provisions on finalisation of the Assessments and lower deferred tax liability provision as compared to the previous year.
1.2.0 MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA
RCF has been entering into a Memorandum of Understanding (MoU) with the Ministry of Chemicals & Fertilizers, Government of India, setting the performance parameters and targets every year. Your Company has consistently maintained âExcellentâ MoU performance rating over the years. However, the Company has received âVery Goodâ rating for the year 2015-16.
Inspite of an excellent performance in 2015-16, Companyâs MoU ratings were âVery Goodâ mainly on account of lower profit due to creation of liability of Rs.181.97 Crore on account of pool price differential for non-urea operations. This had impacted the actual profits and the ratios considered in evaluation of MoU performance. The Company had sought set off between the actual price and the price considered in MOU targets for use of gas in P&K fertilizers at the time of fixing targets which if agreed to by the Ministry would have resulted in the Company getting âExcellentâ ratings.
The performance rating for 2016-17 MoU is yet to be finalised by the Government.
1.3.0 DIVIDEND
Although your Company has lined up a number of capex programmes which will entail substantial expenditure, considering the consistent profits being made by the Company, your Directors have recommended a dividend of Rs.1.10 (i.e. 11%) per equity share (Previous year Rs.1.10 per equity share) for the financial year 2016-17. The total outgo on this account works out to Rs.73.04 Crore (Rs.73.04 Crore in the previous year) including dividend distribution tax and education cess. The dividend payout is subject to the approval of members at the ensuing Annual General Meeting.
1.4.0 APPROPRIATION TO GENERAL RESERVES
Your Company earned a net Profit after Tax of Rs.179.26 Crore (Rs.172.64 Crore in the previous year). The dividend payout along with Tax and education cess is Rs.73.04 Crore (Rs.73.04 Crore in the previous year). The balance amount of Rs.107.01 Crore (Rs.55.25 Crore in the previous year) is transferred to General Reserves.
1.5.0 AWARDS WON
As in the past, your Company has won many awards during the year 2016-17, some of which are as under:
Trombay unit
- 1st Prize in 11th State Level Energy Conservation Award 2015-16 in Chemical Sector instituted by Maharashtra Energy Development Agency (MEDA).
- âNational Energy Conservation Award 2016â- Certificate of Merit in the Fertilizer Sector from Bureau of Energy Efficiency.
- ICC Award 2015 for Efficient Waste Management.
- FAI Award for âExcellence in Bio fertilizer production, promotion and marketingâ for the year 2015-16.
- âPerformance Excellence Award 2015 (Organization)â from Indian Institute of Industrial Engineering.
- âEnvironmental protection Award in the NPK Fertilizerâ for the year 2015-16 issued by FAI.
- FAI Award for Paper presentation on âImproving reliability and environmental performance of Urea Plant at RCF Trombayâ.
Thal Unit
- Green Leaf Award of International Fertiliser Association 2017 to RCF Thal Unit for âExcellence in Safety Health and Environmentâ at Amman, Jordan.
- Certificate of merit to HWP, RCF Thal for âMeritorious performance in Industrial Safety during the year 2015â by National Safety Council-Maharashtra.
- ICC (Indian Chemical Council) Certificate of Merit for excellence in Energy Conservation and Management for the year 2015.
In addition to the above, your Company has been won following Awards:
- Product and Sustain Certification for outstanding achievement at your Companyâs Mumbai Offices, Thal and Trombay Units by International Fertilizer Industry Association.
- Vigilance Excellence Award for CTE inspection in 2016-17 from Vigilance Study Circle, Mumbai
1.6.0 OFFER FOR SALE BY THE GOVERNMENT OF INDIA TO THE PUBLIC
Offer for Sale of 2,75,84,405 equity shares of the Company, representing 5% of the total share capital of the Company by the Government of India, was made in June 2017 in line with the directive of SEBI to maintain all time at least 25% of minimum public shareholding. The offer was opened on 29th June, 2017 (for Non-Retail Investors) and on 30th June, 2017 (for Retails Investors and for Non-Retail Investors who choose to carry forward their bids) through a separate, designated window of BSE Ltd. and The National Stock Exchange of India Limited. The Floor Price for the Offer was fixed at Rs.74.25 per equity share of the Company. An amount of Rs.205.15 Crore (excluding net of stock exchange transaction charges and all applicable taxes and stamp duty) was garnered through offer for sale by the Government of India.
Consequent upon sale of 2,75,84,405 Equity Shares by Government of India, the equity holding of Government of India in your Company stands reduced to 75% of paid up capital from 80%.
2.0.0 OPERATIONAL RESULTS:
2.1.0 Production:
2.1.1 Fertilizers:
Your Company produced 30.17 lakh MT of fertilizers ( 25.52 lakh MT of Urea and 4.65 lakh MT of Suphala 15:15:15 ) during the year as against 31.83 lakh MT of fertilizers (25.46 lakh MT of Urea, 4.62 lakh MT of Suphala15:15:15 and 1.75 lakh MT of Suphala 20:20:0) produced during the previous year. In terms of nutrients, your Company produced 12.44 lakh MT of Nitrogen (N), 0.70 lakh MT of Phosphate (P2O5) and 0.70 lakh MT of Potassium (K2O) during the year as compared to 12.75 lakh MT of Nitrogen (N), 1.04 lakh MT of Phosphate (P2O5) and 0.69 lakh M T of Potassium (K2O) during the previous year.
2.2.0 MARKETING PERFORMANCE
2.2.1 Fertilizer Division:
Your Company achieved sales volume of 31.87 lakh MT during 2016-17 as compared to 33.75 lakh MT during the previous year. Your Company sold 25.63 lakh MT of Urea, 4.76 lakh MT of Suphala 15:15:15, 0.05 lakh MT of Suphala 20:20:0 and 1.43 lakh MT of other bought out products such as DAP, MOP, etc., compared to 26.52 lakh MT of Urea, 4.36 lakh MT of Suphala 15:15:15, 1.86 lakh MT of Suphala 20:20:0 and 1.01 lakh MT of other bought out products during the previous year. The total sale of manufactured fertilizers during 2016-17 was 30.44 lakh MT as against 30.88 lakh MT during the previous year.
Sales of manufactured fertilizers registered reduction of 1.42% over previous year owing to poor agro-climatic conditions and glut of fertilizers in the market.
2.2.2 Industrial Products Division:
Industrial Products Division achieved sales turnover of Rs.919 Crore as against Rs.1063 Crore during the previous year. Owing to depressed sales realizations of IPD products and higher cost of operations on account of increase in gas prices, production of some products like Methanol, Sodium Nitrate/ Nitrite and Methylamines at Trombay and DMF and Formic Acid at Thal were suspended, which had an adverse impact on the profitability of IPD products.
2.2.3 Exports:
Considering the nature of products manufactured by your Company and indigenous demand, the scope for export is very limited. High cost of production is the main restraining factor for venturing in the international market, as it renders our products unviable compared to lower cost of imports of similar products. However, your Company has been successful in popularizing our ABC brand in the overseas market through third party export. During financial year 2016-17, your Company has done third party export of ABC to the tune of Rs.37.74 lakh as against Rs.50.59 lakh during the previous year.
2.3.0 RISK MANAGEMENT
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has framed a Risk Management Policy for risk assessment and minimization procedures. The Risk Management Policy developed with the objective of having a balanced approach towards business plan and mitigating the associated risks, is in place. The system identifies better management practices to ensure greater degree of confidence amongst various stakeholders and facilitates good Corporate Governance practice. All risks associated with Operations, Environment, Finance, Marketing, Human Resource, Legal, Information Technology Security, Projects etc., are continuously monitored. The degree of impact of the perceived risks is further graded into high, medium and low and the probability of the occurrence of each risk is also classified on regular basis. In order to mitigate losses arising out of such perceived risks, appropriate procedures are being adopted to contain the risks. Also the practices adopted during emergencies, including the communication system and mode of disseminating information are periodically reviewed and updated to minimize the impact on the Company. Quarterly report in respect of the same is presented to the Board.
2.4.0 MAJOR EXPANSION AND DIVERSIFICATIONS:
Your Company is planning to undertake major projects as under:
Ongoing Projects
2.4.1 Sewage Treatment Plant (STP) at Trombay
Water supply situation in Mumbai is getting more and more difficult day by day. Ensuring water availability has become critical for the smooth functioning of the Trombay unit given the competing demand for water in the city. Recognizing this, your Company is setting up another new Sewage Treatment Plant (STP) adjacent to the existing STP with a capacity to treat 22.75 Million Litres per Day (MLD) of Municipal Sewage to produce about 15 MLD of treated water. A portion of the treated water will be supplied to M/s Bharat Petroleum Corporation Ltd. (BPCL), on mutually agreed terms. Estimated project capital cost is about Rs.209 Crore and work is underway.
2.4.2 Gas Turbine Project at RCF Thal
Your Company intends to reduce the specific energy consumption in its Ammonia and Urea Plants at Thal. Your Company has proposed to install Gas Turbine (GT) of 2 x 32 mW ISO along with Heat Recovery Steam Generator (HRSG) of 2 x 100 MTPH capacity. At present, the power requirement is met through Steam Turbo Generator (STG) of 30 MW (15x2 MW). The project is being executed on LSTK basis. As a part of this project, some of the steam turbine drives are proposed to be replaced with motors. The estimated energy saving is 0.35 Gcal/MT of Urea and estimated project cost is Rs.494 Crore. Project is estimated to be completed by Dec. 2017. Energy saving of 0.30 Gcal/MT of Urea will be achieved after Dec 2017 and rest will be achieved in the year 2018-19 after installation of new ARC compressor.
2.4.3 New Process Air Compressor at Thal
Installation of one new higher capacity PAC-IV with GT-HRSG for energy saving. Energy saving expected is 0.217 Gcal/MT of Urea. Project is expected to be completed by Sept, 2019 at an estimated cost of Rs.346.25 Crore.
2.4.4 VAM unit for Process Air Compressor at Thal
PAC-I/II suction air chilling for energy saving shall be implemented. Energy saving is expected to be 0.009 Gcal/MT of Urea. Project is expected to be completed in 2017-18 at estimated cost of Rs.13.77 Crore.
2.4.5 Revamp of CO2 compressor at Thal
Revamping of CO2 compressors and turbines in all the three units is planned with investment of Rs.138 Crore. Estimated energy saving is 0.11 Gcal/MT of Urea. Total scheme is expected to be completed in 2018-19.
2.4.6 VAM unit for CO2 Compressor at Thal
Installation of VAM for CO2 compressor suction cooling at estimated cost of Rs.14 Crore. Expected energy saving is 0.01Gcal/MT of Urea. Scheme shall be completed in 2018-19.
2.4.7 VFD for HP Ammonia Feed pump at Thal
Installation of variable frequency drive on HP Ammonia feed pumps for power saving at estimated cost of Rs.8.31 Crore. Saving expected is 0.008 Gcal/ MT of Urea.
2.4.8 Trombay Urea-V Plant Revamp (Casale Scheme)
The revamp scheme is based on End-to-End survey conducted by M/s Casale SA, Switzerland. The project has been taken-up with following objectives:
- Reduction in specific energy consumption of Urea.
- Plant capacity: 1350 MTPD on sustained basis.
- Improving the waste water quality to Boiler Feed Water grade.
The revamp scheme is envisaged to result in energy saving of 0.19 Gcal/MT of Urea. Estimated project capital cost is about Rs.137.03 Crore and work is underway.
2.4.9 Trombay Ammonia V Plant Revamp (KBR Scheme)
Your Company is implementing energy improvement schemes in Ammonia V plant at a total estimated investment of Rs.101.88 Crore. The Basic Engineering is being done by KBR, USA and Detail Engineering shall be done by PDIL, India. The scheme is envisaged to result in energy saving of 0.36 CGal/MT of Ammonia.
Projects Under Consideration:
2.4.10 Additional Ammonia Urea project at Thal
Your Company has planned to expand the capacity of Urea at Thal by setting up one single stream Ammonia plant of capacity 2200 MTPD and one single stream Urea plant of capacity 3850 MTPD at the existing site at approximate cost of Rs.5,414 Crore. The project is awaiting approval of Cabinet Committee on Economic Affairs (CCEA), Government of India.
2.4.11 Gas Turbine at Trombay
Your Company intends to install Gas Turbines (GT) of 2 x 32 Mw ISO along with Heat Recovery Steam Generator (HRSG) of 2 x 65 MTPH capacity, with an aim to reduce the specific energy consumption in Ammonia and Urea Plants at Trombay. PDIL has been lined-up for preparation of Detailed Feasibility Report, Environmental Clearance and Project Management Consultancy services. The Bidding process for implementing the project on LSTK basis is in progress. Estimated project capital cost is Rs.481 Crore.
Joint Venture Projects:
2.4.12 Coal Based Fertilizer Plant at Talcher
Your Company, along with Coal India Limited (CIL), GAIL (India) Limited and Fertilizer Corporation of India Limited (FCIL), is contemplating to set up a fertilizer complex, comprising of 2200 MTPD Ammonia plant and 3850 MTPD Urea plant, at Talcher, Odisha based on coal gasification technology. Coal will be made available locally. Land and certain facilities needed for the project will be provided by FCIL. The project will utilize state-of-the-art Coal Gasification Technology. A joint venture company âTalcher Fertilizers Limitedâ has been incorporated for estaiblishing and operating Coal Gasification based fertilizer complex.
Project capital cost is estimated to be approx. Rs.9863 Crore. LSTK tenders is floated for Coal Gasification, and that for Ammonia-Urea plant and offsite Utilities & power plant shall be floated shortly.
The project is of strategic importance for the country as it aims to make breakthrough for an alternative source of feedstock in the form of abundantly available coal from domestic sources in place of natural gas. It will also help in meeting much needed Urea production capacity for the eastern part of the Country.
2.4.13 Iran JV Project
Your Company along with Gujarat State Fertilizers Corporation (GSFC) is exploring the possibility of setting up a 1.27 million tonne Urea plant in Chabahar in Iran in Joint Venture with Iranian partner. The natural gas based project has an estimated investment of USD 1000 Million.
2.4.14 Algeria JV Project
India mostly depends on imports for meeting its requirements of phosphatic fertilizers and raw material for phosphatic fertilizer industry. On the other hand Algeria is blessed with huge reserves of Rock phosphate in Algeria. Therefore, both the countries intend to join hands for development of Rock phosphate mines in Algeria. Your Company, along with NFL, GSFC and NMDC is exploring possibility of:
- Development and beneficiation of Rock mines in Algeria; and
- Setting up Phosphoric acid/DAP plant with buy back arrangement
Estimated Project Cost is Rs.45,000 Crore. The project is currently in exploratory stage.
2.4.15 Revival of Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) - Namrup Unit
DoF has nominated RCF along with Oil India Ltd., Govt. of Assam and BVFCL in joint venture for revival of Namrup unit of Brahmaputra Valley Fertilizer Corporation Limited.
The proposed project entails setting up an Urea plant with an annual capacity of 8.64 Lakh MT. The estimated Project Cost is Rs.4,930 Crore. The project is currently in the conceptual stage.
2.5.0 SUBSIDIARY AND OTHER JOINT VENTURE COMPANIES
A separate statement containing the salient features of financial statements of all the joint ventures of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the joint ventures and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company. The financial statements including the consolidated financial statements, financial statements ofjoint ventures and all other documents required to be attached to this report have been uploaded on the website of your Company (www. rcfltd.com).
2.5.1 Joint Venture Company
2.5.1.1 FACT-RCF Building Products Ltd., Kochi
Your Company has formed a Joint Venture Company with Fertilizers and Chemicals Travancore Limited (FACT) by incorporating FACT-RCF Building Products Ltd to set up a Rapidwall project at Kochi. Both RCF and FACT have 50:50 equity holding in the Company. The plant is in operation. The Company is building up its customer base and is in the process of stabilising its operations by making special effort on marketing of the product. This project has very good potential and therefore RCF would continue to support it in the coming years.
FRBLâs performance has marginally improved during the year and its operations are expected to improve in future. Being a very novel concept acceptance of FRBLâs product in lieu of conventional items is taking time for sales to pick up and for operations to completely turn around.
During the year, FRBL earned a total income of Rs.21 Crore as against Rs.20.03 Crore during the previous year. FRBL reported a Loss after Tax of Rs.22.05 Crore during the year as against Rs.20.71 Crore in the previous year.
2.5.1.2 Urvarak Videsh Limited (UVL)
Urvarak Videsh Limited (UVL) was incorporated on 18th July, 2008 as Special Purpose Vehicle (SPV) with equity participation of Rashtriya Chemicals and Fertilizers Limited (RCF), National Fertilizers Limited (NFL) and Krishak Bharati Cooperative Limited (KRIBHCO) with the object of setting up joint venture in India and abroad for manufacturing, mining, long term tie ups for Nitrogenous, Phosphatic and Potassic Fertilizers and fertilizer raw materials including exploring the possibility of making investments and rendering Consultancy services, etc. The company explored many alternatives to take up various projects but the same did not fructify due to want of funds as UVL business objective requires heavy capital investment. As the company could not take up any business, the Board of UVL has decided to declare the company as a Dormant company for the time being in terms of the provision of section 455 of the Companies Act, 2013 as keeping the status of the company as active was not serving any purpose. As and when proper opportunities arises in future, business activities can be started by the company by reverting its status as active company.
2.5.1.3 Talcher Fertilizers Limited
Your Company has formed a Joint Venture company, with Coal India Limited (CIL), Gas Authority of India Limited (GAIL) and Fertilizer Corporation of India Limited (FCIL), with the name Talcher Fertilizers Limited for revival of FCILâs fertilizer unit at Talcher by establishing and operating coal gasification based fertilizer complex. The equity participation of RCF, CIL and GAIL is 29.67% each and that of FCIL is 10.99%. The company is yet to start its operations.
2.5.2 Consolidated Financial Statement
The Consolidated Financial Statement of your Company has been prepared by taking into consideration Joint Venture Companies i.e. FACT-RCF Building Products Limited, Urvarak Videsh Limited and Talcher Fertilizers Limited (erstwhile Rashtriya Coal Gas Fertilizers Limited).
The Consolidated financial statements have been prepared under proportionate consolidated method along with Companyâs standalone financial statements.
SUMMARY OF FINANCIAL PERFORMANCE
Rs. Crore
|
Particulars |
2016-17 |
2015-16 |
|
Total Revenue |
7291.15 |
8326.40 |
|
Total Operating Expenses |
6807.34 |
7768.25 |
|
Operational Profit |
483.81 |
558.15 |
|
Depreciation/Impairment |
141.10 |
147.65 |
|
Finance Cost |
93.98 |
145.27 |
|
Share /(loss) of Associates/JVs |
(0.01) |
(3.57) |
|
Profit/ (Loss) before tax |
248.72 |
261.66 |
|
Provision for Tax (including deferred Tax liability/ Asset) |
69.47 |
92.59 |
|
Net Profit / (loss) after tax |
179.25 |
169.07 |
2.6.0 RESEARCH AND DEVELOPMENT
Your Company has taken up several Research and Development projects, some of which are for commercial scale design and engineering. They are as under:
2.6.1 Nanotechnology Research: Patent application
The world agriculture is facing problems like climate change, soil degradation, desertification, high energy cost and depleting natural resources.
Despite sizable increase in the use of chemical fertilizers over the years, the gap between the nutrient removal and replenishment is significantly high in India. In order to address the National and Global needs, the application of Nanotechnology in agriculture has great potential.
Research and Development - Bioresearch has ventured into the area of Nano particles and its application in agriculture for increasing crop productivity and nutrient use efficiency.
Application for an Indian patent has been done with title âFertilizer Compositionâ Publication Number 20/2016 Publication Date 2016/05/13 Publication Type INA Application Number 201621015019 Application Filing Date 2016/04/29.
The product has a potential to revolutionize the fertilizer and agriculture scenario.
2.6.2 Registration of Phosphogypsum based value added product as âCa: S: TOC:: 12:10:2.5 for increasing nutrient use efficiency.
Recent studies have suggested that the world will need to produce 60 to 100% more food when the global population will reach 9 billion by 2050. This requires a radical change in the way food is produced, stored, distributed and accessed.
Land degradation in the form of depletion of soil fertility, erosion and water logging has increased. With a view to make agriculture sustainable and enhance the nutrient use efficiency, an attempt was made to formulate recipe for blending organic matter and soil conditioner âgypsumâ components together and standardise the combinations to maximise the crop yield and nutrient use efficiency. Field trials in-house and in Agriculture Universities were conducted for evaluating nutrient use efficiency. An increase of 17% in yield and increase of nutrient use efficiency to the extent 50% were reported.
The application of this product has been submitted to Department of Fertilizers for registration under Fertilizer Control Order (FCO) 1985.
2.6.3 The upcoming fertilizer revolution- Nanoparticles fertilizer based field trial
Nanotechnology has been termed as the âfuture technologyâ and has being applied in various fields viz. medicine, pharmaceuticals, food, sensors, electronics and agriculture. The application of nanotechnology to agriculture is relatively unexplored field. Nanoparticles (NP) of any element are found to exhibit different characteristics than the original bulk material. The reactivity of the Nanoparticles is much higher than the basic particles. In view of this known characteristic of NP, it was thought to implement this in the field of fertilizers. The idea was to increase the fertilizer (nutrient) use efficiency thereby decrease the losses of nutrients in environment through mineralization, leaching etc. R&D Centre was successful in bringing an idea to reality. Formulations of Suphala (N:P:K 15:15:15) along with ZnO nanoparticles were developed and in-house trials were carried out. After successful inhouse field trials, trial at farmerâs field were planned.
The trials at farmers field were also conducted and the application of 25% NPK with Nanoparticles have shown profound effect on the growth and quality of onion crop.
2.6.4 Commercialization of NPK Composite Biofertilizer
Use of biofertilizers is one of the important components of integrated nutrient management, as they are cost effective and renewable source of plant nutrients and supplement the chemical fertilizers for sustainable agriculture. Several microorganisms and their association with crop plants are being exploited in the production of biofertilizers. NPK composite Biola - a product that contains Nitrogen-fixing, Phosphate solubilising and Potash-mobilising bacteria. It contains all the beneficial microbial strains in a single highly effective pack. This product was launched in the state of Maharashtra. A total quantity of 33 KL was despatched & successfully sold in the market.
2.6.5 NABL Certificate for R&D laboratory
The R&D-lab has been accredited with National Accreditation Board for Laboratory Testing and calibration (NABL) certification for micronutrients fertilizer and soil sample analysis. This accreditation has great importance with respect to the analysis and is graded as ISO 17025:2005. The results generated by NABL accreditation Lab are considered to be the most authentic. R&D has commercialized this facility for the outside customers. Detailed information regarding this facility is also provided on RCF internet website: www.rcfltd.com.
This facility is being utilized by farmers, students and compact manufactures for testing soil compost as well as water.
2.6.6 Commercialization of Micronutrient grade for Vegetable basal for Tamil Nadu state.
Micronutrients are essential for plant growth and play an important role in balanced crop nutrition. They include Boron (B), Copper (Cu), Iron (Fe), Manganese (Mn), Molybdenum (Mo) and Zinc (Zn). These address the hidden hunger of crops. They are as important to plant as primary and secondary nutrients, though plants donât require much of them. The R & D department of your Company has developed micronutrient grade (No.VI) for Vegetable basal application in solid form for Tamil Nadu State. The product has been commercialized successfully. During the year 2016-17, a quantity of 25 MT was manufactured and marketed. The product contains Zinc-1.68%, Boron-2.48%, Manganese-1.22%, Copper-1%, Iron-7.6%, Molybdenum-0.14%.
2.6.7 Promotional activities for creating awareness about Biofertilizers, Micronutrients and Water soluble fertilizers
It is a need of the hour to adopt the Integrated Plant Nutrient Supply (IPNS) system for sustaining crop productivity. Integration of chemical, organic and biological sources of plant nutrients, and their efficient management have shown promising results in sustaining productivity and soil health. With a view to promote the utilization of balanced nutrition and Soil health Management, Promotional activities for creating awareness amongst farmers were carried out in Maharashtra state in Pune district.
The farmers were trained through demonstration in their field with wheat and onion crop. The utilization of balanced nutrition yielded almost 20% more produce.
2.6.8 Bio-waste Composting
Most urban areas in the country are plagued by acute problems related to solid waste. Solid Waste Management is a part of public health and sanitation. The collection and disposal of municipal solid waste is one of the pressing problems of city life, which has assumed great importance in the recent past.
With a view to implement the âSwacch Bharat Abhiyanâ, an initiative of GoI, R&D has initiated efforts for disposal of waste through composting. Composting is being carried out through pit method.
3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL
Your Company is committed to ensuring clean environment, beyond satisfying all stipulated requirements laid down by the statutory authorities, around its operating units.
Your Company has established ISO 14001 compliant Environment Management System (EMS) and IFA Protect & Sustain Product Stewardship System of international standard for environment protection, Safety and product security is at its both the manufacturing units covering aspects of products in Agriculture farm and end users. The Systems are constantly upgraded and regular internal audits and Management Reviews are carried out to ensure compliance and continuously improve the system. Apart from Stack monitors, which continuously monitor the emissions, four fixed ambient air quality monitoring stations are in place, at both Trombay and Thal, to monitor ammonia, NOx, SO2, Particulate matter (PM10 & PM2.5) & metrological parameters.
The Effluent Treatment plants at Trombay and Thal have ensured that the environment in and around the operating units are fully protected. Environmental safety of neighbours around operating units are taken care. Various schemes with state of art technologies and modernisation schemes are implanted to reduce energy consumption and wastages of the scarce natural resources. The waste streams from the plants are recycled/ reused for useful purpose.
Sludge generated in Effluent Treatment Plant, Sulphur Sludge Generated in Sulphuric Acid plant, waste streams of effluents from complex fertilizer plants are recycled back in the processes. 3-R strategy (Reduce, Reuse and Recycle) is employed by way of recycling the sludge generated in ETP, Sulphur sludge generated in Sulphuric Acid Plant is used in Suphala plant for recovery of nutrients.
The integrated Effluent Treatment Plant in Operating Units ensures that effluent discharged from the factory meets the statutory requirements laid down by the Pollution Control Board.
RCF Trombay and RCF Thal have taken up a massive plantation drive in factory premises, in residential colony and surrounding areas and together planted 20515 numbers of trees in the year 2016-17.
For increasing awareness regarding environment and safety, public awareness campaign programmes are arranged by Trombay and Thal units.
4.0.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)
4.1.0 As part of its initiatives under âCorporate Social Responsibilityâ, the Company has undertaken several projects in the areas of rural development, promoting health care and education aimed for the benefit of needy and for general good of the society. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companyâs CSR policy. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-I and forms an integral part of this report. During the year, the company has spent Rs.8.62 Crore on CSR activities. The activities, in brief, are as under:
4.1.1 Education:
4.1.1.1 Schools:
Your Company supports schools, at its two units, which impart education in Marathi, Hindi and English mediums to students from Nursery to 10th Standard. Your Company undertakes the upkeep, maintenance and bears the deficit expenditure incurred by the schools, located in Companyâs residential colonies, which are run by reputed Educational Institutions.
4.1.1.2 Scholarship to meritorious students:
Your Company offers a number of scholarships to students of SC/ ST/ OBC communities for pursuing higher studies. Companyâs scholarship project for sending every year 10 students to 6th Standard in Shivaji Military School in Pune and supporting the earlier batches in their march to higher standards thereafter has received goodwill from all.
4.1.1.3 Supply of Mid-Day Meal:
Your Company is funding Mid-Day Meal Scheme for providing nutritious food to children studying in twenty five unaided schools, providing education to poor children, in and around Trombay area. The scheme is operated through an NGO, âISKCON Food Relief Foundationâ which supplies good and healthy meal to the children on behalf of RCF. In all, 9076 students are availing the benefit of this nutritious mid-day meal.
4.1.1.4 Programme for underprivileged Children
Your Company has adopted the âKhel Khel Meinâ programme of Wockhardt Foundation for under privileged children of age group between 5 to 12 years, by setting up six centres of edu-recreation with parallel learning in slums of Vashi Naka area, near Trombay unit.
4.1.1.5 RCF SUPER-30 programme
Your Company, in association with Centre for Social Responsibility and Leadership (CSRL), has established a unit of Abhayanand Super 30 in Mumbai where about 30 underprivileged talented students of Maharashtra state are provided free residential coaching for 11 months to enable them to get admission in IIT/NIT and other premier engineering colleges. This year 24 students out of these were successful in the JEE mains examination.
4.1.1.6 Distribution of Navneet Guide
Your Company has distributed 1350 sets of 10th Standard Navneet Guides in the schools near Trombay and Thal Units.
4.1.1.7 Farmersâ Education:
Company has two Farmers Training Institutes located at Thal and Nagpur. During the year, 8884 farmers attended & benefited from the training programmes conducted at these two Farmers Training Centres. During the programmes, training was imparted to farmers to upgrade their farm practices, reduce their overheads and increase their wealth. Special programmes designed for women farmers and the scheduled caste & scheduled tribes are also organized on a regular basis so that they can join the bandwagon of the countryâs agricultural renaissance.
Your Companyâs efforts in rendering advisory services to farmers by conducting soil diagnostics to optimize soil productivity are well appreciated.
Based on the analysis, farmers are advised on soil fertility management through rational use of manure, fertilizers and other inputs to make agriculture more productive and sustainable. During the year, more than 1,37,042 soil samples were analysed through the twelve static and six mobile soil testing laboratories and recommendations were given.
4.1.2 Supply of drinking water to the villages:
Your Company has been providing drinking water for last 22 years to seven villages around Thal unit through pipelines laid down from the water reservoir in the unit and spent about Rs.105.43 lakh on this account during the year. More than 15,700 residents of the villages got benefited of the scheme.
4.1.3 Community Medical Facility
4.1.3.1 Running of Mobile Medical Van
Your Company in collaboration with Wockhardt Foundation, is operating the mobile medical vans at Thal, Alibagh and Chembur, Mumbai. Total five such medical vans (three at Chembur and two at Thal) were running during 2016-17. At Thal, on an average seven villages are covered in weekly cycles by a Mobile van and patients are benefitted from free medical services including supply of medicines. Through this facility, ailments like Malaria, Hepatitis, Dengue, Typhoid, Diabetes etc., are treated on regular basis. The Medical Van is accompanied with one MBBS doctor and one assistant. It is equipped with GPS system which enables RCF to track it on real time basis. One medical van attends to approximately 25,000 patients per annum.
4.1.3.2 Distribution of sanitary napkins (Moksha)
Your Company has engaged Wockhardt Foundation for extending medical services for enhancement of female hygiene by free distribution of sanitary napkins (Moksha) through Mobile Medical Vans. Under this scheme, during the year about 70,000 sanitary napkins were distributed. The efforts in rendering novel services to women staying in slums are well appreciated.
4.1.4 Chembur Green Project
Your Company continued to support the Chembur Green project, launched to establish greenery in the eastern suburb of Mumbai, by joining hands with Chembur Citizensâ Forum, an NGO to develop, beautify and maintain N G Acharya Garden (Diamond Garden), at Chembur for a period of 6 years. Your Company continued distribution of free saplings and rendering advice to various co-op. societies and also to individuals.
4.1.5 Contribution to âJalyukta Shivarâ
Your Company has provided part financial assistance for construction of cement concrete Bandhara at Kamthe, Koregaon, Dist. Satara.
4.1.6 Rural Sports
Your Company has supplied sports material and organised sports for tribals of Thal Villages.
4.1.7 Livelihood enhancement projects
Your Company has also supplied paddy, fruit saplings and free fertilizers to nearby needy villagers.
4.1.8 Your Company is maintaining Bio-toilets at gate No.2 of Trombay factory for Truck Drivers and cleaners through Wockhardt Foundation. In association with World Confederation of Warriers and Heal Foundation, Free Medical Check Up and Eye Check up camps have been organized in the schools where RCF is providing Mid Day Meal.
4.1.9 Repair of Roads
As an infrastructure development initiative, repair of roads in and around Thal factory area is being done by your Company on year to year basis.
5.0.0 MICRO, SMALL AND MEDIUM ENTERPRISES
Government of India, Ministry of Micro, Small and Medium Enterprises, vide order dated 23rd March, 2012, notified the public procurement policy in respect of procurement of goods and services produced and provided by Micro, Small and Medium Enterprises. As per this directive, every Central Ministry or Department or Public Sector Undertaking shall set an annual goal of procurement from Micro, Small and Medium Enterprises from the Financial Year 2012-13 and onwards with the objective of achieving an overall procurement of products produced and services rendered by Micro, Small and Medium Enterprises to the extent of minimum of 20% of total annual purchases. All efforts are being made to procure items specified for procurement from MSMEs. Necessary provision has been made in all the tenders stating the eligibility of MSMEs to participate in the tender. Your Company has achieved the set target under specific areas.
6.0.0 SUSTAINABLE DEVELOPMENT
6.1 Your Company has taken up several Sustainable development activities including the following:
6.1.1 New Sewage Treatment plant
RCF is running Sewage Treatment Plant (STP) at Trombay Unit. The existing plant is based on conventional Activated Sludge Process followed by Reverse Osmosis (RO). The plant treats around 22.75 Million Litres per Day (MLD) of sewage received from MCGM which otherwise would have been drained in to the sea after required treatment. The plant generates about 15 MLD of treated water which is being used in our plants as process water. Existing STP meets about 60% of process requirement of our Trombay Unit.
Your Company and M/s. Bharat Petroleum Corporation Limited (BPCL), are setting up a new Sewage Treatment Plant (STP) at RCF, Trombay at an approximate cost of Rs.209 Crore. New Sewage Treatment Plant will be based on latest Membrane Bio-Reactor (MBR) Technology with design capacity to treat 22.75 Million Litres per Day (MLD) of Municipal Sewage to produce about 15 MLD of treated water. The treated water shall be shared by RCF and BPCL. The project is being set up with active support from Municipal Corporation of Greater Mumbai (MCGM). This project is a Sustainability Development Project as it will treat waste sewage generated in the city and convert it into treated water.
The said project when it goes on-stream will generate 15 MLD of treated water for usage in plant operation in RCF and BPCL thereby saving fresh water intake to that extent which will benefit about 30,000 families in the city of Mumbai. Being sustainable development project, this project from your Company will be of great value to residents of Mumbai and Society at large besides improving reliability of operations of RCF.
6.1.2 Solar Power Plant
In its bid towards Indiaâs vision of achieving ecologically sustainable growth, your Company has already forayed into solar power generation.
Your Company has set up a 2 MWp ground mounted Photovoltaic Solar power plant within the factory premises in Trombay Unit in January 2016. During the year 2016-17, the plant has generated 2922.36 MWh of solar power. The power generated is used for captive consumption of the Trombay unit, thereby reducing your Companyâs power import to the equivalent extent.
Your Company has also installed 6 rooftop solar power generation facilities, with an aggregate capacity of 84 KWp a top at its offices of Trombay, Thal and marketing offices. The totally green power generated by solar plant replaces the conventional power generated through burning of fossil fuels leading to reduction in overall Greenhouse gas emissions of the surroundings.
In addition to above, your Company has commissioned solar rooftop facilities atop five locations at Thal and one at Trombay with an aggregate capacity of 1.29 MWp. Your Company is targeting to take up many more Sustainable Development activities in the near future.
6.2 ANNUAL SUSTAINABILITY REPORT
Company has published, during the year, its Sustainability Report for the year 2015-16 based on Global Reporting Initiative (GRI) guidelines and National Voluntary Guidelines (NVG) on âSocial, Environmental and Economic Responsibilities of Businessâ issued by the Ministry of Corporate Affairs, Govt. of India.
The report provides Companyâs economic, environmental and social performance. Sustainability reporting is about organizationâs progress vis-a-vis performance goals, not only for economic achievements, but for environmental protection and social well-being. The Sustainability report for the year 2015-16 is available at http://www.rcfltd.com/ index.php/en/social-responsibility/sustainability-reports/2559-sustainability-report-for-2015-16.
7.0.0 VIGILANCE
Vigilance Department is headed by Shri D. K. Tewatia, IFS, CVO, NFL, who holds the additional charge of Chief Vigilance Officer (CVO) of your Company. CVO is assisted by a team of Officers drawn from various functional departments and placed at Corporate Office in Mumbai and also at Thal. The activities of Vigilance department cover Corporate Office, Trombay Unit, Thal Unit and all the Marketing offices situated across the country. In line with the CVC guidelines, the thrust of the Vigilance in your Company is to bring greater transparency, fairness and efficiency in award of works and their execution.
Efforts are made constantly to keep watch on various activities through regular inspections and surprise checks. System improvements and corrective actions are suggested wherever necessary. The theme that âAll officers are Vigilance Officersâ is implemented in your Company and support of all officers is taken in the implementation of Vigilance guideline Vigilance Department has focused on spreading awareness on rules/regulations, procedures and solicited information/complaints from all regarding malpractices/corruption. The Vigilance Department has a complaint handling system and an online portal for lodging complaints is available. Efforts are made to ensure speedy redressal of grievances.
During the year, Vigilance Department has actively contributed towards e-governance by leveraging technology in all operations in your Company, in making the tender documents more transparent, enhancing the transparency in existing system of dealing with the Dealers/Vendors and increasing the accrued savings to the Company by implementing e-procurement thereby also ensuring transparency in all procurements. Vigilance Department has also ushered in an era of e-Vigilance clearance for issuance of NOC for various purposes to the employees.
Vigilance Department conducted the Vigilance Awareness Week from 31st October to 5th November, 2016 as per CVC Guidelines and involved school and college students from Mumbai, Thal, Pune, Ahemdnagar and Nagpur which helped in spreading the Vigilance Awareness.
8.0.0 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis report for the year under regulations 34(2)(e) of SEBI (LODR) Regulations, 2015 highlighting the industry structure and developments, opportunities and threats, future outlook, risk and concerns etc. is annexed as Annexure II and forms an integral part of this report.
9.0.0 PUBLIC DEPOSIT
Your Company has not accepted any deposits, within the meaning of section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.
10.0.0 OFFICIAL LANGUAGE POLICY
Your Company has fully endeavoured to implement the provisions of Official Language Act, 1963 and the policy of the Government. Publicity material and literature for employees and farmers are made available in Hindi and other regional languages.
11.0.0 AUDITORS
11.1.1 STATUTORY AUDITOR
The Comptroller and Auditor General of India (CAG) has appointed, M/s. Kalyaniwalla & Mistry LlP, (Firm Registration Number 104607W) and M/s. Chhajed & Doshi (Firm Registration Number 101794W) as Joint Statutory Auditors of your Company for the Financial Year 2016-17. The Auditors would be retiring at the conclusion of the Thirty Ninth Annual General Meeting.
There is no Audit qualification for the year under review.
The Statutory Auditors for the Financial Year 201718 will be appointed by the CAG. However, their remuneration is required to be fixed at the AGM by the members.
11.1.2 COST AUDITOR
Your Directors, on the recommendation of Audit Committee, has appointed M/s. K. G. Goyal & Associates, Jaipur, Cost Accountants as Cost Auditors to audit the cost accounts of the Company for the year 2017-18 on a remuneration of Rs.2 lakh excluding applicable taxes. As required under the Companies Act, 2013, the remuneration payable to cost Auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking Membersâ approval for the remuneration payable to M/s. K. G. Goyal & Associates, as Cost Auditors forms part of the notice convening the Annual General Meeting for their ratification.
11.1.3 SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Bhandari and Associates, a firm of Company Secretaries in Practice (C.P. No. 366) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure III and forms an integral part of this Report.
EXPLANATION OR COMMENTS BY THE BOARD ON SECRETARIAL AUDIT REPORT
M/s. Bhandari and Associates, Practising Company Secretaries, Secretarial Auditor of the Company has made certain observations in their Secretarial Audit Report. Since the comments made by Secretarial Auditor are in the nature of factual statement, Company does not have any comments to offer on the same.
12.0.0 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.
13.0.0 DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of section 134(3) (c) of the Companies Act, 2013:
i] that in the preparation of the annual accounts for the year ended March 31, 2017 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii] the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;
iii] that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv] the annual accounts have been prepared on a going concern basis;
v] that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi] that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14.0.0 CORPORATE GOVERNANCE
14.1.0 As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate of Compliance from the Practising Company Secretary forms an integral part of this report.
14.2.0 COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OF PUBLIC ENTERPRISES
Government of India, Department of Public Enterprises (DPE), has laid down certain parameters for the purpose of grading the Central Public Sector Enterprises on the basis of their compliance with guidelines on Corporate Governance and this report needs to be submitted to the Government on quarterly/annual basis. Your Company has been complying with the Guidelines on Corporate Governance for Central Public Sector Enterprises laid down by DPE and regularly submits reports to the Government.
15.0.0 INTERNAL FINANCIAL CONTROL OVER FINANCIAL REPORTING
Your Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Your Companyâs internal financial control over financial reporting includes those policies and procedures that:
(1) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Management and Directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.
16.0.0 DIRECTORS & KEY MANAGERIAL PERSONNEL
Shri R. G. Rajan (DIN 01253189), ceased to be Chairman and Managing Director of the Company w.e.f. 15th June, 2016.
Shri Ashok B. Ghasghase (DIN 06378677), Director (Marketing) ceases to be Director on the Board on his superannuation w.e.f. 1st July, 2016.
Shri Manoj Mishra (DIN 06408953) was appointed as Chairman and Managing Director of the Company w.e.f. 15th June, 2016 and he has ceased to be Chairman and Managing Director w.e.f. 14th March, 2017.
Prof. Damodar Acharya (DIN 06817842), Independent Director ceased to be Director of the Company w.e.f. 30th January, 2017.
Shri Harin Pathak (DIN 07552994), Shri Bharatkumar Barot (DIN 07552993) and Shri G. M. Inamdar (DIN 07552999) have been appointed as Independent Directors of the Company w.e.f. 8th July, 2016.
Ms. Alka Tiwari (DIN 03502306) has been appointed as Government Nominee Director in place of Shri Dharam Pal (DIN 02354549) w.e.f. 6th March, 2017.
Shri Suryanarayana Simhadri (DIN 01951750) has been appointed as Independent Director w.e.f. 8th March, 2017.
Shri C. M. T. Britto (DIN 02449069), Director (Technical) has been entrusted with additional Charge of Chairman and Managing Director of the Company w.e.f. 14th March, 2017 till 13th June 2017.
Shri Britto, Director (Technical) ceased to be Director on the Board on his super annuation w.e.f. 1st July, 2017.
Shri Suresh Warior (DIN 06920261) has been entrusted with additional charge of Chairman and Managing Director w.e.f. 14th June 2017.
The Board has placed on record their appreciation of the Directors who have ceased to be members of the Board for the valuable contribution made and the guidance/suggestion provided by them which has greatly benefited the Company.
As per Section 152 of the Companies Act, Shri Sushil Kumar Lohani (DIN 06912948) and Shri Suresh Warior (DIN 06920261), Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.
DECLARATION OF INDEPENDENCE
All independent Directors of the company have given declaration confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
17.0.0 COMMITTEES OF THE BOARD
The Companyâs Board has the following committees:
i. Audit Committee
ii. Stakeholders Relationship Committee
iii. Share Transfer Committee
iv. Nomination and Remuneration Committee
v. Committee on Corporate Social Responsibility (CSR)
vi. Empowered Committee for Procurement.
The details of the committees along with their composition, number of meetings held and attendance of each Director at the meetings are provided in the Corporate Governance Report.
18.0.0 COMPANYâS POLICY ON DIRECTORâS APPOINTMENT AND RELATED DISCLOSURES
As per notification dated 5th June, 2015, issued by Ministry of Corporate Affairs, provision of section 134(3) (e) of the Companies Act, 2013, regarding disclosure of its policy on Directorâs appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matter provided under subsection (3) of section 178 are not applicable to a Government company.
Your Company being a Government company, the above provisions are not applicable to it.
Similarly, section 197 of the Companies Act, 2013, requiring disclosure of ratio of the remuneration of each Director to the median employeeâs remuneration and other such details including the name and other particulars of every employee of the Company, who if employed throughout/part of the financial year, was in receipt of remuneration in excess of the limits set out in the rules, are not provided in terms of section 197(12) read with rule 5(1)(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, being not applicable to a Government company as per notification dated 5th June, 2015 issued by Ministry of Corporate Affairs.
19.0.0 MEETINGS OF THE BOARD
Ten (10) Board Meetings were held during the year. The details of the Board Meetings held during the financial year 2016-17 are provided in the Corporate Governance Report.
20.0.0 BOARD EVALUATION
Section 134(3) (p) of the Companies Act, 2013, requires the Company to disclose the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual Directors. As per notification dated 5th June, 2015, issued by Ministry of Corporate Affairs, provision of section 134(3) (p) of the Companies Act shall not apply in case Directors are evaluated by the Ministry which is administratively in charge of the Company, as per its own evaluation methodology. Your Company, being a Government company, the performance evaluation is carried out by the Administrative Ministry (Ministry of Chemicals & Fertilizers), Government of India, as per applicable Government Guidelines.
21.0.0 PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of Loans given, Investments made, Guarantees given and Securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to the financial statements.
22.0.0 VIGIL MECHANISM/WHISTLE BLOWER POLICY
The details of Vigil Mechanism/Whistle Blower Policy are provided in Corporate Governance Report.
23.0.0 RELATED PARTY TRANSACTIONS
All contracts/arrangement/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee and also before the Board for approval. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
The details of the investment in equity made by the Company as on 31st March, 2017 is as under:
Rs. Crore
|
1 |
FACT-RCF Building Products Limited |
32.87 * |
|
2 |
Urvarak Videsh Limited |
0.18 * |
|
3 |
Talchar Fertilizers Limited |
0.02 |
|
Total |
33.07 |
* Company has made full provision towards the value of investment.
The details of transactions with related parties are provided in the accompanying financial statements. There are no transactions to be reported in Form AOC-2.
24.0.0 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
During the year no complaint of Sexual Harassment was received by the internal complaint committee formed by your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
25.0.0 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed to this Report as âAnnexure IVâ.
26.0 EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT- 9, as required under section 92 of the Companies Act, 2013, is annexed as Annexure V and form an integral part of this report.
27.0.0 BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 342(f) of Listing Regulations, the Business Responsibility Report initiatives taken from an environmental, social and governance prospective in the prescribed format is available as a separate section of the Annual Report and forms an integral part of this report. Business Responsibility Report is also available on the Companyâs website www.rcfltd.com.
28.0.0 ACKNOWLEDGMENT
Your Directors wish to gratefully acknowledge the valuable guidance and continued support extended by Government of India and in particular, the Department of Fertilizers and the Office of Fertilizer Industry Co-ordination Committee (FICC), Railways, DPE, Members of MOU Task force, and other Central Government departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude, the help and unstinted support from the Government of Maharashtra and other State Governments, MSEB, MIDC, various Media, Municipal Authorities, Maharashtra Pollution Control Board, Bankers to your Company, Financial Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence posed, unstinted support and suggestions made to the Board by the esteemed Share Owners of the Company. The Board also wishes to place on record the positive suggestions and guidance provided by the Statutory Auditors, Cost Auditors and the Office of the Principal Director of Commercial Audit.
Last but not the least, your Directors take pleasure in placing on record their deep appreciation of the excellent contribution made by the employees of your Company at all levels, without which your Company would not have achieved such good performance.
By order of the Board of Directors
[Suresh Warior]
Chairman and Managing Director
Place: Mumbai
Date : 11th August, 2017.
Mar 31, 2016
The Directors of your Company have pleasure in presenting this 38th Annual Report on the working of your Company together with the Audited Accounts for the year ended 31st March, 2016.
1.0.0 FINANCIAL PERFORMANCE
1.1.0 SUMMARY OF FINANCIAL PERFORMANCE
Rs, Crore
|
Particulars |
2015-16 |
2014-15 |
|
Total Revenue |
8761.64 |
7787.81 |
|
Total Operating Cost |
8183.09 |
6903.11 |
|
Operational Profit |
578.55 |
884.70 |
|
Depreciation/Impairment |
145.13 |
258.12 |
|
Finance Cost |
142.32 |
116.95 |
|
Profit/ (Loss) before tax |
291.10 |
509.63 |
|
Provision for Tax |
99.87 |
187.57 |
|
(including deferred Tax |
- |
- |
|
liability/ Asset) |
- |
- |
|
Net Profit / (Loss) |
191.23 |
322.06 |
|
Appropriations: |
||
|
Dividend |
60.69 |
99.30 |
|
Tax and Educational cess |
12.35 |
20.22 |
|
on Dividend |
- |
- |
|
Balance Transferred to |
118.19 |
202.54 |
|
General Reserve |
- |
- |
1.2.0 HIGHLIGHTS OF PERFORMANCE FOR THE YEAR 2015-2016
- Revenue for the year increased by 12.50% to Rs, 8761.64 Crore as compared to Rs, 7787.81 Crore in the previous year.
- Gross profit for the year decreased by 34.61% to Rs, 578.55 Crore as against Rs, 884.70 Crore of previous year.
- Profit before tax decreased by 42.88% to Rs, 291.10 Crore as compared to Rs, 509.63 Crore in the previous year.
- Profit after tax decreased by 40.62% to Rs, 191.23 Crore as compared to Rs, 322.06 Crore in the previous year.
The major factors contributing for reduction of the Companyâs profitability are as under:
i) Depressed sales of fertilizers both traded and manufactured owing to poor agro-climatic conditions, glut of fertilizers in the market and lower urea sales due to lower allotment of imported urea.
ii) Provision made during the year towards pooled price differential for gas used in its non-Urea operations.
iii) Reduction in preset norms of Urea w.e.f. 1st June 2015 under the New Urea Policy 2015 which were partially off-set by the increase in the savings rate at pooled price of gas.
iv) Owing to depressed sales realizations of IPD products and higher cost of operations on account of increase in gas prices, production of some products like Methanol, Sodium Nitrate/ Nitrite and Methylamines at Trombay and DMF & Formic Acid at Thal were suspended.
v) Steep depreciation in rupee vis-a-vis US$, Gas Pool Differential payments and delays in receipt of subsidy resulted in higher finance costs as compared to previous year.
vi) Falling IPP of Urea has impacted the operating margins of production of Urea beyond Reassessed capacity.
1.3.0 MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA
As in the past several years, your Company received âMoU Excellentâ rating for 2014-15 from Ministry of Heavy Industries and Public Enterprises
1.4.0 DIVIDEND
Although your Company has lined up a number of capex programmes which will entail substantial expenditure, considering the consistent profits being made by the Company, your Directors have recommended a dividend of Rs, 1.10 (i.e. 11%) per equity share (Previous year Rs,1.80 per equity share) for the financial year 2015-16. The total outgo on this accounts works out to Rs, 73.04 Crore (Rs,119.52 Crore in the previous year) including dividend distribution tax and education cess. The dividend payout is subject to the approval of members at the ensuing Annual General Meeting.
1.5.0 APPROPRIATION TO GENERAL RESERVES
Your Company earned a net Profit after Tax of Rs, 191.23 Crore (Rs, 322.06 Crore in the previous year). The dividend payout along with Tax and education cess is Rs, 73.04 Crore (Rs, 119.52 Crore in the previous year). The balance amount of Rs,118.19 Crore (Rs,202.54 Crore in the previous year) is transferred to General Reserves.
1.6.0 AWARDS WON
As in the past, your Company won many awards during the year 2015-16 some of which are as under:
- 13th National Award by Institute of Cost Accountants of India for excellence in Cost Management;
- 2nd prize in National Energy Conservation Award-2015 from Ministry of Power;
- The Fertiliser Association of India Award for âBest Production performance of an operating fertilizer unit for nitrogen (Ammonia and Urea) for the year 2014-15;
- âBest Safety Practices-2015â Runnerâs up award from National Safety Council Maharashtra Chapter;
- Indian Chemical Council Certificate of Merit for excellence in Energy Conservation and Management for the year 2014;
- First Prize for State Level Excellence in Energy Conservation & Management for the year 2014-15 from Maharashtra Energy Development Agency (MEDA), Government of Maharashtra;
- 2nd Prize in Rs,10th State level Energy Conservation Award 2014-15â in Fertilizer sector instituted by MEDA;
- Award for best production performance of an Operating Fertilizer Unit for Complex Fertilizerâ for the year 2014-15 from The Fertiliser Association of India;
- Golden Peacock Innovation Management Awardâ for excellence in âInnovation Managementââ for the year 2015.
- 16th Annual Greentech Environment Award for the year 2015 in Platinum category, instituted by Greentech Foundation for outstanding performance in environment management in Fertilizer Sector;
- âProduct Innovation Award for 2014-15â from Federation of Indian Council of Chambers of Commerce and Industries (FICCI) for Gypsum Sona (GEOLA) developed by R & D - Bioresearch;
- Performance Excellence Award for Innovative Industrial Engineering Practices from Indian Institution of Industrial Engineering (IIIE) for
2014-15;
- Organizational Excellence Award by Quality Circle Forum of India;
- Excellence in Suggestion Scheme Award by Indian National Suggestionsâ Schemes Association;
- National Vigilance Excellence Award 2016 from Vigilance Study Circle, Hyderabad;
- Vigilance Excellence Award from Institute of Public Enterprise, Hyderabad;
- Award for best case study from Central Vigilance Commissioner at the Annual function of Vigilance Study Circle, Mumbai.
2.0.0 OPERATIONAL RESULTS:
2.1.0 Production:
2.1.1 Fertilizers:
Your Company produced 31.83 lakh MT of fertilizers (25.46 lakh MT of Urea, 4.62 lakh MT of Suphala 15:15:15 and 1.75 lakh MT of Suphala 20:20:0) during the year as against 32.59 lakh MT of fertilizers (26.01 lakh MT of Urea, 3.97 lakh MT of Suphala15:15:15 and 2.61 lakh MT of Suphala 20:20:0) produced during the previous year. In terms of nutrients, your Company produced 12.75 lakh MT of Nitrogen (N), 1.04 lakh MT of Phosphate (P2O5) and 0.69 lakh M T of Potassium (K2O) during the year as compared to 13.08 lakh MT ofNitrogen (N), 1.12 lakh MT of Phosphate (P2O5) and 0.60 lakh MT of Potassium (K2O) during the previous year.
2.2.0 MARKETING PERFORMANCE
2.2.1 Fertilizer Division:
Your Company achieved sales volume of 33.75 lakh MT during 2015-16 as compared to 36.89 lakh MT in the previous year. Your Company sold 26.52 lakh MT of Urea, 4.36 lakh MT of Suphala 15:15:15, 1.86 lakh MT of Suphala 20:20:0 and 1.01 lakh MT of other bought out products such as DAP, MOP, SSP, Rajphos, NPK etc., compared to 28.58 lakh MT of Urea, 3.89 lakh MT of Suphala 15:15:15, 2.55 lakh MT of Suphala 20:20:0 and 1.87 lakh MT of other bought out products during the previous year. The total sale of manufactured fertilizers during 2015-16 was 30.88 lakh MT as against 32.62 lakh MT in the previous year.
Sales of fertilizers registered reduction of 8.52% over previous year owing to poor agro-climatic conditions and glut of fertilizers in the market.
2.2.2 Industrial Products Division:
Industrial Products Division achieved sales turnover of Rs,1063 Crore as against Rs,1125 Crore during the previous year. Owing to depressed sales realizations of IPD products and higher cost of operations on account of increase in gas prices, production of some products like Methanol, Sodium Nitrate/Nitrite and Methylamines at Trombay and DMF and Formic Acid at Thal were suspended, which had an adverse impact on the profitability of IPD products.
2.2.3 Exports:
Considering the nature of products manufactured by your Company and indigenous demand, the scope for export is very limited. High cost of production is the main restraining factor for venturing in the international market, as it renders our products unviable compared to lower cost of imports of similar products. However, your Company has been successful in popularizing our ABC brand in the overseas market through third party export. During F.Y.2015-16, your Company has done third party export of ABC to the tune of Rs, 50.59 lakh as against Rs, 62.29 lakh during the previous year.
2.3.0 RISK MANAGEMENT
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has framed Risk Management Policy for the risk assessment and minimization procedures. The Risk Management Policy developed with the objective of having a balanced approach towards business plan and mitigating the associated risks, is in place. The system identifies better management practices to ensure greater degree of confidence amongst various stakeholders and facilitates good Corporate Governance practice. All risks associated with Operations, Environment, Finance, Marketing, Human Resource, Legal, Information Technology security, Projects etc., are continuously monitored. The degree of impact of the perceived risks financially, their likely effect on the assets, facilities and third parties are assessed regularly. In order to mitigate losses arising out of such perceived risks, appropriate procedures are being adopted to contain the risks. Also the practices adopted during emergencies, including the communication system and mode of disseminating information are periodically reviewed and updated to minimize the impact on the Company. Quarterly report in respect of the same is presented to the Board.
2.4.0 MAJOR EXPANSION AND DIVERSIFICATIONS:
Your Company is planning to undertake major projects as under:
2.4.1 Additional Ammonia Urea project at Thal
Your Company has planned to expand the capacity of Urea at Thal by setting up one single stream Ammonia plant of capacity 2200 MTPD and one single stream Urea plant of capacity 3850 MTPD at the existing site at approximate cost of Rs, 5530 Crore. The project is awaiting approval from Government of India.
2.4.2 Coal Based Fertilizer Plant at Talcher
Your Company, along with Coal India Limited (CIL), GAIL (India) Limited (GAIL) and Fertilizer Corporation of India Limited (FCIL), is contemplating to set up a fertilizer complex, comprising of 2200 MTPD ammonia plant, 3850 MTPD Urea plant, at Talcher, Odisha through coal gasification route as feed stock. Coal will be made available by CIL from nearby coalfields. Land and certain facilities needed for the project will be provided by FCIL. The project will utilize state-of-the-art Coal Gasification Technology. A joint venture company âTalcher Fertilizers Limitedâ has been incorporated to execute the project.
The Ammonia Synthesis and Urea, plants will be built on lump sum turnkey basis for which prequalification bids have been invited and prequalified parties have been shortlisted. Project capital cost is estimated to be approx. Rs, 8000 crore. Tender has been issued to pre-qualified Lump Sum Turn Key (LSTK) vendors. Selection of Coal Gasification Technology and Coal Block allocation is underway.
The project is of strategic importance for the country as it aims to make breakthrough for an alternative source of feedstock in the form of abundantly available coal from domestic sources in place of natural gas. It will also aid much needed urea production capacity for the eastern part of the Country.
2.4.3 Sewage Treatment Plant (STP) at Trombay
Water situation is getting more and more difficult day by day. Ensuring water availability has become critical for the smooth functioning of the Trombay unit given the competing demand for water in the city. Recognizing this, your Company is setting up additional Sewage Treatment Plant (STP) adjacent to the existing STP plant with a capacity to treat 22.75 Million Litersâ per Day (MLD) of Municipal Sewage to produce about
15 MLD of treated water. A portion of the treated process water will be supplied to Bharat Petroleum Corporation Ltd., on mutually agreed terms. Work order has been placed on LSTK contractor at a cost of ''198 Crore and work is underway.
2.4.4 Solar Power Plant (PV Grid Connected) at Trombay
Your Company has set up 2 MWp Grid connected Photovoltaic Solar power plant within the factory premises at Trombay, Mumbai. The power generated is used for captive consumption at Trombay unit.
This venture is in line with the Solar mission of Government of India and leads RCFâs foray into generation of renewable energy resulting in to reduction in the overall carbon footprint of the company.
2.4.5 Iran Project
Your company has been nominated by the Government along with Gujarat State Fertilisers Corporation (GSFC) for the proposed 1.3 million tonne Urea plant in Iran for import of Urea to India. M/s Faradast Energy Falat Company (FALAT), Iran has been shortlisted as prospective Iranian partner. The consortium is planning to set up an ammonia and Urea plant in Chahbahar in Iran, using natural gas as feedstock which is abundant in that country, with an estimated investment of USD 903 Million.
2.5.0 SUBSIDIARY AND OTHER JOINT VENTURE COMPANIES
A separate statement containing the salient features of financial statements of all subsidiary/ joint ventures of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary/joint ventures and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company. The financial statements including the consolidated financial statements, financial statements of subsidiary/joint ventures and all other documents required to be attached to this report have been uploaded on the website of your Company (www.rcfltd.com).
2.5.1 Subsidiary Company
Rajasthan Rashtriya Chemicals and Fertilizers Limited, Jaipur
Rajasthan Rashtriya Chemicals and Fertilizers Limited (RRCFL) was a subsidiary of the Company. Since, the Company did not start its activities since inception, the Board of Directors of RRCFL took a decision to close down the Company. Accordingly, the name of RRCFL has been struck off from the Register of Registrar of Companies on 24th November, 2015 and said company is dissolved.
2.5.2 Joint Venture Company
2.5.2.1 FACT-RCF Building Products Ltd., Kochi
Your Company has formed a Joint Venture Company with Fertilizers and Chemicals Travancore Limited (FACT) by incorporating FACT-RCF Building Products Ltd to set up a Rapidwall project at Kochi. Both RCF and FACT have 50:50 equity holding in the Company. The plant is in operation. The Company is building up its customer base and is in the process of stabilizing its operations by making special effort on marketing of the product. This project has very good potential and therefore RCF would continue to support it in the coming years.
FRBLâs performance has marginally improved during the year and its operations are expected to improve in future. Being a very novel concept acceptance of FRBLâs product in lieu of conventional items is taking time for sales to pick up and for operations to completely turn around.
During the year, FRBL earned a total income of Rs, 20.06 Crore as against Rs, 4.52 Crore during the previous year. FRBL reported a Loss after Tax of Rs, 16.88 Crore during the year as against Rs, 21.94 Crore in the previous year.
2.5.2.2 Urvarak Videsh Limited (UVL)
Urvarak Videsh Limited (UVL) was incorporated on 18th July, 2008 as a Special Purpose Vehicle (SPV) with equity participation of Rashtriya Chemicals and Fertilizers Limited(RCF), National Fertilizers Limited (NFL) and Krishak Bharti Co-operative Limited (KRIBHCO) with the object of setting up joint venture in India and abroad for manufacturing, mining, long term tie ups for Nitrogenous, Phosphatic and Potassic Fertilizers and fertilizer raw materials including exploring the possibility of making investments and rendering Consultancy services, etc. The company explored many alternatives to take up various projects but the same did not fructify due to want of funds as UVL business objective requires heavy capital investment. As the company could not take up any business and at the same time keeping the status of the company as active was not serving any purpose, the Board of UVL has decided to declare the company as a Dormant company for the time being in terms of the provision of section 455 of the Companies Act, 2013. As and when the proper opportunity arises in future, business activities can be started by the company by reverting its status as active company.
2.5.2.3 Talcher Fertilizers Limited (Erstwhile Rashtriya Coal Gas Fertilizers Limited)
Your Company has formed a Joint Venture company, with Coal India Limited (CIL), GAIL (India) Limited (GAIL) and Fertilizer
Corporation of India Limited (FCIL), with the name Talcher Fertilizers Limited on 13th November, 2015 for revival of FCILâs fertilizer unit at Talcher by establishing and operating coal gasification based fertilizer complex. The equity participation by RCF, CIL and GAIL is 29.67% each and FCIL is 10.99%. The company is yet to start its operations.
2.5.3 Consolidated Financial Statements
The Consolidated Financial Statements of your Company has been prepared by taking into consideration Joint Venture Companies i.e. FACT-RCF Buildings Products Limited, Urvarak Videsh Limited and Talcher Fertilizers Limited (erstwhile Rashtriya Coal Gas Fertilizers Limited).
The Consolidated financial statements have been prepared under proportionate consolidated method along with Companyâs standalone financial statements.
Summary of Financial Performance
Rs, Crore
|
Particulars |
2015-16 |
2014-15 |
|
Total Revenue |
8771.68 |
7790.06 |
|
Total Operating Cost |
8189.64 |
6871.83 |
|
Operational Profit |
582.04 |
918.23 |
|
Depreciation/Impairment |
150.22 |
263.32 |
|
Finance Cost |
146.74 |
121.59 |
|
Profit/ (Loss) before tax |
285.08 |
533.32 |
|
Provision for Tax (including deferred Tax liability/ Asset) |
99.87 |
187.57 |
|
Net Profit / (loss) |
185.21 |
345.75 |
2.6.0 RESEARCH AND DEVELOPMENT
Your Company has taken up several Research and Development projects, some of which are for commercial scale design and engineering. They are as under:
2.6.1 Lab scale development of microbial biopesticide âTrichoderma virideâ
Bio-pesticides are biological or biologically-derived agents that are usually applied in a manner similar to chemical pesticides, but achieve pest management in an environmentally friendly way. Bio-pesticides, for use against crop diseases, have already established themselves on a variety of crops.
Pesticides based on microorganisms and their products have proven to be highly effective, species specific and eco-friendly in nature, leading to their adoption in pest management strategies around the world.
Microbial pesticides used are bacteria, viruses, fungi, nematodes etc. The fungi used for pest control are Trichoderma hazranium, Trichoderma viride, Tricoderma reseii and many more. Trichoderma spp. is fungi from the Hypocreaceae family that are present in nearly all soils. Laboratory scale development of this fungi as biopesticide was carried out successfully. The product will be field tested during the years 2016
17 and 17-18 and commercialized thereafter.
2.6.2 Development of Phosphogypsum based value added Soil Conditioner for increasing nutrient use efficiency.
Recent studies have suggested that the world will need to produce 60 to 100% more food when the global population will reach 9 billion by 2050. This requires a radical change in the way food is produced, stored, distributed and accessed.
Land degradation in the form of deletion of soil fertility, erosion and water logging has increased. With a view to make agriculture sustainable, enhance the nutrient use efficiency, an attempt was made to formulate recipe for blending organic matter and soil conditioner âgypsumâ components together and standardise the combinations to maximize the crop yield and nutrient use efficiency. Field trials in-house and in Agriculture Universities were conducted for evaluating nutrient use efficiency. An increase of 17% yield and increase of nutrient use efficiency to the extent 50% was reported.
A product patent was applied and published for examination on 18th September 2015 (Indian patent application No. 3248/Mum/2015- Plant Nutrient Composition).
The product was also bestowed with the prestigious FICCI âInnovators Awardâ for the year 2015.
2.6.3 Development of best nutrient package for pomegranate through specialty fertilizers for enhancing fruit yield and quality
Pomegranate (Punica granatum L.) is grown in tropical and subtropical regions of the world. It is one of the commercially important fruit crops of India. The fruits are known for their sweetness and fine blend of acidity. Maharashtra alone has around 99,000 hectare area under this crop. Hence, work on development and recommendation of the micronutrient management for pomegranate was undertaken in association with Mahatma Phule Krishi Vidyapeeth, Rahuri, Maharashtra in the year 2015-16 as an MOU item.
The yield increase was recorded to be around 20% through utilization of Biola, Microla and Sujala products. The recommendation of the nutrient package by Agriculture University, will now be disseminated among the farmers.
2.6.4 Development of Zinc solubilizing bacteria as biofertilizer
Zinc is one of the most important micronutrients required relatively in small concentrations in tissues for healthy growth & reproduction of plants. Plants must be provided with essential nutrients in available form & in sufficient quantity not only for their proper growth and development but also for their accumulation of essential elements in proper amount in various parts of the plants.
With a view to provide the farming community with cheaper sources of zinc, the development of Zinc solubilising bacteria as biofertilizer was undertaken. The bacteria obtained through natural sources like zinc mines were successfully formulated as biofertilizer. The product will be tested with Agriculture Universities and commercialized during the year 2016-17. With the present scenario of zinc deficiencies in India, the application of zinc solubilizing bacteria with cheap sources of zinc ores will reduce the cost of agri -inputs and provide sustainable solution to mitigate Zn deficiency.
2.6.5 Lab scale study for development of Nanotechnology based fertilizers
The world agriculture is facing problems like climate change, soil degradation, desertification, high energy cost and depleting natural resources.
Despite sizable increase in the use of chemical fertilizers over the years, the gap between the nutrient removal and replenishment is significantly high in India. In order to address the National and Global needs, the application of Nanotechnology in agriculture has great potential.
Research and Development - Bioresearch has ventured into the area of Nano particles and its application in agriculture for increasing crop productivity and nutrient use efficiency. A research centre âSarjanaâ dedicated to Nanotechnology research was inaugurated in the Company. It is one of its kind among the Public sector enterprises in India.
A paper in the field of Nanotechnology regarding its applicability to biofertilizer was presented by our Scientist at an International conference at Florida, USA in October 2015. The paper was bestowed with the Best oral presentation award.
2.6.6 Commercialization of Micronutrient grade for Paddy Basel for Tamilnadu state
Micronutrients are essential for plant growth and play an important role in balanced crop nutrition. They include Boron (B), Copper (Cu), Iron (Fe), Manganese (Mn), Molybdenum (Mo) and Zinc (Zn). They are as important to plant as primary and secondary nutrients, though plants donât require much of them. Lack of any micronutrient in soil can limit the crop growth even if other nutrients are present in adequate amount. These micronutrients are state specific.
The R & D department of your Company has developed micronutrient grade (No.XI) for Paddy crop basal application in solid form for Tamilnadu state. The product has been commercialized successfully. During the year 2015-16, a quantity of 38.5MT was manufactured and marketed.
2.6.7 Feasibility study for new Biofertilizer plant
It is a need of the hour to adopt the Integrated Plant Nutrient Supply (IPNS) system for sustaining crop productivity. Integration of chemical, organic and biological sources of plant nutrients, and their efficient management have shown promising results in sustaining productivity and soil health. Bio-fertilizers are living cells of different types of micro-organisms which have an ability to mobilize nutritionally important elements from non-usable to usable form from the soil. Company has a bio-fertilizers plant with current installed capacity of 150 KL per annum. With positive outlook from government for the promotion of biofertilizer in a big way, the demand for these will increase. It is projected that the coming years may see the growth @ 21.12% annually.
In the above context, the feasibility study (techno-economic) for 150 Kl capacity biofertilizer facility was initiated. It is envisaged that the capital subsidy provided by state government to the tune of Rs, 40 lakh will be utilized for the project. IRR & payback period for the project are 18.65% and 2.93 years respectively. This project was also included in the MOU for the year 201516.
3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL
Your Company is committed to ensuring clean environment, beyond satisfying all stipulated requirements laid down by the statutory authorities, around its operating units.
Your Company has established ISO 14001 compliant Environment Management System (EMS) at its two manufacturing units. The Systems are constantly upgraded and regular internal audits and Management Reviews are carried out to ensure compliance and continuously improve the system. Apart from Stack monitors, which continuously monitor the emissions, four fixed ambient air quality monitoring stations are in place, at both Trombay and Thal, to monitor ammonia, NOx, SO2, Particulate matter (PM10
& PM2.5) & metrological parameters.
The Effluent Treatment plants at Trombay and Thal have ensured that the environment in and around the Units are fully protected. Various schemes with state of the art technologies and modernization schemes are implemented to reduce energy consumption and wastages of the scarce natural resources. The waste streams from the plants are recycled/ reused for useful purpose.
Sludge generated in Effluent Treatment Plant, Sulphur Sludge Generated in Sulphuric Acid plant, waste streams of effluents from complex fertilizer plants are recycled back in the processes. 3- R strategy (Reduce, Reuse and Recycle) is employed by way of recycling the sludge generated in ETP, Sulphur sludge generated in Sulphuric Acid Plant to Suphala plant for recovery of nutrients. Phosphogypsum from Phosphoric Acid Plant is used in-house in the manufacture of value added building materials viz. rapid wall panels, and wall plaster.
The integrated Effluent Treatment Plant ensures that whatever effluent is discharged from the factory meets the statutory requirements laid down by the Pollution Control Board. Trombay unit of the Company has taken up a massive plantation drive in factory premises, in residential colony and surrounding areas and planted app. 4000 numbers of trees in the year 2015-16. In the Thal factory premises & in residential area during the year 2015-16, plantation of 2500 number of Fruit bearing trees, Teak wood and other species has been under taken .
For increasing awareness regarding environment, public awareness campaign programmes are arranged by Trombay and Thal units.
4.0.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)
4.1.0 As part of its initiatives under âCorporate Social ResponsibilitiesRs,, the Company has undertaken several projects in the areas of rural development, promoting health care and education aimed for the benefit of needy and for general good of the society. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the companyâs CSR policy. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure -I and forms an integral part of this report. During the year, the company has spent Rs, 9.65 Crore on CSR activities. The activities, in brief, are as under:
4.1.1 Education:
4.1.1.1 Schools:
Your Company supports schools, at its two units, which impart education in Marathi, Hindi and English mediums to students from Nursery to 10th Standard. Your Company undertakes the upkeep, maintenance and bears the deficit expenditure incurred by the schools, located in Companyâs residential colonies, which are run by reputed Educational Institutions.
4.1.1.2 Scholarship to meritorious students:
Your Company offers a number of scholarships to students of SC/ ST/ OBC communities for pursuing higher studies. Companyâs scholarship project for sending every year 10 students to 6th Standard in Shivaji Military school in Pune and supporting the earlier batches in their march to higher standards thereafter has received goodwill from all.
4.1.1.3 Supply of Mid-Day Meal:
Your Company is funding Mid-Day Meal Scheme for providing nutritious food to children studying in twenty five unaided schools, providing education to poor children, in and around Tomboy area. The scheme is operated through an NGO, âISKCON Food Relief Foundationâ which supplies good and healthy meal to the children on behalf of RCF. In all, 6,600 students have availed the benefit of this nutritious midday meal.
4.1.1.4 Programme for underprivileged Children
Your Company has adopted the âKhel Khel Meinâ programme of Wockhardt Foundation for under privileged children of age group of 5 to 10 years, by setting up six centres of edu-recreation with parallel learning in slums of Vashi Naka area, near Trombay unit.
4.1.1.5 RCF SUPER- 30 programme
Your Company, in association with Centre for Social Responsibility and Leadership (CSRL), has established a unit of Abhayanand Super 30 in Mumbai where about 30 underprivileged talented students of Maharashtra state are provided 11 months of free residential coaching to enable them to get admission in IIT/NIT and other premier engineering colleges. This year 28 of these students were successful in the JEE mains examination.
4.1.1.6 Farmersâ Education:
Company has two farmers training institutes located in Thal and Nagpur. During the year, 6352 farmers attended & benefited from the training programmes conducted at these two Farmers Training Centres. During the programmes, training was imparted to upgrade their farm practices, reduce their overheads and increase their wealth. Special programmes designed for women farmers and the scheduled caste and scheduled tribes are also organized on a regular basis so that they can join the bandwagon of the countryâs agricultural renaissance.
Your Companyâs efforts in rendering advisory services to farmers by conducting Soil diagnostics to optimize soil productivity are well appreciated.
Based on the analysis, farmers are advised on soil fertility management through rational use of manure, fertilizers and other inputs to make agriculture more productive and sustainable. During the year, more than 1,40,417 soil samples were analyzed and recommendations given through the twelve static and six mobile soil testing laboratories.
4.1.2 Supply of drinking water to the villages:
Your Company has been providing drinking water for more than 21 years to seven villages around Thal unit through pipelines laid down from the water reservoir in the unit and spent about Rs,69.59 lakh on this account during the year. More than 15,700 residents of the villages got benefited of the scheme.
4.1.3 Community Medical Facility
4.1.3.1 Running of Mobile Medical Van
Your Company has engaged Lockhart Foundation and administered free primary health care through mobile Medical Vans. A total of four Mobile medical vans are running in slums of Trombay and villages of Thal and patients are benefited from free medical services including supply of medicines. Through this facility, ailments like Blood pressure, low Haemoglobin Levels, Oxygen saturation, Malaria, Hepatitis, Dengue, Typhoid, Diabetes, etc., are treated on regular basis, through qualified Doctors. One medical van attends to approx. 25000 patients per annum.
4.1.3.2 Running of pathology lab
M/s Wockhardt Foundation is also engaged in the running of Pathology lab in Chembur near RCF township. Near about 28,000 diagnostic tests were performed for needy patients.
4.1.3.3 Distribution of sanitary napkins (Moksha)
Your Company has engaged Wockhardt Foundation for extending the medical services for enhancement of female hygiene by free distribution of sanitary napkins (Moksha) through mobile Medical Vans. Under this scheme during the year about 5,29,000 sanitary napkins were distributed.
4.1.4 Chembur Green Project
Your Company continued to support the Chembur Green project, launched to establish greenery in the eastern suburb of Mumbai, by joining hands with Chembur Citizensâ Forum, an NGO to develop, beautify and maintain N G Acharya Garden (Diamond Garden), at Chembur for a period of 6 years. Your Company continued distribution of free saplings and rendering advice to various co-op. societies and also to individuals.
4.1.5 Contribution to âJalyukta Shivarâ
Under the national campaign of clean and green India, your Company has contributed Rs, 75 lakh to the âJalyukta Shivarâ scheme in response to the appeal from Govt. of Maharashtra.
4.1.6 Rural Sports
Your Company has supplied sports material and organised sports for tribals of Thal Villages.
4.1.7 Livelihood enhancement projects
Your company has also supplied paddy, fruits sapling and free fertilizers to nearby needy villagers.
4.1.8 Your company has constructed Bio toilets at gate No.2, Trombay for Truck Drivers and cleaners through Wockhardt Foundation. Also constructed five toilets in the school where Mid Day Meal is provided. In association with, World Confederation of Warriers and Heal Foundation, Free Medical Check Up and Eye Check Up camps have been organized in the school where RCF is providing Mid Day Meal.
5.0.0 MICRO, SMALL AND MEDIUM ENTERPRISES
Government of India, Ministry of Micro, Small and Medium Enterprises, vide order dated 23rd March, 2012, notified the public procurement policy in respect of procurement of goods and services produced and provided by Micro, Small and Medium Enterprises. As per this directive, every Central Ministry or Department or Public Sector Undertaking shall set an annual goal of procurement from Micro, Small and Medium Enterprises from the Financial Year 2012-13 and onwards with the objective of achieving an overall procurement of products produced and services rendered by Micro, Small and Medium Enterprises to the extent of minimum 20% of total annual purchases during the period of three years. The directive also provides that the goals set with respect to procurement to be met from Micro, Small and Medium Enterprises and achievement made thereto be incorporated in their respective Annual Reports. Your Company has achieved the set target under specific areas.
6.0.0 SUSTAINABLE DEVELOPMENT
6.1 Your Company has taken up several Sustainable development activities including the following:
[i] Improvement of Road infrastructure-construction and repairs.
[ii] Building of Check Dams.
[iii] Prevention of soil erosion and watershed management.
6.1.1 Rapid wall Project
The Rapid wall project is an example of Companyâs faith in sustainable development wherein a waste product generated from Phosphoric Acid Plant is converted into useful building material by adopting a novel technology.
6.1.2 New Sewage Treatment plant
Your Company and Bharat Petroleum Corporation Limited (BPCL), have signed an MOU for setting up a new Sewage Treatment Plant (STP) at RCF, Trombay at approx. cost of Rs,198 Crore. This Plant will be based on latest Membrane Bio-Reactor Technology with design capacity to treat 22.75 Million Litres per Day (MLD) of Municipal Sewage to produce about 15 MLD of treated water. The treated water shall be shared by RCF and BPCL. The project is being set up with active support from Municipal Corporation of Greater Mumbai (MCGM). This project is a Sustainability Development Project as it will treat waste sewage generated in the city and convert it in to treated water. The said project when operational will also reduce the load on MCGM Sewage Treatment facility to the extent of 22.75 MLD.
The said project when it goes on-stream will generate 15 MLD of treated water for usage in plant operation in RCF and BPCL thereby saving fresh water intake to that extent which will benefit about 30,000 families in the city of Mumbai. Being sustainable development project, this project from your Company will be of great value to residents of Mumbai and Society at large.
6.1.3 Solar Power Plant
In its bid towards Indiaâs vision of achieving ecologically sustainable growth, your Company has already forayed into solar power generation.
Your Company has set up a 2 MWp ground mounted Photovoltaic Solar power plant within the factory premises in Trombay Unit. The project has been successfully commissioned on 6th January 2016. Based on the average intensity of solar radiation, the project is likely to generate around 3 million units of power on annual basis. The power generated is used for captive consumption of the Trombay unit, thereby reducing your Companyâs power import to the equivalent extent.
Your Company has also installed 6 rooftop solar power generation facilities, with an aggregate capacity of 84 KWp atop at its offices of Trombay, Thal and marketing offices.
The totally green power generated by solar plant replaces the conventional power generated through burning of fossil fuels leading to reduction in overall Greenhouse gas emissions of the surroundings.
In addition to above, your Company is in the process of setting up solar rooftop facilities atop
5 locations at Thal and 1 at Trombay with an aggregate capacity of 1.29 MWp.
Your Company is targeting to take up many more sustainable development activities in the near future.
6.2 ANNUAL SUSTAINABILITY REPORT
Company has published, during the year, its Sustainability Report for the year 2014-15 based on Global Reporting Initiative (GRI) guidelines and National Voluntary Guidelines (NVG) on âSocial, Environmental and Economic Responsibilities of Businessâ issued by Ministry of Corporate Affairs, Govt. of India. The Report has been hosted on the Companyâs website.
The report provides Companyâs economic, environmental and social performance. Sustainability reporting is about organizationâs progress vis-a-vis performance goals, not only for economic achievements, but for environmental protection and social well-being. The report for
2015-16 would also be published soon.
6.3 WATER CONSERVATION
During the year, your Company has consumed 83,89,070 m3 of raw water as against 93,78,330 m3 during the previous year, resulting in saving of 9,89,260 m3 water at Trombay Unit.
BMC water consumption in this year has come down by 2,76,400 m3, resulting in saving to the tune of Rs, 2.20 Crore.
Your Company has reduced discharge of effluent in to sea by 84, 621 m3 by adopting additional recycling methods . It has also saved the precious BMC water equivalent to Rs, 67.36 Lakh.
Your Company has increased the greenery (Horticulture Area) around the Trombay Unit for which reject water is used. Water from this network is also utilized for toilet/urinal flushing in Trombay Unit.
Your Company has strengthened and extended STP reject water network for scrubbers in ANP and Suphala Plant. It is also utilized in cleaning and washing of equipment and tanks in these plants. This network also provides reject water for different purposes to ETP, PAP, SAP/CNA plants.
Your Company has optimized the following process parameter which has saved equivalent energy and water in Ammonia & Urea Plants:
i. Strengthened the operation of MP Stripper in Ammonia- I Plant which is saving equivalent DM water.
ii. Job of CT fan adjustment and drift eliminator carried out in Ammonia V plant.
iii. Strengthened the operation of water scrubber in Urea Plant with recycle of water for scrubbing etc., helped in reducing water consumption.
7.0.0 VIGILANCE
Dr. A.K. Padhee, Joint Secretary (DOF), is holding the additional charge of Chief Vigilance Officer of the Company . The position of CVO in the company is at par with the Functional Directors. CVO is assisted by a team of Officers drawn from various functional departments and is supported by a Deputy CVO in the rank of General Manager (Vigilance). The activities of Vigilance department cover Corporate Office,
Trombay Unit, Thal Unit and all the Marketing area offices situated accorss the country. In line with the CVC guidelines, the thrust of the Vigilance in your Company is to bring greater transparency, integrity and efficiency. The focus of Vigilance Department is on Preventive and Participative Vigilance.
This is done by keeping a careful watch on various activities through regular inspections and surprise checks. System improvements and corrective actions are taken, wherever necessary. The theme that âAll officers are Vigilance Officersâ is implemented in your company and alertness and support of all officers is taken in the implementation of Vigilance. Vigilance has focused on spreading awareness on rules/ regulations, procedures and solicited information/ complaints from all regarding malpractices/ corruption.
During the year, Vigilance Department has actively contributed towards Good Management in leveraging technology in all operations that helps in implementing robust e-governance in RCF, in making the tender documents more transparent and relevant, enhanced transparency in existing system of dealing with our Dealers/ Vendors and accrued savings by implementing e-procurement in your company thereby ensuring transparency in all procurements. Vigilance Department has also ushered in an era of E Vigilance clearance for NOC for various issues to the employees.
8.0.0 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis report highlighting the industry structure and developments, opportunities and threats, future outlook, risk and concerns etc. is annexed as Annexure II and form an integral part of this report.
9.0.0 PUBLIC DEPOSIT
Your Company has not accepted any deposits within the meaning of section 73 ofthe Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.
10.0.0 OFFICIAL LANGUAGE POLICY
Your Company has fully endeavored to implement the provisions of Official Language Act, 1963 and the policy of the Government. Publicity material and literature for employees and farmers are made available in Hindi and other regional languages.
11.0.0 AUDITORS
11.1.1 STATUTORY AUDITOR
The Comptroller and Auditor General of India (CAG) has appointed, M/s Kalyaniwalla & Mistry ( Firm Registration Number 104607W) and M/s N.B.S & Co. (Firm Registration Number 110100W) as Joint Statutory Auditors of your Company for the Financial Year 2015-16. The Auditors would be retiring at the conclusion of the Thirty Eight Annual General Meeting.
There is no Audit qualification for the year under review.
The Statutory Auditors for the Financial Year 2016-17 will be appointed by the CAG. However, their remuneration is required to be fixed at the AGM by the members.
11.1.2 COST AUDITOR
Your Directors, on the recommendation of Audit Committee, has appointed Shri Rohit J. Vora (M5740) and M/s. Musib & Co.(F/15026), Cost Accountants, as Cost Auditors to audit the cost accounts of the Company for the year 2016-17 on a remuneration of Rs, 3.68 lakh. As required under the Companies Act, 2013, the remuneration payable to cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Memberâs approval for the remuneration payable to Shri Rohit J. Vora, and M/s. Musib & Co., Cost Auditors forms part of the notice convening the Annual General Meeting for their ratification.
11.1.3 SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Bhandari and Associates, a firm of Company Secretaries in Practice (C.P. No. 366) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure III and forms an integral part of this Report.
EXPLANATION OR COMMENTS BY THE BOARD ON SECRETARIAL AUDIT REPORT
M/s. Bhandari and Associates, Practicing Company Secretaries, Secretarial Auditor of the Company has made certain observations in their Secretarial Audit Report. The Board Comments in respect of the same is annexed as Annexure IV and forms an integral part of this Report.
12.0 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the Regulators/courts/tribunals that would impact the going concern status of the company and its future operations.
13.0.0 DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of section 134(3) (c) of the Companies Act, 2013:
i] that in the preparation of the annual accounts for the year ended March 31, 2016 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii] the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;
iii] that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv] the annual accounts have been prepared on a going concern basis;
v] that the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
vi] that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14.0.0 CORPORATE GOVERNANCE
14.1.0 As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate of Compliance from the Practicing Company Secretary forms an integral part of this report.
14.2.0 COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OF PUBLIC ENTERPRISES
Government of India, Department of Public Enterprises (DPE), has laid down certain parameters for the purpose of grading the Central Public Sector Enterprises on the basis of their compliance of guidelines on Corporate Governance and this report needs to be submitted to the Government on quarterly/annual basis. Your Company has been largely complying with the Guidelines on Corporate Governance for Central Public Sector Enterprises laid down by DPE and regularly submits reports to the Government.
15.0.0 INTERNAL FINANCIAL CONTROL OVER FINANCIAL REPORTING
Your Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Your Companyâs internal financial control over financial reporting includes those policies and procedures that:
(i) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of Management and Directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
16.0.0 DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year, Shri Dharam Pal (DIN 02354549) has been appointed as Government Nominee Director in place of Shri Sham Lal Goyal (DIN 03342782) w.e.f.28th January, 2016.
Shri Manoj Mishra (DIN 06408953) has been appointed as Chairman and Managing Director of the Company w.e.f. 15th June, 2016.
Shri R. G. Rajan (DIN 01253189), ceased to be Chairman and Managing Director of the Company w.e.f. 14th June, 2016. The contribution of Shri R. G. Rajan to your Company has been immense. His guidance, suggestions and advice has greatly benefited the Company. The Board places on record its appreciation for the valuable contribution of Shri R. G. Rajan during his tenure as CMD of the Company.
Shri Ashok B. Ghasghase (DIN 06378677) ceases to be Director(Marketing) of the Company on his superannuation w.e.f.1st July, 2016.
The contribution of Shri Ashok B. Ghasghase to your Company has been immense. His guidance, suggestions and advice has greatly benefited the Company. The Board places on record its appreciation for the valuable contribution of Shri Ashok B. Ghasghase during his tenure as Director (Marketing) of the Company.
The Board of Directors at their meeting held on 8th July, 2016 has appointed Shri Harin Pathak (DIN07552994), Shri Bharatkumar Barot (DIN 07552993) and Shri G. M. Inamdar (DIN 07552999) as an Independent Directors of the Company.
As per Section 152 of the Companies Act, 2013, Shri Sushil Kumar Lohani (DIN 06912948) and
Shri Suresh Warior (DIN 06920261), Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.
All independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
17.0.0 COMMITTEES OF THE BOARD
The Board of Directors has the following committees:
i. Audit Committee
ii. Stakeholders Relations Committee
iii. Share Transfer Committee
iv. Nomination and Remuneration Committee
v. Committee on Corporate Social Responsibility (CSR)
vi. Empowered Committee for Procurement.
The details of the committee along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.
18.0.0 REMUNERATION POLICY
Department of Public Enterprises vide OM No. 2(70)/08- DPE(WC) dated 26th November 2008 has fixed pay scales of Board Level and below Board Level executives and non-unionized supervisors.
19.0.0 MEETINGS OF THE BOARD
Thirteen (13) Board Meetings were held during the year. The details of the number of meetings of the Board held during the financial year 2015-16 forms part of the Corporate Governance Report.
20.0.0 BOARD EVALUATION
Section 134(3) (e) of the Companies Act, 2013 requires the Company to disclose its policy on directorâs appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matter provided under sub-section (3) of section 178. Section 134(3) (p) of the Companies Act, 2013, also requires the company to disclose the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors.
RCF is a government company where directors are appointed by the government of India or on the recommendation of the government. The remuneration etc. of Directors are decided as per the DPE guidelines. The tenure of the Directors are also decided by the government.
RCF, being a government company, has been exempted from the provisions of section 134(3) (e) & p and section 178(2) & (3) of the companies Act, 2013.
21.0.0 PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of Loans given, Investments made, Guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to the financial statements.
22.0.0 VIGIL MECHANISM/WHISTLE BLOWER POLICY
The details of Vigil Mechanism/Whistle Blower Policy are provided in Corporate Governance Report.
23.0.0 RELATED PARTY TRANSACTIONS
All contracts/arrangement/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
The details of the investment in equity made by the Company as on 31st March, 2016 is as under:
Rs,Crore
|
1 |
FACT-RCF Building Products Limited |
*32.87 |
|
2 |
Urvarak Videsh Limited |
*0.18 |
|
3 |
Talcher Fertilizers Limited |
0.02 |
|
Total |
33.07 |
* Company has made full provision towards the value of investment.
The details of the advance given by the Company against equity pending for allotment as on 31st March, 2016 is as under:
Rs,Crore
|
1 |
FACT-RCF Building Products Limited |
**2.36 |
** Company has made full provision towards the said amount.
The details of transactions with related parties are provided in the accompanying financial statements. There are no transactions to be reported in Form AOC-2.
24.0.0 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of the Rules issued there under, internal complaint committee formed by your Company has received one complaint of sexual harassment at work place, which was disposed off as per procedure laid down under the Act during the year 201516.
25.0.0 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed to this Report as âAnnexure Vâ.
26.0.0 EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT- 9, as required under section 92 of the Companies Act, 2013, is annexed as âAnnexure VIâ and forms an integral part of this report..
27.0 ACKNOWLEDGMENT
Your Directors wish to gratefully acknowledge the valuable guidance and continued support extended by Government of India and in particular, the Department of Fertilizers and the Office of Fertilizer Industry Co-ordination Committee (FICC), Railways, DPE, members of MOU Task force, and other Central Government departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude, the help and unstinted support from the Government of Maharashtra and other State Governments, MSEB, MIDC, various Media, Municipal Authorities, Maharashtra Pollution Control Board, Bankers to your Company, Financial Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence posed, unstinted support and suggestions made to the Board by the esteemed share Owners of the Company. The Board also wishes to place on record the positive suggestions and guidance provided by the Statutory Auditors, Cost Auditors and the Office of the Principal Director of Commercial Audit.
Last but not the least, your Directors take pleasure in placing on record their deep appreciation of the excellent contribution made by the employees of your Company at all levels, without which your Company would not have achieved such good performance.
By order of the Board of Directors
[Manoj Mishra]
Chairman and Managing Director
Place: Mumbai
Date : 8th August, 2016
Mar 31, 2015
Dear Members,
The Directors of your Company have pleasure in presenting this 37th
Annual Report on the working of your Company together with the Audited
Accounts for the year ended 31st March, 2015.
1.0.0 FINANCIAL PERFORMANCE
1.1.0 SUMMARY OF FINANCIAL PERFORMANCE
Rs. Crore
Particulars 2014-15 2013-14
Total Income 7787.81 6661.64
Cost of Sales 6903.11 6021.28
Operational Profit 884.70 640.36
Depreciation/Impairment 258.12 141.75
Finance Cost 116.95 131.29
Profit/ (Loss) before tax 509.63 367.32
Provision for Tax 187.57 117.43
(including deferred Tax liability/
Asset)
Net Profit / (loss) 322.06 249.89
Appropriations:
Dividend 99.30 82.75
Tax and Educational cess on 20.22 14.06
Dividend
Balance Transferred to General 202.54 153.08
Reserve
1.2.0 HIGHLIGHT OF PERFORMANCE FOR THE YEAR 2014-2015
* Income for the year increased by 16.91% to Rs. 7787.81 Crore as
compared to Rs. 6661.64 Crore.
* Gross profit for the year increased by 38.16% to Rs. 884.70 Crore as
against Rs. 640.36 Crore of previous year.
* Profit before tax increased by 38.74% to Rs. 509.63 Crore as compared
to Rs. 367.32 Crore.
* Highest ever profit after tax of Rs. 322.06 Crore as compared to Rs.
249.89 Crore, registering an increase of 28.88%.
The Company's Performance during the year has been bolstered by
higher volumes of manufactured and traded fertilizers and higher energy
efficiencies at both Trombay and Thal units, despite various challenges
encountered on gas availability and delayed disbursement of subsidy.
As in the past several years, your Company received 'MOU Excellent'
rating for 2013-14 from Ministry of Heavy Industries and Public
Enterprises.
1.3.0 DIVIDEND
Although your Company has lined up a number of capex programmes which
will entail substantial expenditure, considering the consistent profits
being made by the Company, your Directors have recommended a dividend
of Rs. 1.80 (i.e. 18%) per equity share (Previous year Rs.1.50 per
equity share) for the financial year 2014-15, which is highest payout
in the history of RCF. The total out go on this account works out to
Rs. 119.52 (Rs. 96.81 Crore in the previous year) including dividend
distribution tax and education cess. The dividend payout is subject to
the approval of members at the ensuing Annual General Meeting.
1.4.0 APPROPRIATION TO GENERAL RESERVES
Your Company earned a net Profit after Tax of Rs. 322.06 Crore (Rs.
249.89 Crore in the previous year). The dividend payout along with
Tax/cess is Rs. 119.52 Crore (Rs. 96.81 Crore in the previous year).
The balance amount of Rs. 202.54 Crore (Rs.153.08 Crore in the previous
year) is transferred to General Reserves.
1.5.0 AWARDS WON
As in the past, your Company won many awards during the year 2014-15
some of which are as under:
* Golden Peacock Environmental Management Award for the year 2014 for
Thal Unit;
* First Prize for State Level Excellence in Energy Conservation &
Management for the year 2012- 13 from MEDA, Government of Maharashtra
for Thal Unit;
* Environmental Excellence Award 2014-15 in Gold Category instituted by
Greentech Foundation for outstanding performance in environment
management for Trombay Unit;
* Paryavaran Gaurav Puraskar from Maharashtra Pollution Control Board,
Pune region and Environmental Club of India for Thal Unit;
* 11th National award for excellence in Cost Management-2013 from The
Institute of Cost Accountants of India.
* Vigilance Excellence Award from Vigilance Study Circle, Hyderabad;
* Vigilance Excellence Award at Corporate level and also individual
award for case studies from Institute of Public Enterprises, Hyderabad;
3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL
Your Company is committed to ensuring clean environment, beyond
satisfying all stipulated requirements laid down by the statutory
authorities, around its operating units.
Your Company has established ISO 14001 compliant Environment Management
System (EMS) at its two manufacturing units. The Systems are constantly
upgraded and regular internal audits and Management Reviews are carried
out to ensure compliance and continually improve the system. Apart from
Stack monitors, which continuously monitor the emissions, four fixed
ambient air quality monitoring stations are in place, at both Trombay
and Thal, to monitor ammonia, NOx, SO2, Particulate matter (PM 10 &
PM2.5) & metrological parameters.
The Effluent Treatment plants at Trombay and Thal have ensured that the
environment in and around the Units are fully protected. Various
schemes with state of the art technologies and modernisation schemes
are implemented to reduce energy consumption and wastages of the scarce
natural resources. The waste streams from the plants are recycled/
reused for useful purpose, wherever possible.
The integrated Effluent Treatment Plant ensures that whatever effluent
is discharged from the factory meets the statutory requirements laid
down by the Pollution Control Board.
RCF, Trombay has taken up a massive plantation drive in factory
premises, in residential colony and surrounding areas and planted
15,000 numbers of trees in the year 2014-15. Similarly 2650 trees have
been planted in Thal.
For increasing awareness regarding environment, public awareness
campaign programmes are arranged by Trombay and Thal units.
4.0.0 CORPORATE SOCIAL RESPONSIBILITIES (CSR) INITIATIVES
4.1.0 As part of its initiatives under "Corporate Social
Responsibilities', your Company has undertaken several activities,
aimed for the benefit of needy and for general good of the society.
These activities are in accordance with Schedule VII of the Companies
Act, 2013. The activities, in brief, are as under:
4.1.1 Education:
4.1.1.1 Schools:
Your Company supports schools, at the two units, which impart education
in Marathi, Hindi and English mediums to students from Nursery to 10th
Standard. Your Company undertakes the upkeep, maintenance and bears
the deficit expenditure incurred by the schools, located in Company's
residential colonies, which are run by reputed Educational
Institutions.
4.1.1.2 Scholarship to meritorious students:
Your Company offers a number of scholarships to students of SC/ ST/ OBC
communities for pursuing higher studies. Your Company's scholarship
project for sending every year 10 students to 6th Standard in Shivaji
Military school in Pune and supporting the earlier batches in their
march to higher standards thereafter has received goodwill from all.
4.1.1.3 Supply of Mid-Day Meal:
Your Company is funding Mid-Day Meal Scheme for providing nutritious
food to children studying in twenty five unaided schools, providing
education to poor children, in and around Trombay area. The scheme is
operated through an NGO, 'ISKCON Food Relief Foundation' which
supplies good and healthy meal to the children on behalf of RCF. In
all, 6,000 students have availed the benefit of this nutritious mid-
day meal.
4.1.1.4 Programme for underprivileged Children:
Your Company has adopted the "Khel Khel Mein" programme of
Wockhardt Foundation for under privileged children of age group of 5 to
10 years, by setting up six centres of edu-recreation with parallel
learning in slums of Vashi Naka area, near Trombay unit.
4.1.1.5 RCF SUPER- 30 programme:
Your Company, in association with Centre for Social Responsibility and
Leadership (CSRL), has established a unit of Abhayanand Super 30 in
Mumbai where about 30 underprivileged talented students of Maharashtra
state are provided 11 months of free residential coaching to enable
them to get admission in IIT/NIT and other premier engineering
colleges. This year 26 of these students were successful in the JEE
mains examination.
4.1.1.6 Farmers' Education:
More than 30000 farmers attended & benefited from the training
programmes conducted at the two Farmers Training Centres in the last
half decade and have used the knowledge to upgrade their farm practices
and have succeeded in reducing their overheads and increase in their
wealth. Special programmes designed for women farmers and the scheduled
caste and scheduled tribes are also organized on a regular basis so
that they too join the bandwagon of the country's agricultural
renaissance.
Your Company's efforts in rendering advisory services to farmers by
conducting Soil diagnostics to optimize soil productivity are well
appreciated.
Based on the analysis, farmers are advised on soil fertility management
through rational use of manure, fertilizers and other inputs to make
agriculture more productive and sustainable. During the year, more than
143000 soil samples were analyzed and recommendations given through the
twelve static and six mobile soil testing laboratories.
4.1.2 Supply of drinking water to the villages:
Your Company has been providing drinking water for more than 20 years
to seven villages around Thal unit through pipelines laid down from the
water reservoir in the unit and spent about Rs. 114 lakh on this
account during the year. About 16000 residents of the villages got
benefit of the scheme.
4.1.3 Community Medical Facility:
4.1.3.1 Running of Mobile Medical Van:
Your Company has engaged Wockhardt Foundation and administered free
primary health care through mobile Medical Vans. Total of four Mobile
medical vans are running in slums of Trombay and villages of Thal and
patients are benefited from free medical services including supply of
medicines. Through this facility, ailments like Blood pressure, low
Haemoglobin Levels, Oxygen saturation, Malaria, Hepatitis, Dengue,
Typhoid, Diabetes, etc., are treated on regular basis, through
qualified Doctors. One medical van attends to approx. 25000 patients
per annum.
4.1.3.2 Running of pathology lab:
M/s Wockhardt Foundation is also engaged in the running of Pathology
lab in Chembur near RCF township. Nearly 3000 patients have benefited
from this scheme.
4.1.3.3 Assistance to differently abled persons:
Your Company with assistance of ALIMCO (PSU) has extended services of
providing Aids and Appliances to nearly 75 differently abled persons
belonging to the under privileged section of the society.
4.1.3.4 Distribution of sanitary napkins (Moksha):
Your Company has engaged Wockhardt Foundation for extending the medical
services for enhancement of female hygiene by free distribution of
sanitary napkins (Moksha) through mobile Medical Vans. The efforts in
rendering novel services to the women in slum areas.
4.1.4 Chembur Green Project:
Your Company continued to support the Chembur Green project, launched
to establish greenery in the eastern suburb of Mumbai, by joining hands
with Chembur Citizens' Forum, an NGO to develop, beautify and
maintain N. G. Acharya Garden (Diamond Garden), at Chembur for a period
of 5 years. Your Company continued distribution of free saplings and
rendering advice to various co-op. societies and also to individuals.
4.1.5 Conservation of Natural Resources(Solar System):
Your Company has continued to focus on conservation of Natural
Resources by installation of solar power system at Deaf & Dumb school
at Patiala.
In addition 10 Bio Toilets inside factory premises were installed for
Truck drivers, loaders and cleaners etc. The . bio toilet coverts the
human waste into treated effluent and bio gas which is free from
Pathogens.
4.1.6 Contribution to "SWACHH BHARAT KOSH":
Your Company has contributed Rs. 1 Crore in the national campaign of
clean and green India.
4.1.7 Rural Sports
Your Company has supplied sports material and organised sports for
tribal of Thal Villages.
4.1.8 Livelihood enhancement projects
Your Company has also supplied paddy, fruits sapling and free
fertilizers to nearby villagers.
During the year, your Company has spent Rs. 8.30 Crore on CSR
activities. The Annual Report on CSR activities is annexed to this
report as Annexure I.
5.0. 0 MICRO, SMALL AND MEDIUM ENTERPRISES
Government of India, Ministry of Micro, Small and Medium Enterprises,
vide order dated 23rd March, 2012, notified the public procurement
policy in respect of procurement of goods and services produced and
provided by Micro, Small and Medium Enterprises. As per this
directive, every Central Ministry or Department or Public Sector
Undertaking shall set an annual goal of procurement from Micro, Small
and Medium Enterprises from the Financial Year 2012- 13 and onwards
with the objective of achieving an overall procurement of products
produced and services rendered by Micro, Small and Medium Enterprises
to the extent of minimum 20% of total annual purchases in a period of
three years. The directive also provides that the goals set with
respect to procurement to be made from Micro, Small and Medium
Enterprises and achievement made in that direction be incorporated in
their respective Annual Reports. Your Company has already achieved the
set target of 20%.
6.0. 0 SUSTAINABLE DEVELOPMENT
6.1 Your Company has taken up several Sustainable development
activities including the following:
[i] Improvement of Road infrastructure- construction and repairs.
[ii] Building of Check Dams.
[iii] Prevention of soil erosion and watershed management.
6.1.1 Rapid wall Project:
The Rapid wall project, which has been implemented, is an example of
Company's faith in sustainable development wherein a waste product
generated from Phosphoric Acid Plant is converted into useful building
material by adopting a novel technology.
6.1.2 New Sewage Treatmentplant:
Your Company and Bharat Petroleum Corporation Limited (BPCL), have
signed an MOU for setting up a Sewage Treatment Plant (STP) at RCF,
Trombay at approx. cost of Rs. 198 Crore. The Sewage Treatment Plant
shall be named as RCF-BPCL Sewage Treatment Plant. The RCF-BPCL Sewage
Treatment Plant will be based on latest Membrane Bio-Reactor Technology
with design capacity to treat 22.75 Million Litres per Day (MLD) of
Municipal Sewage to produce about 15 MLD of treated water. The treated
water shall be shared by RCF and BPCL. The project is being set up with
active support from Municipal Corporation of Greater Mumbai (MCGM).
This project is a Sustainability Development Project as it will treat
waste sewage generated in the city and convert it in to treated water.
The said project when operational will also reduce the load on MCGM
Sewage Treatment facility to the extent of 22.75 MLD.
The said project when it goes on-stream will generate 15 MLD of treated
water for usage in plant operation in RCF and BPCL thereby saving fresh
water intake to that extent which will benefit about 30,000 families in
the city of Mumbai. Being sustainable development project, this project
from your Company will be of great value to residents of Mumbai and
Society at large.
6.1.3 Solar Power Plant:
In its bid towards India's vision of achieving ecologically
sustainable growth, Your company has already forayed in solar power
generation. The company have installed 5 rooftop solar power
generation facilities atop our offices. Your company has already lined
up a contract for setting up a 2 MWp Photovoltaic Solar power plant
within our factory premises at Trombay, Mumbai at a cost Rs. 14.20
Crore. Based on the average intensity of solar radiation, the project
on commissioning is likely to generate around 3 million units of power
on annual basis. The power generated shall be used for captive
consumption of the Trombay unit and reduce your Company's power
import to the equivalent extent.
The power generated by solar plant shall replace the conventional power
generated through burning of fossil fuels with a totally green power
leading to reduction in overall Greenhouse gas emissions of the
surroundings.
Your Company is also considering several major activities connected
with Green House Gas, sustainable electricity distribution based on
solar energy etc. Your Company is targeting to take up many more
sustainable development activities in the near future.
6.2 ANNUAL SUSTAINABILITY REPORT
RCF has published, during the year, its Sustainability Report for the
year 2013-14 based on Global Reporting Initiative (GRI) guidelines and
National Voluntary Guidelines (NVG) on 'Social, Environmental and
Economic Responsibilities of Business' issued by Ministry of
Corporate Affairs, Govt. of India. The Report has been posted on the
Company's website.
The report provides Company's economic, environmental and social
performance. Sustainability reporting is about organization's
progress vis- a-vis performance goals, not only for economic
achievements, but for environmental protection and social well-being.
The report for 2014-15 would also be published soon.
7.0.0 VIGILANCE
Vigilance department is headed by a full time Chief Vigilance Officer
(CVO), deputed from the All India Services by the Government of India.
The position of CVO is at par with the Functional Directors. CVO is
assisted by a team of Officers drawn from various functional
departments. The activities of Vigilance department cover Corporate
office, Trombay unit, Thal unit and all the marketing offices situated
throughout the country. In line with the CVC guidelines, the thrust of
Vigilance in your Company is to bring greater transparency, integrity
and efficiency. The focus of Vigilance department is on Preventive and
Participative Vigilance.
This is done by keeping careful watch on various activities through
regular inspections and surprise checks. System improvements and
corrective actions are taken wherever necessary. The concept that
"All Officers are Vigilance Officers" is implemented in your
Company and alertness and support of all officers is taken in the
management of Vigilance. Vigilance has focused on spreading awareness
on rules / regulations, procedures and soliciting information /
complaints from all regarding malpractices / corruption.
During the year, Vigilance Department has actively contributed towards
leveraging technology in all operations that helps in implementing
robust e-governance in RCF, in making the tender documents more
transparent and relevant, enhanced transparency in existing system of
dealing with our Dealers/Vendors and accrued savings to your company by
implementing e-procurement thereby ensuring transparency in all
procurements.
8.0.0 HUMAN RESOURCES
8.1.0 TRAINING ANDDEVELOPMENT
One of the strengths of your Company lies in its skilled and
professional manpower. This could be achieved by adopting good HR
policies and undertaking training and development of all employees.
Training imparted includes enhancing General Management skills of the
employees in various functions viz. Marketing, Finance, Commercial and
Health Services disciplines.
Quality Management Systems, Environment Management Systems,
Occupational Health and Safety Systems and 5 S Systems are given
focused attention. The work culture of your Company has been enhanced
by introducing the Six Sigma and Lean Quality Circles. System of
Mentorship for newly recruited Executives is in place.
Your Company is the first Public Sector Undertaking to have formally
introduced Quality Systems in various HR and HRD processes by being
successfully rated at People Capability Maturity Model (PCMM) Level 2.
Time Bound efforts are planned to achieve Level 3 rating of PCMM.
The Company has been conferred with the 'Best PSU Public Sector
Training Program' Award by ASSOCHAM in January, 2015.
Institute of Directors has also awarded the Company with the 'Golden
Peacock National Training Award' for the year 2014-15.
8.2.0 INDUSTRIAL RELATIONS
Your Company maintained cordial and harmonious Industrial Relations
with all its employees. All the issues are settled amicably through
regular discussions, meetings and dialogues with the employees. There
was no occurrence of any untoward incident during the year.
Your Company had 3957 employees comprising of 1546 Officers and 2411
workmen, as on 31st March, 2015 compared to 3967 employees (1508
officers and 2459 workmen) as on the corresponding date of the previous
year.
8.3.0 MATHADI CONTRACT LABOUR MANAGEMENT
Due to cordial relations with Mathadi Labour, Trombay and Thal Units
could achieve the targets and recorded production and dispatch
milestones.
Management strongly believes in continuous dialogues and meetings with
Unions of Contract Labours. Mutual Trust and Transparency are the key
factors in cordial industrial relations. From November 2014 onwards,
retirement age of contract workers was enhanced from 58 years to 60
years. All the gratuity claims of the retired/expired contract workers
have been settled.
8.4.0 GRIEVANCE REDRESSAL
There is a "three tier system" in existence through which the
employees' grievances are resolved. It helps in achieving the
objectives of employees' satisfaction enhancement within guidelines
and it also develops faith and confidence in the system and department.
8.5.0 WELFARE AND SPORTS
Your Company undertakes several welfare schemes like education,
medical, transport, housing etc., according to the needs of the
employees. In regards to sports, your Company is a prominent patron and
sponsored various sports events. Your Company's Football, Cricket,
Hockey, Kabaddi and other teams continue to show excellent performance
at District, State and National levels.
8.6.0 WELFARE / EMPLOYMENT OPPORTUNITY TO WEAKER SECTION
The guidelines in respect of reservation in recruitment and promotion
of SC/ST, OBC, Ex-servicemen and Persons with Disabilities are followed
by your Company. As on 31st March 2015, your Company has on its rolls,
552 employees belonging to Scheduled Caste, 261 Scheduled Tribe and 437
Other backward castes.
Your Company is committed to the welfare of the backward classes in
general and SC/ST employees in particular. Regular meetings are held
with SC/ST Employees Welfare Association to address grievances, if any,
and for providing guidance for development.
Your Company has adopted 38 SC/ST students under SC/ST Adoption Scheme.
Medical Camp is organized every year at Chaitya Bhoomi, Dadar on 6th
December, on the occasion of 'Mahaparinirvan Day'. Financial
assistance for making arrangement for medical camp and for medicines
along with the vehicles and Doctors is made available by the Company.
Your Company's Thal Unit provides various amenities like water, road
for the nearby villages e.g. Thal, Navgaon, Boris, Gunjis etc., where
the majority of the population belongs to the SC/ST categories.
The facility continued during the year. Scholarships were given to
meritorious students of SC/ST community in the nearby villages of Thal.
Large number of SC/ST farmers have been trained in the programmes
conducted at the Company's Farmers' Training Centres at Nagpur and
Thal.
9.0. 0 OFFICIAL LANGUAGE POLICY
Your Company has fully endeavoured to implement the provisions of
Official Language Act, 1963 and the policy of the Government. Publicity
material and literature for employees and farmers are made available in
Hindi and other regional languages.
10.0. 0 INTERNAL CONTROL SYSTEM AND THEIR
ADEQUACY
The Company has a well-defined Internal Control System that is adequate
and commensurate with the size and nature of its business comprising of
an in-house Audit Department, which conducts internal audit of various
operational and financial matters on on-going basis. Internal Audit
group consists of adequate number of financial and technical personnel
and is headed by a Cost Accountant in the rank of Dy. General Manager.
The recommendation and observations of the Internal Audit Department
are reviewed regularly by the Audit Committee constituted by the Board
of Directors. The performance of your Company is regularly monitored by
the Audit Committee.
The Company has an effective budgetary control mechanism in place to
take care of the detailed capex and operational budget. Appropriate
monitoring mechanism to compare the actual performance with the budget
ensures that necessary review is periodically undertaken.
11.0. 0 COST AUDIT
Your Directors had, on the recommendation of Audit Committee, appointed
Shri Suresh D. Shenoy, Cost Accountant and M/s V.J.Talati & Co., Cost
Accountants to audit the cost accounts of the Company for the financial
year 2014-15. As required under the Companies Act, 2013, the
remuneration payable to the cost auditor is required to be placed
before the Members in a general meeting for their ratification.
Accordingly, a resolution seeking Member's ratification for the
remuneration payable to Shri Suresh D. Shenoy and M/s V.J. Talati &
Co., Cost Auditors was approved by the members in 36th Annual General
Meeting.
Shri Suresh D. Shenoy and M/s. V. J. Talati & Co.,cost Accountants,
have been appointed, by the Board, on the recommendation of Audit
Committee, as Cost Auditors for the year 2015-16 on a remuneration of
Rs. 3.35 lakh. As required under the Companies Act, 2013, the
remuneration payable to cost Auditor is required to be placed before
the Members in a general meeting for their ratification. Accordingly, a
resolution seeking Members ratification for the remuneration payable to
M/s V. J. Talati & Co., and Shri Suresh D. Shenoy, Cost Auditors is
included in the notice convening the Annual General Meeting.
12.0.0 DIRECTORS' RESPONSIBILITY STATEMENT
In terms of section 134(3) (c) of the Companies Act, 2013, your
Directors state that:
i] in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any;
ii] such accounting policies have been selected and applied
consistently and judgments and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2015 and of the profit of the Company for
the year ended on that date;
iii] proper and sufficient care has been taken 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;
iv] the annual accounts have been prepared on a going concern basis;
v] the proper internal financial controls were in place and that such
internal financial controls were adequate and were operating
effectively; and
vi] systems to ensure compliance with the provisions of all applicable
laws were in place and were adequate and operating effectively.
13.0. 0 CORPORATE GOVERNANCE
13.1.0 As per Clause 49 of the listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance practices
followed by the Company, together with a certificate of Compliance from
the Company's Auditor forms an integral part of this report.
13.2.0 COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY
DEPARTMENT OF PUBLIC ENTERPRISES
Government of India, Department of Public Enterprises (DPE), has laid
down certain parameters for the purpose of grading the Central Public
Sector Enterprises on the basis of their compliance of guidelines on
Corporate Governance and this report needs to be submitted to the
Government on quarterly/annual basis. Your Company has been complying
with the Guidelines on Corporate Governance for Central Public Sector
Enterprises laid down by DPE and regularly submits reports to the
Government.
14.0. 0 CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis describing the
Company's objectives, projections, estimates and expectations may be
'forward looking statements' and actual results may or may not be
in accordance therewith. The Company's performance is dependent on
several external factors such as performance of monsoon, significant
changes in economic environment, Government Policies, fluctuations in
prices of raw material and finished products and also their
availability etc., which could adversely affect the operations of your
Company.
15.0. 0 AUDITORS
The Comptroller and Auditor General of India (CAG) has appointed, M/s.
M. M. Nissim & Co. and M/s NBS & Co., as Joint Statutory Auditors of
your Company for the Financial Year 2014-15. The Auditors would be
retiring at the conclusion of the Thirty Seventh Annual General
Meeting.
The Statutory Auditors for the Financial Year 2015- 16 will be
appointed by the CAG. However, their remuneration is to be fixed at the
AGM by the members.
16.0. 0 DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year, Shri Sushil Kumar Lohani has been appointed as
Government Nominee Director in place of Shri S. C. Gupta w.e.f. 2nd
July, 2014, Shri Suresh Warior has been appointed as Director (Finance)
and Chief Financial Officer w.e.f. 18th July, 2014 and Shri D. M. Sati
has been appointed as Company Secretary and Compliance Officer in place
of Shri K. C. Prakash w.e.f. 1st August, 2014.
As per Section 152 of the Companies Act, Shri Sham Lal Goyal and Shri
C. M. T. Britto, Directors retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for reappointment.
Independent Director has given declaration that he meets the criteria
of independence as laid down under Section 149(6) of the Companies Act,
2013 and Clause 49 of the Listing Agreements.
17.0 REMUNERATION POLICY
Department of Public Enterprises vide OM No. 2(70)/08- DPE(WC) dated
26th November 2008 has fixed pay scales of Board Level and below Board
Level executives and non-unionised supervisors.
18.0 MEETINGS OF THE BOARD
Eleven (11) Board Meetings were held during the year. The details are
given in the Corporate Governance Report.
19.0 NOMINATION AND REMUNERATION COMMITTEE:
The details of Nomination and Remuneration Committee are given in
Corporate Governance Report.
20.0 PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN AND
SECURITIES PROVIDED
Particulars of Loans given, Investments made, Guarantees given and
securities provided along with the purpose for which the loan or
guarantee or security is proposed to be utilized by the recipient are
provided in the notes to the financial statements.
21.0 VIGIL MECHANISM/WHISTLE BLOWER POLICY
The details of Vigil Mechanism/Whistle Blower Policy are provided in
Corporate Governance Report.
22.0 RELATED PARTY TRANSACTIONS
All contracts/arrangement/transactions entered by the Company during
the financial year with related parties were in the ordinary course of
business and on an arm's length basis. There are no materially
significant related party transactions made by the Company with
Promoters, Directors, Key Managerial Personnel or other designated
persons which may have a potential conflict with the interest of the
Company at large.
All Related Party Transactions are placed before the Audit Committee as
also the Board for approval. None of the Directors has any pecuniary
relationships or transactions vis-a-vis the Company.
23.0 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of
the Rules issued thereunder, your Company confirms that no complaint
/case has been filed/pending with the Company during the year 2014-15.
24.0 SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s. Bhandari and
Associates, a firm of Company Secretaries in Practice to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Audit
Report is annexed to this Report as Annexure II.
25.0 EXPLANATION OR COMMENTS BY THE BOARD ON SECRETARIAL AUDIT REPORT
M/s. Bhandari and Associates, Practising Company Secretaries,
Secretarial Auditor of the Company has made certain observations in
their Secretarial Audit Report. The Board Comments in respect of the
same are as under:
25.01.01 In respect of observation made at Sr. no Al,
A2&A3:
"The Company is a Central Public Sector Undertaking and its Directors
on the Board are appointed by the President of India. The present Board
of the Company consists of 7 Directors comprising of 4 Whole-time
Directors (including CMD), 2 Government Nominee Directors and 1
Independent Director. Company has taken up with Government for
appointing balance Independent Directors including one woman director.
25.01.02 In respect of observation made at Sr. no A4:
A Separate meeting of Independent Directors could not be held during
the said period as the Company has only one Independent Director on its
board.
26.0 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3) (m)
of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts)
Rules, 2014, is annexed to this Report as Annexure III.
27.0 EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form
MGT 9 are annexed to this report as Annexure IV.
28.0 ACKNOWLEDGMENT
Your Directors wish to gratefully acknowledge the valuable guidance and
continued support extended by Government of India and in particular,
the Department of Fertilizers and the Office of Fertilizer Industry
Co-ordination Committee (FICC), Railways, DPE, members of MOU Task
force, and other Central Government departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude, the help
and unstinted support from the Government of Maharashtra and other
state Governments, MSEB, MIDC, various media, Municipal authorities,
Maharashtra Pollution Control Board, Bankers to your Company, Financial
Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence posed,
unstinted support and suggestions made to the Board by the esteemed
share Owners of the Company. The Board also wishes to place on record
the positive suggestions and guidance provided by the Statutory
Auditors, Cost Auditors and the Office of the Principal Director of
Commercial Audit.
Last but not the least, your Directors take pleasure in placing on
record their deep appreciation of the excellent contribution made by
the employees of your Company at all levels, without which your Company
would not have achieved such good performance.
By order of the Board of Directors
[R. G. Rajan]
Chairman and Managing Director
Place: Mumbai
Date : 14th July, 2015
Mar 31, 2014
To the members,
Rashtriya Chemicals and Fertilizers Ltd,
Mumbai
The Directors of your Company have pleasure in presenting this 36th
Annual Report on the working of your Company together with the Audited
Accounts for the year ended 31st March, 2014.
1.0.0 FINANCIAL PERFORMANCE:
Summary of financial performance:
Rs. Crore
Particulars 2013-14 2012-13
Total Income 6661.64 6866.83
Cost of Sales 6021.28 6186.39
Operational Profit 640.36 680.44
Depreciation/Impairment 141.75 173.15
Finance Cost 131.29 127.17
Proflt/(Loss) before tax 367.32 380.12
Provision for Tax 117.43 99.22
(including deferred Tax liability/Asset)
Net Proflt/(loss) 249.89 280.90
Appropriations:
Dividend 82.75 82.75
Tax and Educational cess on Dividend 14.06 14.06
Balance Transferred to General Reserve 153.08 184.09
1.1.0 Highlights for the year 2013-2014:
Your Company earned a total income of Rs. 6661.64 crore as against Rs.
6866.83 crore during the previous year. Your Company achieved a gross
profit of Rs. 640.36 crore as against Rs. 680.44 crore of previous year.
The net Profit before Tax was Rs. 367.32 crore as against Rs. 380.12 crore
in the previous year. The Net Profit after Tax during the year was
lower at Rs. 249.89 crore as against Rs. 280.90 crore in the previous year
registering a reduction of 11.04 % over previous year. Performance for
the year 2013-14 was lower as compared to previous year due to
substantial depreciation in Indian Rupee against USD, reduction in MRP
of P&K fertilizers, non-receipt of timely subsidy resulting in higher
fnancing costs, lower complex fertilizer production because of lower
operating load of Suphala owing to ongoing structural rehabilitation,
lower sales of v imported fertilizers, higher tax payout, etc.
As in the past several years, your Company received MOU Excellent''
rating-for 20.12-13 from Ministry of Heavy Industries and Public
Enterprises and has achieved excellent performance during 2013-14 as
well.
1.2.0 -Dividend:
Although your Company has lined up a number - of'' capex programmes
which will entail substantial '', ''.expenditure, considering the
consistent profits being made by the Company, your Directors propose to
pay dividend at Rs. 1.50 per each equity share of Rs. 10, same as paid in
the previous year. The total out go works out to Rs. 96.81 (Rs. 96.81 crore
in the previous year) including dividend distribution tax and education
cess.
1.3.0 Appropriation to General Reserves:
Your Company earned a net Profit after Tax of Rs. 249.89 crore (Rs. 280.90
crore in the previous year). The dividend payout along with Tax/cess is
Rs. 96.81 crore (J 96.81 crore in the previous year). The balance amount
ofRs. 153.08 crore (Rs. 184.09 crore in the previous year) is transferred
to General Reserves.
1.4.0 Awards Won:
As in the past, your company achieved many awards during the year
2013-14 some of which are as under:
11th National Award for excellence in Cost Management for 2013, from
Institute of Cost Accountants of India under the category, Public
Manufacturing Organisations (Large).
- Sustainability Award 2013 for excellence in Safety, Health &
Environment in Chemical & Petrochemical Sector was conferred upon RCF,
Trombay Unit by FICCI.
- Greentech Safety Award - 2013 in Silver category for excellence in
safety management among fertilizer industries, instituted by Greentech
Foundation
- FAI runner up award for the best technical innovation in Suphala
plant (15:15:15) for 2012- 13.
- Golden Peacock Occupational Safety & Health Award 2012-13 from
Institute of Directors at World Congress on Environment Management.
- Special Commendation Golden Peacock National Training Award.
- National Award for innovative Training practices, ''from . Society
for Training and Development.
2.8. RESEARCH AND DEVELOPMENT:
Your Company has taken up several Research and Development projects,
some of which taken up for commercial scale design and engineering, are
as under:
2.8.1 Lab scale development of Potassium (K) mobilizers as Bio
fertilizer Microorganisms play a key role in the natural K cycle and
are capable of mobilizing available K in the soils. They are
functionally more useful and environmentally more feasible than soluble
K. The special focus on K mobilizers/solubilizers is due to the fact
that K is one of the major nutrients required by all crops. The
biofertilizer with K mobilizing bacteria is developed in laboratory and
is sent to Madurai University for feld trials. Your Company will take
further steps to commercialise the product after successfully
completing the feld trials.
2.8.2 Pilot scale production of value added Gypsum (Gypsum Sona)
The R & D department of your Company has developed a new product for
enhancing organic matter in sodiac and saline soils by using
Phosphogypsum. The product, named as ''Gypsum-Sona" is found to have
soil rejuvenating characteristics and also increases crop yield
manifold. Pilot scale production is completed and is sent for feld
trials. The feld trials have shown promising results and the product is
expected to be commercialized in the coming year.
2.8.3 Micro propagation of Stevia through Tissue Culture Technique
Micro propagation requires relatively shorter time as compared to
conventional practice of propagation.
Therefore tissue "culture offers tremendous potential for the large
scale production of Stevia. The protocol -for'' micro-propagation
(multiplication) of Stevia through, tissue* culture techniques has been
successfully- developed by" R''&D. The manufacturing and sale of
uniform, and f disease" free Stevia saplings will be done. after field
testing experiments. The technique will make available. the uniform and
disease free Stevia sapling to the farming community for large scale
cultivation.
2.8.4 New formulations for manufacturing specialized products using
Calcined Gypsum:
The R & D department of your Company has developed, in consultation
with Institute of Chemical Technology, a formulation for manufacturing
an ecofriendly "External wall plaster" from Calcined Gypsum. The
product is undergoing further tests and after successful trials, would
be taken up for commercial production. Your Company has also developed
another formulation using the Calcined Gypsum, for manufacturing a
''Cement Bonding Material, similar to Cement mortar, which can be used
on roads etc., to fll potholes.
2.9.0 CONSERVATION OF ENERGY:
In order to save and conserve energy, your Company undertook various
steps during the year 2013-14. Several modifications in the plants
have resulted in significant reduction in the energy consumption. A few
of the measures undertaken are as follows:
At Trombay unit, air preheater coil of new design was installed to
recover the waste energy from fue gas of reformer in Ammonia V plant.
Similarly, a new MP stripper was installed in place of LP stripper thus
saving significant amount of steam in Ammonia I. Besides, several
equipment such as new MP stripper, improved energy efficient motors,
unloading compressors at ammonia storage, semi- lean MDEA solution
pump, etc., have been installed which have helped the unit in reducing
the energy consumption.
Some of the energy conservation measures undertaken at Thal unit
include replacement of 6 no. of MP turbines with LP turbines, resulting
into MP steam saving of 25 MT/Hr, replacement of old S-200 converter
basket with new S-300 basket which improved conservation of energy to
the extent of 0.02 Gcal/MT of ammonia, retubing of water cooler in
Ammonia stream -I with resultant benefit in energy saving of 0.03
Gcal/MT of ammonia, installation of roof top grid synchronised Solar
Power Generation facility of 10 KWp on Administration Building, etc.
The particulars with regard to Conservation of Energy, Technology
Absorption, Foreign Exchange outgo as required under Section 217 (i)
(e) of the Companies Act, 1956 are enclosed as Annexure I.
3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL:
Your Company is committed to ensuring clean environment, beyond
satisfying all stipulated requirements laid down by the statutory
authorities, around its operating units.
Your Company has established ISO 14001 compliant Environment Management
System (EMS) at its two manufacturing units. The Systems are constantly
upgraded and regular internal audits and Management Reviews are carried
out to ensure compliance and continually improve the system. Apart
from Stack monitors, which continuously monitor the emissions, four
fixed ambient air quality monitoring stations are in place, at both
Trombay and Thal, to monitor ammonia, NOx, SO2, Particulate matter
(PM10 & PM2.5) & metrological parameters.
The Effluent Treatment plants at Trombay and Thal have ensured that the
environment in and around the Units are fully protected. Various
schemes are implanted to reduce wastages of the scarce natural
resources. The waste streams from the plants are recycled/reused for
useful purpose.
Sludge generated in Effluent Treatment Plant, Sulphur Sludge Generated
in Sulphuric Acid plant, waste streams of effluents from complex
fertilizer plants are recycled back in the processes. The integrated
Effluent Treatment Plant ensures that whatever effluent is discharged
from the factory meets the statutory requirements laid down by the
Pollution Control Board.
For increasing awareness regarding environment, public awareness
campaign programmes are arranged by Trombay and Thal units.
4.0.0 CSR Activities:
4.1.0 In line with the CSR philosophy adopted, your Company undertook
several activities, aimed for the benefit of needy and for general good
of the society, during the financial year 2013-14. Your Company carried
out many activities under CSR policy and spent/committed about Rs. 15.28
crore which are briefly stated as under:
4.1.1 Education:
4.1.1.1 Schools:
Your Company supports schools, at the two units, which impart education
in Marathi, Hindi and English mediums to students from Nursery to 10th
Standard. Your Company undertakes the upkeep, maintenance and bears the
deficit expenditure incurred by the schools, located in Company''s
residential colonies, which are run by reputed Educational
Institutions.
4.1.1.2 Scholarship to meritorious students:
Your Company offers a number of scholarships to . students of
SC/ST/OBC communities for pursuing higher studies. Your Company''s
scholarship project for sending every year, 10 students to 6th Standard
in Shivaji Military school in Pune and supporting the earlier batches
in their march to higher standards thereafter has received goodwill
from all.
4.1.1.3 Supply of Mid-Day Meal:
Your Company started Mid-Day Meal Scheme for providing nutritious food
to children studying in seven unaided schools, providing education to
poor children, in and around Trombay area. The scheme is operated
through an NGO,''ISKCON Food Relief Foundation'' which supplies good and
healthy meal to the children on behalf of RCF In all 10,000 students
have availed the benefit of this nutritious meal.
4.1.1.4 Programme for underprivileged Children
Your Company has adopted the "Khel Khel Main" programme of Wockhardt
Foundation for under privileged children of age group of 5 to 10 years,
by setting up six centres of edu-recreation with parallel learning in
slums of Vashi Naka area near Trombay unit.
4.1.1.5 RCF SUPER- 30 programme
Your Company, in association with Centre for Social Responsibility and
Leadership (CSRL), has established a unit of Abhayanand Super 30 in
Mumbai where about 30 underprivileged talented students of Maharashtra
state are provided 11 months of free residential coaching to enable
them get admission in IIT/NIT and other premier engineering colleges.
29 of these students were successful in the entrance examination.
4.1.1.6 Farmers'' Education:
More than 30000 farmers attended & benefited from the training
programmes conducted at the two Farmers Training Centre in the last
half decade and have used the knowledge to upgrade their farm practices
and, have- succeeded in reducing their overheads. and increase their
wealth. Special programmes designed ''for, -women farmers and the
scheduled *cas"te, and scheduled tribes are also organized on a regular
basis so that they too join the bandwagon of the country''s agricultural
renaissance.
.Your Company''s efforts in rendering advisory services to farmers by
conducting Soil diagnostics to optimize soil productivity, are well
appreciated.
Based on the analysis, farmers are advised on soil fertility management
through rational use of manure. fertilizers and other inputs to make
agriculture more productive and sustainable. During the year, more than
95,000 soil samples were analyzed and recommendations given through the
twelve static and six mobile soil testing laboratories.
4.1.2 Supply of drinking water to the villages:
Your Company has been providing drinking water since more than 20 years
to seven villages around Thal unit through pipelines laid down from the
water reservoir in the unit and spent about Rs. 80 lakh on this account
during the year. About 16000 residents of the villages got benefit of
the scheme.
4.1.3 Community Medical Facility
Your Company has engaged Wockhardt Foundation and administered free
primary health care through mobile Medical Vans. On an average 7
Villages are covered in weekly cycles by a mobile van and patients are
benefited from free medical services including supply of medicines.
Through this facility, ailments like Blood pressure, low Haemoglobin
Levels, Oxygen saturation, Malaria, Hepatitis, Dengue, Typhoid,
Diabetes, etc., are treated on regular basis, through qualified
Doctors. One medical van attends to approx. 25000 patients per annum.
Total of four such vans are operating in Thal and Trombay areas.
4.1.4 Chembur Green Project:
Your Company continued to support the Chembur Green project, launched
to establish greenery in the eastern suburb of Mumbai, by joining hands
with Chembur Citizens'' Forum an NGO to develop, beautify and maintain
Diamond Garden, at Chembur for a period of 5 years. Your Company
continued distribution of free saplings and rendering advice to various
co-op. societies and also to individuals.
5.0.0 Micro, Small- and Medium Enterprises.
Government -of. India,* Ministry of Micro, Small and Medium.
Enterprises, vide order dated 23 rd March, 2012, * notified ''the public
procurement policy in respect of procurement of goods and services
produced and provided by Micro, Small and Medium Enterprises. As per
this directive, every Central Ministry or Department* or- Public Sector
Undertaking shall set*an annual''goal *of procurement from Micro, Small
and Medium Enterprises from the Financial Year 2012-13 and onwards with
the objective of achieving an overall procurement of products produced
and services rendered by Micro, Small and Medium Enterprises to the
extent -of. minimum 20% of total annual purchases in a period of three
years. There are about 358 items/services stated in the directive.
After a period of three years,.'' i.e. from 1st April, 2015, overall
procurement goal of minimum 20% shall be made mandatory. The directive
also provides that the goals set with respect to procurement to be met
from Micro, Small and Medium Enterprises and achievement made thereto
be incorporated in their respective Annual Reports. To comply with the
directive, your Company, for the year 2013-14, has set a goal of 15%
and has achieved a higher level of 19.53% excluding natural gas, bulk
raw materials and proprietary items. The Company is sure to achieve 20%
during 2014-15.
6.0.0 Sustainable Development
Your Company has taken up several Sustainable development activities
including the following:
[i] Improvement of Road infrastructure- construction and repairs.
[ii] Building of Check Dams.
[iii] Prevention of soil erosion and watershed management.
The Rapidwall project, which has been implemented, is an example of
Company''s faith in sustainable development wherein a waste product
generated from Phosphoric Acid Plant is converted into useful building
material by adopting a novel technology.
As already stated, Your Company is planning to put up a new Sewage
treatment plant of similar capacity as that of the existing one at
Trombay unit as a part of sustainable development plan to enable Mumbai
city to have additional potable water for its citizens as your Company
would be recycling the sewage water supplied by BMC and would be using
that water in place of clean water supplied by BMC.
In its bid towards India''s vision of achieving ecologically sustainable
growth your Company plans to venture into setting up Solar based power
generation facilities. The Company has already set up rooftop solar
power generation facilities to the tune of 34 KW atop of its offices at
five locations in Maharashtra. It has plans for setting up 2 MW Solar
Power generation facility at its Trombay Unit.
Your Company is also considering several major activities connected
with Green House Gas, sustainable electricity distribution based on
solar energy etc. Your Company is targeting to take up many more
sustainable development activities in the near future.
6.1.0 Annual Sustainability Report :
RCF has published, during the year, its maiden Sustainability Report
for the year 2012-13 based on Global Reporting Initiative (GRI)
guidelines and National Voluntary Guidelines (NVG) on ''Social,
Environmental and Economic Responsibilities of Business'' issued by
Ministry of Corporate Affairs, Govt. of India. The Report has been
posted on the Company''s website.
The report provides Company''s economic, environmental, and social
performance. Sustainability reporting is about organization''s progress
vis-a-vis performance goals, not only for economic achievements, but
for environmental protection and social well being. The report for
2013-14 would also be published soon.
7.0.0 Vigilance
Vigilance department is headed by a full time Chief Vigilance Officer
(CVO), deputed from the All India Services by the Government of India.
The position of CVO is at par with the Functional Directors. CVO is
assisted by a team of Officers drawn from various functional
departments. The activities of Vigilance department cover Corporate
office, Trombay unit, Thal unit and all the marketing offices situated
throughout the country. In line with the CVC guidelines, the thrust of
Vigilance in your Company is to bring greater transparency, integrity
and efficiency. The focus of Vigilance department is on Preventive and
Participative Vigilance.
This is done by keeping careful watch on various activities through
regular inspections and surprise checks. System improvements and
corrective actions are taken wherever necessary. The theme that "All
Officers are Vigilance Officers" is implemented in your Company and
alertness and support of all officers is taken in the management of
Vigilance. Vigilance has focused on spreading awareness on rules/
regulations, procedures and soliciting information/complaints from
all regarding malpractices/corruption.
During the year, Vigilance department has actively contributed towards
implementing e-governance in RCF, in making the tender documents more
transparent and relevant, enhanced transparency in the existing system
of dealing with our dealers/ vendors and accrued savings to your
Company by implementing systems for reduction in wastages in handling
bulk raw material. With persistent efforts from Vigilance department,
your Company has implemented the system of e-procurement for ensuring
more transparency in procurements."
8.0.0 HUMAN RESOURCES:
8.1.0 Training and Development:
One of the strengths of your Company is its skilled and professional
man power. This could be achieved by adopting good HR policies and
undertaking training and development of all employees. Training
imparted includes enhancing General Management skills of the employees
in various functions viz. Marketing, Finance, Commercial and Health
Services disciplines.
Quality Management Systems, Environment Management Systems,
Occupational Health and Safety Systems and 5 S Systems are given
focused attention. The work culture of your Company has been enhanced
by introducing the Six Sigma and Lean Quality Circles. System of
Mentorship for newly recruited Management Trainees is in place.
Training and Development programmes were conducted, in-house for the
employees of your Company at various levels. Besides this,
comprehensive Safety Management Programmes were carried out for
officers in Technical disciplines. Special emphasis has been laid on
Process Safety Management. The following awards have been won by
employees of your Company for the year under report:
¦ OSH India 2013 Safety Hero Gold Medal awarded to Shri Kishan Singh
Kathayat, Sr. Engg (Safety) for accomplishment in making Hkl safe
workplace.
¦ Shri Shantanu Shinde, Sr. Grade Operator,Urea V has been conferred
with''. Prestigious Prime Minister''s Shram-Vir Award for the year 2012.
8.2.0 Industrial Relations:
Your COrnpany maintained cordial Industrial
Relations with all its employees. All the issues are settled
"through"regular discussions, meetings and dialogues'', with the
employees. Your Company had "396.7 employees comprising of 1508 Officers
and 2459 workmen, as on 31st March, 2014 compared to "4.048 employees
(1548 officers and 2500 workmen) as on the corresponding date of the
previous year.
8.3.0. Welfare and Sports
Your Company undertakes several welfare schemes like education,
medical, transport, housing etc., according to the needs of the
employees. In regards to sports, your Company is a prominent patron and
sponsored various sports events. Your Company''s Football, Cricket,
Hockey, Kabaddi and other teams continue to show excellent performance
at District, State and National levels and have brought laurels to your
Company by winning several prizes.
8.4.0. Welfare/Employment opportunity to weaker section:
The guidelines in respect of reservation in recruitment and promotion
of SC/ST, OBC, Ex- servicemen and Persons with Disabilities are
followed by your Company. As on 31st March 2014, your Company had on
its rolls, 542 employees belonging to Scheduled Caste, 257 Scheduled
Tribe and 396 Other backward castes.
Your Company is committed to the welfare of the backward classes in
general and SC/ST employees in particular. Regular meetings are held
with SC/ST Employees Welfare Association to address grievances, if any,
and for providing guidance for development.
Medical Camp is organized every year at Chaitya Bhoomi, Dadar on 6th
December, on the occasion of ''Mahaparinirvan Day''. Financial assistance
for making arrangement for medical camp and for medicines along with
the vehicles and Doctors are made available by the Company.
Your Company''s Thal Unit provides various amenities like water, road
etc, for the nearby villages e.g. Thal, Navgaon, Boris, Gunjis etc.,
where the majority of the population belongs to the SC/ST categories.
The facility continued during the year. Scholarships were given to
meritorious students of SC/ST community in the nearby villages of Thal.
Large number of SC/ST farmers have been trained in the programmes
conducted at the Company''s Farmers'' Training-Centres at Nagpur and
Thal.
9.0.0 PARTICULARS OF EMPLOYEES:
A statement providing, the information as required under section 217
(2A) of the Companies Act, 1956 is attached to this report as Annexure
II.
10.0.0 OFFICIAL LANGUAGE POLICY:
Your Company has fully endeavoured to implement the provisions of
Official Language Act, 1963 and the policy of the Government. Publicity
material and literature for employees and farmers are made available in
Hindi and other regional languages.
11.0.0 INTERNAL CONTROL SYSTEM:
The Company has a well-defined Internal Control System that is adequate
and commensurate with the size and nature of its business comprising of
an in-house Audit Department, which conducts internal audit of various
operational and financial matters on on-going basis. Internal Audit
group consists of adequate number of financial and technical personnel
and is headed by a Chartered Accountant in the rank of General Manager.
The recommendation and observations of the Internal Audit Department
are reviewed regularly by the Audit Committee constituted by the Board
of Directors. The performance of the corporation is regularly monitored
by the Board of Directors.
The Company has an effective budgetary control mechanism in place to
take care of the detailed capex and operational budget. Appropriate
monitoring mechanism to compare the actual performance with the budget
ensures that necessary review is periodically undertaken.
12.0.0 COST AUDIT
Your Company has appointed Shri S.D.Shenoy, Cost Accountant and M/s
VJ.Talati & Co, Cost Accountants for conducting Audit of the Cost
Records for the financial year 2013-14. The Cost Audit Reports for
2012-13 were fled in XBRL form, within due date, with the Ministry of
Company Affairs on 26.9.2013 and even for 2013-14 also, the Report will
be fled within the due date.
13.0.0 DIRECTORS'' RESPONSIBILITY STATEMENT:
In terms of section 217 (2AA) of the Companies Act, 1956, your
Directors state that: i] in preparing the annual accounts, the
applicable accounting standards have been followed;
ii] the accounting policies adopted have been consistently applied and,
wherever necessary, judgements and estimates made that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit or
loss of the Company for the year;
iii] proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safe guarding the assets of your Company and for
preventing and detecting fraud and other irregularities; and
iv] the annual accounts have been prepared on a going concern basis.
14.0.0 CORPORATE GOVERNANCE:
14.1.0 As per Clause 49 of the listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance along with a
certificate of Compliance is annexed and forms part of this report.
14.2.0 COMPLIANCE OF CORPORATE
GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OF PUBLIC ENTERPRISES
Government of India, Department of Public Enterprises, has laid down
certain parameters for the purpose of grading the Central Public Sector
Enterprises on the basis of their compliance of guidelines on Corporate
Governance and this report needs to be submitted to the Government on
quarterly/annual basis. Your Company has been complying with the
Guidelines on Corporate Governance for Central Public Sector
Enterprises laid down by DPE and regularly submits reports to the
Government.
15.0.0 CAUTIONARY STATEMENT:
Statements in the Management Discussion and Analysis describing the
Company''s objectives, projections, estimates and expectations may be
''forward looking statements'' and actual results may or may not be in
accordance therewith. The Company''s performance is dependent on several
external factors such as performance of monsoon, significant changes in
economic environment, Government Policies, fuctuations in prices of raw
material and fnished products and also their availability etc., which
could adversely affect the operations of your Company.
16.0.0 AUDITORS:
The Comptroller and Auditor General of India (CAG) has appointed, M/s
M.M. Nissim & Co. and M/s NBS & Co as Joint Statutory Auditors of your
Company for the Financial Year 2013-14. The Auditors would be retiring
at the conclusion of the Thirty sixth Annual General Meeting.
The Statutory Auditors for the Financial Year 2014- 15 will be
appointed by the CAG. However, their remuneration is to be fixed at the
AGM by the members.
Shri S. D. Shenoy and M/s. V. J. Talati & Co., have"_ been appointed,
by the Board, as Cost Auditors for the year 2014-15 and the
remuneration payable is ''to. be approved at the AGM by the members.
17.0.0 DIRECTORS:
President of India appointed Prof. Damodar Acharya as Director of your
Company w.e.f 30.01.2014. Shri S.K. Lohani I.A.S, has been appointed
as an Additional Director on 02.07.2014. Shri Suresh Warior has been
appointed as an Additional Director on 18.07.2014, Shri Gautam Sen,
Director (Finance) has demitted his Office on 31.01.2014 on attaining
the age of superannuation. The contribution of Shri Gautam Sen to your
Company has been immense. His guidance, suggestions and advice have
greatly benefited the Company. Your Directors place on record their
appreciation of the contribution of Shri Sen to your Company. Notice
under section 160 of the Companies Act has been received proposing the
candidature of Prof. Damodar Acharya, Shri S.K. Lohani and Shri Suresh
Warior as Directors of the Company.
As per Section 152 of the Companies Act, Shri Ashok Ghasghase, Director
retires by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for reappointment.
18.0.0 ACKNOWLEDGMENT:
Your Directors wish *to ''gratefully .acknowledge the valuable
guidance.and''continued support extended by Government *of", India" and-
in particular, the Department of Fertilizers and the Office of
Fertilizer Industry. Co-ordi''nation Committee (FICC), Railways, DPE,
members of MOU Task force, and other Central Government''.departmfents
and Agencies.
"The Board also wishes to acknowledge with sincere gratitude, the help
and unstinted support from the State Governments, MSEB, MIDC, various
media, Municipal authorities, Maharashtra Pollution * Control Board,
Bankers to your Company, Financial Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence posed,
unstinted support and suggestions made to the Board by the esteemed
share Owners of the Company. The Board also wishes to place on record
the positive suggestions and guidance provided by the Statutory
Auditors, Cost Auditors and the Office of .the Principal Director of
Commercial Audit.
Last but not the least, your Directors take pleasure in placing on
record their deep appreciation of the excellent contribution made by
the employees of your Company at all levels, without which your Company
would not have achieved such good performance.
By order of the Board of Directors
[RG. Rajan]
Chairman and Managing Director.
Place : Mumbai
Date : 19.07.2014
Mar 31, 2013
To the members of Rashtriya Chemicals and Fertilizers Ltd.,
Mumbai
The Directors of your Company have pleasure in presenting this 35th
Annual Report on the working of your Company together with the Audited
Accounts for the year ended 31st March, 2013.
1.0.0 FINANCIAL PERFORMANCE:
Summary of financial performance:
Rs. Crore
Particulars 2012-2013 2011-2012
Total Income 6987.48 6600.43
Cost of Sales 6345.96 6034.20
Operational Profit 641.52 566.23
Depreciation / Impairment 173.15 142.44
Finance Cost 88.25 49.33
Profit/(Loss) before tax 380.12 374.46
Provision for Tax (including deferred
Tax liability/ Asset) 99.22 125.22
Net Profit / (loss) 280.90 249.24
Appropriations:
Dividend 82.75 77.24
Tax and Educational cess on Dividend 14.06 12.53
Balance Transferred to General Reserve 184.09 159.47
1.1.0 Highlights for the year 2012-2013:
Your Company achieved a total income of Rs. 6987.48 crore as against
Rs. 6600.43 crore during the previous year. Your Company achieved a
gross profit of Rs. 641.52 crore as against Rs. 566.23 crore. The net
Profit before Tax was Rs. 380.12 crore as against Rs. 374.46 crore in
the previous year. The Net Profit after Tax during the year was higher
at Rs. 280.90 crore as against Rs. 249.24 crore in the previous year
registering an increase of 12.70% over previous year. Performance for
the year 2012-13 was better as compared to previous year which was due
to higher realizations, as well as increased volume of manufactured
Complex fertilizers and Industrial products.
As in the past several years, your Company received ''MOU Excellent''
rating for 2011-12 from Ministry of Heavy Industries and Public
Enterprises.
1.2.0 Dividend:
Although your Company has lined up a number of capex programmes which
will entail substantial expenditure, considering the consistent profits
being made by the Company, your Directors propose to pay dividend at
Rs. 1.50 per each equity share of Rs. 10, as against Rs. 1.40 paid in
the previous year. The total out go works out to Rs. 96.81 crore (Rs.
89.77 crore in the previous year) including dividend distribution tax
and education cess.
1.3.0 Appropriation to General Reserves:
Your Company earned a net Profit after Tax of Rs. 280.90 crore C 249.24
crore in the previous year). The dividend payout along with Tax/cess is
Rs. 96.81crore (Rs. 89.77 crore in the previous year). The balance
amount of Rs. 184.09 crore (Rs. 159.47 crore in the previous year) is
transferred to General Reserves.
1.4.0 Awards Won:
Your company achieved many awards during the year 2012-13 as under:
- National award for Excellence in Cost Management awarded by the
Institute of Cost Accountants of India.
- ''PSE Excellence Award'' from the Indian Chamber of Commerce for
Environment Excellence and Sustainable Development under Miniratna
Category.
- Golden Peacock award for excellence in Environmental Management
2012 by the Institute of Directors.
- The Aqua Excellence award 2011 (PSU category) from Aqua Foundation
for outstanding contribution towards cause of water.
- Best HR Strategy award 2011 and outstanding contribution of HR for
organizational development by Indian Human Capital Summit 2011.
Apart from the above awards, the two units of your company received
awards for their individual performance as under:
The Trombay unit was bestowed with the following awards:
- Fertilizer Association of India (FAI) Award for ''Production,
Promotion and Marketing of Bio- fertilizers'' for the year 2011-12.
- Annual Environment Excellence Award 2011 by Greentech Foundation
for outstanding performance in environment management in Gold category.
Thal unit of your Company was bestowed with ''Gold Award in Fertilizer
Sector'' by Greentech Foundation, New Delhi for outstanding
achievements in Safety Management for the year 2012.
2.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL:
Your Company is dedicated to improve environmental performance through
continual improvement and is going beyond satisfying all stipulated
requirements laid down by the statutory authorities for environment
management and pollution control.
With an aim to sustaining the operations in an environment friendly
manner, your Company established, ISO 14001 compliant, Environment
Management System (EMS) at its two manufacturing units. The Systems are
constantly upgraded and the three separate systems, namely Quality
Management System (ISO 9001:2008), Environment Management System (ISO
14001:2004) & Occupational Health and Safety Assessment Series (OHSAS
18001:2007), are all brought under Integrated Management System.
Regular internal audits and Management Reviews are being carried out to
ensure compliance and continually improve the system.
Measures taken to conserve water have yielded not only savings but also
have further improved the environmental management. The state of art
Effluent Treatment plants and the Sewage Treatment plants at Trombay
have ensured that the environment in and around the Unit is fully
protected. Your Company''s Sewage treatment plant is highly acclaimed
by all. Your company is contemplating to install another plant.
Various schemes are implanted to reduce wastages of the scarce natural
resources. The waste streams from the plants are recycled / reused for
useful purpose.
After successful study by R&D department to recover approx. 50% of the
present R.O. reject water of Sewage Treatment Plant as process water,
the project has been completed to recover approx. 3000 m3/day of
process water. Apart from savings, water is being conserved every day
to that extent.
Sludge generated in Effluent Treatment Plant, Sulphur Sludge generated
in Sulphuric Acid plant, waste streams of effluents from complex
fertilizer plants are recycled back in the processes. The integrated
Effluent Treatment Plant ensures that whatever effluent is discharged
from the factory meets the statutory requirements laid down by the
Pollution Control Board.
During the process of converting raw materials into finished products,
certain residual chemicals are formed, which are either recycled or
converted into harmless chemicals as far as possible, before
discharging them into the atmosphere, giving due importance to cleaner
environment.
To check the effectiveness of the environmental management system and
ensure compliance with emission regulations, monitoring network has
been incorporated. Apart from Stack monitors, which continuously
monitor the emissions, four fixed ambient air quality monitoring
stations are in place to monitor ammonia, NO , SO, Particulate matter
'' x 2'' (PM10 & PM2.5) & metrological parameters.
Your Company has taken up the exercise of Greenhouse Gas (GHG)
Accounting, which is the process of estimating the company''s total
GHG emissions in terms of equivalent tonnes of Carbon di oxide. This is
popularly known as Carbon Foot printing. Carbon Foot printing is
typically regarded as a primary step for undertaking structured
approach to managing company''s carbon risks. Total GHG emission in
Trombay unit has reduced by 7.1% during the year under report, over the
emission during previous year. The reduction was mainly due to
reduction in specific consumption of energy in urea and reduction in
N2O emission from nitric acid plant. Total GHG emission at Thal unit
reduced by 1.3% during the year over that during previous year, mainly
due to the steps taken to reduce energy consumption of urea.
For increasing awareness regarding environment, public awareness
campaign programmes are arranged by Trombay unit.
3.0.0 PRINCIPLES OF GLOBAL COMPACT.
Your Company is a member of United Nations Global Compact and fully
supports the Ten Principles in the areas of human rights, labour and
environment which are derived from the earlier declarations by United
Nations, ILO and other international organisations. Your Company has
posted a detailed write-up on its website www.rcfltd. com in this
respect.
4.0.0 CSR Activities:
4.1.0 In line with the CSR philosophy adopted, your Company undertook
several activities, aimed for the benefit of needy and for general good
of the society, during the financial year 2012-13. Your Company carried
out many activities under CSR policy and spent/committed about Rs.
12.86 crore which are briefly stated as under:
4.1.1 Education:
4.1.1.1 Schools:
Education is fundamental to Society. Your Company supports schools, at
the two units, which impart education in Marathi, Hindi and English
mediums to students from Nursery to 10th Standard. Schools are located
in the Company''s residential colonies at the Units. Your Company
undertakes their upkeep, maintenance and bears the deficit expenditure
incurred by the schools which are run by reputed Educational
Institutions. During the year your Company spent an amount of Rs. 2.11
crore under this activity. About 2000 students attend the schools.
4.1.1.2 Scholarship to meritorious students:
Your Company encourages students from SC / ST / OBC communities by
offering them scholarship for pursuing higher studies. Your company''s
scholarship project for sending every year, 10 students to 6th Standard
in Shivaji Military school and Raigadh Military school and supporting
the earlier batches in their march to higher standards thereafter has
received goodwill from all. Your Company spent Rs. 16 lakh for this
purpose.
4.1.1.3 Supply of Mid-Day Meal:
Your Company started Mid Day Meal Scheme for providing nutritious food
to children studying in seven unaided schools, providing education to
poor children, in and around Trombay area. The scheme is operated
through a NGO,''ISKCON Food Relief Foundation'' which supplies good
and healthy meal to the children on behalf of RCF. In all 6000 students
are availing the benefit of this nutritious meal and your Company has
spent about Rs. 1 crore against this scheme over a year.
4.1.1.4 Programme for underprivileged Children
Your Company has adopted the "Khel Khel Main" programme of
WOCKHARDT Foundation for under privileged children of age group of 5 to
7 years. Your Company has setup six centres of edu- recreation with
parallel learning in slums of Vashi Naka area. 1200 children in the age
group of 5 to 10 years participate in the programme.
The Programme provide the children with fun and educational toys like
blocks, puzzles, clay, cars, story books, colouring books, drawing
books, stationery etc. Children are taught social interactions,
sharing, caring and child bonding. Prominent speakers in the field are
invited to give talk to the children on any civic topic like
environment, nature, hygiene, good manners, social conduct etc. which
will help them in future.
4.1.1.5 Farmers'' Education:
The adoption of Agricultural technology for increasing crop yield and
land productivity is greatly facilitated by training and adequate
dissemination of knowledge. RCF sought to bridge the gap between
Research Scientist and the farmer by setting up its State of the Art
Farmers'' Training Centre (FTC) in 1988 at Nagpur and in 1998 at Thal.
These early steps have paid rich dividend since then. More than 30000
farmers have attended & benefitted from these training programmes
conducted at the two Farmers Training Centre in the last half decade
and have used the knowledge to upgrade their farm practices and have
succeeded in reducing their overheads and increase their wealth.
The Training Centres are equipped with the latest audio-visual aids,
classrooms and also hostels providing residential accommodation to the
farmers The Company''s dedicated training facilities are manned by
in-house professionally qualified faculty, eminent Research Scientists
from agricultural institutions, Agro experts, progressive farmers &
senior agriculture departmental officials are invited on regular
interval as visiting faculty members.
The curriculum covers aspects of farm management and specifies of farm
technology, with special reference to regional needs. The programmes
are designed to cover both general aspects as well as region specific
aspects of farming technology. These are supplemented by training with
regard to moonlighting in subsidiary occupations and the lucrative,
futuristic option of food processing. The regional agricultural
universities take an active part in the farmers'' training process and
case studies with regard to geological situations, cropping pattern,
socio-economic problems etc. are discussed regularly. Field visits to
research centres, agricultural institutes and subsidiary occupation
centres are also organized.
Special programmes designed for women farmers and the scheduled caste
and scheduled tribes are also organized on a regular basis so that they
too join the bandwagon of the country''s agricultural renaissance.
This is a unique way to disseminate information and educate farmers as
regards the various services available to them to enhance their crop
yield and soil fertility.
Approximately 3000 farmers are trained every year at both the
institutes and total annual expenditure is about Rs. 40 lakh.
4.1.2 Supply of drinking water to the villages:
Your Company has been providing drinking water since more than 20 years
to seven villages around Thal unit through pipelines laid down from the
water reservoir in the unit and spent Rs. 84 lakh on this account
during the year. 15758 residents of the villages got benefit of the
scheme.
4.1.3 Village Adoption:
As a part of IRDP activities, 5 to 10 tribal and backward villages are
adopted each year from different states. These programmes are carried
out in association with Agricultural department, Zilla Parishads,
District Rural Development Financial Institutions and NGOs.
The major activities conducted include, providing basic needs of the
community like construction of community hall, drinking water facility,
lift irrigation facility, shelter for small and marginal farmers, water
shed development programmes, financial help to self help groups,
conducting Medical camps, veterinary camps, vaccination camps,
providing appropriate sanitation facilities, encouragement of use of
Bio-gas etc.
Agricultural Need Development Programmes are also conducted to support
the farmers to increase their productivity by providing them the latest
development in agriculture. If necessary inputs like quality hybrid
seeds, fertilizers, agricultural implements etc. are also provided. In
addition to this fertilizer/crop demonstrations are conducted to show
the effectiveness of scientific practices to the farmers.
Training and support is given to the farmers to develop subsidiary
occupation to augment their income. Some of the areas where training
has been imparted are Weaving, Bee keeping, Tailoring, Dairy, Poultry,
Goat keeping, etc.
Along with economic development, your company encourages organization
of social / cultural activities in the adopted villages.
Your company spent about Rs. 28 lakh on this account.
During last five years your company has adopted 27 villages in the
states of Maharashtra, Karnataka & Andhra Pradesh.
4.1.4 Advice on Soil nutrients:
Your Company''s efforts in rendering advisory services to farmers by
conducting Soil diagnostics to optimize soil productivity, are well
appreciated.
Soil testing helps diagnose soil health and evolve soil specific and
crop specific solutions. It helps to identify problematic soils, their
nutritional status, texture and structure. Based on the analysis,
farmers are advised on soil fertility management through rational use
of manure, fertilizers and other inputs to make agriculture more
productive and sustainable. During the year, more than 95,000 soil
samples were analyzed and recommendations given through the twelve
static and six mobile soil testing laboratories.
4.1.5 Community Medical Facility
In the baseline survey undertaken, for your company, by Tata Institute
of Social Science (TISS) in Thal area, it was highlighted that major
problem in the that area is lack of primary health facility for common
ailments like cough, cold and most of times villagers have to travel
long distance to get the treatment for such minor ailments. Keeping
this in view, your company has engaged Wockhardt Foundation and
administered free primary health care to more than 7.50 lakh patients
till date over a period of about 5 years. On an average 25 Villages are
covered in weekly cycles and around 25000 patients are benefitted from
free medical services including supply of medicines. Through this
facility ailments like Blood pressure, Hemoglobin Levels, Oxygen
saturation, Malaria hepatitis, Dengue, Typhoid and Diabetes, etc are
treated on regular basis, through qualified Doctors.
During the year 2012-13, your company extended the service in Chembur
as well covering the need in the slum areas. Your company spent about
Rs. 54 Lakhs.
4.1.6 Chembur Green Project:
Your Company continued to support the Chembur Green project, launched
to establish greenery in the eastern suburb of Mumbai. Your Company''s
efforts has brought back the green forestry amidst concrete jungle in
the area. The development of traffic islands, kitchen gardens,
exhibitions, Rose shows and other activities in schools and colleges
have increased the environment consciousness among the citizens. Your
Company continues distribution of free saplings and rendering advice to
various co-op. societies and also to individuals.
Your Company joined hands with Chembur Citizens'' Forum a NGO to
develop, beautify and maintain Diamond Garden, at Chembur for a period
of 5 years at a cost of Rs. 75 lakh. The park attracts about 2000
people every day and about 4000 people during the week ends.
5.0 Micro, Small and Medium Enterprises.
Government of India, Ministry of Micro, Small and Medium Enterprises,
vide order dated 23rd March, 2012, notified the public procurement
policy in respect of procurement of goods and services produced and
provided by Micro, Small and Medium Enterprises. As per the directives,
every Central Ministry or Department or Public Sector Undertakings
shall set an annual goal of procurement from Micro, Small and Medium
Enterprises from the Financial Year 2012-13 and onwards with the
objective of achieving an overall procurement of minimum of 20% of
total annual purchases of products produced and services rendered by
Micro, Small and Medium Enterprises in a period of three years. There
are about 358 items/services stated in the directive. After a period of
three years, i.e. from 1st April, 2015, overall procurement goal of
minimum 20% shall be made mandatory. The directive also provides that
the goals set with respect to procurement to be met from Micro, Small
and Medium Enterprises and achievement made thereto be incorporated in
their respective Annual Reports. To comply with the directive, your
Company, for the year 2012-13, has set a goal of 4% and has achieved
the same.
6.0.0 Sustainable Development
Your Company has taken up several Sustainable development activities
including the following:
[i] Improvement of Road infrastructure - construction and repairs.
[ii] Building of Check Dams.
[iii] Prevention of soil erosion and watershed management.
The Rapidwall project, which has been implemented, is an example of
Company''s faith in sustainable development wherein a waste product
generated from Phosphoric Acid Plant is converted into useful building
material by adopting a novel technology.
As already stated, Your Company is planning to put up a new Sewage
treatment plant of similar capacity as that of the existing one at
Trombay unit as a part of sustainable development plan to enable Mumbai
city to have additional potable water for its citizens as your Company
would be recycling the sewage water supplied by BMC and would be using
that water for its use.
In its bid towards India''s vision of achieving ecologically
sustainable growth, RCF plans to venture into setting up Solar based
power generation facilities. RCF has plans for setting up 2 MW Solar
Power generation facility at its Trombay Unit. In addition to above,
RCF is setting up to the tune 30 KW rooftop solar power generation
facilities atop its various offices in Maharashtra.
Your Company is also considering several major activities connected
with Green House Gas, sustainable electricity distribution based on
solar energy etc. Your Company is targeting to take up many more
sustainable development activities in the near future.
Sustainability Report status for Annual Report:
RCF is in process of preparing its maiden Sustainability Report for the
year 2012-13 based on Global Reporting Initiative (GRI) guidelines and
National Voluntary Guidelines (NVG) on Social, Environmental and
Economic Responsibilities of Business'' issued by Ministry of
Corporate Affairs, Govt. of India.
This report shall provide company''s economic, environmental, and
social performance. Sustainability reporting is about organizations
progress against performance goals, not only for economic achievements,
but for environmental protection and social wellbeing. This is also
termed as ''Triple Bottom Line'' approach.
RCF''s Sustainability Report is likely to be ready and published by
mid of August 2013.
In order to give more thrust to sustainable development, a Committee of
the Board has been formed to approve Sustainable Development plans and
to oversee Sustainable Development performance.
7.0.0 Vigilance
Vigilance department is headed by a full time Chief Vigilance Officer
(CVO), deputed from the All India Services by the Government of India.
The position of CVO is at par with the Functional Directors. CVO is
assisted by a team of Officers drawn from various functional
departments. The activities of Vigilance department cover Corporate
office, Trombay unit, Thal unit and all the marketing offices situated
throughout the country. In line with the CVC guidelines, the thrust of
the vigilance in your company is to bring greater transparency,
integrity and efficiency. The focus of Vigilance department is on
Preventive and Participative Vigilance.
This is done by keeping careful watch on various activities through
regular inspections and surprise checks. System improvements and
corrective actions are taken wherever necessary. The theme that "All
Officers are Vigilance Officers" is implemented in your company and
alertness and support of all officers is taken in the management of
Vigilance. Vigilance has focused on spreading awareness on rules /
regulations, procedures and solicited information / complaints from all
regarding malpractices / corruption.
During the year, Vigilance department has actively contributed towards
implementing e-governance in RCF, in making the tender documents more
transparent and relevant, enhanced transparency in the existing system
of dealing with our dealers/ vendors and accrued savings to your
company by implementing systems for reduction in wastages in handling
bulk raw material. With consistent efforts from Vigilance department,
your company is in the final stages of implementing e-procurement for
ensuring more transparency in procurements.
8.0.0 HUMAN RESOURCES:
8.1.0 Training and Development:
One of the strengths of your Company is its skilled and professional
man power. This could be achieved by adopting good HR policies and
undertaking training and development of all employees. Training
imparted includes enhancing General Management skills of the employees
in various functions viz. Marketing, Finance, Commercial and Health
Services disciplines.
Quality Management Systems, Environment Management Systems,
Occupational Health and Safety Systems and 5 S Systems are given
focused attention. The work culture of your Company has been enhanced
by introducing the Six Sigma and Lean Quality Circles. System of
Mentorship for newly recruited Management Trainees has been instituted.
Training and Development programmes were conducted, in-house for the
employees of your Company at various levels. Besides this,
comprehensive Safety Management Programmes were carried out for
officers in Technical disciplines.
8.2.0 Industrial Relations:
Your Company maintained cordial Industrial Relations with all its
employees. All the issues are settled through regular discussions,
meetings and dialogues with the employees. Your company had 4048
employees comprising of 1548 Officers and 2500 workmen, as on 31st
March, 2013 compared to 4104 employees (1517 officers and 2587 workmen)
as on the corresponding date of the previous year.
8.3.0. Welfare and Sports
Your Company undertakes several welfare schemes like education,
medical, transport, housing etc., according to the needs of the
employees. In regards to sports, your Company is a prominent patron and
sponsored various sports events. Your company''s Football, Cricket,
Hockey, Kabbaddi and other teams continue to show excellent performance
at District, State and National levels and have brought laurels to your
Company by winning several prizes.
8.4.0. Welfare / Employment opportunity to weaker section: The
guidelines in respect of reservation in recruitment and promotion of
SC/ST, OBC, Ex- servicemen and Persons with Disabilities are followed
by your company.
Your Company is committed to the welfare of the backward classes in
general and SC/ST employees in particular. Regular meetings are held
with SC/ ST Employees Welfare Association to address grievances, if
any, and for providing guidance for development.
Medical Camp is organized every year at Chaitya Bhoomi, Dadar on 6th
December, on the occasion of ''Mahaparinirvan Day''. Financial
assistance for making arrangement for medical camp and for medicines
along with the vehicles and Doctors are made available by the Company.
Your Company''s Thal Unit provides various amenities like water, road
for the nearby villages e.g. Thal, Navgaon, Boris, Gunjis etc. where
the majority of the population belongs to the SC/ST categories. The
facility continued during the year. Scholarships were given to
meritorious students of SC/ST community in the nearby villages of Thal.
Large number of SC/ST farmers have been trained in the programmes
conducted at the Company''s Farmers'' Training Centres at Nagpur and
Thal.
9.0.0 PARTICULARS OF EMPLOYEES:
A statement providing the information as required under section 217
(2A) of the Companies Act, 1956 is attached to this report as Annexure
II.
10.0.0 OFFICIAL LANGUAGE POLICY:
Your Company has fully endeavoured to implement the provisions of
Official Language Act 1963 and the policy of the Government. Publicity
material and literature for employees and farmers is made available in
Hindi and other regional languages.
11.0.0 INTERNAL CONTROL SYSTEM:
The Company has a well defined Internal Control System i.e. adequate
and commensurate with the size and nature of its business comprising of
an in- house Audit Department, which conducts internal audit of various
operational and financial matters on on-going basis. Internal Audit
group consists of adequate number of financial and technical personnel.
The recommendation and observations of the Internal Audit Department
are reviewed regularly by the Audit Committee constituted by the Board
of Directors. The performance of the corporation is regularly monitored
by the Board of Directors.
The Company has an effective budgetary control mechanism in place to
take care the detailed capex and operational budget. Appropriate
monitoring mechanism to compare the actual performance with the budget
ensures that necessary review is periodically undertaken.
12.0.0 COST AUDIT
Your Company has appointed the following Cost Auditors for conducting
Audit of the Cost Records for the financial year 2012-13:
1. Shri S.D. Shenoy, for conducting the cost audit of Trombay Unit,
Compliance Reporting, Consolidation, Report filing.
2. M/s V.J. Talati & Co., for conducting the Cost audit of all the
products of Thal unit and Training activities.
The Cost Audit Reports for 2011-12 were filed in XBRL form, within due
date, with the Ministry of Coorporate Affairs on 22.1.2013 and even for
2012-13 also, the Report will be filed within the due date.
13.0.0 DIRECTORS'' RESPONSIBILITY STATEMENT:
In terms of section 217 (2 A A) of the Companies Act, 1956, your
Directors state that:
i] in preparing the annual accounts, the applicable accounting
standards have been followed,
ii] the accounting policies adopted have been consistently applied and
wherever necessary, made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit or
loss of the Company for the year,
iii] proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of your Company and for
preventing and detecting fraud and other irregularities; and
iv] the annual accounts have been prepared on a going concern basis.
14.0.0 CORPORATE GOVERNANCE:
14.0.1 As per Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance along with a
certificate of Compliance is annexed and forms part of this report.
14.0.2 COMPLIANCE OF CORPORATE GOVERNNANCE GUIDELINES ISSUED BY
DEPARTMENT OF PUBLIC ENTERPRISES
Government of India, Department of Public Enterprises, has laid down
certain parameters for the purpose of grading of Central Public Sector
Enterprises on the basis of their compliance of guidelines on Corporate
Governance and this report needs to be submitted to the Government on
quarterly / annual basis. Your Company has been complying with the
Guidelines on Corporate Governance for Central Public Sector
Enterprises laid down by DPE and regularly submits reports to the
Government.
15.0.0 OFFER FOR SALE OF SHARES [OFS].
Government of India, Department of Disinvestment, has disinvested
6,89,61,012 equity shares of your Company [12.5%], through OFS to the
public on 8th March, 2013at a price of Rs. 45 per share. With this,
Government has totally disinvested (i.e. 11,03,34,212 equity shares)
20% of the paid up capital. Your Company has complied with the
provisions of Listing Agreements with Stock Exchanges in respect of
minimum shareholding by public.
16.0.0 CAUTIONARY STATEMENT:
Statements in the Management Discussion and Analysis describing the
Company''s objectives, projections, estimates and expectations may be
''forward looking statements'' and actual results may or may not be
in accordance therewith. The Company''s performance is dependent on
several external factors such as performance of monsoon, significant
changes in economic environment, Government Policies, fluctuations in
prices of raw material and finished products and also their
availability etc. which could adversely affect the operations of your
Company.
17.0.0 AUDITORS:
The Comptroller and Auditor General of India (CAG) has appointed, M/s.
Nissim & Co, and M/s. N.B.S & Co as Joint Statutory Auditors of your
Company for the Financial Year 2012-13. The Auditors would be retiring
at the conclusion of the Thirty fifth Annual General Meeting.
The Statutory Auditors for the Financial Year 2013-14 will be appointed
by the CAG. However, their remuneration is to be fixed at the AGM by
the members.
18.0.0 DIRECTORS:
President of India appointed Shri S.C. Gupta I.A.S. as Director of
your Company w.e.f. 4th April, 2013 in place of Dr. V Rajagopalan, IAS.
The contribution of Dr. V. Rajagoplan to your Company has been immense.
His guidance, suggestions and advice has greatly benefitted the
Company. Your Directors place on record their appreciation of the
contribution of Dr. V. Rajagopalan to your Company. Notice under
section 257 of the Companies Act has been received proposing the
candidature of Shri S.C. Gupta, as Director of the Company.
As per Section 256 of the Companies Act, Shri Sham Lal Goyal and Shri
C.M.T. Britto, Directors retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for reappointment.
19.0.0 ACKNOWLEDGMENT:
Your Directors wish to gratefully acknowledge the valuable guidance and
continued support extended by Government of India and in particular,
the Department of Fertilizers and the Office of Fertilizer Industry
Co-ordination Committee (FICC), Railways, DPE, members of MOU Task
force, and other Central Government departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude, the help
and unstinted support from the State Governments, MSEB, MIDC, various
media, Municipal authorities, Maharashtra Pollution Control Board,
Bankers to your Company, Financial Institutions, Dealers and Customers.
Your Board wishes to acknowledge gratefully, the confidence posed,
unstinted support and suggestions made to the Board by the esteemed
share owners of the Company.
The Board also wishes to place on record the positive suggestions and
guidance provided by the Statutory Auditors, Cost Auditors and the
Office of the Principal Director of Commercial Audit.
Last but not the least, your Directors take pleasure in placing on
record their deep appreciation of the excellent contribution made by
the employees of your Company at all levels, without which your Company
would not have achieved such good performance.
By order of the Board of Directors
R.G. Rajan
Chairman and Managing Director
Place : Mumbai
Date : 30.05.2013
Mar 31, 2012
To the Members of Rashtriya Chemicals and Fertilizers Ltd,
The Directors of your Company have pleasure in presenting this 34th
Annual Report on the working of your Company together with the Audited
Accounts for the year ended 31st March, 2012.
1.0.0 FINANCIAL PERFORMANCE:
Summary of financial performance:
Rs. Crore
Particulars 2011-2012 2010-2011
Sales including Subsidy 6499.22 5574.10
Other Income 129.42 103.15
Total Income 6628.64 5677.25
Cost of Sales 6099.01 5200.25
Operational Profit 529.63 477.00
Depreciation 142.44 112.66
Interest (Net) 12.74 9.65
Profit/ (Loss) before tax 374.45 354.69
Provision for Tax (including
deferred Tax liability/ Asset) 125.22 109.57
Net Profit / (loss) 249.23 245.12
Appropriations:
Dividend 77.24 60.69
Tax and Educational cess on 12.53 9.84
Dividend
Balance Transferred to General 159.46 174.59
Reserve
1.1.0 Highlights for the year 2011-2012:
Your Company achieved a turnover of Rs. 6499.22 crore compared to Rs.
5574.10 crore in the previous year. The turnover was higher by Rs.
925.12 crore during the year compared to previous year. The total
income from operations was Rs. 6628.64 crore as against Rs. 5677.25 crore
during the previous year. Your Company achieved a gross profit of Rs.
529.63 crore as against Rs. 477 crore in the previous year. The net
Profit before Tax at Rs. 3 74.45 crore as against Rs.354.69 crore
registered an increase of 5.57%. The Net Profit after Tax during the
year was higher at Rs. 249.23 crore as against Rs. 245.12 crore in the
previous year registering an increase of 1.68% over previous year.
Performance for the year 2011-12 was better as compared to previous
year which was due to higher realizations, as well as increased volume
of manufactured Complex fertilizers and Industrial products like
Ammonia. This increase is despite having a net foreign exchange
variance loss ofRs. 14.84 crore, higher operating and repairs &
maintenance expenditure.
Your Company received 'MOU Excellent' rating for 2010-2011 and is
likely to get the same for 2011 -12 from Ministry of Heavy Industries
and Public Enterprises.
1.2.0 Dividend:
Although your Company has lined up a number of capex programmes which
will entail substantial expenditure, considering the consistent profits
being made by the Company, your Directors propose to pay higher
dividend at Rs. 1.40 per each equity share of Rs.10/-, as against Rs. 1.10
paid in the previous year. The total out go works out to X 89.77'crore
(Rs. 70.53 crore in the previous year) including dividend distribution
tax and education cess.
1.3.0 Appropriation to General Reserves:
Your Company earned a net Profit after Tax of Rs. 249.23 crore (Rs. 245.12
crore in the previous year). The dividend pay out along with Tax/cess
is Rs. 89.77 crore (Rs. 70.53 crore in the previous year). The balance
amount of Rs. 159.46 crore (Rs. 174.59 crore in the previous year) is
transferred to General Reserves.
3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL:
Your Company is dedicated to improve environmental performance through
continual improvement and is going beyond satisfying all stipulated
requirements laid down by the statutory authorities for environment
management and pollution control.
With an aim to sustaining the operations in an environment
friendly manner, your Company established, ISO 14001 compliant,
Environment Management System (EMS) at its two manufacturing units. The
Systems are constantly upgraded and the three separate systems, namely
Quality Management System (ISO 9001:2000), Environment Management
System (ISO 14001:2004) & Occupational Health and Safety Assessment
Series (OHSAS 18001:2007), are all brought under Integrated Management
System. Regular internal audits and Management Reviews are being
carried out to ensure compliance and continually improve the system.
Measures taken to conserve water have yielded not only savings but also
have further improved the environmental management. The state of art
Effluent Treatment plants and the Sewage Treatment plants at Trombay
have ensured that the environment in and around the Unit is fully
protected. Your Company's Sewage treatment plant is highly acclaimed
by all.. Your Company is contemplating to install another plant.
Various schemes are implanted to reduce wastages of the scarce natural
resources. The waste streams from the plants are recycled/ reused for
useful purpose. Sludge generated in Effluent Treatment Plant, Sulphur
Sludge Generated in Sulphuric Acid plant, waste streams of effluents
from complex fertilizer plants are recycled back in the processes. The
integrated Effluent Treatment Plant ensures that whatever effluent is
discharged from the factory meets the statutory requirements laid down
by the Pollution Control Board.
In Trombay Unit of your Company, New granulation technology is adopted
in Ammonium Nitro phosphate plant to reduce dust emission. Capacity of
Sewage treatment plant is increased with installation of 5th RO. Your
Company has adopted the most effective system of environmental
management at its Trombay complex by process up- gradation, adoption of
cleaner technologies in new plants, suitable treatment of effluent &
continuous monitoring of emission & ambient air quality & by adoption
of reduce, recycle & reuse methodology. A scheme is under
implementation, to recover Ammonia from the condensate and further
improve quality of emission.
To check the effectiveness of the environmental management system and
ensure compliance with emission regulations, monitoring network has
been incorporated. Apart from Stack monitors, which continuously
monitor the emissions, four fixed ambient air quality monitoring
stations are in place to monitor ammonia, NOx, S02, Particulate matter
(PM10 & PM25) & metrological parameters.
During the process of converting raw materials into finished products,
certain residual chemicals are formed, which are either recycled or
converted into harmless chemicals as far as possible, before discharging
them into the atmosphere, giving due importance to cleaner environment.
Your Company has taken up the exercise of Greenhouse Gas (GHG)
Accounting, which is the process of estimating the Company's total GHG
emissions in terms of equivalent tonnes of Carbon dioxide. This is
popularly known as Carbon Foot printing. Carbon Foot printing is
typically regarded as a primary step for undertaking structured
approach to managing company's carbon risks. Total GHG emission in
Trombay unit has reduced by 7.1 % during the year under report, over
the emission during previous year. The reduction was mainly due to
reduction in specific consumption of energy in urea and reduction in
N2G emission from nitric acid plant. Total GHG emission at Thai unit
reduced by 1.3% during the year over that during previous year, mainly
due to the steps taken to reduce energy consumption of urea. The
specific energy reduced from 6.366 to 6.359 Gcal/MT of urea.
For increasing awareness regarding environment, public awareness
campaign programmes are arranged by Trombay unit.
4.0.0 PRINCIPLES OF GLOBAL COMPACT.
Your Company is a member of United Nations Global Compact and fully
supports the Ten Principles in the areas of human rights, lab our and
environment which are derived from the earlier declarations by United
Nations, ILO and other international organizations. Your Company has
posted a detailed write-up on its website www.rcfltd.com in this
respect.
5.0.0 CSR Activities:
5.1.0 in line with the CSR philosophy adopted, your Company undertook
several activities, aimed for the benefit of needy and for general good
of the society, during the financial year 2011 -12. Your Company
carried out many activities under CSR policy, and spent/committed about
Rs. 12.48 crore, which are briefly stated as under:
5.1.1 Education:
5.1.1.1 Schools:
Your Company attaches utmost importance to Education of children and to
this end, supports schools, both at its Thai and Trombay units, to
cater to students from Nursery to 10th Standard. The schools admit
children from communities nearer to its two operating units.
Instructions are imparted in Marathi, Hindi and English medium. Your
Company has provided school buildings in the Company's residential
colonies at Thai and Trombay and undertakes its upkeep, maintenance and
bears the deficit expenditure incurred by the schools. The schools are
entrusted to reputed Educational Institutions. Your Company also
supports the cause of education in the marketing areas. During the
year your Company spent an amount of Rs.3.14 crore under this activity.
5.1.1.2 Scholarship to meritorious students:
Your Company encourages students from SC/ ST/ OBC communities by
offering them scholarship for pursuing higher studies. During the year,
your Company spent Rs. 30 lakh.
5.1.1.3 Supply of Mid-Day Meal:
Your Company, through 'ISCKON Food Relief Foundation' provided
nutritious mid-day meals to about 5000 children, studying in seven
unaided schools imparting education to the poor children, in Trombay
area at a cost of Rs. 80 lakh and proposes to cater to more students in
financial year 2012-13.
5.1.1.4 Farmers' Education:
Your Company imparts farming education to increase productivity through
intensive and integrated extension activities in the field of
Agriculture, recommending balanced use of fertilizers and
simultaneously to extend the services as promoter, activator and
organizer of various socio- economic and educational activities to
improve the quality of life of various rural masses particularly small,
marginal and SC/ST families.
5.1.2 Supply of drinking water to the villages:
Your Company has been providing drinking water since more than 20 years
to seven villages around Thai unit through pipelines laid down from the
water reservoir in the unit and spent Rs. 64 lakh on this account during
the year.
5.1.3 Village Adoption:
Your Company provides support to needy people by providing tools,
tackles and training to enable them learn self-sustaining vocations and
improve their economic capabilities. An Expenditure of Rs. 10 lakh is
spent on the training imparted for improving their skills during the
financial year. Your Company sponsored games and sports such as Kabaddi,
KhoKho etc.
5.1.4 Chembur Green Project:
Your Company continued to support the Chembur Green project, launched
to establish greenery in the eastern suburb of Mumbai. Your Company's
efforts since more than 30 years has brought back the green forestry
amidst concrete jungle in the area. The development of traffic islands,
kitchen gardens, exhibitions, Rose shows and
other activities in schools and colleges have increased the environment
consciousness among the citizens. Your Company continues distribution
of free saplings and rendering advice to various co-op. societies and
also to individuals.
5.1.5. Service to Farmers:
5.1.5.1 Advice on Soil nutrients:
The services of your Company in respect of rendering Soil diagnostics,
as a means of advising farmers about use of proper dosage of
fertilizers in order to optimize soil productivity, are well
recognized. During the year, more than 70,000 soil samples were
analyzed and recommendations given through the five static and six
mobile soil testing laboratories. Your Company is taking steps to
supplement the sendee by adding six additional static and six mobile
testing laboratories to its existing infrastructure as a service to the
nation.
5.1.6 Farm practices:
Your Company continues to have grass root contact with farmers to
disseminate knowledge of proper farm practices to enhance their farm
income. In this regard, your Company undertook crop specific
development programs depending on the State/area. Your Company has
established several Farmers Service Centres for providing services such
as soil sample collection, arranging farmers meeting, film shows, and
exhibitions and for providing general guidance in the fields of
farming. Several farmers' / dealers' training programmes were conducted
during the year at the Company's two Farmers Training Institutes.
5.1.7 Other activities:
Your Company has constructed a mini sports stadium along with
accessories and facilities in Jaleshwar, Balasore district to encourage
sports and culture of the area.
6.0.0 Sustainable Development
Your Company has taken up several Sustainable development activities
including the following:
[i] Improvement of Road infrastructure- construction and repairs.
[ii] Building of Check Dams.
[iii] Prevention of soil erosion and watershed management.
The Rapid wall project, which has been implemented, is an example of
Company's faith in sustainable development wherein a waste product
generated from Phosphoric Acid Plant is converted into useful building
material by adopting a novel technology.
Your Company is also considering several major activities connected
with Green House Gas, sustainable electricity distribution based on
solar energy etc. Your Company has signed an agreement of Financial Aid
for rehabilitation of the existing Bio-gas plant in Shatabdi hospital
which is being coordinated through Rotary Club Chembur. Your Company is
targeting to take up many more sustainable development activities in
the near future.
In order to give more thrust to sustainable development, a Committee of
the Board has been formed to approve Sustainable Development plans and
to oversee Sustainable Development performance.
Your Company is planning to put up a new Sewage Treatment Plant of
similar capacity as that existing at Trombay unit as a part of
sustainable development plan to enable Mumbai city to have additional
potable water for its citizens as your Company would the recycling the
sewage water supplied by BMC and would be using that water for its use.
7.0.0 Vigilance
Vigilance Department is headed by a full time Chief Vigilance Officer
(CVO) deputed, from the All India Service, by Government of India. The
position of CVO is at par with the functional directors. CVO is
assisted by a team of senior officers drawn from various functional
departments. Vigilance Department is engaged in Vigilance activities at
Corporate Office, Trombay Unit, Thai Unit and also at the Marketing
Offices situated through out the country. The thrust of vigilance in
your Company is to bring out greater transparency, integrity and
efficiency in the functioning of various departments. Vigilance
Department emphasises on Preventive and Participative Vigilance.
Careful watch is kept on various activities through regular and
surprise inspections. System improvements and corrective action are
taken wherever necessary. All officials of the organization are
considered to be part of vigilance set up and their alertness and
support are taken in the management of vigilance. One of the prime
functions of vigilance is to spread awareness with reference to
vigilance issues and solicit information/complaints regarding any
malpractice/corruption.
During the year, the department had actively contributed in adoption of
Fraud Prevention Policy, Integrity Pact, and revision of manuals
relating to marketing, procurement and works contracts. As a result of
vigorous follow up, good progress has been achieved by your company in
E- conveyance by implementing E-tendering, E-reverse auction, E-Payments
and E-Receipts.
8.0.0.HUMAN RESOURCES:
8.1.0 Training and Development:
One of the strengths of your Company is its skilled and professional
man-power. This could be achieved by adopting good HR policies and
undertaking training and development of all employees. Training
imparted includes enhancing General Management skills of the employees
in various functions viz. Marketing, Finance, Commercial and Health
Services disciplines.
Quality Management Systems, Environment Management Systems,
Occupational Health and Safety Systems and 5 S Systems are given
focused attention. The work culture of your Company has been enhanced
by introducing the Six Sigma and Lean Quality Circles. System of
Mentorship for newly recruited Management Trainees has been instituted.
Training and Development programmes were conducted, in-house for the
employees of your Company at various levels. Besides this,
comprehensive Safety Management Programmes were carried out for
officers in Technical disciplines.
Your Company has been awarded, by World HRD Congress, with Global HR
Excellence Award, for "Excellence in TrainingÃ. Your Company has
also been accorded the award for "Best HR Strategic Planà and
"Outstanding Contribution of HR to Organization Developmentà in the
Indian Human Capital Summit 2011.
8.2.0 Industrial Relations:
Your Company maintained cordial Industrial Relations with all its
employees. All the issues are settled through regular discussions,
meetings and dialogues with the employees. Your Company has 4104
employees comprising of 1517 officers and 2587 workmen as on 31st
March, 2012 compared to 4238 employees (1541 officers and 2697 workmen)
as on the corresponding date of the previous year.
8.3.0. Welfare and Sports
Your Company undertakes several welfare schemes like education,
medical, transport, housing etc., according to the needs of the
employees. In regard to sports, your company is a prominent patron and
sponsored various sports events. Your company's Football, Cricket,
Hockey, Kabbaddi and other teams continue to show excellent performance
at District, State and National levels and have brought laurels to your
company by winning several prizes.
8.4.0. Welfare / Employment opportunity to weaker section: The
guidelines in respect of reservation in recruitment and
promotion of SC/ST, OBC, Ex-servicemen and Persons with Disabilities
are followed by your Company. Your Company has 572 Scheduled Caste
(SC), 259 Scheduled Tribe (ST) and 341 OBC employees on its rolls.
During the year, your Company recruited 40 persons, including 2 persons
with physical disability, on regular employment. Due representation to
SC/ST/OBC was given in recruitments.
Your Company is committed to the welfare of the backward classes in
general and SC/ST employees in particular. Regular meetings are held
with SC/ST Employees Welfare Association to address grievances, if any,
and providing guidance for development.
Medical Camp is organized every year at Chaitya Bhoomi, Dadar on 6th
December, on the occasion of 'Mahaparinirvan Day'. Financial assistance
for making arrangement for medical camp and for medicines along with
the vehicles and Doctors are made available by your Company.
Your Company's Thai Unit provides various amenities like water, road
for the nearby villages e.g. Thai, Navgaon, Boris, Gunjis etc. where
the majority of the population belongs to the SC/ST categories. The
facility continued during the year. Scholarships were given to
meritorious students of SC/ST community in the nearby villages of Thai.
Large number of SC/ST farmers have been trained in the programmes
conducted at the Company's Farmers' Training Centres at Nagpur and
Thai.
9.0.0 PARTICULARS OF EMPLOYEES:
A statement providing the information as required under section 217 (2
A) of the Companies Act, 1956 is attached to this report as Annexure
II.
10.0.0 OFFICIAL LANGUAGE POLICY:
Your Company has fully endeavored to implement the provisions of
Official Language Act 1963 and the policy of the Government. Publicity
material and literature for employees and farmers is made available in
Hindi and other regional languages.
Your Company was awarded the First prize by Mumbai Town Official
Language implementation Committee for excellence in implementation of
Official Language Policy. Your Company's House Magazine, "DarpanÃ
was also awarded first Prize in House Magazine competition organized by
Mumbai Town Official Language implementation Committee for the year
2011-12
11.0.0 INTERNAL CONTROL SYSTEM:
Your Company has a well defined Internal Control System
i.e. adequate and commensurate with the size and nature of its business
comprising of an in-house Audit Department, which conducts internal
audit of various operational and financial matters on on-going basis.
Internal Audit group consists of adequate number of financial and
technical personnel. The recommendations and observations of the
Internal Audit Department are reviewed regularly by the Audit Committee
constituted by the Board of Directors. The performance of the
committee is regularly monitored by the Board of Directors.
Your Company has an effective budgetary control mechanism in place to
take care the detailed capex and operational budget. Appropriate
monitoring mechanism to compare the actual performance with the budget
ensures that necessary review is periodically undertaken.
12.0.0 COSTAUDIT
As per the Government's directive, your Company's Cost Records in
respect of manufacture of Fertilizers and Sulphuric Acid for the year
ended 31st March, 2012 are being audited by M/s Rohit Vora & Co. and
M/s C.R.Musib & Associates, firms of Cost Auditors. The Cost Auditors
are likely to complete the audit by 31Ã July, 2012. The Cost Audit
Reports for 2010-11 were filed with the Ministry of Company Affairs on
29111 September,2011 for Trombay Urea and on 27th September,2011 in
respect of Sulphuric acid and Thai Urea as against the due date of 30th
September,2011.
13.0.0 DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of section 217 (2AA) of the Companies Act, 1956, your
Directors state that:
i] in preparing the annual accounts, the applicable accounting
standards have been followed,
ii] the accounting policies adopted have been consistently applied and
wherever necessary, made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit or
loss of the Company for the year,
iii] proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safe guarding the assets of your Company and for
preventing and detecting fraud and other irregularities; and
iv] the annual accounts have been prepared on a going concern basis.
14.0.0 CORPORATE GOVERNANCE:
As per Clause 49 of the listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance along with a certificate of
Compliance is annexed and forms part of this report.
15.0.0 CAUTIONARY STATEMENT:
Statements in the Management Discussion and Analysis describing the
Company's objectives, projections, estimates and expectations may be
'forward looking statements' and actual results may or may not be in
accordance therewith. Your Company's performance is dependent on
several external factors such as effective monsoon, significant changes
in economic environment, Government Policies, fluctuations in prices of
raw material and finished products and also their availability etc.
which could adversely affect the operations of your Company.
16.0.0 DIRECTORS:
Shri Manoj Priya demitted his Office as Director (Technical) on
30.09.2011 on attaining the age of superannuation. The contribution of
Shri Manoj Priya to your Company has been immense. His guidance,
suggestions and advice has greatly benefited the Company. Your
Directors place on record their appreciation of the contribution of
Shri Manoj Priya to your Company. President of India appointed Shri
C.M.T.Britto as Director (Technical), who assumed the office on
11.04.2012. Notice under section 257 of the Companies Act has been
received proposing the candidature of Shri C.M.T.Britto as Director of
your Company.
As per Section 256 of the Companies Act, Dr V. Rajagopalan and Shri
Gautam Sen, Directors retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
17.0.0 AUDITORS:
The Comptroller and Auditor General of India (CAG) has appointed, M/s.
JCR & Company and M/s Nissim & Co, as Joint Statutory Auditors of your
Company for the Financial Year 2011-12. The Auditors would be retiring
at the conclusion of the Thirty fourth Annual General Meeting.
The Statutory Auditors for the Financial Year 2012-13 will be appointed
by the CAG. However, their remuneration is to be fixed at the AGM by
the members.
18.0.0 ACKNOWLEDGMENT:
Your Directors wish to gratefully acknowledge the valuable guidance and
continued support extended by Government of India and in particular,
the Department of Fertilizers and the Office of Fertilizer Industry Co-
ordination Committee (FICC), Railways, DPE, members of MOU Task force,
and other Central Government departments and Agencies. '
The Board also wishes to acknowledge with sincere gratitude, the help
and unstinted support from the State Governments, MSEB, MIDC, various
media, Municipal authorities, Maharashtra Pollution Control Board,
Bankers to your Company, Financial Institutions, Dealers and Customers.
The Board also wishes to place on record the positive suggestions and
guidance provided by the Statutory
Auditors, Cost Auditors and the Office of the Principal Director of
Commercial Audit.
Last but not the least, your Directors take pleasure in placing on
record their deep appreciation of the excellent contribution made by
the employees of your Company at all levels, without which your Company
would not have achieved such good performance. '
By order of the Board of Directors
R.G.Rajan
Chairman and Managing Director.
Place: Mumbai
Date : 30th May 2012
Mar 31, 2011
To the members
Rashtriya Chemicals and Fertilizers Ltd,
Mumbai
The Directors of your Company have pleasure in presenting this 33rd
Annual Report on the working of your Company together with the Audited
Accounts for the year ended 31 st March, 2011.
1.0.0 FINANCIAL PERFORMANCE:
Summary of financial performance :
Rs. Crore
Particulars 2010-2011 2009-2010
Sales including Subsidy 5574.10 5697.18
Other Income 103.15 129.07
Total Income 5677.25 5826.25
Cost of Sales 5200.51 5386.55
Operational Profit 476.74 439.70
Depreciation 112.62 75.60
Interest (Net) 9.65 19.87
Prior year adjustment 0.22 (0.02)
Profit/(Loss) before tax 354.69 344.21
Provision for Tax (including
deferred Tax liability/Asset) 109.57 109.34
Net Profit/(loss) 245.12 234.87
Appropriations:
Dividend 60.69 60.69
Tax and Educational cess on 9.84 10.08
Dividend
Balance Transferred to General 174.59 164.10
Reserve
1.1.0 Highlights for the year 2010-2011:
Your Company achieved a turnover of Rs.5574.10 crore compared to
Rs.5697.18 crore in the previous year. The turnover is lower by Rs.
123.08 crore during the year compared to previous year mainly due to
lower subsidy received from Government of India. The total income from
operations was Rs. 5677.25 crore as against Rs.5826.25 crore during the
previous year. Your Company achieved a gross profit of Rs.476.74 crore
as against Rs.439.70 crore. The net Profit before Tax at Rs.354.69
crore as against Rs.344.21 crore registered an increase of 3.04%. The
Net Profit after Tax during the current year, is higher at Rs.245.12
crore as against Rs.234.87 crore in the previous year registering an
increase of 4.36% over previous year. The net Interest cost during the
year has been Rs.9.65 crore compared to Rs.19.87 crore during the
previous year due to good treasury and foreign currency management.
Your Company received 'MOU Excellent' rating for 2009-2010 and is
likely to get the same for 2010-11 from Ministry of Heavy Industries
and Public Enterprises.
1.2.0 Dividend:
Your Company has lined up a number of capex programmes which will
entail substantial expenditure and, in order to fund these programmes,
it is necessary to plough back its profits. In view of this, your
Directors propose to pay dividend at Rs.1.10 per each equity share of
Rs.10/-, same as that in the previous year. The total out go works out
to Rs. 70.53 crore (Rs. 70.77 crore in the previous year) including
dividend distribution tax and education cess.
1.3.0 Appropriation to General Reserves:
Your Company earned a net Profit after Tax of Rs. 245.12 crore (Rs.
234.87 crore in the previous year). The dividend pay out along with
Tax/cess is Rs. 70.53 crore (Rs. 70.77 crore in the previous year). The
balance amount of ^ 174.59 crore (Rs.164.10 crore in the previous year)
is transferred to General Reserves.
2.0.0 MANAGEMENT DISCUSSION AND ANALYSIS:
2.1.0 OPERATIONAL RESULTS:
2.1.1 PRODUCTION:
2.1.2 Fertilizers:
Your Company produced 27.29 lakh MT of fertilizers (21.24 lakh MT of
Urea, 4.47 lakh MT of Suphalal 5:15:15 and 1.58 lakh MT of Suphala
20:20) during the year as against 25.96 lakh MT (20.89 lakh MT of Urea,
4.90 lakh MT of Suphala 15:15:15 and 0.17 lakh MT of Suphala 20:20)
produced in the previous year and achieved overall installed capacity
utilisation of 100.08% as against 96.23% during the previous year. The
capacity utilisation of the Urea plants was to the extent of 104.28%.
As regards complex fertilizers, Suphala [15:15:15] plant produced to
the extent of 106.43% and Suphala 20:20 (ANP) produced 58.52% as the
plant got stabilised in second half of the year. In terms of nutrients,
your Company produced 10.76 lakh MT of Nitrogen (N), 0.99 lakh MT of
Phosphate (P205) and 0.67 lakh MT of Potash (K20) during the year as
compared to 10.38 lakh MT of N, 0.77 lakh MT of P205 and 0.74 lakh MT
of K20 during the previous year.
The details of performances of the units are given below:
2.1.2.1 Thai Unit:
Thai unit produced 17.83 lakh MT of Urea during the year compared to
17.82 lakh MT produced in the previous year. The unit achieved a
capacity utilisation of 104.49% as compared to 104.41% during the
previous year. The unit produced 11.35 lakh MT of Ammonia compared to
11.28
lakh MT during previous year. The energy consumption per MT of Urea was
6.37 Gcal/ MT (6.30 Gcal MT in the previous year). In terms of
nutrients in the fertilizers, the unit produced 8.20 lakh MT of N
during the year, same as in previous year.
Thai unit of your Company was bestowed with following awards during the
year:
i. Certificate of Merit for Excellence in Energy Conservation and
Management from Indian Chemical Council for 2009.
ii. "Runner up Award" for "Best Technical Innovation" from Fertilizers
Association of India for the year 2009-10.
iii: "Green Tech Environment Excellence Award jn Gold Category" for the
year 2010.
2.1.2,2 Trombay Unit:
The Trombay Unit produced 3.41 lakh MT of Urea, 4.47 lakh MT of Suphala
15:15:15 and 1.58 lakh MT of ANP during the year under report compared
to 3.07 lakh MT of Urea, 4.90 lakh MT of Suphala 15:15:15 and 0.17 lakh
MT of ANP produced during the previous year.
The unit achieved an overall capacity utilization of 92.75% compared to
82.14% during the previous year. In terms of Nutrient values, the unit
produced 2.56 lakh MT of N, 0.99 lakh MT of P205 and 0.67 lakh MT of
K20 during the year compared to 2.18 lakh MT, 0.77 lakh MT and 0.74
lakh MT respectively in the previous year.
The unit was bestowed with the following awards:
i. Green Tech Environment Excellence Award for "Environmental
Excellence in Fertilizer Sector" for 2009-10
ii. Second best "National Energy Conservation Award" in Fertilizer
Sector for Energy Conservation.
2.1.3 Industrial Products:
Your Company is one of the prime chemicals manufacturers in the country
producing several Industrial Chemicals at its two units. During the
year, your Company produced 1.51 lakh MT of various major Industrial
Chemical products compared to 1.19 lakh MT during the previous year.
Your Company produces, amongst others, Methanol, Methylamines and
derivatives, Ammonium Nitrate, Sodium Nitrate/Nitrite, Ammonium
Bi-Carbonate, Formic Acid etc.
2.2.0 MARKETING PERFORMANCE:
2.2.1 Fertilizer Division:
Your Company achieved sales volume of 40.14 lakh MT during 2010-11 as
compared to 40.73 lakh MT in the previous year. Your Company sold 29.86
lakh MT of Urea, 4.50 lakh MT of Suphala 15:15:15; 1.52 lakh MT of
Suphala 20:20 and 4.26 lakh MT of other bought out products such as
DAP, MOP, etc. compared to 28.62 lakh MT of Urea, 4.87 lakh MT of
Suphala 15:15:15, and 0.16 lakh MT of Suphala 20:20 and 7.08 lakh MT of
other bought out products respectively during the previous year. The
total sale of manufactured fertilizers during 2010-11 was 27.56 lakh MT
as against 25.99 lakh MT in 2009- 10 registering a nominal increase of
6.07%. the total sales value, excluding subsidy, of manufactured
fertilizers during the period 2010-11 was Rs.1503.33 crore compared to
Rs.1267.71 crore in the previous year.
Though, the sale of own manufactured fertilizers was higher by 1.58
lakh MT, since the total sale of bought out fertilizers during 2010-11
was 12.58 lakh MT as against 14.74 lakhJVIT in 2009-10, the total sale
during the year was marginally lower by 0.59 lakh MT.
2.2.2 Industrial Products Division:
Despite various constraints due to global recession during the second
half of the financial year, Industrial Products Division achieved
turnover of Rs. 726.25 Crore as against the sales turnover of Rs.
717.28 Crore during the previous year. Ammonium Nitrate (Melt),
Methanol, Methylamines and Cone. Nitric Acid, etc contributed
significantly to the turnover.
2.2.3 Exports :
During the year Under report, your Company exported 384 MT of Suphala
15:15:15 worth Rs. 0.74 crore as against 1220 MT of Rs. 2.58 crore
during the previous year. Considering the products manufactured by your
Company, scope for exporting and earning foreign exchange is very
limited.
2.2.4 FUTURE PLANS OF FERTILIZER MARKETING:
Your Company has plans to increase the sales of all fertilizers from
40.14 lakh MT in 2010-11 to about 45 lakh MT in 2011-12. Your Company
is tying up with SSP Units for manufacturing and marketing 6 lakh MT of
SSP to increase turnover and profitability. Your Company also intends
to import and market complex fertilizers, water soluble fertilizers,
SOP, Aluminium Sulphate, Zinc Sulphate and develop customised/fortified
fertilizers like Boronated Suphala and Zincated urea.
2.3.0 The Fertilizer Industry:
The Nutrient Based Subsidy (NBS) scheme for decontrolled phosphatic and
potassic fertilizers has come into effect from 1.4.2010 as was informed
in the previous report. The scheme has been revised w.e.f 1.4.2011. The
main features of the NBS scheme are as under:
i. Revised NBS would be applicable for DAP, DAP-lite, MOP, MAP, TSP,
AS, 15 grades of complex fertilizers and SSP.
ii. Inclusion of'S' as a nutrient.
iii. Fixed subsidy per kg for each nutrient for the year.
iv. Any variant of fertilizer specified above, with secondary and micro
nutrients would also be covered under NBS. Secondary and micro
nutrients would be eligible for separate subsidy.
v. Fortified fertilizers with Boron will be eligible for Rs. 300/MT
additional subsidy and fertilizers with fortified zinc would be
eligible for Rs. 500/MT.-
vi. MRP can be fixed by the Company.
vii. 20% of the price decontrolled fertilizers produced/ imported will
be under movement control under ECA. DOF will regulate the movements
to bridge gaps in supply to underserved areas.
viii. All subsidised fertilizers, except Urea, are brought under Open
General Licence.
ix. Freight reimbursement for fertilizers under NBS is limited to rail
freight at actuals and road freight at normated levels for direct
despatches from plant/ports to districts upto a maximum lead of 700 km.
In case of SSP, a lumpsum reimbursement of Rs. 200/MT will be paid.
Your Company welcomes the policy and the modifications made as it
affords a challenge ,to improve the market share and enables your
Company to market the products in a dynamic scenario.
2.4.0 Strength and Weakness:
2.4.1 Strengths:
Your Company's strength lies in its skilled manpower, high Brand Equity
for the Products manufactured such as Ujjwala, Suphala, Microla, Biola,
and Sujala. The wide spread marketing network ensures that your Company
- reaches the products to all parts of the country. The Farmers'
Training Institute and R&D Centre ensure that quality services are
provided to the farmers/ dealers by educating them and providing inputs
for better crop realisation. Your Company has a wide portfolio of
chemical products and can withstand difficult economic situations by
adopting optimal mix of production. The well maintained plants and
equipment ensure uninterrupted production and distribution of goods,
2.4.2 Weaknesses:
The Plants have been in operation for a very long time, some of them
since 1965 by carrying out regular upkeep, maintenance and
up-gradation. The complex fertilizers are based on imported raw
materials which can face severe volatility in raw material prices and
foreign currency exchange rate affecting the profitability of the
company.
2.4.3 Opportunities:
Due to your Company's good reputation, several opportunities exist,
abroad, for Collaborations / Diversification in manufacturing and,
mining of raw materials and marketing of varieties of products. The
increased availability of feedstock gas would permit for undertaking
major expansion at Thai. Alternate feedstock like Coal gasification
gives an opportunity for undertaking Fertilizer Projects in other parts
of the country. All these opportunities would lead to substantial
increase in the turnover of your Company by marketing varieties of
fertilizers. Clean Development Mechanism (CDM) activities enable
realization of Carbon Credits. Experienced and Skilled Manpower of your
Company has been in demand for rendering O&M service in India and
abroad.
2.4.4 Threats:
Manufacturing and marketing of Fertilizers is the core business of your
Company. Agro-climatic conditions have a large effect on the
performance of your Company. In the recent years, there has been high
volatility in the prices of raw material and creation of scarcity
impeding production and marketing plans. The chemicals business is
highly susceptible to cut throat global market competition.
2.5.0 Risk Management:
Your Company has put in place Risk Management System, with the
objective of having a balanced approach towards business plan and to
mitigate the associated risks through better management practices,
resulting in greater degree of confidence amongst various stakeholders.
Risks associated with operations, Environment, Finance, Human Resource,
legal, Information security etc and the degree of impact financially,
its likely effect on the assets, facilities and third parties are
assessed regularly. In order to mitigate losses arising out of
perceived risks, the procedures being adopted to contain the risks, as
also the practices adopted during emergencies, including the
communication system and mode of disseminating information are
periodically reviewed and updated to minimise the impact on the
Company.
The profitability is, susceptible to the input costs of major raw
materials, such as Rock Phosphate, Sulphur, DAP, MOP, MAP etc. and
hence your Company has been developing alternate source of raw
materials to reduce the risk of dependency. To safeguard against major
breakdown at the data centre, your Company has installed another server
at a separate site, which replicates the data on production server and
can be available to ERP users.
2.6.0 MAJOR EXPANSION AND DIVERSIFICATIONS:
In line with its Mission, your Company has taken up several ambitious
projects for growth. Besides these large capital outlay projects, your
Company has also taken up projects for enhancing energy efficiency,
increasing production and improving reliability in its existing plants.
The projects which have been implemented, being implemented and are
under active considerations are listed below:
2.6.1 Projects implemented:
2.6.1.1 Revamp of Methanol Plant:
The existing Methanol plant was revamped for increasing the capacity
from 180 MTPD to 242 MTPD and to bring down the energy consumption from
9.094 to 7.9632 Gcal /MT of Methanol at a cost of Rs. 137 Crore. The
plant is running on sustained basis and has been achieving desired
results.
2.6.1.2. Ammonium Nitro Phosphate (ANP) Granulation Project:
Your Company has taken up ANP Granulation Project of 900 MTPD capacity
at a cost of Rs. 80.49 crore by using the slurry prepared in the wet
section (front end) of ANP. Subsequent to trial production, and after
overcoming initial problems, plant was stabilized and is running on
consistent load. It is envisaged to revamp wet section of the plant to
improve nutrient & and energy efficiency.
2.6.1.3 Clean Development Mechanism (CDM):
Your Company has successfully implemented Nitrous Oxide abatement
project, which is a green house gas, in its HP and MP Nitric Acid
Plants leading to generation of Carbons Credits. This project has been
registered with UNFCCC and your Company has received the first tranche
of 1,55,115 CERs (Certified Emission. Reduction) for MP Nitric Acid
plant in January 2011 after due verification of the project.
2.6.1.4 Rapidwall Project at Trombay:
Rapidwall Project has been set up at a cost of Rs. 81.10 crore, to
utilize Phospho Gypsum produced as by-product in Trombay, with
Australian technology from M/s. Rapidwall Building Systems Pty. Ltd.
Australia (RBS). Rapidwall is a revolutionary and environmental
friendly, load-bearing, prefabricated glass fiber reinforced walling
system with broad construction applications. More than 500 wall panels
have been manufactured at Trombay. As required, sample panels have been
successfully tested at NT Madras and the product has also received 'in
principle' approval from Building Material Technology Promotion Council
(BMTPC) under the Ministry of Housing and Urban Poverty Alleviation.
Apart from Wall panels, the plant also manufactures Plaster which is
being marketed vigorously. Your Company is taking various steps for
marketing of all products by entering into Memorandum of Intent with
large project developers and also gaining foothold in retail market.
This has given the company, confidence regarding sustained demand in
near future.
2.6.2 On going Projects:
2.6.2.1 De-bottlenecking of Thai Plants:
Thai Ammonia Revamp Project is being implemented to enhance capacity of
existing Thai Ammonia Plants from 2 x 1500 MTPD to 2 x 1750 MTPD and
reduce specific energy consumption to 8.15 Gcal/MT of ammonia.
Simultaneously Thai urea plant is also being revamped, wherein the
capacity of one of the urea streams will be increased to 2300 MTPD so
as to convert the entire ammonia into urea and achieve urea production
of 6015 MTPD. The total project cost is Rs. 488.75 Crore. The revamped
ammonia plant will be commissioned by December 2011 and the Urea plant
by 2012.
2.6.3 Projects on the Anvil:
2.6.3.1 Additional Ammonia Urea project at Thai
Your Company has plans to expand the capacity of urea at Thai by
setting up one single stream ammonia plant of capacity 2200 MTPD and
one single stream urea plant of capacity 3500 MTPD at the existing
site, at an estimated project cost of Rs. 4400 crore. The selection
process for lumpsum turnkey contractors (LSTK) for main plants has been
started and your Company has received four bids from international
parties/consortium for the project. Draft EIA report has been prepared
and further action is being undertaken for obtaining environment
clearance. Other pre-project activities, including preparation of
detailed feasibility report, are underway. The project when
commissioned will be a significant step towards bridging the increasing
demand supply gap of urea in the country.
2.6.3.2 Single Super Phosphate project at Thai
Your Company has envisaged to set up Single Super Phosphate (SSP) plant
at Thai to manufacture 5 lakh MT/ year SSP. The project cost would be
Rs. 278 crore. Feasibility of the project is being examined and the
project is likely to take 24 months to complete from the zero date.
2.6.3.3 Coal Based Fertilizer Plant at Talcher:
Under the scheme of revival of sick Fertilizer Units, your Company has
been nominated by the government to be the lead partnertto revive FCI
Unit at Talcher, Orissa through Coal Gasification route as the
feedstock.
Your Company, along with Coal India Limited (CIL) and GAIL is
contemplating to set up a fertilizer complex, comprising of 2500 MTPD
ammonia plant, 3500 MTPD Urea plant, 800 MTPD Nitric Acid and 1000 MTPD
ammonium nitrate plant. Coal for this will be made available by CIL
through its subsidiary Mahanadi Coal Fields which is. located nearby.
The front end Coal Gasification will be set up on "Build, Own, Operate"
(BOO) basis. The ammonia synthesis, urea, nitric acid and ammonium
nitrate plants will be built on lumpsum turnkey basis for which
prequalification bids have been invited. Project capital cost involved
is approx. Rs. 8000 Crore.
2.6.3.4 Gas based urea plant in Ghana:
Ghana has recently discovered oil and gas in its offshore Jubilee
Fields. Ghana Government intends to go for value addition to this
natural resource through setting up of downstream processing facilities
including a fertilizer plant. Governments of Ghana and India have
signed a Memorandum of Understanding (MoU) for setting up the
fertilizer project to produce about 1 million metric tons of Urea
fertilizer.
Your Company has been nominated by Government of India to take a lead
role for development of the fertilizer project. The proposed grass-root
project would consist of an ammonia plant of 2000 MTPD capacity and a
Urea plant of 3500 MTPD capacity. The site for the project has been
identified and pre-feasibility report has been submitted for
consideration by the respective governments. The project is likely to
be commissioned in 2016-17. Discussions are being held to finalise
pricing and quantity of gas to be supplied to the project.
2.6.3.5 Phosphatic Fertilizer Project in Saudi Arabia
Your Company is exploring the opportunity of participating in
Phosphatic Fertilizers project in Saudi Arabia, being undertaken by
Ma'aden at Al Khabra mines at a project cost of US$3.0 billion. Ma'aden
is willing to offer equity shares upto 30% to Indian Companies. If the
project fructifies it would help in tying up for Phosphatic supply,
apart from the benefit of being a shareholder of the venture.
2.6.3.6 Coal Based Fertilizer Plant In Indonesia:
As per the Memorandum of Understanding signed between governments of
India and Indonesia a study is to be conducted for setting up a coal
based fertilizer plant in Indonesia. Your Company has been nominated to
conduct the study from Indian side and action has been initiated in
this direction.
Apart from the above, your Company is working on development of several
other projects including development of Port based infrastructure.
2.7 Subsidiary and other Joint Venture Companies:
2.7.1 FACT-RCF Building Products Ltd., Kochi
Your Company has formed a Joint Venture Company with Fertilizers and
Chemicals Travancore Limited (FACT) by incorporating FACT-RCF Building
Products Ltd to set up a Rapidwall project at Kochi. Both your Company
and FACT haye 50:50 equity holding in the Company. The plant will use
gypsum available with FACT to produce load bearing wall panels, wall
plaster and wall putty through Rapidwall technology. The plant has
been mechanically completed and will be soon commissioned in the
current financial year.
2.7.2 Urvarak Videsh Limited
The JV Company is exploring the possibility of revival of old unit of
HFCL at Barauni and has engaged PDIL for consultancy work for EIA and
technology selection. The JV Company would decide further course of
action based on feasibility of the project. The Company has been
incorporated with an authorised capital of Rs. 5 crore and has a paid
up capital ofRs.15 lakh of which your Company's contribution is Rs. 5
lakh. If the promoters do not find that the objectives for which the
Company was incorporated can not be achieved, action would be taken to
wind up the Company.
2.7.3 Rajasthan Rashtriya Chemicals & Fertilizers Ltd, Jaipur
The Joint Venture Company incorporated to undertake the project for
manufacturing 850 MTPD of DAP has not been functional as the promoters
are yet to take decision on investment in the project. As it is
unlikely that the promoters would go ahead with the project, the
promoters are likely to take steps to wind up the JVC.
2.7.4 RCF HM Construction Solutions Pvt Ltd.
Your Company has incorporated a 50:50 Joint Venture Company with First
Future Properties Pvt. Ltd for marketing the Rapidwall products with an
authorised . capital of Rs. 5 crore and paid up capital of Rs. 10
lakh. Considering the nature of products and technical skills
available, your Company is confident of marketing the products by
entering into MOUs/long term supply contracts with the
builders/developers. Your Company is therefore contemplating to wind up
the JVC.
2.7.5 Consolidated Statement
Consolidated financial statement of your company with subsidiary
company and other Joint venture companies and statement under section
212' in respect of the subsidiary company are attached to the accounts.
2.8.0. RESEARCH AND DEVELOPMENT:
Your Company has taken up several Research and Development projects,
some of which taken up for commercial scale design and engineering, are
as under:
2.8.1 CHEMICAL DIVISION
2.8.1.1 Study to recover Process water from present R.O. reject water
in Sewage Treatment Plant (STP).
R&D division of your Company carried out experiment to recover process
water from R.O. reject water of STP and has successfully recovered
usable process water. The scheme suggested by R&D is in the process of
implementation and your Company would recover about 3000 m3/day of
Process water from RO reject water.
2.8.1.2. Fortified fertiliser NPK 15:15:15 with Boron (0.2% )
Boronated Suphala (NPKB 15:15:15:0.2), a new range of NPK Fortified
Fertilizer, has been successfully developed on laboratory scale. Field
Trials on certain crops are being carried out at Agriculture
Universities such as Mahatma Phule Krishi Vidyapeeth* Rahuri & Dr.
Punjabrao Deshmukh Krishi Vidyapeeth, Akola.
This product will give value addition to the existing NPK fertilizer
and it will be beneficial, especially, in the boron deficient" regions.
Production on commercial scale is being undertaken shortly in the
existing Suphala production plant to produce (15:15:15:0.2) Boronated
Suphala.
2.8.1.3. Study undertaken to find cost effective substitute for
proprietary anti-precipitating agent "Kemfert" in Sujala 19:19:19.
Anti-precipitating agent is being used in Sujala 19:19:19 (drip grade)
to overcome clogging of drippers during drip application. R&D division
of your Company has undertaken a study to find suitable cheaper
substitute for the anti-precipitating agent. Mono Sodium salt of
Hydroxy Ethelene Di-phosphonic Acid (HEDP) which is readily available
in market, is found to be suitable, cheaper and is giving having
satisfactory performance.
2.8.2 AGRICULTURE DIVISION
2.8.2.1 Customized fertilizers
Your Company is developing certain Customised Fertilizer grades for
usage in Satara, Sangli, Pune, Solapur and Kolhapur Districts of
Maharashtra. These formulations are crop and region specific customized
formulations, developed in two formats viz. 100% water soluble
fertilizer for drip and foliar application and Granular product for
soil application. The agronomic efficacy studies on these grades are in
progress at Mahatma Phule Krishi Vidyapeeth, Rahuri Agriculture
University.
2.8.2.2. Liquid Bio-fertilizer
Liquid Bio-fertilizers (phosphate solubilizers) are formulations,
without any carrier, with increased shelf life. The liquid
bio-fertilizer has several advantages, over carrier (lignite) based
product, such as application through seed, soil, drip irrigation, flood
irrigation, sprinklers, spray against only seed and soil application
for lignite based biofertilizers.
The product has shelf life of 2 years in lab conditions (1.5 yrs in
field condition), in comparison to 6 months of lignite based
bio-fertilizer.
Laboratory studies as well as field trials have been successfully
completed and this product will soon be commercialised.
2.9.0 CONSERVATION OF ENERGY:
Your Company undertook several steps for conserving energy. These
included several modifications in the plants which have resulted in
significant reduction in the energy consumption. Some of the measures
undertaken are as follows:
In Thai unit several measures undertaken such as Replacement of
Synthesis gas compressor turbine rotor for Ammonia Line I, Relocation
of HP section pressure control valve outlet gas to Medium Pressure
decomposer, conversion of existing radar type level transmitter to
purge type for Hydrolyser, conversion of unit -11 & 31 condenser
cooling water side from double pass to single pass, installation of gas
cooler, resulted in considerable saving in energy.
In Trombay unit, Methanol plant has been revamped to reduce energy
consumption. Apart from this, several other measures such as
installation of vapour absorption machine in Ammonia I, replacement of
old motors with energy efficient LT motors, installation of variable
frequency Drives for slurry pumps, installation of high capacity reject
water pumps in ETP and several other measures have been undertaken
which resulted in saving of energy.
The particulars with regard to Conservation of Energy, Technology
Absorption, Foreign Exchange outgo as required under Section 217 (i)
(e) of the Companies Act, 1956 are enclosed as Annexure I.
3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL:
Your Company is dedicated to improve environmental performance through
continual improvement and is going beyond satisfying all stipulated
requirements laid down by the statutory authorities for environment
management and pollution control.
With an aim to sustain the operations in an environment friendly
manner, your Company established ISO 14001 compliant Environment
Management System (EMS) at its two manufacturing units. The Systems are
constantly upgraded and the three separate systems, namely Quality
Management System (ISO 9001:2000), Environment Management System (ISO
14001:2004) & Occupational Health and Safety Assessment Series (OHSAS
18001:2007), are all brought under Integrated Management System.
Regular internal audits and Management Reviews are being carried out to
ensure compliance and continually improve the system.
Measures taken to conserve water have yielded not only savings but also
have further improved the environmental management. The state of art
Effluent Treatment plants and the Sewage Treatment plants at Trombay
have ensured that the environment in and around the Units is fully
protected. Various schemes are implemented to reduce wastage of the
scarce natural resources. The waste streams from the plants are
recycled/reused for useful purpose. Sludge generated in Effluent
Treatment Plant, Sulphur Sludge Generated in Sulphuric Acid plant,
waste streams of effluents from complex fertilizer plants are recycled
back in the processes. The integrated Effluent Treatment Plant ensures
that whatever effluent is discharged from the factory meets the
statutory requirements laid down by the Pollution Control Board.
In Trombay Unit of your Company, New granulation technology is adopted
in Ammonium Nitro phosphate plant to reduce dust emission. Capacity of
Sewage treatment plant is increased with installation of 5th RO. Your
Company has adopted the most effective system of environmental
management at its Trombay complex by process up-gradation, adoption of
cleaner technologies in new plants, suitable treatment of effluent and
continuous monitoring of emission & ambient air quality.
To check the effectiveness and compliance to emission regulations,
monitoring network has been incorporated. Apart from Stack monitors,
which continuously monitor the emissions, four fixed ambient air
quality monitoring stations monitor ammonia, NOx, S02, Particulate
matter (PM10 & PM2.5)& metrological parameters.
During the process of converting raw materials into finished products,
certain residual chemicals are formed, which are either recycled or
converted into harmless chemicals as far as possible, before
discharging them into the atmosphere, giving due importance to cleaner
environment.
4.0.0 PRINCIPLES OF GLOBAL COMPACT:
Your Company is a member of United Nations Global Compact and fully
supports the Ten Principles in the areas of human rights, labour and
environment which are derived from the earlier declarations by United
Nations,
ILO and other international organisations. Your Company has. posted a
detailed write-up on its website www.rcfltd. com in this respect.
5.0.0 CORPORATE SOCIAL RESPONSIBILETY (CSR) ACTIVITIES:
5.1.1 Being a conscientious corporate citizen, your Company has
developed its corporate philosophy imbibing self regulating mechanism
to ensure that it's operations benefit all stake holders. Public
Interest is a deliberate inclusion honouring Triple bottom line
approach - people, planet and profit.
As stated in para 4.0.0, your Company is a member of United Nations
Global Compact and supports the ten Principles of human rights, labour
and environment.
As a responsibility to the society around its business areas, your
Company undertakes several activities aimed for the benefit of needy
and also for general good. During the financial year 2010-11, your
Company carried out the following activities under CSR policy and spent
about Rs. 7 crore:
5.1.2 Education:
5.1.2.1 Running of Schools:
Your Company runs schools, both at its Thai and Trombay units to impart
quality education from Nursery to 10th Standard. The schools admit
children from nearby community. Instructions are imparted in Marathi,
Hindi and English medium. Your Company has provided school building in
the Company's residential colonies at Thai and Trombay and undertakes
its upkeep, maintenance and bears the deficit expenditure incurred by
the schools. The schools are entrusted to reputed Educational
Institutions. During the year, your Company spent about Rs. 307 lakh
on this activity.
5.1.2.2 Scholarship to meritorious students:
Your Company encourages students from SC/ ST/ OBC communities by
offering them scholarship for pursuing higher studies. During the year
your Company spent Rs. 2.30 lakh towards scholarship.
5.1.2.3 Farmers' Education:
Your Company imparts farming education to increase productivity through
intensive and integrated extension activities in the field of
Agriculture, recommending balanced use of fertilizers and
simultaneously to extend the services as promoter, activator and
organiser of various socio-economic and educational activities to
improve the quality of life of various, rural masses particularly
small, marginal and SC/ST families.
5.1.3 Supply of drinking water to the villages:
Your Company has been providing drinking water since more than 20 years
to seven villages around Thai unit through pipelines laid down from the
water reservoir in the unit. During the year your Company spent about
Rs. 78 lakh towards the same.
5.1.4 Village Adoption:
Your Company provides support to needy people by providing tools,
tackles and training to enable them learn self sustaining vocations and
improve their economic capabilities. An amount of Rs. 10 lakh is spent,
on imparting training for improving their skills, during the financial
year. Your Company sponsored games and sports such as - Kabaddi, Kho
Kho etc by spending an amount of Rs. 37 lakh.
5.1.5 . Chembur Green Project:
Launched to establish greenery in the eastern suburb of Mumbai, your
Company has grown and brought back the green forestry amidst concrete
jungle. The development of traffic islands, kitchen gardens,
exhibitions, Rose shows and other activities in schools and colleges
have increased the environment consciousness among the citizens. Your
Company continues distribution of free saplings and rendering advice to
various co-op. societies and also to individuals. Your Company also
introduced organic manure from urban waste in the year so as to protect
environmental degradation of soil.
5.1.6. Service to Farmers:
5.1.6.1 Advice on Soil nutrients:
Your Company attaches special importance to undertaking Soil
diagnostics to advise farmers about use of proper dosage of fertilizers
in order to optimize soil productivity. Over 70,000 soil samples were
analyzed and recommendations given through the five static and six
mobile soil testing laboratories.
5.1.7 Farm practices:
Your Company continues to have grass root contact with farmers to
disseminate knowledge of proper farm practices to enhance their farm
income. In this regard, your Company undertook crop specific
development programs depending on the State/area. Your Company has
established several Farmers' Services Centres for providing services
such as soil sample collection, arranging farmers meeting, film shows,
and exhibitions and for providing general guidance in the fields of
farming. Several farmers'/dealers' training programmes were conducted
during the year at the Company's two Farmers Training Institutes.
5.1.7 Other activities:
5.1.7.1 Your Company is constructing at a cost of Rs. 93 lakh a mini
sports stadium, alongwith accessories and facilities, in Jaleshwar,
Balasore district to encourage sports and culture of the area. The
construction would be completed by December 2011. The total amount
spent during the year isRs.61.70 lakh.
5.1.7.2 Your Company has also undertaken construction of 15 Number of
Bus shelters, at Madurai city and 30 Nos. in Madurai Rural Area at a
cost of Rs.152.40 lakh for the benefit of general public.
6.0.0 HUMAN RESOURCES:
6.1.0 Training and Development:
Human Resource Development has always been the cornerstone of your
Company and this year's activities have also been special and focussed.
Exclusive Training & Development initiatives were successfully carried
out to enhance General Management Skills of the employees in Marketing,
Finance, Commercial and Health Services disciplines. Besides this,
comprehensive Safety Management Programmes were carried out for
officers in Technical disciplines.
Activities were also focused on strengthening and effective
implementation of Quality Management Systems, Environment Management
Systems, Occupational Health & Safety Systems and 5-S systems.
Training & Development programmes were conducted, in-house, for the
employees of your Company at various levels.
The Training department contributed to the development of other
Organisations by accepting special assignments to train
employees/students of industrial and academic institutions. HRD has
been contributing in selection and grooming of young talents, imparting
domain knowledge, developing skills and mind set towards achieving
professional excellence.
6.2.0 Industrial Relations:
Your Company maintained cordial Industrial Relations with all its
employees. All the issues are settled through regular discussions,
meetings and. dialogues with the employees. Your Company has 4238
employees comprising of 1541 officers and 2697 workmen as on 31st
March, 2011 compared to 4334 employees (1589 officers and 2745 workmen)
as on the corresponding date of the previous year.
6.2.1. Welfare and Sports
Your Company undertakes several welfare schemes like education,
medical, transport, housing etc., according to the needs of the
employees. In regards to sports, your Company is a prominent patron and
sponsored various sports events. Your Company's Football, Cricket,
Hockey, Kabaddi and other teams continue to show excellent performance
at District, State and National levels and have brought laurels to your
Company by winning several prizes.
6.2.2. Welfare / Employment opportunity to weaker section:
The guidelines in respect of reservation in recruitment and promotion
of SC/ST, OBC, Ex-servicemen and Persons with Disabilities are followed
by your Company. Your Company has 593 Scheduled Caste (SC), 261
Scheduled Tribe (ST) and 339 OBC employees on its rolls.
During the year, your Company recruited 70 persons, including 2 persons
with physical disability, on regular employment. Your Company also
recruited 4 Operator Trainees, 9 Steno Trainees and 16 Technical
Trainees. Due representation to SC/ST/OBC was given in recruitments.
Your Company is committed to the welfare of the backward classes in
general and SC/ST employees in particular. Regular meetings are held
with SC/ST Employees Welfare Association to address grievances, if any,
and providing guidance for development.
Medical Camp is organized every year at Chaitya Bhoomi, Dadar on 6th
December, on the occasion of 'Mahaparinirvan Day'. Financial assistance
for making, arrangement for medical camp and for medicines along with
the vehicles and Doctors was made available by the Company.
Your Company's Thai Unit continued to provide various amenities like
water, road for the nearby villages e.g. Thai, Navgaon, Boris, Gunjis
etc. where the majority of the population belongs to the SC/ST
categories. Scholarships were given to meritorious students of SC/ST
community in the nearby village of Thai.
The following activities were also taken up by your Company:-
a) Training programmes were conducted for farmers at Company's
Institute at Nagpur and Thai. Large number of SC/ST farmers have
undergone training in these programmes.
b) Your Company's Marketing Department gives special consideration in
enrolment of dealers belonging to SC/ ST category. A large number of
dealers belonging to SC/ ST have already been appointed.
7.0.0 OFFICIAL LANGUAGE POLICY:
Your Company has fully endeavoured to implement the provisions of
Official Language Act 1963 and the policy of the Government. Publicity
material and literature for employees and farmers is made available in
Hindi and other regional languages.
Your Company was awarded the First prize by Mumbai Town Official
Language implementation. Committee for excellence in implementation of
Official Language Policy. Your Company's House Magazine, "Darpan" was
also awarded first Prize in House Magazine competition organised by
Mumbai Town Official Language Implementation Committee for the year
2010-11.
9.0.0 INTERNAL CONTROL SYSTEM:
Your Company has a well defined Internal Control System, adequate and
commensurate with the size and nature of its business, comprising of an
in-house Audit Department, which conducts internal audit of various
operational and financial matters on on-going basis. Internal Audit
group consists of adequate number of financial and technical personnel.
The recommendations and observations of the Internal Audit Department
are reviewed regularly by the Audit Committee constituted by the Board
of Directors. The performance of your Company is regularly monitored
by the Board of Directors.
Your Company has an effective budgetary control mechanism in place both
in respect of capex and revex to take care of the detailed capex and
operational budget. Appropriate monitoring mechanism to compare the
actual performance with the budget ensures that necessary review is
periodically undertaken.
10.0.0 COST AUDIT
As per the Government's directive, your Company's Cost Records in
respect of manufacture of Fertilizers and Sulphuric Acid for the year
ended 31st March, 2011 are being audited by Rohit Vora & Co. and OR.
Musib & Associates, firms of Cost Auditors. The Cost Auditors are
likely to complete the audit by 31st July, 2011.
11.0.0 DIRECTORS' RESPONSIBILITY STATEMENT:
The Companies Act, 1956 requires the Board of Directors of your Company
to prepare accounts for each financial year giving a true and fair view
of the state of affairs of the Company and the profit or loss of the
Company for that period.
Your Directors state that:
i] in preparing the annual accounts, the applicable accounting
standards have been followed,
ii] the accounting policies adopted have been consistently applied and
wherever necessary, made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit or
loss of the Company for the year,
iii] proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of your Company and for
preventing and detecting fraud and other irregularities; and
iv] the annual accounts have been prepared on going concern basis.
12,0.0 CORPORATE GOVERNANCE:
As per Clause 49 of the listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance along with a certificate of
Compliance is annexed and forms part of this report.
13.0.0 CAUTIONARY STATEMENT:
Statements in the Management Discussion and Analysis describing the
Company's objectives, projections, estimates and expectations may be
'forward looking statements' and actual results may or may not be in
accordance therewith. Your Company's performance is dependent on
several external factors such as downtrend in the agriculture, below
normal monsoon, significant changes in economic environment, Government
Policies, fluctuations in prices of raw material and finished products
and also their availability, etc. which could adversely affeGt the
operations of your Company.
14.0.0 DIRECTORS:
Government of India appointed Shri Sham Lai Goyal, IAS, Joint Secretary
Department of Fertilizers, Ministry of Chemicals and Fertilizers as
additional Director in place of Shri Deepak Singhal. The contribution
of Shri Deepak Singhal to your Company has been immense. His guidance,
suggestions and advice has greatly benefited the. Company. Your
Directors place on record their appreciation of the contribution of
Shri Deepak Singhal to your Company. Notice under Section 257 of the
Companies Act has been received proposing the candidature of Shri Sham
Lai Goyal as
Director of the Company.
As per Section 256 of the Companies Act, Shri Manoj Priya, Director,
retires by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for reappointment.
15.0.0 AUDITORS:
The Comptroller and Auditor General of India (CAG) has appointed, M/s.
JCR & Company and M/s GD Apte & Co., as Joint Statutory Auditors of
your Company for the Financial Year 2010-11. The Auditors would be
retiring at the conclusion of the Thirty third Annual General Meeting.
The Statutory Auditors for the Financial Year 2011 -12 will be
appointed by the CAG. However, their remuneration is to be fixed at the
AGM by the members.
16.0.0 ACKNOWLEDGMENT:
Your Directors wish to gratefully acknowledge the valuable guidance and
continued support extended by Government of India and in particular,
the Department of Fertilizers and the Office of Fertilizer Industry Co-
ordination Committee (FICC), Railways, members of MOU Task force, and
other Central Government departments and Agencies.
The Board also wishes to acknowledge with sincere gratitude, the help
and unstinted support from the State Governments, MSEB, MIDC, various
media, Municipal authorities, Maharashtra Pollution Control Board,
Bankers to your Company, Financial Institutions, Dealers and Customers.
The Board also wishes to place on record the positive suggestions and
guidance provided by the Statutory Auditors, Cost Auditors and the
Office of the Principal Director of Commercial Audit.
Last but not the least, your Directors take pleasure in placing on
record their deep appreciation of the excellent contribution made by
the employees of your Company at all levels, without which your Company
would not have achieved such good performance.
By order of the Board of Directors
Place: Mumbai R.G. Rajan
Date : 10.05.2011 Chairman and Managing Director
Mar 31, 2010
The Directors of your Company have pleasure in presenting this 32nd
Annua! Report on the working of your Company together with the Audited
Accounts for the year ended 31 st March, 2010.
1.0.0 FINANCIAL PERFORMANCE:
Summary of financial performance :
Rs, Crore
Particulars 2009-2010 2008-2009
Sales including Subsidy 5697.18 8455.32
Other Income 129.07 83.11
Total Income 5826.25 8538.43
Cost of Sales 5386.57 8051.23
Operational Profit 439.66 487.20
Depreciation 75.60 86.58
Interest (Net) 19.87 74.93
Prior year adjustment (0.02) (0.01)
Profit/ (Loss) before tax 344.21 325.70
Provision for Tax (including 109.34 114.12
deferred Tax liability/ Asset)
Net Profit / (loss) 234.87 211.58
Appropriations:
Dividend 60.69 66.20
Tax and Educational cess on 10.08 11.25
Dividend
Balance Transferred to General 164.10 134.13
Reserve
1.1.0 Highlights for the year 2009-2010:
Your Company achieved a turn over of Rs.5697.18 crore compared to
Rs.8455.32 Crore in the previous year. The turnover is lower by Rs
2758.14 crore during the year compared to previous year mainly due to
lower imports of urea by Government of India and discontinuance of
costly feed stock of Naptha leading to less subsidy realisation. The
total income from operations was Rs. 5826.25 crore as against Rs.
8538.43 crore during the previous year. Your Company achieved a gross
profit of Rs.439.66 crore as against Rs. 487.20 crore. The net Profit
before Tax at Rs. 344.21 crore as against Rs. 325.70 crore registered
an increase of 5.68 % despite lower gross profit mainly due to
substantial reduction in the net interest. The Net Profit after Tax
during the current year, is higher at Rs.234.87 crore as against
Rs.211.58 crore in the previous year registering an increase of 11%
over previous year. The net Interest cost during the year has been Rs.
19.87 crore compared to Rs.74.93 crore during the previous year due to
good treasury and foreign currency management which ensured reduction
in interest cost and gain in foreign exchange transactions. Your
Company received MOU Excellent rating for 2008-2009 and is likely to
get the same for 2009-10 from Ministry of Heavy Industries and Public
Enterprises.
120 Dividend:
Your Company has lined up a number of capex programmes which will
entail substantial expenditure and, in order to fund these programmes,
it is necessary to plough back its profits. In view of this, your
Directors propose to pay dividend at Re.1.10 per each equity share of
Rs.10/-, compared to previous year devidend of Re.1.20 per each share.
The dividend for the current year works out to 11 % compared to 12%
last year. The total out go works out to Rs.70.77 crore (Rs77.45crore
in the previous year) including dividend distribution tax and education
cess. This amounts to 30.13% of the net profit
1-3.0 Appropriation to General Reserves:
Your Company earned a net Profit after Tax of Rs 234.87 crore(Rs 211.58
crore in the previous year). The dividend pay out along with Tax/cess
is Rs 70.77 crore ( Rs.77.45 crore in the previous year). The balance
amount of Rs. 164.09 crore (Rs.134.13 crore in the previous year) is
transferred to General Reserves.
2.9.0 CONSERVATION OF ENERGY:
Your Company undertook several steps for conserving energy. These
include several modifications in the plants which have resulted in
significant reduction in the energy consumption. Some of the measures
undertaken are as follows:
In Thai unit several measures .undertaken such as Replacement of
Synthesis gas compressor turbine rotor has enabled saving 18.47 MT/Hr
HP Steam corresponding to 0.11 MKcal/MT of Ammonia. Zirconium coating
of primary Reformer line II and Super heater II furnaces, re-routing of
off-gas generated in urea plant to steam generation plant as fuel,
providing sparger to recover ammonia loss through vent stack,
replacement of conventional spacer in cooling water tower fan with
light weight carbon composite fibre spacer, are some of the measures
under taken in Thai unit which resulted in considerable saving in
energy. In Trombay unit also several such measures as: provision of
capacitor banks on 11 KV system fed from Ammonia-I, high capacity C.W
pump for Methyl Ammine Plant, installation of new surface condenser for
Ammonium Nitrate in ANP plant, replacing 3 no. of 37 KW motors with
energy efficient motors in Water Treatment Plant and several other
measures resulted in energy saving.
The particulars with regard to Conservation of Energy, Technology
Absorption, Foreign Exchange outgo as required under Section 217 (i)
(e) of the Companies Act, 1956 are enclosed as Annexure I.
3.0.0 HEALTH, SAFETY, ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL:
Your Company has strong Health, Safety and Environmental policies. The
policies ensure that the plants are operated with utmost care and no
hazards or mishaps take place and are carried out complying with
applicable Laws and Rules. Your Company is going beyond satisfying all
stipulated requirements laid down by the statutory authorities for
environment management and pollution control. The Environment
Management Systems at both the units have been re certified under
ISO14001. Internal Audits and management reviews are undertaken
regularly to identify if any improvements are required to be
undertaken. Measures taken to conserve water have yielded not only in
savings but also have further improved the environmental management.
The state of art Effluent Treatment plants and the Sewage Treatment
plants at Trombay have ensured that the environment in and around the
Units is fully protected. Various schemes are implanted to reduce
wastages of the scarce natural resources. The waste streams from the
plants are recycled/ reused for useful purpose. Sludge generated in
Effluent Treatment Plant, Sulphur Sludge Generated in Sulphuric Acid
plant, waste streams of effluents from complex fertilizer plants are
recycled back in the processes. The integrated Effluent Treatment Plant
ensures that whatever effluent is discharged from the factory meets the
statutory requirements laid down by the Pollution Control Board.
4.0.0 PRINCIPLES OF GLOBAL COMPACT :
Your Company is a member of United Nations Global Compact and fully
supports the Ten Principles in the areas of human rights, labour and
environment which are derived from the earlier declarations by United
Nations, ILO and other international organisations. Your Company has
posted a detailed write-up on its website www.rcfltd. com in this
respect.
5.0.0 CSR Activities:
5.1.1 Recognising the responsibilities to tne Society, your company
undertakes several activities directly and indirectly helping the
community in bettering the life and environs in which they live. Some
of the activities undertaken are as follows:
5.1.2 Chembur Green Project:
Launched to establish greenery in the eastern suburb, over a period of
29 years, your company has grown and brought back the green forestry
amidst concrete jungle. The development of traffic islands, kitchen
gardens, exhibitions, Rose shows and other activities in schools and
colleges have increased the environment consciousness among the
citizens. Your Company continues distribution of free saplings and
rendering advice to various co-op. societies and also to individuals.
Your Company also introduced organic manure from urban waste in the
year so as to protect environmental degradation of soil.
5.1.3 Advise on Soil nutrients:
Your Company continued to give special importance to Soil diagnostics
as a means of advising farmers about use of proper dosage of
fertilizers in order to optimize soil productivity. Over 70,000 soil
samples were analyzed and recommendations given through the five static
and five mobile soil testing laboratories. Soil samples are also
collected through using the facilities of ITCs e-choupal.
Micronutrient analysis of soil had also been undertaken where sought-
around 1500 samples were analyzed during the year.
5.1.4 FarmersEducation:
Your Companys Marketing Strategy includes the fertilizer promotion,
farmers education and rural development programmes. Its aim is to
increase productivity through intensive and integrated extension
activities in the field of Agriculture, recommending balanced use of
fertilizers and simultaneously to extend the services as promoter,
activator and organiser of various socio- economic and educational
activities to improve the quality of life of various rural masses
particularly small, marginal and SC/ ST families.
5.1.5 Practical training to Agricultural students:
Your Company initiated a novel programme called "Earn- while-you-learn"
to impart practical training to students from agricultural colleges and
enable them to earn during their graduation. This was implemented
successfully in Maharashtra particularly while promoting the use of
solid soluble fertilizers.
5.1.6 Farm practices:
Your Company continues to have grass root contract with farmers,
disseminate knowledge of proper farm practices to enhance their farm
income. In this regard, your Company undertook crop specific
development programs depending on the State/area. Your Company has
established several Farmers Services Centres for providing services
such as soil sample collection, arranging farmers meeting, film shows,
and exhibitions and for providing general guidance in the fields of
farming. Severai farmers / dealers training programmes were
conducted during the year at the Companys two Farmers Training
Institutes.
5.1.7 Dealerstraining
More than 1600 dealers/farmers were trained during the year. Your
Company has 2 well equipped Farmer Training Institutes at Thai and
Nagpur where programmes are conducted year round for the benefit of
farmers/dealers. Faculty is drawn from within the Company and also
from agricultural universities, State/Central Government institutions.
Special hi-tech programmes were also organized in collaboration with
Agro-Won.
5.1.8 Other activities:
Your Company undertakes several activities related to the weaker
section of society, which are enumerated separately in para 6.2.2.
Companys publicity programme focuses oh bringing your Companys theme
message to the masses in easily understandable manner and also for
enhancing brand image. Press, TV and Radio were extensively used to
spread your Companys messages to its customers. Your Company has also
undertaken field publicity like wall paintings; Village Indication
Boards etc. were extensively used. Calendars in different regional
languages were published, which had wide appeal to the customers. Your
Company also participated in different State level exhibitions during
the year. Literature and posters, appropriate to the themes, were
distributed at different Krishimelas/crop seminars organised by your
Company.
6.0.0 HUMAN RESOURCES:
6.1.0 Training and Development:
Human Resource Development has always been the corner stone of your
company and this years activities have also been special and focussed.
Exclusive Training & Development initiatives were successfully carried
out to enhance General Management Skills of the employees in Marketing,
Finance, Commercial and Health Services Disciplines. Besides this
comprehensive Safety Management Programmes were carried out for
officers in Technical Disciplines.
Activities were also focused on strengthening and effective
implementation of Quality Management Systems, EnvironmentManagement
Systems, Occupational Health & Safety Systems and 5-S systems.
Over 300 Training & Development programmes were conducted in-house for
the employees of your company at various levels.
The Training department contributed to the development of other
Organisations by accepting special assignments to train
empioyees/students of industrial and academic institutions. HRD has
been contributing in selection and grooming of young talents, imparting
domain knowledge, developing skills and mind set towards achieving
professional excellence.
6.2.0 Industrial Relations:
Your company maintained cordial Industrial Relations with all its
employees. All the issues are settled through regular discussions,
meetings and dialogues with the employees. Your company has 4334
employees comprising of 1589 officers and 2745 workmen as on 31st
March. 2010 compared to 4278 employees (1563 officers and 2715 workmen)
as on the corresponding date of the previous year. The increase in the
strength is essentially on account of recruitment in Technical areas
during the year.
6.2.1. Welfare and Sports
Your company undertakes several welfare schemes like education,
medical, transport, housing etc., according to the needs of the
employees. In regards to sports, your company is a prominent patron and
sponsored various sports events Your companys Football, Cricket,
Hockey. Kabbaddi and other teams continue to show excellent
performance at District, State and National levels and have brought
laurels to your company by winning several prizes.
6.2.2. Welfare / Employment opportunity to weaker section:
The guidelines in respect of reservation in recruitment and promotion
of SC/ST, OBC, Ex-servicemen and Persons with Disabilities are followed
by your company. Your company has 605 Scheduled Caste (SC), 263
Scheduled Tribe (ST) and 324 OBC employees on its rolls.
During the year your Company has recruited 177 persons on regular
employment. 9 Management Trainees and 56 OperatorTrainees were also
recruited. Due representation to SC/ST/OBC was given in recruitments.
Your Company is committed to the welfare of the backward classes in
general and SC/ST employees in particular. Regular meetings are held
with SC/ST Employees Welfare Association to address grievances, if any,
and providing guidance for development.
Medical Camp is organized every year at Chaitya Bhoomi, Dadaron 6th
December, on the occasion ofMahaparinirvan Day. Financial assistance
for making arrangement for medical camp and for medicines along with
the vehicles and Doctors was made available by your Company. Your
Company provides financial assistance every year to Dr Babasaheb
Ambedkar Samaj Kalyan Mandal for celebration of Dr. Babasaheb Ambedkar
Jayanti. The same was provided this year also.
Your Companys Thai Unit provides various amenities like water, road
for the nearby villages e.g. Thai, Navgaon, Boris, Gunjis etc. where
the majority of the population belongs to the SC/ST categories. The
facility continued during the year. Scholarships were given to
meritorious students of SC/ST community in the nearby village of Thai.
The following activities were also taken up by your company: -
a) Training programmes were conducted for farmers at Companys
Institute at Nagpur and Thai. Large number of SC/ST farmers have
undergone training in these programmes.
b) Your Companys Marketing Department also gives special consideration
in enrolment of dealers belonging to SC/ST category. A large number of
dealers belonging to SC/ST have already been appointed.
List of employees of your Company who received remuneration in excess
of reportable amount as laid down under section 217[2] [A] of the
Companies Act is attached as Annexure to this Report.
Your Company has fully endeavored to implement the provisions of
Official Language Act 1963 and the policy of the Government. Publicity
material and literature for employees and farmers is made available in
Hindi and other regional languages.
Your Company was awarded the First prize for the year 2009-1 Oby
MumbaiTown Official Language implementation Committee for excellence in
implementation of Official Language Policy. Your Companys House
Magazine, - "Darpan" was also awarded first Prize in House Magazine
competition organised by MumbaiTown Official Language implementation
Committee for the year 2009-10. Your Company carried out a special
drive for training in Hindi Stenography, wherein Sr. Officers of
Rajbhasha Vibhag were invited for guidance and training. During the
year, 7 employees passed the Hindi Stenography examination. Senior
officers of Ministry of Home Affairs, connected with implementation of
Hindi Language Policy visited your Company and appreciated the efforts
taken in the regard.
Your Company has a well defined Internal Control System i.e. adequate
and commensurate with the size and nature of its business comprising of
an in-house Audit Department, which conducts internal audit of various
operational and financial matters on on-going basis. Internal Audit
group consists of adequate number of financial and technical personnel.
The present internal Audit system is commensurate with the size and the
nature of business. However, your Company desires to extend the
coverage at Corporate Office to certain new areas, including on the
aspect of deduction and payment of Income Tax. The recommendation and
observations of the Internal Audit Department are reviewed regularly by
the Audit Committee constituted by the Board of Directors. The
performance of the corporation is regularly monitored by the Board of
Directors.
Your Company has an effective budgetary control mechanism in place to
take care of the detailed capex and operational budget. Appropriate
monitoring mechanism to compare the actual performance with the budget
ensures that necessary review is periodically undertaken.
As per the Governments directive, your Companys Cost Records in
respect of manufacture of Fertilizers and Sulphuric Acid for the year
ended 31st March, 2010 are being audited by the Cost Auditors by Rohit
Vora & Co. and C.R.Musib & Associates.
The Companies Act, 1956 requires the Board of Directors of your Company
to prepare accounts for each financial year giving a true and fair view
of the state of affairs of the Company and the profit or loss of the
Company for that period.
The Directors state that:
i] in preparing the annual accounts, the applicable accounting
standards have been followed.
ii] the accounting policies adopted have been consistently applied and
wherever necessary, made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit or
loss of the Company for the year.
iii] proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safe guarding the assets of your Company and for
preventing and detecting fraud and other irregularities; and
iv] the annual accounts have been prepared on going concern basis.
As per Clause 49 of the listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance along with a certificate of
Compliance is annexed and forms part of this report.
Statements in the Management Discussion and Analysis describing your
Companys objectives, projections, estimates and expectations may be
forward looking statements and actual results may or may not be in
accordance therewith. Your Companys performance is dependent on
several external factors such as downtrend in the agriculture,
below/normal monsoon, significant changes in economic environment,
Government Policies etc which could adversely affect the operations of
your Company.
Government of India appointed Dr. V. Rajagopalan, Additional Secretary
& Financial Advisor, Department of Fertilizers, Ministry of Chemicals
and Fertilizers as additional Director in place of Shri Mathew C.
Kunnumkal w.e.f. 03.05.2010. The term of office of Prof. Ashok Misra,
Shri I. C. Srivastava and Shri Anil Agrawal, Independent Directors has
a|so concluded on 06.05.2010, and Governement is yet to nominate
Directors in their place. The contribution of all the four Directors
to your Company have been immense. Their guidance, suggestions and
advices has greatly benefited the Company. Your Directors place on
record their appreciation of the contribution of the Directors to your
Company. Notice under section 257 of the Companies Act has been
received proposing the candidature of Shri V.Rajagopalan as Director of
the Company.
As per Section 256 of the Companies Act, Shri Deepak Singhal and Shri
Gautam Sen Directors retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
The Comptroller and Auditor General of India (CAG) has appointed, M/S
JCR & Company and M/s G D Apte & Co., as Joint Statutory Auditors of
your Company for the Financial Year 2009-10. The Auditors would be
retiring at the conclusion of the Thirty second Annual General Meeting.
The Statutory Auditors for the Financial Year 2010-11 will be appointed
by the CAG. However, their remuneration is to be fixed at the AGM by
the members.
Your Directors wish to gratefully acknowledge the valuable guidance and
continued support extended by the Government of India and in
particular, the Department of Fertilizers and the Office of Fertilizer
Industry Co- ordination Committee (FICC), Railways etc.
The Board also wishes to acknowledge with sincere gratitude, the help
and unstinted support from the State Governments, MSEB, MIDC, various
media, Municipal authorities, Director-Industrial Health and Safety,
and other Statutory authorities, Maharashtra Pollution Control Board,
Bankers to your Company, Financial Institutions, Dealers and Customers.
The Board also wishes to place on record the positive suggestions and
guidance provided by the Statutory Auditors, Cost Auditors and the
Office of the Principal Director of Commercial Audit.
Last but not the least, your Directors take pleasure in placing on
record their deep appreciation of the excellent contribution made by
the employees of your Company at all levels, without which your Company
would not have achieved such good performance.
By order of the Board of Directors
Place: Mumbai U.S.Jha
Date : 06.05.2010 Chairman and Managing Director
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