Mar 31, 2023
Your Directors present their 52nd Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March 2023.
(Rs. in Crs) |
||
Particulars |
31.03.2023 |
31.03.2022 |
Revenue from Operations |
2,828.82 |
1874.92 |
Add: Other Income |
20.63 |
23.39 |
Total Income |
2,849.45 |
1898.31 |
Profit before interest, |
374.41 |
199.03 |
depreciation and tax |
||
Less: Finance Cost |
30.93 |
14.19 |
Less: Depreciation & |
43.72 |
44.41 |
amortisation expenses |
||
Profit Before Tax |
299.76 |
140.43 |
Less: Tax expenses |
15.32 |
-- |
Profit After Tax |
284.44 |
140.43 |
Add: Net Comprehensive |
(2.67) |
14.06 |
Income |
||
Total Comprehensive Income |
281.77 |
154.49 |
Taking into account the financial position of the Company and the norms of your Company''s Dividend Distribution Policy, the Directors have recommended a Dividend of Rs. 1.50 (15% on the face value) per equity share of Rs. 10 each fully paid-up, for the year 2022-23 on the paid up equity share capital.
During the financial year 2022-23 the Plants were in operation for 361 on stream days and produced the highest ever production of 759,199 MT of Urea since the commissioning of the Plant. For the whole year the Company had received
0.9 MMSCMD of Natural Gas (NG). During the year, your Company manufactured 759,199 MT of Neem Coated Urea and sold 757,984 MT. The Plants were operated using Natural Gas (NG), imported Naphtha and Furnace Oil and achieved energy efficiency levels of 6.176 Gcal/MT of Urea.
Your Company has an arrangement with Indian Oil Corporation (IOC) for using their Tank Farm Facility at Tuticorin Port premises for handling a part of Company''s Imported Naphtha shipments. This has facilitated your
Company for speedy discharge of cargo, thereby minimizing the demurrage to a large extent. This arrangement will be continued until such time a reliable supply of full quantum of NG is assured.
Progress of NG Supply Pipelines
IOC, authorized to lay the Natural Gas Pipeline from Ennore to Tuticorin, has completed the 145 km Natural Gas pipeline in Ramanathapuram - Tuticorin sector in the first phase and laying of the pipeline from Ennore to Ramnad line merging at Sayalkudi is in progress. It is expected to be ready by October 2023. On completion of this pipeline your Company will receive its full requirement of 1.5 MMSCMD of NG. Compressor station at Ramnad is ready for operation and your Company is getting high pressure gas with a quantity of 0.9 MMSCMD. To adhere to the Policy of the Government, various modifications are being carried out in a phased manner to be a Gas based plant, to maintain Urea production level of 2080 MTPD.
There are no deposits covered under Chapter V of the Companies Act, 2013 (the Act) during the year 2022-23, which are required to be furnished.
The Consolidated Financial Statements of the Company are prepared in accordance with Ind AS and forms part of the Annual Report.
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the Statement containing salient features of the Financial Statements of the Company''s Associates and Joint Ventures (in Form AOC-1) is attached to the Financial Statements. Your Company has no Subsidiaries.
During the year 2022-23, revenue from operations was ? 2,150.25 crores as compared to ? 1,805.58 crore in 2021-22 up by 19%. The company''s top line increased due to increase in crude price and higher CS (Caustic Soda) Lye price realisation. Linear Alkyl Benzene (LAB) the major product of the company''s contributions reduced substantially due to increase in raw material cost and competition from low-priced imports consequent to expiry of Anti-dumping duty on imports from China, Iran & Qatar in April 2022. However C S Lye product increased its contribution due to better prices.
The Company has received BIS certification for LAB product, first in the Country. The Board of TPL has recommended a dividend of ?1.50 per equity share of ?10 each fully paid-up for the year 2022-23 (15% in the previous year) subject to the approval of Members.
Refurbishment of defective systems and installation of newer ones continued during the year to stabilize and also increase the production. Salt was procured from Gujarat in addition to what is available in the local salt market. Throughout the year the price of ammonia, a major raw material remained high. The selling price of soda ash and ammonium chloride also remained high. Hence for the first time after 20 years TFL made profit in all the four quarters, registering a significant net profit for the whole year. The company revalued its land and buildings and thus the net worth has become positive. It is expected that the company will continue this trend and the carried over losses will get wiped out in the next 3 years.
The 22.0 MW AC Floating Solar Project ever since its commissioning during March 2022 has been operating successfully. During the year 35.53 million units of electricity were supplied to the captive consumers.
Drawing power from GREENAM enables your Company to meet the Renewable Power obligations as stipulated by the Government as well as substantially save on water lost by evaporation from the company''s water reservoirs. During the year, the GREENAM has made a profit of ?2.18 crores with the total revenue of ?18.71 crores. Like any renewable project, the EBITDA is high at ?17.12 crores, around 91.5% of the revenue.
From the beginning of the year 2023-24, the plant is operating to its full capacity and hence is expected to perform better than the last year by atleast 10%.
DNV (Det Norske Veritas) conducted the Recertification audit for QMS.ISO 9001:2015, EMS - ISO 140001:2015 and certified that all the requirements as per the standards are being practiced and there is no non-conformity points. QMS, EMS systems and OHS system certificates are valid till January 2026. DNV have audited the periodical medical examination report being done by the Company for all employees and found to be in order. Green Belt development is being given at importance and is a continuing activity with about 1184 tree saplings planted during this year. Your Company has obtained Consent to Operate with mixed feed stock, viz., Natural Gas and Naphtha, valid up to 31 st March 2026.
Your Company continues to provide a conducive work environment and opportunities for development of its employees. Industrial Relations in the Company have been cordial during the year under review. The number of employees as on 31st March 2023 is 580. Your Company continues with the regular campus recruitment programme as a process of building the organization from the bottom.
Annual Return in Form MGT-7 for the year 2021-22 as required under Section 92 of the Act has been placed on the website of the Company. The Form MGT-7 for the year 2022-23 shall be filed with Registrar of Companies within the prescribed time after the 52nd Annual General Meeting of your Company to be held on 27th September 2023. Thereafter it can be accessed using the web link: https://www. spic.in/ investors/annual-return/.
Since the date of last Report, the Board of Directors had appointed Ms. Jayashree Muralidharan, I.A.S, with effect from 3rd November 2022, Dr. V Jaya Chandra Bhanu Reddy, I.A.S. with effect from 29th March 2023 and Mr. C Samayamoorthy,
I.A.S. with effect from 11th August 2023 as Nominee Directors of TIDCO and Ms. Devaki Ashwin Muthiah as Nominee Director of private promoter with effect from 24th May 2023. Ms. Vandana Garg, I.A.S. and Ms. A R Rajalakshmi, Nominee Directors of TIDCO resigned with effect from 10th November
2022 and 13th June 2023 respectively.
The Board of Directors at their Meeting held on 7th July
2023 accepted the resignation of Mr. S R Ramakrishnan as Director / Whole-time Director to be effective from the end of his tenure on 29th July 2023. In the same Board Meeting, Mr. E Balu was inducted as Director and appointed as Wholetime Director w.e.f 30th July 2023 for a period of three years on terms and conditions subject to approval of shareholders of the ensuing 52nd AGM.
The Board of Directors placed on record the invaluable services rendered by M/s. Vandana Garg, I.A.S, A R Rajalakshmi as Directors and Mr. S R Ramakrishnan as Whole-time Director during their tenure.
Ms. Jayashree Muralidharan, I.A.S. shall retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers herself for re-election.
The Board of Directors vide Resolution dated 17th January 2023 re-appointed. Mr. S Radhakrishnan as Independent Director for a second term of 5 years from 7th February 2023, and the approval of the shareholders was obtained through Postal Ballot on 30th March 2023. In the opinion of the
Board, Mr. S Radhakrishnan, re-appointed as Independent Director during the year, is a person of integrity, with expertise, experience & proficiency. He is independent of the Management.
All the Independent Directors of the Company on the date of this Report have duly submitted the disclosures to the Board stating that they have fulfilled the requirements set out in Section 149 (6) of the Act and the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, as amended so as to qualify themselves to act as Independent Directors.
TRANSFER OF SHARES IN RESPECT OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) AUTHORITY
Pursuant to Section 124 (6) of the Companies Act, 2013 read with The Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules 2016, the Company during March 2018 transferred to IEPF Authority, 1,66,454 equity shares in respect of 1008 shareholders.
As per the information provided by the Registrars and Transfer Agent, out of the 1,66,454 equity shares, which remained unclaimed by 1008 shareholders at the beginning of the year, 1000 shares were released to 2 shareholders during the year. As at the end of the year 1,65,454 shares remained unclaimed by 1006 shareholders.
Independent Directors are familiar with their roles, responsibilities in the Company, nature of the industry, business model etc., through familiarisation programmes. Documents / Brochures, Reports and Internal Policies of your Company are provided to them. Presentations are made at the Board / Committee Meetings, on Company''s Performance, business strategy, risks involved and global business environment. Details of means of familiarization of the business to Independent Directors are disclosed on the Company''s website under the following web link: https://www.spic.in/wp-content/uploads/2022/07/ Familiarization-Programmes-2022-23.pdf
The statement in terms of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed vide Annexure II (Page no. 26) forming part of this Report.
M/s. MSKA & Associates, Chartered Accountants (Firm Registration No.: 105047W) Chennai, the Statutory Auditors appointed by the shareholders for a period of five years from
2022-23 shall hold office from the conclusion of 51st AGM till the conclusion of 56th AGM of the Company on a remuneration of ?24 lakh plus out of pocket expenses and applicable taxes for audit and related services, for each year and the Board of Directors has been authorized to revise the remuneration during the term. There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in their Report on the Standalone and Consolidated Financial Statements of your Company for 2022-23.
M/s. B Y & Associates, Cost Accountant (Firm Registration No. 003498) was appointed as the Cost Auditor of the Company for the year 2022-23 to carry out the audit of your Company''s Cost Accounts and Records of fertilizer business. The Company is required to maintain Cost Records as specified by the Central Government under Section 148 (1) of the Act and that accordingly such accounts and records were made and maintained. The Cost Audit Report for the previous year ended 31st March 2022 was duly filed within the time stipulated under the Act.
In accordance with Section 148(1) of the Act, the Company has maintained the accounts and cost records for 202223, as specified by the Central Government. The Board of Directors at their Meeting held on 24th May 2023, on the recommendation of the Audit Committee, have re-appointed M/s. B Y & Associates, Cost Accountant (Firm Registration No. 003498) as Cost Auditor for the year 2023-24 at a remuneration of ?1,50,000/- plus reimbursement of actual out-of-pocket expenses subject to ratification by Members at the ensuing 52nd AGM.
In terms of Section 204 of the Act, Regulation 24A of Listing Regulations, your Company appointed Ms. B Chandra, Practicing Company Secretary, Chennai as Secretarial Auditor for 2022-23. The Company has complied with the requirements of the Secretarial Standards specified by the Institute of Company Secretaries of India constituted under Section 3 of the Company Secretaries Act, 1980, and approved as such by the Central Government.
The Secretarial Audit Report for the year 2022-23 as furnished is given as Annexure III (Page no. 29) to this Report. There is no qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditor in their Report.
Pursuant to the provisions contained in Section 134 (3) of the Act, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the Management confirm that:
a) In the preparation of the annual financial statements
for the year ended 31st March 2023, the applicable Accounting Standard had been followed along with proper explanation relating to material departures;
b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2023 and of the profit of the Company for the year ended on that date;
c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis;
e) They have laid down proper internal financial controls to be followed by the Company and such controls are adequate and were operating effectively;
f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
As per Section 143(12) of the Act, during the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee formed as per the requirements of Act.
No loans or guarantees were given by the Company under Section 186 of the Act during the year under review. Your Company, during May 2022, pledged 34,00,000 equity shares of 10/- each held in Greenam in favour of Indian Renewable Energy Development Agency Limited (IREDA) to secure the term loan of '' 88 and ''70 crores sanctioned to Greenam to meet its capital expenditure for its floating solar power project.
The transactions entered into by your Company during the year 2022-23 with Related Parties as defined under the Act were in the ordinary course of business and at arm''s length basis. Details of contracts / arrangements with related parties as required under Section 188 (1) and 134 (h) of the Act in Form AOC-2 is attached as Annexure V (Page no. 32).
The details of transactions with any person or entity belonging to the Promoter/Promoter Group which holds 10% or more shareholding in the Company, in the format prescribed under Ind AS are furnished in Note No. 38 of Notes on Accounts.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY THAT HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT.
There has been no material changes or commitments affecting the financial position of your Company that has occurred between the end of the financial year i.e., 31st March 2023 and the date of this Report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company has an Energy Audit group, which identifies potential areas for improvement, scans the environment for innovative and reliable solutions and considers proposal for implementation. Efforts are continuously being taken to reduce energy consumption in the Plants.
⢠Improvement to the efficiency of the Turbo Generator I.
⢠New boiler at the downstream of ammonia converter, generating 60mTPH of steam from the heat available with the gas, has been installed.
⢠Heat Recovery & Steam Generation system which recovers the heat from the Gas Turbine flue gas has been installed.
⢠Critical turbines were overhauled to improve the efficiency.
⢠Periodical Steam system audit was carried out and the faulty traps and leaks were addressed immediately.
Technology Absorption - Nil Foreign Exchange Earnings and Outgo
The foreign exchange earned in terms of actual inflows and the foreign exchange outgo in terms of actual outflows during the year:
(Rs. in Lakhs) |
||
Particulars |
2022-23 |
2021 - 22 |
Foreign Exchange earnings |
54.57 |
35.78 |
Foreign Exchange expenditure |
4,511.47 |
2,119.28 |
Your Company has adequate internal financial control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems were reviewed by Statutory / Internal Auditors and reported to the Audit Committee of the Board, for identification of
deficiencies and necessary time bound actions were taken to improve efficiency at all levels. The Committee also reviews the Report of Internal Auditors, key issues, significant processes and accounting policies. Risk Management is an integral part of the business process. Your Company pursuant to Listing Regulations has constituted a Risk Management Committee and has a Policy on Risk Management to identify and draw mitigation plans to manage risk. The Board of Directors reviews the Risk Management Report periodically.
There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.
Corporate Governance Report 2022-23 along with the Certificate of the Statutory Auditors, M/s. MSKA & Associates, Chartered Accountants, confirming compliance to conditions of Corporate Governance as stipulated in the Listing Regulations forms part of this Report.
Your Company has a structured framework for evaluation of the Individual Directors, Chairperson, the Board as a whole and its Committees. The Independent Directors at their Meeting held on 28th March 2023 evaluated the performance of Non-Independent Directors, Board as a whole, the Chairperson and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Board of Directors at their Meeting held on 24th May 2023 evaluated the performance of all Independent Directors and the Board as a whole and its Committees. The evaluation criteria was based on the participation, contribution and guidance offered and understanding of the business etc., which are relevant to the Directors in their capacity as Members of the Board/ Committees.
The details of the Meetings of Board and Audit Committee held and its composition are provided in the Corporate Governance Report.
Company has a Policy on Material Subsidiary approved by the Board of Directors as per the Listing Regulations and is available on the Company''s website under the web link:https://www.spic.in/wp-content/uploads/2021/02/ MATERIAL-SUBSIDIARY-POLICY.pdf
Your Company has a Nomination and Remuneration Policy as required under Section 178(3) of the Act and the Listing Regulations. The details of the Policy are available in Annexure I (Page no. 24) to this Report
The Policy on Related Party Transactions as required under the Listing Regulations and the Act, is available on the Company''s website under the web link: https://www.spic. in/wp-content/uploads/2021/02/Policy-on-Related-Parties-30th-Mar-2022.pdf
Your Company has a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company in line with SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended. The details of the Policy are available on the website of the Company under weblink: https://www. spic.in/wp-content/uploads/2021/02/Policy-for-Determining Material-Events.pdf
POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH)
The Company has zero tolerance for sexual harassment at workplace. A policy is in place and an Internal Complaints Committee has been constituted which is monitoring the prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of POSH and the Rules made thereunder. There were no complaints reported under the POSH during the year under review.
Pursuant to the provisions of Section 177 of the Act and the Listing Regulations, Whistle Blower Policy for Directors and employees to report genuine concerns or grievances including reporting of instances of leakage of Unpublished Price Sensitive Information (UPSI) is in place and a Vigil Mechanism established, the details of which are available on the website of the Company under weblink: https://www.spic. in/wp-content/uploads/2021/02/Whistle- Blower-Policy-and-Vigil-Mechanism-24.03.2020.pdf.
Your Company has a CSR Policy in line with the provisions of the Act. As a responsible corporate citizen, your Company in its endeavour to contribute for the sustained development and growth of the Society at large has taken several initiatives voluntarily. Your Company is not required to spend towards CSR activities, in view of absence of profits computed under Section 198 of the Act. However, the details of CSR
initiatives undertaken voluntarily by your Company are given in Annexure IV (Page no. 31) to this Report. The details of the Policy are available on the website of the Company under weblink: https://www.spic.in/wp-content/uploads/2021/02/
Corporate-Social-Responsibility-Policy.pdf DIVIDEND DISTRIBUTION POLICY Dividend Distribution Policy has been formulated as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Second Amendment) dated 5th May 2021. The details of the Policy are available on the website of the Company under weblink: https://www.spic. in/wp-content/uploads/2021/08/Dividend-Distribution-Policy. pdf.
The year 2022-23 recorded higher agricultural production over the previous year with a marginal increase in the cropped area by 5.96 %. The increase in production of food grain, Oil seeds, Sugarcane and Cotton is 2.5%, 5.4%, 6.7% & 8.4%, respectively over the previous year. The uneven distribution of monsoon during Kharif resulted a reduction in the area under cultivation, while the Rabi crop compensated for this shortfall. The enhancement of support price (9%) by the Government for the produce propelled the area under cultivation during the year.
The overall availability of Urea during the year was satisfactory, inspite of reduction in imports. The supplies from the indigenous production increased by 14% at 28.49 million tonnes, from 25.08 million tonnes, a year ago. The total sales during the year stood at 35.73 million tonnes as against 34.18 million tonnes during the previous year.
Your Company continued to extend service to the farmers for improved cultivation practices, soil health management, integrated nutrient and pest management practices to bring down the cost of cultivation as well as to reduce the deposit of toxic residues in the environment.
Your Company undertook the following activities during the year.
Your Company is the Lead Fertilizer Supplier (LFS) for Tamil Nadu and Puducherry. As an LFS, we ensured the active usage of ePOS devices to conduct Fertilizer Sales at the fertilizer retail points. The repeated conduct of awareness programs among the farmers and capacity building exercise to retailers in association with the officials of Agriculture Department and National Informatics Centre (NIC) ensured 95% adherence of fertilizers sales through ePOS devices. The nonadherence is due to non-functioning of ePOS machines due to network disturbance and power failures. There
are 12,763 ePOS machines have been deployed and monitored by us.
The Department of Fertilizers, Government of India has introduced a new concept of Pradhan Mantri Kisan Samridhi Kendra (PMKSK) during the year, with an aim to provide quality agri inputs & required services under one roof as an âone stop shop'' for the farming community to impart the latest technologies in Agriculture for resource optimization and to increase the returns from the farms.
As per the mandate, your Company established 2,473 PMKSKs spread across Tamil Nadu, Puducherry, Kerala, Karnataka, Andhra Pradesh, Telangana & Maharashtra. These Centers provide support facilities for testing of soil, irrigation water & agri inputs like fertilizers & seed apart from educating the farmers to practice soil test based nutrient management, integrated pest management, soil health management, etc.
Through our Mobile Soil Testing Facility, we have extended the soil testing services to farmers located in the State of Tamil Nadu and in the bordering districts of the neighboring states of Karnataka and Andhra Pradesh. Based on the soil fertility reports, we encouraged the farmers to use enough manures for sustaining and improving the soil fertility and productivity levels.
We offered In-house training programs to progressive farmers from the State of Tamil Nadu in our training center located at Tuticorin. The outreach programs were also conducted to farmer groups to impart latest agro technologies for enhancing economic returns from farming.
As part of the In-house training programs, we have established and managing a demonstration field of âan integrated agriculture farmâ having high value agriculture crops, medicinal plants, mushroom cultivation and animal husbandry in Tuticorin. The trainees are exposed to this concept for quicker adaptation of Integrated Agriculture Practices for enhancing the returns from farming.
The bimonthly Tamil Magazine covers articles relevant to current challenges in farming with suitable solutions. The success stories of farmers adopting latest technologies are also published to create awareness.
This is becoming a platform for sharing new found knowledge / technologies in improving the productivity of farms.
Prospects for 2023-24
As per IMD 1st stage long range forecast for monsoon, India is likely to witness normal rainfall during southwest (SW) monsoon season. However, due to delay in the onset of the SW monsoon, delays and disruption in sowing is witnessed mostly from rain fed areas of southern states.
Considering this IMD forecast of normal annual rainfall, the country will be working towards a targeted food grain production at 332 million tonnes for the year compared to expected production of 328 million tonnes during 2022-23. Demand estimation of Urea for the year 2023-24 based on IMD report is encouraging. The estimated domestic production of Urea is close to 30 Million tonnes, with significant reduction in the imports. The additional quantity is expected from enhancement of production of existing units as well as from the commencement of production from new plants.
Nano Urea
Nano Urea, a liquid formulation containing 4 ~ 14 % Nitrogen has been introduced by Indian Farmers Fertilizer Cooperative Ltd (IFFCO) during 2021. This is recommended as a substitute product for the prilled and granulated Urea. The acceptance of this Nano Urea by the farmer is yet to gain momentum due to the instability of Nutrient content, non-compatibility with other agro chemicals and higher cost of application. As Urea forms 82 % of the total nitrogenous fertilizers consumed in India, Government is encouraging fertilizer companies to formulate strategies to replace Urea with Nano-Urea.
National Fertilizers Limited (NFL) and Rashtriya Chemicals and Fertilizers Limited (RCF), under administrative control of Department of Fertilizers, has signed Non-Disclosure Agreement (NDA) & Memorandum of Understanding (MoU) with IFFCO to transfer the technology of Nano Urea from IFFCO.
Your Company has entered into a research tie up with Tamil Nadu Agriculture University for a detailed field study to know the efficacy and phytotoxicity of Nano Urea in comparison
to SPIC Urea (Prilled Urea). This study will also reveal the economic benefit of using Nano Urea over SPIC Urea in Paddy cultivation. Once the field trails are completed, more information on the efficacy of the product to device suitable strategy of employing Nano Technology in Nutrient Delivery Systems would be available.
All India Urea Production, Import, Supplies and sales with previous year.
Your Company supplies highest quality of Tissue Culture Banana plants to the farmers of Tamil Nadu, Andhra Pradesh, Telangana and Karnataka. Your Company is offering after sales services to the farmers by providing technical assistance on Banana cultivation. The unit is accredited by the Department of Biotechnology with NCS-TCP certification. Having got the protocols customized for the production of high value crops like ornamentals, orchids etc., your Company will enter into this ornamental plants segment in the near future. In order to increase the profitability by optimizing the cost, we are undertaking laboratory modernization activities with induction of higher efficiency machines with high energy consuming ones, redesigning the process flow, and adoption of new systems to enhance sterility standards in the production laboratories.
It is expected to be completed by December 2023, to commence the commercial production of high value crop plants by January 2023.
The significant changes in the financial ratios of the Company, which are 25% or more as compared to the previous year are summarized below:
Ratios |
2022-23 |
2021-22 |
Reasons for change |
Net Profit Ratio (%) |
10.09% |
7.53% |
Increased Net profit due to economies / benefit of Gas based Plant. Consequently a higher Net Profit ratio in current year. |
Debt Service Coverage Ratio (times) |
2.46 |
2.13 |
a) Increased operating profit due to economies / benefit of Gas based Plant. b) Also the repayment of borrowings had improved the debt coverage ratio in current year. Both contributed to higher Debt Service Coverage Ratio |
Debtors Turnover Ratio (days) |
4 |
4 |
- |
Enhanced production and supply of Urea to the market: The enhancement in the production and supply is expected to the tune of 150 to 200 Kt per year. This enhancement is less than the imported stocks made available to southern states to meet the demand. With our increased supplies to southern states, it is expected that, the import of Urea will come down to that extend. The additional supply of Urea is in line with the objective of Government of India to be self-reliant in Urea. The current market share for Urea in TN is close to 30% and additional allocation from DoF will increase the share to 45 %.
The instances of sale of Urea without the use of ePOS machine at the retail locations: We have a system by which we can monitor the quantity of stocks available at each of the license holder in the state of TN. This helps us to identify the piling up of stock to undertake physical verification and completion of ePOS sales through the intervention of the State AGrl (Agriculture) Dept. In addition to this, our district
wise supply plan is very much dependent on the stock availability at all stages like Whole sellers'' account and retailers'' account. This enables us to moderate the supplies and to prevent the instances of sale of Urea outside ePOS machines.
Your Company is grateful for the co-operation and continued support extended by the Department of Fertilizers, Ministry of Chemicals and Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of Agriculture, Ministry of Shipping, Ministry of Corporate Affairs and other Departments of the Central Government, the Government of Tamil Nadu, Governments of other States, Tamil Nadu Industrial Development Corporation Limited, Tamil Nadu Generation and Distribution Corporation Ltd., Indian Oil Corporation Limited, Oil and Natural Gas Corporation Limited, Financial Institutions and Banks. The Directors appreciate the dedicated and sincere services rendered by all the employees of your Company.
Mar 31, 2018
The Directors present their 47th Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March 2018.
FINANCIAL SUMMARY
(Rs. in crores)
Particulars |
31.03.2018 |
31.03.2017 |
Revenue from Operations |
1994.46 |
1502.43 |
Add: Other Income |
4.92 |
13.79 |
Total Income |
1999.38 |
1516.22 |
Profit before interest, depreciation and tax |
115.77 |
67.75 |
Less: Finance Cost |
40.88 |
10.57 |
Less: Depreciation & amortisation expenses |
40.11 |
30.83 |
Add: Exceptional Items |
2.44 |
- |
Profit Before Tax |
37.22 |
26.35 |
Less: Tax Expenses |
- |
- |
Profit After Tax |
37.22 |
26.35 |
Add : Net Comprehensive Income/(loss) |
0.24 |
2.08 |
Total Comprehensive Income |
36.98 |
28.43 |
DIVIDEND
In view of the accumulated losses, the Board of Directors are unable to recommend dividend on the Preference Share Capital and Equity Share Capital of the Company.
STATE OF COMPANYâS AFFAIRS
Production
During the year under review, the plants were in operation between 1st April ''17 to 11th January â18 and from 11th February â18 onwards. The shutdown of plants for 31 days during January and February â18 was for Annual Turnaround Maintenance, undertaking repairs of essential equipments and maintenance activities to improve the reliability and energy efficiency levels for sustained production. Your Company produced 100% neem coated Urea and achieved 6,58,892 MTs during 2017-18 compared to 5,62,670 MTs in the previous year. During the year, sale of Manufactured Urea was 6,62,074 MTs and sale of Imported Urea was 79,189 MTs.
Your Company has achieved the energy efficiency levels of 6.834 GCal/MT of Urea as against 6.664 GCal/MT. The plants were operated using mainly imported Naphtha and Furnace Oil.
Handling of Imported Urea:
Government of India allotted SPIC, two coastal ports namely Karaikal and Tuticorin for handling Imported Urea in the previous year. Your Company has handled 50,800 MTs of Imported Urea during the financial year 2017-18.
Working Capital :
During the year under review, Rupee denominated (unsecured) Masala Bonds as per RBI Guidelines were subscribed for an aggregate value of Rs. 128.66 crores carrying 9% interest p.a. by one of the Related Parties. This was pursuant to a Program Agreement dated 10 November 2016. This facility helped achieve the targeted production.
Progress in conversion of ammonia plant from naphtha to gas:
Good progress has been made by Indian Oil Corporation, authorized to lay the Natural Gas Pipeline from Ennore to Tuticorin, in terms of engineering, procurement and necessary approvals for laying the first stage of the gas pipeline from Ramnad to Tuticorin. Your Company continues to be in the state of readiness to complete the process as and when gas connectivity is established.
With the New Urea Policy 2015, revised target energy norm was set to become 6.5 Gcal/MT from 1st April 2018. To adhere to the policy, various energy saving measures are being designed, engineered and implemented with Natural Gas and dual feedstock option.
The Cabinet Committee on Economic Affairs chaired by the Prime Minister Shri Narendra Modi, in late March 2018 has accorded the following approval to the proposal of Department of Fertilizers:
a) The Target Energy Norms under New Urea Policy-2015(NUP-2015) for 11 urea units to be implemented w.e.f. 1st April, 2018.
b) The extension of present energy norms with token penalties, under the New Urea Policy-2015 for a further period of two years for 14 urea manufacturing units which failed to achieve the Target Energy Norms.
c) Three Naphtha based urea units of which your Company is one, are also allowed the existing energy norms for another two years/till gas pipeline connectivity.
d) The target energy norms as per NUP-2015 will be continued for 5 years w.e.f. 1st April, 2020.
The extension of present energy norms for further period of 2 years will ensure easy availability of urea to farmers throughout the country. It will also help to maximize the indigenous urea production and will lessen the import of urea.
Handling of Imported Naphtha Shipments
SPIC has signed a Hospitality Agreement with IOC for a period of two years for using their Tank farm facility at Tuticorin Port premises for handling a part of SPIC''s Imported Naphtha shipments. This has facilitated SPIC for faster discharge of cargo and thereby minimizing the ship demurrage to a large extent.
SPIC PROJECTS STATUS
AMMONIA PLANT DCS UPGRADATION:
Conversion of Ammonia plant Centum XL DCS to latest state of art technology Centum VP DCS and August PLC system to Pro safe PLC system has been completed. New DCS will also accommodate NG usage as and when gas is made available.
AMMONIA PLANT ENERGY REDUCTION PROJECT
Detailed engineering is being carried by M/s. TECHNIMONT. Procurement is being carried out for the project activities.
Erection of NG lines to reformer, boiler & dual burner for auxiliary boiler north has been completed.
LNG FACILITY: Supply of 200 MTPD LNG TO SPIC Plant.
Land Soil Testing has been completed and civil construction is being started.
UREA PLANT REACTOR
Replacement of Urea reactor with new reactor with improved material of construction and high efficiency trays is in progress. The new reactor, ordered on M/s. STaMi CARBON, is expected to arrive at site by November 2018.
PUBLIC DEPOSITS
There are no deposits covered under Chapter V of the Companies Act, 2013 (the Act) during the year 2017-18 the details of which are required to be furnished.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with Ind AS and forms part of the Annual Report.
FINANCIAL STATEMENTS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company''s subsidiaries, associates and joint ventures (in Form AOC-1) is attached to the Financial Statements. During the year under review, M/s Greenam Energy Private Limited became an Associate Company.
Tamilnadu Petroproducts Limited (TPL)
During the year under review, revenue from operations was Rs.1081.83 crores compared to Rs.1007.58 crores in 2016-17. The Net profit for the year was Rs.46.71 crores against Rs.9.30 crores in the previous year. Though TPL is facing stiff competition from imports, various steps have been taken to improve the performance which have started showing results. The significant improvement in profitability was on account of the improved productivity and realizations from both LAB and Heavy Chemicals Division.
Tuticorin Alkali Chemicals And Fertilizers Limited (TFL)
The turn over continued to be low for the financial year 201718 at Rs.138 crores due to low CO2 internal generation from the newly installed CO2 recovery unit and non availability of CO2 gas from SPIC. The problems for the low CO2 recovery from the flue gas were identified and are being attended continuously and it is expected that the production will be improved to the required level by end of the Q1 of 2018-19.
The loss for the year hence is high at Rs.45 crores. The water shortage has been brought under control by recovering water from the sea water pumped to the salt fields of the company which also improved the salt production. The Draft Rehabilitation Scheme earlier submitted to BIFR is currently under the consideration of National Company Law Tribunal. As per their direction the issue has been referred to SEBI for exemptions for the conversion of the assistance received from the promoters into equity capital and an EGM was held in this regard on 10th April, 2018.
Greenam Energy Private Limited (GREENAM)
Greenam Energy Private Limited (Greenam) which is setting up a Floating Solar Power Project of capacity 24.7 MW DC in the water reservoirs of the Company at Tuticorin, has been sanctioned a term loan Rs.88 crores by M/s Indian Renewable Energy Development Agency Limited (IREDA) for the Project. Infusion of Promoters'' contribution is one of the conditions precedent for disbursement of loan by IREDA. An agreement will be entered into by the Company with Greenam, permitting them to use the Company''s reservoir for the Project and for usage of certain portion of land for installing inverters, transformers and Power evacuation systems. The Project activities are progressing and the commissioning is expected by May 2019.
SAFETY, HEALTH AND ENVIRONMENT
Adequate care and attention have been bestowed on matters relating to safety, health and environment in the plant. Your Company is certified with the latest version of QMS - ISO 9001:2015 and EMS - ISO 14001:2015 Standards and has received two safety awards from the Government of Tamilnadu.
Your Company continues to conduct health camps as an ongoing activity to create awareness on critical health related matters viz., eye camps and cancer / diabetes awareness. Similarly, Green Belt development is also a continuing activity with tree planting given top most importance. Your company has installed online continuous emission monitoring for Urea Prilling tower and complied with the guidelines of CPCB.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Your Company continues to provide a conducive work environment and opportunities for development of its employees. Industrial Relations in the Company have been cordial during the year under review. The number of employees as on 31st March, 2018 is 647. In addition, 90 candidates were selected during the year in Campus Hiring program.
EXTRACT OF ANNUAL RETURN
Form MGT-9 as on 31st March 2018 as required under Section 92 of the Act is given in Annexure I to this Report.
DIRECTORS
Mr. M S Shanmugam, IAS, TIDCO Nominee, ceased to be a Director under Section 167 (1) (b) of the Companies Act, 2013 with effect from 30th November 2017. Mr. T K Arun, TIDCO Nominee, resigned from the Board with effect from 16th November 2017 consequent to his attaining superannuation.
At the Board Meeting held on 7th February 2018, with a view to broad base the Board it was decided to induct professionals with expertise in the field of Fertilizers and having vast experience in various disciplines of Corporate Management / Governance. Mr. T K Arun was inducted as Non Executive / Non Independent Director and Mr. S Radhakrishnan was inducted as an Independent Director of the Company based on the recommendation of the Nomination and Remuneration Committee. The appointment of Mr. S Radhakrishnan is for a period of 5 years from 7th February 2018. Approval of the shareholders is being sought at this Annual General Meeting for the appointment of Mr. T K Arun as Director liable to retire by rotation and Mr. S Radhakrishnan as Independent Director. The Board of Directors had appointed Mr. S Visakan IAS, Nominee of TIDCO as Additional Director of the Company effective 13 June 2018.
Mr. S R Ramakrishnan as Director, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-election.
All the Independent Directors of the Company on the date of this Report have duly submitted the disclosures to the Board stating that they have fulfilled the requirements set out in Section 149 (6) of the Act and the Listing Regulations, so as to qualify themselves to act as Independent Directors.
TRANSFER OF SHARES IN RESPECT OF UNCLAIMED DIVIDENDTOINVESTOREDUCATIONANDPROTECTION FUND (IEPF) AUTHORITY
Section 124 (6) of the Companies Act 2013 read with The Investor Education and Protection fund (Awareness and Protection of Investor) Rules 2001 the Company after giving due notice in writing to the shareholders, whose shares remained unclaimed were transferred to IEPF Authority. 1,66,454 equity shares in respect of 1008 shareholders were transferred and Corporate action taken in this regard has been informed through CDSL.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
Independent Directors are familiar with their roles, responsibilities in the Company, nature of the industry, business model etc., through familiarisation programmes, Documents / Brochures, Reports and Internal Policies of your Company provided to them. Presentations are made at the Board / Committee Meetings, on Company''s Performance, business strategy, risks involved and global business environment. Details of means of familiarization of the business to Independent Directors are disclosed on the Company''s website under the following web link: http://spic.in/wp-content/uploads/policies/Familiarisation-Program-for-Independent Directors.pdf
KEY MANAGERIAL PERSONNEL
Mr. S R Ramakrishnan was re appointed as Whole-time Director for a period of 3 years with effect from 30th July 2017 and approval of shareholders was obtained for reappointment at the 46th Annual General Meeting held on 26th July 2017.
PARTICULARS OF REMUNERATION OF DIRECTORS, KMP AND EMPLOYEES
The information required under section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ended 31st March, 2018 and forming part of this Report is given in Annexure III to this Report.
STATUTORY AUDITORS
In line with the policy on rotation of Auditors introduced in the Companies Act, 2013 (Act), the Shareholders at the 46th AgM held on 26th July 2017 approved the appointment of MZSK & Associates (presently known as M/s. MSKA & Associates), Chartered Accountants, Chennai as Statutory Auditors of the Company for a period of 5 years from 201718 and to hold office until the conclusion of 51st AGM of the Company subject to ratification at every AGM on such remuneration as may be decided by the Board of Directors. The Act has been amended effective 7th May 2018 deleting the provision relating to ratification of appointment by shareholders at every subsequent AGMs. Hence, seeking ratification of shareholders would not arise.
COST AUDITOR
Mr. P R Tantri, Cost Accountant (M. No. 2403) was appointed as the Cost Auditor of the Company for 2017-18 to carry out the audit of your Company''s Cost Accounts and Records of fertilizer business. The Cost Audit Report for the year ended 31st March 2017 was filed within the time stipulated under the Act. The Board of Directors at their meeting held on 17th May 2018, on the recommendation of the Audit Committee, have re-appointed Mr. P R Tantri, Cost Accountant as Cost Auditor for 2018-19 at a remuneration of Rs.1,00,000/- plus reimbursement of actual out-of-pocket expenses . As required under Section 148 of the Act and Rule 14 of the Companies (Audit & Auditors) Rules, 2014, ratification by Members is sought for the payment of remuneration to the Cost Auditor.
SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Act, and the Rules made thereunder, your Company has appointed Ms. B Chandra, Practicing Company Secretary, Chennai as Secretarial Auditor. The Secretarial Audit Report as furnished is given as Annexure IV to this Report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in the Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Section 134 (3) of the Act, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the management confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable IND AS had been followed along with proper explanation relating to material departures;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) they have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively;
(f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
No loans or guarantees were given by the Company under Section 186 of the Act during the year under review. Your Company invested in 1,86,000 equity shares of Rs.10/- each of OPG Power Generation Pvt Ltd @ Rs.11.50 /- per share in order to qualify as captive user under Group Captive Scheme of the Electricity Rules, 2005. Further 2 equity shares of Rs.10/- each at par were invested in M/s. Greenam Energy Private Limited, which is setting up a 24.7 MW DC solar project at an estimated cost of Rs.136 Crores.
RELATED PARTY TRANSACTIONS
The transactions entered into during the financial year with Related Parties as defined under the Act were in the ordinary course of business and at arm''s length basis. Details of contracts / arrangements with related parties as required under Section 188 (1) and 134 (h) of the Act have been disclosed in Form AOC-2 and is attached as Annexure VI. As required under Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, approval of the Members is being sought at this Annual General Meeting for the transactions with Related Parties considered material in nature.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes or commitments affecting the financial position of your Company that has occurred between the end of the financial year i.e., 31st March 2018 and the date of this Report.
ENERGY CONSERVATION, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy
Your Company has an Energy Audit group, which identifies potential areas for improvement, scans the environment for innovative and reliable solutions and considers proposal for implementation. Efforts are continuously being taken to reduce energy consumption in the plants.
Some of the activities implemented during the year:
- As energy conservation activity, Primary Reformer and High Temperature Shift I bed catalyst were completely renewed with new catalyst in Ammonia plant.
- To avoid energy loss through the heat exchangers, several exchangers re-tubed / replaced.
- Boiler (North) Burners was replaced with Dual fired burners as part of NG conversion.
- To reduce the energy loss and improve the performance, Cold Air heater tubes in Boiler (North) & (South) were renewed. Additional Steam Generation Unit Air Preheater tubes were renewed.
- Performance of all pumps and compressors were studied with our energy Audit group. Various energy saving technologies like provision of VFD, speed reduction, impeller trimming and smoothening the fluid passage with special coatings were implemented.
- Steam system audit were carried out periodically and the faulty traps and leaks has been addressed immediately.
Technology Absorption - Nil
Foreign Exchange Earnings and Outgo:
The foreign exchange earned in terms of actual inflows and the foreign exchange outgo in terms of actual outflows during the year:
(Rs.in Lakhs)
Particulars |
2017-18 |
2016-17 |
Foreign Exchange earnings |
16.14 |
153.84 |
Foreign Exchange |
1,38,551.44 |
1,14,864.79 |
expenditure |
INTERNAL FINANCIAL CONTROL & RISK MANAGEMENT SYSTEM
Your Company has adequate internal financial control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems were reviewed by Internal Auditors and reported to the Audit Committee of the Board, for identification of deficiencies and necessary time bound actions were taken to improve efficiency at all levels. The Committee also reviews the internal auditors'' report, key issues, significant processes and accounting policies.
Risk Management is an integral part of the business process. The Company has a Risk Management Committee and a Policy on Risk Management to identify and draw mitigation plans to manage risk. The Audit Committee of the Board reviews the risk management report periodically.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.
Corporate Governance Report 2017-18 along with the Certificate of the Statutory Auditors, M/s. MSKA & Associates, Chartered Accountants, confirming compliance to conditions of Corporate Governance as stipulated in the Listing Regulations forms part of this Report.
PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS
Your Company has a structured framework for evaluation of the Individual Directors, Chairperson, Board as a whole and its Committees. The Independent Directors at their Meeting held on 7th February 2018 evaluated the performance of Non-Independent Directors, Board as a whole, Chairperson and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Board of Directors at their Meeting held on 17th May 2018 evaluated the performance of all Directors and the Board as a whole and its Committees through circulation of questionnaires, to assess the performance on select parameters relating to roles, responsibilities and obligations of the Board and functioning of the Committees. The evaluation criteria was based on the participation, contribution and guidance offered and understanding of the areas which are relevant to the Directors in their capacity as Members of the Board/ Committees.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, four Board Meetings were held on 18th May 2017, 7th September 2017, 4th December 2017 and 7th February 2018, the details of which are provided in the Corporate Governance Report.
AUDIT COMMITTEE
The details of the composition and meetings of the Audit Committee held are provided in the Corporate Governance Report.
POLICIES
POLICY ON MATERIAL SUBSIDIARY
The Board had approved the Policy on Material Subsidiary as per the Listing Regulations and is available on the Company''s website under the web link: http://spic.in/wp-content/uploads/ policies/Determining-Material-Subsidiary-Policy.pdf.
NOMINATION AND REMUNERATION POLICY
Your Company has a Nomination and Remuneration Policy as required under Section 178(3) of the Act and the Listing Regulations. The details of the Policy are given in Annexure II to this Report.
POLICY ON RELATED PARTY TRANSACTIONS
The Policy on Related Party Transaction as required under the Listing Regulations is available on the Company''s website under the weblink: http://spic.in/wp-content/ uploads/policies/ Policy-on-Related-Parties.pdf.
POLICY ON INSIDER TRADING
Your Company has a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company in line with SEBI (Prohibition of Insider Trading) Regulations, 2015.
POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013. (POSH)
The Company has zero tolerance for sexual harassment at workplace. A policy is in place and an Internal Complaints Committee has been constituted which is monitoring the prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of POSH and the Rules made there under. There were no complaints reported under the POSH during the year under review.
VIGIL MECHANISM:
Pursuant to the provisions of Section 177 of the Act and the Listing Regulations, Whistle Blower Policy for Directors and employees to report genuine concerns or grievances has been put in place and a Vigil Mechanism established, the details of which are available on the website of the Company under weblink: http://spic.in/wp-content / uploads / policies/Whistle- Blower-Policy-and-Vigil-Mechanism.pdf.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has a CSR Policy in line with the provisions of the Act. As a responsible corporate citizen, your Company in its endeavour to contribute for the sustained development and growth of the Society has taken several initiatives. Your Company is not required to spend towards CSR activities, in view of absence of profits computed under Section 198 of the Act. However, the details of CSR initiatives undertaken voluntarily by your Company are given in Annexure V to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Overview
The year 2017-18 witnessed normal to excess monsoon all over the country which resulted in good crop coverage. The rainfall received in June-July was around 65-80% only and the distribution of rainfall was not uniform which has resulted in crop failures in some areas in Karnataka, Andhra Pradesh and Tamil Nadu.
During the fiscal year 2017-18, the indigenous production, imports, and sale of Urea was marginally higher than that of the previous year. India produced a total of 24.024 million ton of Urea, which is 0.7% lesser than the production recorded during the previous year. The import of Urea under Government of India account during the year stood at 5.975 million ton which is 9% higher than the last year. The total supplies to the market stood at 30.08 million ton which is more or less equal to the previous year. The sale of urea during the year recorded 30.311 million ton which is 2.4 % higher than that of the previous year. (Source: Ministry of Chemicals and Fertilizers, Government of India).
The capacity utilization of Urea has declined marginally from 103% to 102% during the year under review. As a result, the stocks available in the market had decreased to 1.026 million tonnes, which is 23.25% lesser than that of the previous year.
Comparison of All India Urea Production, Import, Supplies and Sales with previous year.
As per Government of India directives, we have started packing Indigenous Neem Coated Urea in 45 kg bags with effect from 16th March 2018.
DBT In Fertilizers:
The objective of Direct Benefit Transfer (DBT) by Govt. of India is an initiative to avoid diversion of subsidized fertilizers to non-agricultural purposes and also to identify the end user which will enable smooth transfer of concession/benefits directly to consumer as in cooking gas concessions.
The GOI has successfully completed the implementation of Pan-India rollout of Phase-1 of DBT in Fertilizers on 1st March 2018. In Southern States their roll out happened from 1st January 2018.
SPIC, being LFS for Tamilnadu and Pondicherry States has successfully deployed 11,524 devices across the State along with 11 Fertilizer companies and State Agriculture Department officials.
Based on this, all Fertilizer Companies will get the concession for subsidized Fertilizers when sold and recorded through the POS Devices. As a result, the receipt of concession will happen as and when the sale of Fertilizer happen to the consumer. Since Fertilizer business being seasonal and closely associated with monsoon showers, sale of fertilizers and receipt of concession will not be uniform over the months, which will necessitate enhanced requirement of funds as working capital to sustain the operations.
Challenges in the new situation
Aadhar identification is the basis of sale process through Point of Sales (PoS). In most of the rural locations, this process fails or delays due to network and power issues. Any sale which happens without involving POS devices will not be recorded to permit the concession of a particular company. In this situation, all fertilizer companies are employing additional manpower at District and Taluk levels to monitor the physical stock and PoS device stock to ensure 100% sale happening through PoS Device.
We are also in the process of identifying resources to be deployed in rural locations to follow up the stock positions and sales at the retail centers to ensure the generation of subsidy bills in time.
Tissue Culture Business:
The turnover for the financial year 2017-18 was Rs.817 Lacs. The unit recorded the highest number, i.e., 36.59 lakh banana Plant sales during 2017-18 after an achievement of 29.74 plants in 2005-06.
For the first time, explored export opportunities and exported 42,500 nos. hardened Gerbera plants to Nepal. Trial shipments of Ex-Agar Gerbera plants to Netherlands and Dubai are on the cards.
New Business Development:
SPIC ABC has signed MOU with ICAR-CPCRI, Kasargod, Kerala for technology transfer and started production of the following business:
- Tissue Culture Arecanut Production - Production of Arecanut plants through Tissue Culture Technology.
- Vermi Compost Production from fallen coconut leaves.
- Production of Vermi Compost from waste coir pith.
CHALLENGES
As mentioned in the last year''s report, the completion of gas pipeline infrastructure by IOC and steady supply of gas are important requirements for stable operation of your Company. The working capital pressures will continue to be a challenge till the GST refund from both the Center and the State is streamlined and the DBT scheme gets fully stabilized in the market place.
ACKNOWLEDGEMENT
Your Company is grateful for the co-operation and continued support extended by the Department of Fertilizers, Ministry of Chemicals and Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of Agriculture, Ministry of Shipping, Ministry of Corporate Affairs and other Departments of the Central Government, the Government of Tamilnadu, Governments of other States, Tamilnadu Industrial Development Corporation Limited, Tamilnadu Generation and Distribution Corporation Ltd, Financial Institutions and Banks. The Directors appreciate the dedicated and sincere services rendered by all the employees of your Company.
For and on behalf of the Board of Directors
ASHWIN C MUTHIAH
Place : Chennai (DIN:00255679)
Date : 14 June 2018 Chairman
Mar 31, 2016
The Directors present their 45th Annual Report together with the Audited Financial Statements of the Company for the year ended 31 March 2016.
FINANCIAL SUMMARY
(Rs. in Crores)
Particulars |
31.03.2016 |
31.03.2015 |
Revenue from Operations |
1837.91 |
2094.16 |
Add: Other Income |
17.94 |
8.64 |
Total Income |
1855.85 |
2102.80 |
Profit before interest, depreciation and tax |
57.01 |
76.23 |
Less: Finance Cost |
12.05 |
28.26 |
Less: Depreciation & amortization expenses |
29.36 |
30.39 |
Add: Exceptional Items |
9.17 |
- |
Profit Before Tax |
24.77 |
17.59 |
Less: Tax Expenses |
- |
- |
Profit After Tax |
24.77 |
17.59 |
DIVIDEND
In view of the accumulated losses, the Board of Directors are not in a position to recommend dividend on the Preference Share Capital and Equity Share Capital of the Company.
RESERVES
Since all the Debentures have been redeemed in earlier years, a sum of Rs.38 crores available in Debenture Redemption Reserve was transferred to Profit and Loss.
STATE OF COMPANYâS AFFAIR Production
During the year under review, the plant had a steady run between 1 April 2015 to 19 April 2015 and again between
20 May 2015 to 27 March 2016. The stoppage of plant for
30 days during April - May 2015 was due to delay in Government according approval for continuation of subsidy for Naphtha based Urea Plants. During this period of shutdown, the Company undertook repairs and maintenance activities to improve reliability, energy efficiency levels and increase production. Also Government has made it mandatory to produce only neem coated Urea from June 2015 onwards. Your Company had installed neem coating facility and produced 100% neem coated urea since June 2015. Urea production achieved during the year 2015-16 was 620,426 MTs compared to 491,905 MTs in the previous year. During the year, sale of Manufactured Urea was 623,475.20 MTs and sale of Imported Urea was 146,700.35 MTs
Your Company during this year, has also achieved the best ever energy efficiency levels of 6.8484 GCal/PMT of Urea since commissioning.
Efforts are continuously being made to augment working capital to enable sustained operations of your Ammonia and Urea Plants. The plant operations were carried out by mainly importing Naphtha and Furnace Oil.
The Naphtha handling facility in the Tuticorin port premises was commissioned during July 2015 and taken on lease by your Company.
Handling of Imported Urea:
Government of India allotted SPIC, two coastal ports for handling imported urea in Karaikal and Tuticorin. Your Company has handled Imported Urea which are 100% neem coated.
Progress in conversion of ammonia plant from naphtha to gas:
The contract for laying pipeline from Ennore to Tuticorin has been given to IOC and they have completed the reconnaissance studies. Government of India has permitted your Company to continue producing Urea using naphtha as feed stock and hence was able to sustain its operation during the year. In respect of conversion of the existing facility from naphtha based to natural gas, your Company is in the state of readiness to complete the process as and when gas connectivity is established. During the Global Investor Meet, Tamilnadu in September 2015, your Company entered into a Memorandum of Understanding with Government of Tamil Nadu for gas conversion, modernization and capacity enhancement.
PUBLIC DEPOSITS
There are no deposits covered under Chapter V of the Companies Act, 2013 (the Act) during the year 2015-16, the details of which are required to be furnished.
FINANCIAL STATEMENTS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company''s subsidiaries, associates and joint ventures (in Form AOC-1) is attached to the Financial Statements. As regards the annual accounts of subsidiaries and their contribution to the overall performance is given therein, refer Notes to the Form AOC-1. During the year under review, no Company has become or ceased to be its subsidiaries, associates and joint venture companies.
During the year under review, the Board of Directors of your Company had approved in principle to wind up the subsidiary, SPIC Fertilizers and Chemicals, Mauritius and its step down subsidiary SPIC Fertilizers and Chemicals FZE (SFC FZE), Dubai, subject to requisite statutory approvals. The Company''s investment in SPIC Fertilizers and Chemicals, Mauritius, which has invested in a wholly owned subsidiary Company SFC FZE, Dubai, whose objective was production of ammonia and urea in Jebel Ali Free Zone Dubai, did not materialize due to non allocation of gas. The Board of Directors & shareholders of SFC FZE, Dubai have approved the commencement of winding up.
TAMILNADU PETROPRODUCTS LIMITED (TPL)
During the year under review, revenue from operations was Rs. 700.63 crores as against Rs. 949.87 crores in 2014-15. The profit was Rs. 38.15 crores after exceptional item of Rs.57.71 crores against a loss of Rs.53.07 crores in the previous year. TPL had achieved an operating profit of Rs. 12.77 crores with a overall cash profit of Rs. 55.73 crores. The finance cost was lower at Rs. 14.74 crores against Rs. 19.57 crores during the previous year. This was made possible through lower borrowings and repayment of long term loans out of the proceeds from sale of property.
The Plant which was under shutdown for a period of 55 days from 2nd December 2015 due to unprecedented rainfall and flooding resumed operations on 26th January 2016. In spite of this, production was maintained at normal levels of 255-260 MTD.
TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LIMITED (TFL)
During the year 2015-16, TFL operated comparatively better than last year and achieved a turnover of Rs.156.54 crores. Efforts were made to complete the settlement offered by the Asset Reconstruction Company and the consequent reduced interest write backs resulted in a net profit of Rs.33.64 crores. The Company is implementing its own CO2 facility, recovering it from the boiler flue gases. The Plant is expected to be ready by August 2016. The Company has submitted a revised Draft Rehabilitation Scheme with the above changes.
POLICY ON MATERIAL SUBSIDIARY
The Board had approved the Policy on Material Subsidiary as per the Listing Regulations and is available on the Company''s website under the web link: http://spic.in/wp-content/ uploads/2016/01/Determining-Material-Subsidiary-Policy.pdf
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with Section 129 (3) of the Act and relevant Accounting Standards Viz., AS-21 (Consolidated Financial Statements), AS-23 (Accounting for Investment in Associates in Consolidated Financial Statements) and AS-27 (Financial Reporting of Interests in Joint Ventures) issued by the Institute of Chartered Accountants of India and forms part of the Annual Report.
SAFETY, HEALTH AND ENVIRONMENT
Adequate care and attention have been bestowed on matters relating to safety, health and environment in the plant. Your Company is certified with ISO 9001 and ISO 14001 by External Auditors M/s. Det Norske Veritas (DNV).
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Your Company has taken several initiatives to ensure that the knowledge gained over decades is shifted down to the next generation of employees. The Company has conducted Management Development and Supervisory Development Programmes as well as put in place âSuccession Plan and Long term career growth plansâ. Your Company continues to provide a conducive work environment and opportunities for development of its employees. Industrial Relations in the Company have been cordial during the year under review. The number of employees as on 31st March, 2016 is 657.
EXTRACT OF ANNUAL RETURN
Form MGT-9 as on 31st March 2016 as required under Section 92 of the Act is given in Annexure-I to this Report.
DIRECTORS
Consequent to the resignation of Ms. G Latha, I.A.S with effect from 15th December 2015, the Board of Directors at their Meeting held on 4th February 2016, pursuant to Sec 161(4) of the Act and on the recommendation of Nomination and Remuneration Committee appointed Mr. M S Shanmugam,
I.A.S as Director representing Tamilnadu Industrial Development Corporation Limited (TIDCO) in the place of Ms. G Latha I.A.S. The Board of Directors placed on record the invaluable services rendered by Ms. G Latha I.A.S during her tenure as Director of the Company.
Mr. B Elangovan, TIDCO Nominee shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-election.
All the Independent Directors of the Company on the date of this Report have duly submitted the disclosures to the Board stating that they have fulfilled the requirements set out in Section 149 (6) of the Act and the Listing Regulations, so as to qualify themselves to act as Independent Directors.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has familiarized the Independent Directors with their roles, responsibilities in the Company, nature of the industry, business model etc., through a familiarization programme. Documents / Brochures, Reports and Internal Policies of your Company are provided to the Directors to familiarize with the Company''s procedures and practices. Presentations are made at the Board / Committee Meetings, on Company''s Performance, business strategy, risks involved and global business environment. Presentations are also made to the Independent Directors separately on the Company''s business segments. Site visits to plant location to help the Independent Directors to enhance their understanding of the plant operations of the Company.
Details of the familiarization programme imparted to the Independent Directors have been disclosed on the Company''s website under the following web link: http://spic.in/wp-content/ uploads/2015/12/Familiarization-Programmes-Imparted-to-Independent-Directors.pdf
KEY MANAGERIAL PERSONNEL
During the year under review, there were no changes in the Key Managerial Personnel (KMP) of your Company. The Board of Directors at their Meeting held on 26th May 2016 decided to relieve Mr. A V Kumar, Chief Financial Officer from service on his attaining superannuation w.e.f. 30th June 2016. In his place Mr. K R Anandan was appointed as Chief Financial Officer of the Company w.e.f. 1st July 2016.
NOMINATION AND REMUNERATION POLICY
Your Company has a Nomination and Remuneration Policy as required under Section 178(3) of the Act and the Listing Regulations. The details of the Policy are given in Annexure-II to this Report.
PARTICULARS OF REMUNERATION OF DIRECTORS, KMP AND EMPLOYEES
The information required under section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ended March 31, 2016 and forming part of this Report is given in Annexure-III to this Report.
STATUTORY AUDITORS
At the 44th Annual General Meeting held on 21st September
2015, the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company to hold office until the conclusion of the 45th AGM was ratified by the Members. The Company has received a certificate from the Auditors to the effect that it would be in accordance with the provisions of Section 141 of the Act, if they are appointed at the 45th AGM. In terms of Section 139 of the Companies Act, 2013, the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company for 2016-17, to hold office from the conclusion of the 45th AGM to the conclusion of the 46th AGM is being proposed.
boardâs reply to audit qualification Audit Qualification
We refer to Note No 2(b)(i) of the consolidated financial statements relating to non-consolidation of the financial statements of a subsidiary to reflect the adjustments relating to the period 1 April 2011 to 31 March 2016 due to the following reasons:
a) The proposed voluntary winding up of the step down subsidiary Company effective February 29, 2016 has been approved by their Shareholders and the Board of Directors of the subsidiary. The Board of Directors of the Holding
Company have also approved the commencement of the winding up of the subsidiary Company.
b) The preparation of the financial statements of the subsidiary Company on a going concern basis despite the intention of the ultimate holding Company to wind up the operations of the subsidiary Company. The independent auditor of the subsidiary Company has qualified his report for preparation of the accounts on a going concern basis for the years ended 31 March 2010 to 31 March 2015 and has also stated that there may be material adjustments required to the reclassification and carrying amount of assets and liabilities as disclosed in these consolidated financial statements. The impact of such adjustments, if any, is currently not ascertainable.
c) The Financial statements of the subsidiary for the year ended 31 March 2016 have not been prepared by the management for the reasons mentioned in the Note.
We are unable to determine the impact of the above matters on the consolidated financial statements for the year ended 31 March 2016
Our report on consolidated financial statements for the year ended 31 March 2015 was similarly qualified.
Reply:
The Company''s investments included Rs. 18453.62 lac (Previous Year Rs. 18453.62 lac) in equity share capital of SPIC Fertilizer and Chemicals Limited, Mauritius (SFCL Mauritius), which had invested in a wholly owned subsidiary Company viz, SPIC Fertilizer and Chemicals FZE, Dubai (SFC FZE, Dubai) in the earlier years, whose objective was production of ammonia and urea in Jebel Ali free zone, Dubai. Since the project did not materialize due to non allocation of gas, the said subsidiary Company had decided to be wound up as on 29 February 2016. SFCL Mauritius has approved the decision of SFC FZE, Dubai to effect winding up. The Board of Directors of Holding Company have also approved the commencement of winding up.
The independent auditor of SFCL Mauritius, in his audit report has expressed a qualified opinion regarding the preparation of financial statements on going concern basis for the years ended March 31, 2010 to March 31, 2015 and has stated that there may be material adjustment to the reclassification and carrying amount of assets and liabilities as disclosed in these consolidated financial statements, the impact of which cannot be assessed currently. The financial statements of SFC FZE, Dubai as on the date of winding up is under finalization and therefore the financial statements of SFCL Mauritius for the year ended March 31, 2016 are also under preparation.
In view of above matters, the accounts relating to subsidiary Company SFCL Mauritius included in the consolidated financial statements is as at March 31, 2011 which is based on management accounts and do not include the adjustments relating to the period April 1, 2011 to March 31, 2016. Necessary adjustments would be effected on completion of the winding up proceedings.
The Board of Directors of the Company at their Meeting held on 6th November 2015, had decided to wind up SFCL Mauritius and write off the investments subject to getting the approval of the Regulatory Authorities concerned.
Hence, the consolidated financial statements for the year ended 31st March 2016 do not include the consolidated accounts of the subsidiary Company - SFCL Mauritius as the control is intended to be temporary because the subsidiary is held with a view to its winding-up in near future.
COST AUDITOR
Mr. P R Tantri, Cost Accountant (M. No. 2403) was appointed as the Cost Auditor of the Company for 2015-16 to carry out the audit of your Company''s cost accounts and records. The Cost Audit Report for the year ended 31st March 2015 was filed within the time stipulated under the Act. The Board of Directors at their meeting held on 26th May 2016, on the recommendation of the Audit Committee, have appointed Mr. P R Tantri, Cost Accountant as Cost Auditor to audit the Cost Accounts and Records of the fertilizer business of your Company for the Financial Year 201617 at a remuneration of Rs.1,00,000/- plus reimbursement of actual out-of-pocket expenses for travelling and other expenses. As required under Section 148 of the Act and Rule 14 of the Companies (Audit & Auditors) Rules, 2014, ratification by Members is sought for the payment of remuneration to the Cost Auditor.
SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Act, and the Rules made there under, your Company has appointed Ms. B Chandra, Practicing Company Secretary, Chennai as Secretarial Auditor. The Secretarial Audit Report as furnished is given as Annexure-IV to this Report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in the Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Section 134 (3) of the Act, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the management confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) they have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively;
(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
There were no loans, guarantees given or investments made by the Company under Section 186 of the Act during the year under review.
RELATED PARTY TRANSACTIONS
The transactions entered into during the financial year with related parties as defined under the Act were in the ordinary course of business and at arm''s length basis. There are no material contracts / arrangements / transactions to be disclosed. Hence the provisions of Section 188 of the Act would not apply and disclosure in form AOC-2 is not required.
The Policy on Related Party Transaction as required under the Listing Regulations is available on the Company''s website under the we blink : http://spic.in/wp-content/uploads/2016/01/ Policy-on-Related-Parties.pdf
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes or commitments affecting the financial position of your Company that has occurred between the end of the financial year i.e., 31st March 2016 and the date of this Report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of Energy
An Energy Audit group, consisting of senior executives and certified energy auditors, is focusing on various energy saving measures. This group identifies potential areas for improvement, scans the environment for innovative and reliable solutions and considers proposal for implementation. Efforts are continuously being taken to reduce energy consumption in the plants
Some of the activities implemented during the year are:
-To avoid the energy loss through the exchangers, the coolers of loop refrigeration condenser (Top), the material of construction has been upgraded with Duplex Stainless steel make. Similarly, Degasser cooler, the material of construction has been upgraded with Austenitic Stainless steel make in the Ammonia plant.
- As energy conservation activity, Dissociate B inner shell was painted with 2 layers of ceramic coating in the Ammonia plant.
- Performance of all pumps and compressors were studied with our energy Audit group. Various energy saving technologies like provision of VFD, speed reduction, impeller trimming and smoothening the fluid passage with special coatings were implemented.
- Steam system audit were carried out periodically and the faulty traps and leaks has been addressed immediately.
Technology Absorption - Nil
Foreign Exchange Earnings and Outgo:
The foreign exchange earned in terms of actual inflows and the foreign exchange outgo in terms of actual outflows during the year:
(Rs.in Lakhs)
Particulars |
2015-16 |
2014-15 |
Foreign Exchange earned |
85.37 |
35.87 |
Foreign Exchange outgo |
1,25,377.23 |
1,44,982.17 |
INTERNAL FINANCIAL CONTROL & RISK MANAGEMENT SYSTEM
The Company has adequate internal financial control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are reviewed by Internal Auditors and reported to the Audit Committee of the Board, for identification of deficiencies and necessary time bound actions are taken to improve efficiency at all the levels. The Committee also reviews the internal auditors'' report, key issues, significant processes and accounting policies.
Risk Management is an integral part of the business process. The Company has constituted a Risk Management Committee and adopted a policy on risk management, identified and drawn mitigation plans to manage risk. The Audit Committee of the Board reviews the risk management report periodically.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.
CORPORATE GOVERNANCE
Corporate Governance Report 2015-16 along with the Certificate of the Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, confirming compliance of conditions of
Corporate Governance as stipulated in the Listing Regulations forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As a responsible corporate citizen, your Company in its Endeavour to contribute for the sustained development and growth of the Society has set out in its CSR Policy, plans in line with the provisions of the Act and the Rules there under. Your Company is not required to spend towards CSR activities, in view of absence of profits computed under Section 198 of the Act. However, the details of CSR initiatives undertaken by your Company voluntarily are given in Annexure-V to this Report.
PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS
Your Company has a structured framework for evaluation of the Individual Directors, Chairperson, Board as a whole and its Committees.
The Independent Directors at their Meeting held on 4th February 2016 evaluated the performance of Non Independent Directors, Board as a whole, Chairperson and assessing the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
The Board of Directors evaluated the performance of all Directors and the Board as a whole and its Committees were done through circulation of questionnaires, to assess the performance on select parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees. The evaluation criteria was based on the participation, contribution and offering guidance to and understanding of the areas which are relevant to the Directors in their capacity as Members of the Board/Committees.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, four Board Meetings were held, the details of which are provided in the Corporate Governance Report.
AUDIT COMMITTEE
The details of the Composition and Meetings of the Audit Committee held are provided in the Corporate Governance Report.
VIGIL MECHANISM
Pursuant to the provisions of Section 177 of the Act and the Listing Regulations, Whistle Blower Policy for Directors and employees to report genuine concerns or grievances has been put in place and a Vigil Mechanism established, the details of which are available on the website of the Company under we blink: http://spic.in/wp-content/uploads/2016/01/Whistle-Blower-Policy-and-Vigil-Mechanism.pdf
POLICY ON INSIDER TRADING
Your Company has a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company in line with SEBI (Prohibition of Insider Trading) Regulations, 2015.
POLICY ON SEXUAL HARASSMENT OF WOMEN (POSH) AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace. A policy is in place and an Internal Complaints Committee has been constituted which is monitoring the prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women (POSH) at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. There were no complaints reported under the POSH during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS Industry Overview
Indian Fertilizer Industry has been the backbone of Indian agriculture since the era of green revolution in 1960s. It has emerged as a world class industry in terms of state-of-the-art production technologies, high energy efficiency with excellent record in the areas of safety and environment; supporting the ever growing demand for Indian Agriculture, producing food grains, pulses, oil seeds, sugar, cotton, fruits, vegetables and plantation crops like rubber, tea, coffee, cardamom, etc. Currently, India is the second largest consumer of fertilizers and third largest producer of nitrogenous and phosphate fertilizers in the world.
During the fiscal year 2015-16, India produced a total Urea of 24.465 million ton which is 8.3% higher than the production recorded during the previous year. With the import of 8.474 million ton, which is less by 3.1% over the previous year; the total supplies to the market stood at 32.772 million ton which is higher by 6.24% higher than that of the previous year. The sale of urea during the year recorded 31.974 million ton which is 3.5 % higher than that of the previous year. (Source: Ministry of Chemicals and Fertilizers, Government of India).
Despite a significant increase in production and sales of Urea, the food grain production enhancement is only marginal for the year due to erratic and deficient monsoon.
Based on the third crop cutting survey for the year 2015-16 crop year (July - June) the total food grain production is estimated to 252.23 million ton, which is marginally higher by 0.21 million ton over the production of 252.02 million ton recorded during 2014-15.
Production of rice, coarse cereals, pulses, oilseeds, sugarcane, cotton and jute was lower than that of the previous year. However, the wheat crop recorded a higher harvest by 7.51 million ton over the previous year; compensating the reduction in the yields of other food crops during the crop year.
CHALLENGES
The completion of gas pipeline infrastructure by IOC and steady supply of gas are important requirements for stable operation of your Company. It is also proposed to undertake modernization of the Ammonia/Urea Plants to achieve lower energy consumption, to improve reliability and cost effective capacity expansion with Natural Gas as feedstock. This investment will have to be in line with the gas availability so that we are ready in time.
ACKNOWLEDGEMENT
Your Company is grateful for the co-operation and continued support extended by the Department of Fertilizers, Ministry of Chemicals and Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of Agriculture, Ministry of Corporate Affairs and other Departments of the Central Government, the Government of Tamilnadu, Governments of other States, Tamilnadu Industrial Development Corporation Limited,
Tamilnadu Generation and Distribution Corporation Ltd, Financial Institutions and Banks. The Directors appreciate the dedicated and sincere services rendered by all the employees of your Company.
For and on behalf of the Board of Directors
ASHWIN C MUTHIAH
Place : Chennai (DIN:00255679)
Date : 1 August, 2016 Chairman
Mar 31, 2015
Dear Members,
The Directors present their 44th Annual Report together with the
Audited Financial Statement of the Company for the year ended 31 March
2015.
FINANCIAL SUMMARY (Rs. in Crores)
Particulars 31.03.2015 31.03.2014
Revenue from operations 2094.16 1345.47
Add: Other income 8.64 8.48
Total Income 2102.80 1353.95
Profit before interest, depreciation 76.23 45.74
and tax
Less: Finance cost 28.26 20.92
Less: Depreciation and 30.39 43.67
amortisation expense
Add: Exceptional items - 84.71
Profit Before Tax 17.59 65.86
Less: Tax expenses - -
Profit After Tax 17.59 65.86
DIVIDEND
In view of the accumulated losses, the Board of Directors are not in a
position to recommend dividend on the Preference Share Capital and
Equity Share Capital of the Company.
RESERVES
There is no transfer of profits to the reserves.
STATE OF COMPANY'S AFFAIR Production
During the year under review, the plant had a steady run between 1
April 2014 to 30 September 2014 and again between 11 January 2015 to 31
March 2015. The stoppage of plant for 102 days was mainly due to delay
in Government according approval for continuation of subsidy for
Naphtha based Urea Plants. Urea production achieved during the year
2014-15 was 491,405 MTs compared to 285,923 MTs in the previous year.
Your Company earned a profit before tax of Rs.17.59 crores during the
year under review and the performance would have been much better but
for the stoppage of plant. Efforts are continuously being made to
augment working capital to enable sustained operations of your Ammonia
and Urea Plants. The plant operations were carried out mainly by
importing Naphtha and Furnace Oil. The reliability of plant operation
is expected to improve with the commissioning of a Naphtha Handling
Facility in the Tuticorin Port premises which will be taken on lease by
your Company. During the shutdown of Ammonia and Urea plants in the
third quarter of 2014-15, your Company undertook repairs and
maintenance activities to improve reliability, energy efficiency levels
and increase production.
Progress in conversion of ammonia plant from naphtha to gas:
Government is in the process of identifying the party to lay the gas
pipe line from Ennore to Tuticorin. Meanwhile, the Department of
Fertilizers has permitted the Naphtha based Urea plants to run on
Naphtha till such time the gas connectivity is established; but with a
cap on the Naphtha price which is linked to the average delivered RLNG
(Re-gasified Liquefied Natural Gas) price to the recently converted
plants. Your Company is in a state of readiness to complete the process
of conversion activities to use natural gas / mixed feedstock as and
when gas connectivity / availability is established.
PUBLIC DEPOSITS
There are no deposits covered under Chapter V of the Companies Act,
2013 ("the Act") during the year 2014-15, the details of which are
required to be furnished.
FINANCIAL STATEMENT OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE
COMPANIES
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies
(Accounts) Rules, 2014, the statement containing salient features of
the financial statements of the Company's subsidiaries', associates'
and joint ventures' (in Form AOC-1) is attached to the Financial
Statement. As regards the annual accounts of subsidiaries, refer Notes
to the Form AOC-1. During the year under review, no company has become
or ceased to be subsidiaries, associates and joint ventures companies.
The Board had approved the policy on Material Subsidiary as per the
Listing Agreement and is available on the Company's website under the
web link:
http://www.spic.in/Determining%20Material%20Subsidiary%20
Policy.pdf
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company are prepared in
accordance with Section 129 (3) of the Act and relevant Accounting
Standards Viz., AS-21 (Consolidated Financial Statements), AS-23
(Accounting for Investment in Associates in Consolidated Financial
Statements) and AS-27 (Financial Reporting of Interests in Joint
Ventures) issued by the Institute of Chartered Accountants of India and
forms part of the Annual Report.
SAFETY, HEALTH AND ENVIRONMENT
Adequate care and attention have been bestowed on matters relating to
safety, health and environment in the plant. Your Company has bagged 4
safety awards from Director of Industrial Safety and Health at a
function held in Chennai in November 2014, for the lowest accident days
during the previous years. Certification of ISO 9001 and ISO 14001
stage audit by External Auditors M/s. Det Norske Veritas (DNV) have
been completed and your Company is certified for ISO 9001 and ISO
14001.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
The Company considers its human resources as important asset and
endeavours to nurture, groom and retain talent to meet the current and
future needs of its business. The Company continues to provide a
conducive work environment and opportunities for professional
development of its employees through training and development.
Industrial Relations in the Company have been cordial during the year
under review. The number of employees as on 31st March, 2015 is 517.
EXTRACT OF ANNUAL RETURN
Form MGT-9 as on 31st March 2015 as required under Section 92 of the
Act is given in Annexure - I to this Report.
DIRECTORS
The Board of Directors, pursuant to Section 149 of the Act and on the
recommendation of the Nomination and Remuneration Committee appointed
Tmt Sashikala Srikanth and Brig (Retd) Harish Chandra Chawla as
Independent Directors on 8th September 2014 and Mr. Sumanjit Chaudhry
on 10th February 2015 for a period of five years subject to the
approval of the Members. The Board of Directors at their Meeting held
on 14th November 2014 appointed Tmt G Latha I.A.S, Nominee of TIDCO as
an Additional Director of the Company. Thiru S R Ramakrishnan,
Whole-time Director is liable to retire by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
re-election. Thiru K K Rajagopalan, Whole-time Director resigned from
the services of the Company and also as a Director with effect from
30th September 2014. The Directors placed on record the appreciation
for the invaluable services rendered by Thiru K K Rajagopalan during
his tenure as Whole-time Director of the Company.
Particulars relating to the appointment of Thiru S R Ramakrishnan, Tmt
Sashikala Srikanth, Brig (Retd) Harish Chandra Chawla, Thiru Sumanjit
Chaudhry and Tmt G Latha I.A.S are given in the annexure to the Notice.
All the Independent Directors of the Company on the date of this Report
have duly submitted the disclosures to the Board stating that they
fulfil the requirements enumerated under Section 149 (6) of the Act and
Listing Agreement, so as to qualify themselves to be appointed as
Independent Directors.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
Documents/Brochures, Reports and Internal Policies of your Company are
provided to the Directors to familiarise with the Company's procedures
and practices. Presentations are made at the Board/Committee Meetings,
on Company's performance, business strategy, risks involved and global
business environment. Presentations are also made to the Independent
Directors separately on the Company's business segments. Site visits
to plant location were organized to help the Independent Directors to
enhance their understanding of the operations of the Company. The
details of such familiarization programmes for Independent Directors
are available on the Company's website under weblink:
http://www.spic.in/Familiarisation%20Program%20for%20
Independent%20Directors.pdf
KEY MANAGERIAL PERSONNEL
During the year under review, the following changes took place in the
appointment / resignation of the Key Managerial Personnel (KMP) of your
Company:
Sl. Name of the KMP Designation
No
Appointed as Whole-time
1 S R Ramakrishnan Director w.e.f 30 July 2014
Ceased to be Whole-time
2 K K Rajagopalan Director and Director from
30th September 2014
Appointed as Chief
Financial Officer w.e.f. 1st
3 A V Kumar June 2014 in the place of
Mr. M S Sridhar, CFO
NOMINATION AND REMUNERATION POLICY
Your Company has a Nomination and Remuneration Policy for appointment
and remuneration of the Directors, Key Managerial Personnel and Senior
Executives of the Company including criteria for determining
qualifications, positive attributes, independence of a Director and
other related matters as required under Section 178(3) of the Act and
the Listing Agreement. The details of the Policy are given in Annexure
- II to this Report.
PARTICULARS OF REMUNERATION OF DIRECTORS, KMP AND EMPLOYEES
The information required under section 197(12) of the Act read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 and forming part of the Board's Report for the year ended March
31,2015 is given in Annexure - III to this Report.
STATUTORY AUDITORS
At the 43rd Annual General Meeting (AGM) held on 8th September 2014,
M/s. Deloitte Haskins & Sells, Chartered Accountants, were appointed as
Statutory Auditors of the Company to hold office until the conclusion
of the 45th AGM of the Company. The Company has received a certificate
from the Auditors to the effect that it would be in accordance with the
provisions of Section 141 of the Act if they are re-appointed at the
44th AGM. In terms of Section 139 of the Companies Act, 2013, the
appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as
Statutory Auditors of the Company shall be ratified by the Members at
every AGM and the resolution seeking ratification is being proposed.
DIRECTOR'S REPLY TO AUDIT QUALIFICATION Audit Qualification-I
Attention is invited to Note 2(b)(i) to the consolidated financial
statements describing non consolidation of the financial statements of
a subsidiary to reflect the adjustments relating to the period 1 April
2011 to 31 March 2015, as the said financial statements are not
available to the Company for the reasons explained in the said Note.
Our audit report for the previous year was also similarly qualified.
Reply
As Jebel Ali Free Zone Authorities (JAFZA) had taken over the assets of
SPIC Fertilizers and Chemicals (SFC) FZE, Dubai, the holding Company
SFCL Mauritius lost control over the subsidiary. Full provision has
been made for these investments in earlier years. The Company is
considering writing off the investments in SFCL Mauritius and is in the
process of getting the approval of the Regulatory Authorities
concerned, to write off the aforesaid investment in the books of
account. The accounts relating to the subsidiary company, SFCL
Mauritius included, in the consolidated financial statement is as at 31
March 2011 which are based on Management accounts and since the
financial statements from 1 April 2011 to 31 March 2015 are under
preparation, adjustments, if any, to liabilities, in the consolidated
financial statement for the said period has not been made in respect of
these two subsidiaries.
For the reasons mentioned in Note 2(b)(i) of the Notes to the
Consolidated Financial Statements since the Company has already made
provision in full for the said investment, the proposal to write off,
subject to requisite approval of Regulatory Authorities concerned is
not likely to affect the financial statements of your Company.
Subsequent to the date of the Statutory Auditors' Report, the annual
accounts of SFCL, Mauritius for the year ended 31 March 2010, 31 March
2011, 31 March 2012 and 31 March 2013 were approved by the Directors of
SFCL Mauritius on 29th May 2015 and also adopted by their Shareholders
on 2nd June, 2015.
Audit Qualification-II
With respect to a jointly controlled entity, the consolidated financial
statements carry long term loans and advances amounting to Rs. 211.59
lac, short term loans and advances of Rs.578.93 lac and current
liabilities of Rs. 160.86 lac relating to the consolidated financial
statements of the subsidiary company - Certus Investment & Trading
Limited, Mauritius and its two subsidiaries.
Based on the disclaimer of opinion given by the independent auditors of
the subsidiary of the jointly controlled entity, Certus Investment &
Trading Limited, Mauritius, we are unable to express our opinion on the
long term loans and advances amounting to Rs. 211.59 lac, short term
loans and advances of Rs.578.93 lacs and current liabilities amounting
to Rs. 160.86 lac included in the consolidated financial statements.
Reply
The Board of Directors of Tamilnadu Petroproducts Limited, a jointly
controlled entity have given the following reply with reference to the
qualification made by their Statutory Auditors:
"As regards the short term advance of Rs.3419.54 lakhs (proportionate
share of Rs.578.93 lakhs) carried in the Consolidated Financial
Statement (CFS), it has been confirmed that as on date the subsidiary
has recovered the entire dues. As regards the long term loans and
advances of Rs.1249.80 lakhs (proportionate share of Rs.211.59 lakhs)
in the CFS, which represent the advance paid to the technology partner
for knowhow, there is time till December 2016 to avail the same. It is
also being explored if the rights can be transferred to other
interested parties and hence at present no adjustment is deemed
necessary.
In the light of the above, it is expected that these matters will have
no impact on the Consolidated Financial Statement."
COST AUDITOR
Thiru P R Tantri, Cost Accountant was appointed as the Cost Auditor of
the Company for 2014-15 to carry out the audit of your Company's cost
accounts and records. The Cost Audit Report for the year ended 31st
March 2014 was filed within the time stipulated under the Act. The
Board of Directors, on the recommendation of the Audit Committee, have
appointed Thiru P R Tantri, Cost Accountant as Cost Auditor to audit
the cost accounts and records of the fertilizer business of your
Company for the Financial Year 2015-16 at a remuneration of
Rs.1,00,000/- plus reimbursement of actual out-of-pocket expenses for
travelling and other expenses. As required under Rule 14 of the
Companies (Audit & Auditors) Rules, 2014, approval of Members is sought
for the payment of remuneration to the Cost Auditor.
SECRETARIAL AUDIT REPORT
Secretarial Audit under Section 204 of the Act, for financial year
2014-15 was conducted by Ms. B Chandra, Practicing Company Secretary,
Chennai. The Secretarial Audit Report as furnished is given as Annexure
- IV to this Report. There are no qualifications, reservations or
adverse remarks made by the Secretarial Auditor in the Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Section 134 (3) of the Act,
your Directors to the best of their knowledge and belief and according
to information and explanations obtained from the management, confirm
that:
(a) in the preparation of the annual financial statements for the year
ended March 31, 2015, the applicable Accounting Standards had been
followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31,2015 and of the profit of the Company for
the year ended on that date;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(d) the Directors have prepared the annual accounts on a going concern
basis;
(e) the Directors have laid down proper internal financial controls to
be followed by the Company and such controls are adequate and operating
effectively;
(f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS
There were no loans, guarantees or investments made by the Company
under Section 186 of the Act during the year under review.
RELATED PARTY TRANSACTIONS
The transactions entered into during the financial year with related
parties as defined under the Act were in the ordinary course of
business and at arm's length basis. There are no material contracts /
arrangements / transactions to be disclosed. Hence the provisions of
Section 188 of the Act would not apply and disclosure in form AOC-2 is
not required.
The approval of the Members is being sought at the 44th AGM for the
transactions considered material as per Clause 49 of the Listing
Agreement. The policy on Related Party Transaction as required under
the Listing Agreement is available on the Company's website under the
weblink: http://www.spic.in/Policy%20on%20Related%20Parties.pdf.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY
There are no material changes or commitments affecting the financial
position of your Company that has occurred between the end of the
financial year i.e., 31st March 2015 and the date of this Report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO Conservation of Energy
An Energy Audit group, consisting of senior executives and certified
energy auditors, is focusing on various energy saving measures. This
group identifies potential areas for improvement, scans the environment
for innovative and reliable solutions and considers proposal for
implementation. Efforts are continuously being taken to reduce energy
consumption in the plants.
Some of the activities implemented during the year are:
- To avoid the energy loss through the exchangers, the coolers of
loop refrigeration condenser (bottom), the material of construction has
been upgraded with Duplex Stainless steel make. Similarly, syn gas
coolers (I/II Stage) & PAC intercooler (III Stage), the material of
construction has been upgraded with Austenitic Stainless steel make in
the Ammonia plant.
- To prepare the plant towards natural gas operation, all the
reformer and fired heater - burners were replaced with dual fuel fired
burners. These burners were designed for higher efficiency and lowest
emission.
- To reduce the stack temperature and to conserve energy, tubes of
the leaky cold air heater bundles of Ammonia plant boilers (3 boilers)
were replaced.
- As energy conservation activity, two of the old generation cooling
tower cells have been replaced in the Ammonia plant.
- Performance of all pumps and compressors were studied with our
energy Audit group. Various energy saving technologies like provision
of VFD, speed reduction, impeller trimming and smoothening the fluid
passage with special coatings were implemented.
Technology Absorption - Nil
Foreign Exchange Earnings and Outgo:
The foreign exchange earned in terms of actual inflows and the foreign
exchange outgo in terms of actual outflows during the
year: Rs.in Lakhs
Particulars 2014-15 2013-14
Foreign Exchange earned 35.87 66.67
Foreign Exchange outgo 1,44,982.17 80,920.17
INTERNAL FINANCIAL CONTROL & RISK MANAGEMENT SYSTEM
The Company has adequate internal control systems to monitor business
processes, financial reporting and compliance with applicable
regulations. The systems are periodically reviewed by the Audit
Committee of the Board, for identification of deficiencies and
necessary time bound actions are taken to improve efficiency at all the
levels.
The Committee also reviews the internal auditors' report, key issues,
significant processes and accounting policies.
Risk Management is an integral part of the business process. The
Company has constituted a Risk Management Committee and adopted a
policy on risk management, identified and drawn mitigation plans to
manage risk. The Audit Committee of the Board reviews the risk
management report periodically.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and Company's
operations in future.
CORPORATE SOCIAL RESPONSIBILITY
As a responsible corporate citizen, your Company in its endeavour to
contribute for the sustained development and growth of the Society has
set out in its Corporate Social Responsibility (CSR) Policy, plans in
line with the provisions of the Act and the Rules thereon. The details
of CSR initiatives undertaken by your Company is given in Annexure - V
to this Report
PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS
The Board on recommendation of the Nomination and Remuneration
Committee has structured a framework for evaluation of the Individual
Directors, Chairperson, Board as a whole and its Committees.
The Independent Directors at their Meeting held during March 2015
evaluated the performance of Non Executive Directors, Chairperson and
assessing the quality, quantity and timeliness of flow of information
between the Company Management and the Board that is necessary for the
Board to effectively and reasonably perform their duties.
The evaluation of the Directors and the Board as a whole and its
Committees were done through circulation of questionnaires, which
assessed the performance on select parameters related to roles,
responsibilities and obligations of the Board and functioning of the
Committees. The evaluation criterion was based on the participation,
contribution and offering guidance to and understanding of the areas
which are relevant to the Directors in their capacity as Members of the
Board/Committees.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, six Board Meetings were held on 28th May
2014, 30th July 2014, 8th September 2014, 14th November 2014, 10th
February 2015 and 24th March 2015.
AUDIT COMMITTEE
The Audit Committee comprises of 4 Members with 3 Independent Directors
and 1 Non-Executive Director viz.,
Name of the Director Designation Category
Thiruvalargal
S Shankar Chairman Independent
B Narendran Member Independent
Tmt Sashikala Srikanth Member Independent
(w.e.f. 8th Sept 2014)
T K Arun Member Non-Executive
VIGIL MECHANISM
Pursuant to the provisions of Section 177 (9) and (10) of the Act and
the Listing Agreement, Whistle Blower Policy for Directors and
employees to report genuine concerns or grievances is put in place and
a Vigil Mechanism established, the details of which are available on
the website of the Company under weblink:
http://www.spic.in/Whistle%20Blower%20
Policy%20and%20Vigil%20Mechanism.pdf.
POLICY ON INSIDER TRADING
Your Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company in line with SEBI (Prohibition
of Insider Trading) Regulations, 2015.
POLICY ON SEXUAL HARASSMENT OF WOMEN (POSH) AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and
has adopted a policy on prevention, prohibition and redressal of sexual
harassment at workplace in line with the provisions of Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the Rules framed thereunder. An Internal
Complaints Committee has been constituted and Orientation Programmes
were conducted in the Registered Office and the Plant site at
Tuticorin, for all female employees. The Members of the committee also
attended a Workshop conducted by CII's Women Network to familiarize
themselves with practices and procedures. There were no complaints
reported under the POSH.
MANAGEMENT DISCUSSION AND ANALYSIS Industry Overview
Indian Fertilizer Industry has been the backbone of Indian agriculture
since the era of green revolution in 1960s. It has emerged as a world
class industry in terms of state-of-the-art production technologies,
high energy efficiency with excellent record in the areas of safety and
environment supporting the ever growing demand for food
grain.Currently, India is the second largest consumer of fertilisers
and third largest producer of nitrogenous and phosphatic fertilisers in
the world.
For the year 2014-15 crop year (July - June period), India is expected
to record a decline in food-grain production of 3% at 257.07 MT,
compared to the highest ever food-grain production of 265.57 MT in
2013-14. The decline is due to lower production of rice, coarse cereals
and pulses on account of erratic rainfall conditions during the monsoon
season in 2014. Despite the indigenous production and import of
fertilisers which is on the rise, there is still a huge deficit in
indigenous production of fertilisers to meet the agricultural needs of
Indian farmers. The urea production for 2014-15 was 225.85 lakh MT as
compared to 227.15 lakh MT in the previous year while the GoI has
imported 72.89 lakh MT during 2014-15 compared to 70.88 lakh MT in
2013-14. (Source - Press Information Bureau, Ministry of Chemicals and
Fertilizers, GoI).
Globally, the nitrogenous fertiliser raw material prices have been on a
declining trend over the last one year. A comparison with the margins
of 2013-14 fiscal year shows that Indian fertilisers companies have
started reflecting the comfort of lower crude oil prices. Also, the
volatility in INR against USD throughout the year enabled the companies
to insulate from facing large fluctuations in the forex market. With
falling crude oil and natural gas prices, the quantum of subsidy will
come down. This factor along with growing demand for fertilisers might
benefit the fertiliser companies.
Challenges
During the year under review, your company did face some
uncertainties/challenges in the policy front due to delays in the
notification of subsidy continuation resulting in the stoppage of the
plants for 102 days. In the coming years Naphtha based Urea units,
would continue to face uncertainties for continuous operation;
especially in the procurement of Naphtha and Furnace Oil since the
price of gas to be considered for eligible subsidy would not be known
in advance. The frequent start- stop of an Ammonia/Urea complex due to
uneconomical price of Naphtha/Furnace Oil can be a deterrent in
addition to detrimental effects on the catalysts and equipment
operating at high temperatures and pressures. This would disrupt the
availability of much needed fertilizers. Hence your Company has flagged
the above issues to the GoI.
Regarding gas connectivity to your plant, Indian Oil Corporation has
been short listed by PNGRB (Petroleum and Natural Gas Regulatory Board)
to lay the Gas pipeline from Ennore to Tuticorin via Ramnad. Once the
contract is formally awarded, the Tuticorin - Ramnad section is likely
to be completed on priority in about 15 months time. This would help
your company to source about 0.6 - 0.9 MMSCMD of gas from ONGC, ahead
of the completion of IOC LNG Terminal at Ennore in mid 2018.
Since the Government has proposed to reduce the pre-set energy norm to
6.5 G Cal/MT of urea by 2018 from the present norm of 7.382 G Cal/MT,
your Company on a priority basis, has already initiated corrective
action to bring down the energy consumption.
During the current year (201 5-1 6) the budget allocation for subsidy
for indigenous urea is only Rs.34000 crore against Rs.36200 crore
allocated last year. If we factor in the carry over liability of last
year, increase in domestic gas price and the exchange rate
fluctuations, there could be an adverse impact on the disbursement of
Urea subsidy and consequently managing the working capital needs would
be a challenge.
ACKNOWLEDGEMENT
Your Company is grateful for the co-operation and continued support
extended by the Department of Fertilizers, Ministry of Chemicals and
Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of
Agriculture, Ministry of Corporate Affairs and other Departments of the
Central Government, the Government of Tamilnadu, Governments of other
States, Tamilnadu Industrial Development Corporation Limited, Tamilnadu
Generation and Distribution Corporation Ltd, Financial Institutions and
Banks. The Directors appreciate the dedicated and sincere services
rendered by all the employees of your Company.
For and on behalf of the Board of Directors
ASHWIN C MUTHIAH
Place : Chennai (DIN:00255679)
Date : 4 August, 2015 Chairman
Mar 31, 2014
The Directors present their 43rd Annual Report together with the
audited statement of accounts of the Company for the financial year
ended 31 March 2014.
OPERATING RESULTS (Rs. in Crore)
2013-14 2012-13
Income from Operations 1345.47 2076.08
Other Income 8.48 15.44
Total Income 1353.95 2091.52
Profit before interest,
depreciation and tax 45.74 34.83
Finance Cost 20.92 44.00
Depreciation 43.67 43.45
Exceptional items 84.71 1157.75
Profit before tax 65.86 1105.13
Provision for tax  Â
Profit/ (Loss) after tax 65.86 1105.13
In terms of the Company''s Scheme of Compromise and Arrangement with
Creditors under Sec. 391 and other relevant provisions of the Companies
Act, 1956 approved by the Hon''ble Hight Court of Madras by its Order
dated 16 August 2012, the Creditors under the Scheme as of 1 April 2013
were to be paid over a period of 46 quarterly instalments from 6 Jan
2013 with an option to prepay the settlement amount at any time after
the expiry of two years from the date of commencement.The Hon''ble High
Court of Madras vide its Orders dated 26 Aug 2013 and 6 Dec 2013
permitted the Company to exercise pre-payment option even before the
expiry of two years.The Company thereafter effected fi nal payments by
March 2014 to all the remaining Creditors in accordance with the
approved Scheme, leaving no further liability. Arising out of the above
settlement, a sum of Rs.9158.61 lakhs was settled to the Creditors in
line with the Scheme. Consequently, a sum of Rs.11692.51 lakhs being
the excess liability has been written back during the current year as
an exceptional item. The Trust Deed dated 2 Jan 2013 executed by the
Company to create charge in favour of such remaining Creditors on the
Specified Assets through the Trust was terminated effective 27 March
2014, consequent to payment to Creditors in full as per the Scheme.
Production
During the year under review, the plant could not be run continuously
on account of working capital constraints and raw-material shortage.
The plant was shutdown from the beginning of the financial year for a
period of 106 days till 15 July 2013 and from 30 October 2013 to 8
February 2014. Working Capital constraints caused by delayed subsidy
disbursement issues affected raw materials supply. These factors
affected the production performance of your Company. Urea production
achieved during the year 2013-14 was 2,85,923 MTs compared to 4,81,920
MTs in the previous year. Efforts are being made to augment working
capital to enable sustained operations of your Company''s Ammonia and
Urea plants.
The previous year''s profits included a write-back of excess liability
of an exceptional nature of Rs.1157.75 Crores to the Statement of Profi
t & Loss and a corresponding write-back of Rs.116.92 Crores to the
Statement of Profit & Loss has been made on account of full and fi nal
settlement with Creditors under the Scheme. Hence, the comparable profi
t before tax for the current year would be Rs.65.86 Crores as against
Rs.1105.13 Crores for the previous year.
Promoters'' contribution:
During the year, the Promoters have brought in Rs.28.35 Crores by way
of loan for meeting re-payment obligations to the Creditors as per the
Scheme.
Conversion of Ammonia plant from Naphtha to Gas:
Study for converting the Feedstock of Ammonia plant from Naphtha to
Mixed Feedstock (Natural Gas/Naphtha with any combination) and the
basic engineering have been completed with the detailed engineering
nearing completion. Procurement activity for long lead items is in
progress. Civil Foundation for long lead items has been completed.
However, in the absence of fi rm allocation of gas, carriers are averse
to commit huge capital in laying pipeline for transporting gas to your
Plant. The Department of Fertilizers is also seized of the matter.
As per the New Pricing Scheme III introduced by Dept. of Fertilizers,
all Naphtha based urea producing fertilizer plants are required to
switch over to gas to avail any subsidy beyond 30 June 2014.
Representations have been made to Government of India to continue
disbursing subsidies till such time Government of India allocates gas
on assured basis to the plant and switch over to gas based production.
The representation is under consideration of the Government of India.
Agri-business Division
The performance of the Division which was affected by acute power
shortage achieved a turnover of Rs.5.58 Crores as against Rs.13.85
Crores in the previous year.
SUBSIDIARIES / JOINT VENTURES / INVESTMENTS
SPEL Semiconductor Limited (SPEL)
SPEL accounted sales of Rs.63.39 Crores with a profit of Rs.0.32
Crores for the year 2013-14.
Subsequent to the approval of the shareholders in the Extra Ordinary
General Meeting on 30 Dec 2013, and as approved by SEBI, the entire
equity shares of SPEL held by the Company were sold to M/s Natronix
Semiconductor Technology Private Limited, Singapore at Rs.7.62 per
share for a total consideration of Rs.1966.81 lakhs.
Tamilnadu Petroproducts Limited (TPL)
During the year 2013-14 TPL''s revenue from operations was Rs.1051.82
crore against Rs.1281.42 crore in the previous year. TPL incurred a net
loss of Rs.37.30 crore vis-a-vis the net loss of Rs. 50.56 crore during
the year 2012-13. The Company made an operating profit of Rs. 5 crore
against operating loss of Rs. 34 lakh in FY 2012-13. TPL''s operations
continued to be affected due to large scale import of Linear Alkyl
Benzene and Caustic soda into India. In spite of this TPL could bring
down the losses through concerted efforts to cut the cost and also
ensure the best possible market realization.
Tuticorin Alkali Chemicals and Fertilisers Limited
Due to non-availability of raw material and labour unrest, its Plant
could be operated for only 62 days during the financial year, when
9775 MT of Soda Ash and 7672 MT of Ammonium Chloride were produced.
Measures were taken to reduce the overheads and sales of only Rs.27
Crores could be achieved.
SPIC FERTILIZERS AND CHEMICALS LTD., MAURITIUS (SFCL, MAURITIUS) AND
SPIC FERTILIZERS AND CHEMICALS FZE, DUBAI (SFC FZE)
The Company had invested in the equity share capital of SPIC
Fertilizers and Chemicals Limited, Mauritius which in turn invested in
its wholly owned subsidiary, SPIC Fertilizers and Chemicals (SFC) FZE,
Dubai for putting up a fertiliser complex. As the Project did not
materialise, Jebel Ali Free Zone Authority (JAFZA) in Dubai, had taken
over the land, plant & machinery of SFC FZE and the company did not
have any other option in the matter. The Promoters viz., SPIC and the
Emirates Trading Agency, Dubai have jointly decided to close the
operations of SFC FZE, Dubai.
SPIC Petrochemicals Limited (SPIC Petro)
The assets and effects of SPIC Petro were taken over by the Offi cial
Liquidator (OL) during May 2010. Pursuant to Order dated 20 December
2010 passed by the Hon''ble High Court of Madras, ARCIL [Asset
Reconstruction Company (India) Limited] took possession of the assets
and effects of SPIC Petro during January 2011. On the application fi
led by Chennai Petroleum Corporation Limited to set aside the above
said Order, an interim stay was granted by the Hon''ble High Court of
Madras restraining ARCIL from selling the land belonging to SPIC Petro.
ARCIL had fi led its counter and the case is still pending in the
Court.
General exemption under Section 212 of the Companies Act, 1956:
Pursuant to the general exemption granted to companies in the General
Circular No.51/12/2007 dated 8 February, 2011 issued by the Ministry of
Corporate Affairs, Government of India and the resolution passed by the
Board of Directors at its meeting held on 28 May, 2014, the Balance
Sheet, Statement of Profit and Loss and other documents of the
subsidiary companies are not being attached with the Company''s Annual
Report. However, the financial information of the subsidiary
companies is disclosed in the Annual Report in compliance with the
above said circular. The Company will make available the said documents
to any Member of the Company, who may be interested in obtaining the
same. The said documents will also be kept open for inspection by any
Member of the Company / its subsidiary(ies), at the Registered Office
of the Company and that of the respective subsidiary companies.
DIVIDEND
In view of the accumulated losses, the Board of Directors are not in a
position to recommend dividend on the Preference Share Capital and
Equity Share Capital of the Company.
SAFETY, HEALTH AND ENVIRONMENT
There have been no safety, health and environment issues in the plant.
The Company was awarded fi rst prize in Group A (belongs to Industries
working for more than 5 lakh man- hours in a year) by the State for the
year 2010 and State Safety Award for 2012.
ISO 9001 and ISO 14001 stage audit by External Auditors have been
completed and we await their certifi cation.
PUBLIC DEPOSITS
As on 31 March 2014, there were no outstanding public deposits.
HUMAN RESOURCE DEVELOPMENT
The Company considers its human resources as important asset and
endeavours to nurture, groom and retain talent to meet the current and
future needs of its business. The Company continues to provide a
conducive work environment and opportunities for professional
development of its employees through training and development.
INDUSTRIAL RELATIONS
Industrial Relations in the Company has been cordial during the year
under review.
DIRECTORS'' RESPONSIBILITY STATEMENT
In accordance with the requirements of Section 217(2AA) of the
Companies Act, 1956, the Directors of the Company declare that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31 March 2014.
(iii) the Directors have taken proper and suffi cient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the annual accounts on a ''going
concern'' basis.
AUDITORS
Your Company''s Auditors, Deloitte Haskins & Sells, Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and are eligible for re-appointment.
DIRECTORS
Since the date of the last Directors'' Report, Thiru M S Shanmugam, IAS,
Nominee of TIDCO resigned as Director of the Company. The Board of
Directors at their meeting held on 28 May 2014 accepted the resignation
of Thiru M S Shanmugam, IAS. The Board of Directors placed on record
the invaluable services rendered by Thiru M S Shanmugam, IAS during his
tenure as Director of the Company.
Thiru B Elangovan, Nominee Director of TIDCO shall retire by rotation
at the ensuing Annual General Meeting and being eligible, offers
himself for re-election. Particulars relating to the appointment of
Thiru B Elangovan seeking re-election at the ensuing Annual General
Meeting are furnished in the annexure to the Notice. As required under
the provisions of Companies Act, 2013, Thiru B Narendran and Thiru S
Shankar have been proposed for appointment as Independent Directors for
a period of 5 years from the date of 43rd Annual General Meeting.
The Board of Directors at their meeting held on 30 July 2014 co-opted
Thiru S R Ramakrishnan as Additional Director and appointed him as
Whole-time Director of the Company for a period of three years from 30
July 2014 on certain terms and conditions, subject to the approval of
the shareholders and such other approval as may be required. Pursuant
to Sec. 161 of the Companies Act, 2013, the term of his Office as
Additional Director will be upto the ensuing 43rd AGM. It is therefore
proposed to appoint him as Director, liable to retire by rotation and
seek approval of the shareholders.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under
review, as stipulated under Clause 49 of the Listing Agreement with the
National Stock Exchange of India Limited is presented in a separate
section forming part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS21 on Consolidated
Financial Statements read with Accounting Standard AS23 on Accounting
for investments in associates in Consolidated Financial Statements and
AS27 on Financial reporting of interests in Joint Ventures, the audited
Consolidated Financial Statements are provided in the Annual Report.
Jebel Ali Free Zone Authorities (JAFZA) had taken over the assets
of SFC FZE, Dubai. SPIC Petro is under liquidation as per Order dated
17 April 2009 passed by the Hon''ble High Court of Madras. Subsequently,
ARCIL took possession of the assets from the Offi cial Liquidator on 4
January 2011. Therefore the financial statements of subsidiary
companies, SFCL, Mauritius and SPIC Petro have not been considered for
consolidation. However, full provision had already been made in the
earlier years. The Consolidated Financial Statements include financial
results of other subsidiary companies.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
In terms of Section 217(1)(e) of the Companies Act, 1956, read with
Rule-2 of the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules 1988, information relating to conservation of
energy is set out in the annexure forming part of this Report. There is
no information to provide in respect of technology absorption, foreign
exchange earnings and outgo and research and development.
PARTICULARS OF EMPLOYEES
Statement giving details of Employees of the Company in receipt of
remuneration in excess of the amount prescribed by Section 217 (2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended is enclosed.
COST AUDITOR
Thiru P R Tantri, Cost Accountant, Bengaluru was appointed as the Cost
Auditor of the Company for the financial year 2013- 14 pursuant to
Section 233B of the Companies Act, 1956 to carry out the audit of your
Company''s cost records. The Cost Audit report for the year ended 31
March 2013 certifi ed by Thiru P R Tantri was fi led on 30 September
2013 with the Ministry of Corporate Affairs.
ACKNOWLEDGEMENT
Your Company is grateful for the co-operation and continued support
extended by the Department of Fertilizers, Ministry of Chemicals and
Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of
Agriculture, Ministry of Corporate Affairs and other Departments of the
Central Government, the Government of Tamilnadu, other State
Governments, Tamilnadu Industrial Development Corporation Limited,
Tamilnadu Generation and Distribution Corporation Ltd (formerly
Tamilnadu Electricity Board), ARCIL, Financial Institutions and Banks.
The Directors appreciate the dedicated and sincere services rendered by
all the employees of your Company.
For and on behalf of the Board of Directors
Place : Chennai ASHWIN C MUTHIAH
Date : 30 July, 2014 Chairman
Mar 31, 2013
The Directors present their 42nd Annual Report together with the
audited statement of accounts of the Company for the financial year
ended 31 March 2013.
OPERATING RESULTS
(Rs. in crore)
2012-13 2011-12
Income from Operations 2076.08 3308.91
Other Income 15.44 13.79
Total Income 2091.52 3322.70
Profit before interest,
depreciation and tax 34.83 161.06
Finance Cost 44.00 80.24
Depreciation 43.45 61.21
Excess Liability Written back 1157.75
Profit before tax 1105.13 19.61
Provision for tax 25.92
Profit/ (Loss) after tax 1105.13 (6.31)
To revive your Company which was affected over the years by
under-performance of various investments and considering the need to
protect the interest of the stakeholders and employees, a Scheme of
Compromise and Arrangement was filed under Section 391 of the Companies
Act, 1956 (SCHEME). The SCHEME was approved by the Hon''ble Madras High
Court vide its Order dated 16 August 2012. Based on the options
exercised by the creditors under the SCHEME, your Company has commenced
payment of dues as per the settlement terms of the SCHEME. As of 31
March 2013 an amount Rs.132.76 crore has been paid to the creditors.
During the year under review, the plant could not be run continuously
on account of working capital constraints, water and raw-material
shortage. The plant was shutdown for a period of 53 days from August to
October 2012, due to water shortage arising out of failure of monsoon
and stoppage of water supply by Tamil Nadu Water Supply and Drainage
Board. Working Capital constraints caused by subsidy disbursement
issues affected raw materials supply and led to stoppage of plants from
2 March 2013 onwards to date. These factors affected the production
performance of your Company. Urea production achieved during the year
2012-13 was 4,81,820 MTs only compared to 6,20,407 MTs in the previous
year. Efforts are being made to augment working capital to enable
commencement of operations of your Company''s Ammonia and Urea plants.
Your Company recorded a revenue of Rs.2076.08 crore and profit before
tax of Rs. 1105.13 crore for the current year as against previous
year''s revenue of Rs.3308.91 crore and profit before tax of Rs.19.61
crore. Previous year''s revenue also included revenue from operations of
SPIC Maintenance Organisation and Phosphatics Division which were hived
off during that year. Hence, the comparable numbers for the previous
year would be a revenue of Rs.2455.15 crore and a loss before tax of
Rs. 13.24 crore. During the year, there was a write back of excess
liability of exceptional nature of Rs. 1157.75 crore to the Profit and
Loss Account, on account of the settlement with creditors under the
SCHEME. Your Company therefore posted a profit after tax of Rs. 1105.13
crore in comparison to a loss after tax of Rs.6.31 crore in the
previous year.
Promoters'' contribution :
During the year, the Promoters brought in Rs.65.23 crore by subscribing
to Warrants convertible into equity shares, issued on preferential
basis and Rs.71.48 crore by way of loans for meeting the Working
Capital requirement and payment obligations to the Creditors as per the
SCHEME.
Fertilizer Policy - Conversion of Ammonia plant from Naptha to Gas:
As per the proposed "Modified NPS III Policy" for Urea, all Naptha /
Fuel Oil based plants producing Urea will be given time till March 2014
to convert to Gas based plants. Your Company has therefore approached
the Department of Fertilizers (DoF) for firm allocation of gas to the
Unit and to get gas connectivity to the factory in Tuticorin by
creating necessary infrastructure. The process involves modification of
desulphurising and reforming sections of your Company''s Ammonia Plant,
besides changing fuel burners to dual burners. To equip itself to
receive the gas as and when the pipe line connectivity is established,
land has been acquired and the basic engineering completed. Detailed
Engineering is nearing completion and the procurement activity for long
lead items has been initiated.
Pharmaceuticals Division
After acquisition of the Pen-G Unit by M/s Asset Reconstruction Company
(India) Ltd and closure of the API Unit due to restrictions imposed by
Pollution Control Board, the Pharmaceuticals Division had in its fold
only the Formulations and Enzymes Units. However, due to low demand for
Formulation products and uncertain power situation, the Formulations
operations were discontinued from 2 April 2012. The Enzymes Unit was
sold in December 2012 in view of the business becoming unviable.
Agri-business Division
The performance of the Division which was affected by acute power
shortage achieved a turnover of Rs. 13.85 crore as against Rs. 15.21
crore in the previous year,
SUBSIDIARIES / JOINT VENTURES / INVESTMENTS
SPEL Semiconductor Limited (SPEL)
SPEL accounted sales of Rs.80.77 crore with a loss of Rs.4.55 crore for
the year 2012-13. This was owing to global semiconductor sales for 2012
decreasing by 2.6% to US$ 299.9 Billion (according to Gartner Inc), due
to poor market condition.
Tamilnadu Petroproducts Limited (TPL)
During the year 2012-13 TPUs revenue from operations was Rs.1281.42
crore against Rs. 1248.19 crore in the previous year. TPL incurred a
net toss of Rs.50.56 crore vis-a-vis the net profit of Rs.5.94 crore
during 2011-12. The company''s operations were affected mainly due to
crude price increase, escalations in other input costs, dumping, higher
cost of alternate power to meet energy shortage, exchange losses, etc.
which could not be passed on to the customers on account of competition
from overseas suppliers.
Tuticorin Alkali Chemicals and Fertilisers Limited (TAC)
During the year 2012-13, their Plant could be operated only for 235
days, primarily due to non-availability of Carbon-di- oxide from SPIC.
The company produced 56,750 MTs of Soda Ash and 50,226 MTs of Ammonium
Chloride, representing 49% capacity utilization. The turnover was
Rs.155.91 crore with a net loss Rs.21.77 crore. BIFR (Board for
Industrial and Financial Reconstruction) proceedings are in progress.
SPIC Fertilizers And Chemicals FZE, Dubai (SFC FZE) and SPIC
Fertilizers And Chemicals Ltd., Mauritius (SFCL, Mauritius)
During the first quarter of the financial year 2010-11, as part of
recovery process, the Jebel Ali Free Zone Authority (JAFZA) in Dubai,
had taken over the land, plant & machinery of SFC FZE and the company
did not have any other option in the matter. The Promoters, viz., SPIC
and the Emirates Trading Agency, Dubai have jointly decided to close
the operations of SFC FZE, Dubai.
SPIC Petrochemicals Limited (SPIC Petro)
The assets and effects of SPIC Petro were taken over by the Official
Liquidator (OL) during May 2010, Pursuant to Order dated 20 December
2010 passed by the Hon''ble High Court of Madras. ARCIL [Asset
Reconstruction Company (India) Limited] took possession of the assets
and effects of SPIC Petro during January 2011. On the application filed
by Chennai Petroleum Corporation Limited to set aside the above said
Order, an interim stay was granted by the Hon''ble High Court of Madras
restraining ARCIL from selling the land belonging to SPIC Petro. ARCIL
has filed its counter and the case is still pending in the Court.
General exemption under Section 212 of the Companies Act, 1956:
Pursuant to the general exemption granted to companies in the General
Circular No. 51/12/2007 dated 8 February 2011 issued by the Ministry of
Corporate Affairs, Government of India and the resolution passed by the
Board of Directors at its meeting held on 29 May 2013, the Balance
Sheet, Statement of Profit and Loss and other documents of the
subsidiary companies are not being attached with the Company''s Annual
Report. However, the financial information of the subsidiary companies
is disclosed in the Annual Report in compliance with the above said
Circular. The Company will make available the said documents to any
Member of the Company, who may be interested in obtaining the same. The
said documents will also be kept open for inspection by any Member of
the Company / its subsidiary(ies), at the Registered Office of the
Company and that of the respective subsidiary companies.
PREFERENTIAL ALLOTMENT OF SECURITIES
1. During the year under review, in line with the rework package
approved by Corporate Debt Restructuring Empowered Group,
- On 27 April 2012, 12,631 Equity Shares of Rs.10/- each at a premium
of Rs.9/- per share, fully paid up were allotted to Industrial
Investment Bank of India (IIBI) pursuant to the approval of the
shareholders at the Annual General Meeting held on 16 November 2011, by
way of conversion of debt of Rs.2.40 lac into equity. IIBI later
assigned its financial exposure in the Company to M/s Edelweiss Asset
Reconstruction Company Limited during July 2012.
- On 9 November 2012, 72,631 Equity Shares of Rs.10/- each at a premium
of Rs.9/- per share, fully paid up were allotted to United India
Insurance Company Limited pursuant to the approval of the shareholders
at the Annual General Meeting held on 26 September 2012 by way of
conversion of debt of Rs.13.80 lac into equity.
2. Your Company allotted equity shares to a company belonging to
Promoters'' group, on preferential basis, pursuant to the approval of
the shareholders at the Annual General Meeting held on 26 September
2012 as detailed below:
- On 10 January 2013, 74,55,350 Equity Shares of Rs.10/- each were
allotted by way of part conversion of 1,49,10,700 Warrants that were
issued on 11 October 2012;
- On 13 March 2013, 74,55,350 Equity Shares of Rs.10/- each were
allotted by way of conversion of the balance 74,55,350 Warrants issued
under (a) above; and
- On 13 March 2013, 2,23,66,000 Equity Shares of Rs.10/- each were
allotted by way of full conversion of 2,23,66,000 Warrants that were
issued on 7 March 2013 on receipt of requisite Exemption Order from
SEBI.
DIVIDEND
In view of the accumulated losses, the Board of Directors are not in a
position to recommend dividend on the Preference Share capital and
Equity Share capital of the Company.
SAFETY, HEALTH AND ENVIRONMENT
Won Award for "Longest accident free man-hours worked for the year
2008", from National Safety Council, Tamilnadu Chapter. The online
Ambient air quality monitoring system was erected and uploaded to Care
Air Centre - Tamil Nadu Pollution Control Board.
DISCONTINUED OPERATIONS
Discontinuance of Formulations and Enzymes'' operations of Pharma
Division are covered under ''Pharmaceuticals Division''.
PUBLIC DEPOSITS
As on 31 March 2013, there were no outstanding public deposits and the
overdue unclaimed deposits covering 6 depositors, amounted to Rs. 0.52
lac.
HUMAN RESOURCE DEVELOPMENT
The Company considers its human resources as important assets and
endeavours to nurture, groom and retain talent to meet the current and
future needs of its business. The Company provides a conducive and
challenging work environment and opportunities for professional
development of its employees through training and development.
INDUSTRIAL RELATIONS
Industrial Relations in the Company has been cordial during the year
under review.
DIRECTORS'' RESPONSIBILITY STATEMENT
In accordance with the requirements of Section 217(2AA) of the
Companies Act, 1956, the Directors of the Company declare that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of. the Company as at 31 March 2013.
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the. Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the annual accounts on a ''going
concern'' basis.
AUDITORS
Your Company''s Auditors, Deloitte Haskins & Sells , Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and are eligible for re-appointment.
DIRECTORS
Since the date of the last Directors'' Report, Thiru M Jayasankar
resigned as Director of the Company. The Board of Directors at their
meeting held on 29 May 2013 accepted the resignation of Thiru M
Jayasankar and in his place Thiru S Shankar was appointed as an
Independent Director in the casual vacancy caused by the resignation.
The Board of Directors placed on record the invaluable services
rendered by Thiru M Jayasankar during his tenure as Director of the
Company.
Thiruvalargal B Narendran and M S Shanmugam, IAS, Directors shall
retire by rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for re-election. In accordance with Clause
49 of the Listing Agreement, Particulars relating to the appointment of
Thiruvalargal Narendran and Shanmugam, IAS seeking re-election at the
ensuing Annual General Meeting are furnished in the annexure to the
Notice.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review
as stipulated under Clause 49 of the Listing Agreement with the
National Stock Exchange of India Limited is presented in a separate
section forming part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS21 on Consolidated
Financial Statements read with Accounting Standard AS23 on Accounting
for investments in associates in Consolidated Financial Statements and
AS27 on Financial reporting of interests in Joint Ventures, the audited
Consolidated Financial Statements are provided in the Annual Report.
Jebel AN Free Zone Authorities (JAFZA) had taken over the assets of SFC
FZE, Dubai. SPIC Petro is under liquidation as per Order dated 17 April
2009 passed by the Hon''ble Madras High Court. Subsequently, ARCIL took
possession of the assets from the Official Liquidator on 4 January
2011. Therefore the financial statements of subsidiary companies, SFCL,
Mauritius and SPIC Petro have not been considered for consolidation.
However, full provision had already been made in the earlier years. The
Consolidated Financial Statements include financial results of other
subsidiary companies.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
In terms of Section 217(1)(e) of the Companies Act, 1956, read with
Rule-2 of the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules 1988, information relating to conservation of
energy is set out in the annexure forming part of this Report. There is
no information to provide in respect of technology absorption, foreign
exchange earnings and outgo and research and development.
PARTICULARS OF EMPLOYEES
No employee of the Company was in receipt of remuneration in excess of
the amount prescribed by Section 217 (2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules,1975, as amended.
COST AUDITOR
Thiru P R Tantri, Cost Accountant, Bengaluru was appointed as the Cost
Auditor of the Company for the financial year 2012-13 pursuant to
Section 233B of the Companies Act, 1956 to carry out the audit of your
Company''s cost records. The Cost Audit report for the year ended 31
March 2012 certified by Thiru P R Tantri was filed on 31 January 2013
with the Ministry of Corporate Affairs.
ACKNOWLEDGEMENT
Your Company is grateful for the co-operation and continued support
extended by the Department of Fertilizers, Ministry of Chemicals and
Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of
Agriculture, Ministry of Corporate Affairs and other departments of the
Central Government, the Government of Tamilnadu, other State
Governments, Tamilnadu Industrial Development .Corporation Limited,
Tamilnadu Electricity Board, ARCIL, Financial Institutions and Banks.
The Directors appreciate the dedicated and sincere services rendered by
all employees of your Company.
For and on behalf of the Board of Directors
Place : Chennai ASHWIN C MUTHIAH
Date :29May2013 Chairman
Mar 31, 2012
The Directors present their 41st Annual Report together with the
audited statement of accounts of the Company for the financial year
ended 31 March 2012.
OPERATING RESULTS
(Rs. in Crore)
2011-12 2010-11
Income from Operations 3308.91 1743.39
Other income 13.79 14.46
Total income 3322.70 1757.85
Profit before interest, depreciation 161.06 197.91
and tax
Finance Cost 80.24 26.98
Depreciation 61.21 88.95
Profit before tax 19.61 81.98
Provision for tax 25.92 -
Profit/(loss) after tax (6.31) 81.98
FINANCE
The Company recorded a revenue of Rs.3308.91 Crore and profit before
tax of Rs.19.61 Crore as against previous year revenue of Rs.1743.39
Crore and profit before tax of Rs.81.98 Crore respectively. The
Company's profit from ordinary activities before finance cost and
exceptional items is Rs.71.59 Crore as against Rs.3.11 Crore in the
previous year. The improvement in the profit is mainly due to Urea
Plant operating at its full capacity coupled with energy efficiency
measures undertaken by the Company. The Company incurred a loss of
Rs.6.31 Crore in comparison to Profit after tax of Rs.81.98 Crore in
the previous year. The loss is mainly due to provision for exchange
currency fluctuation of Rs.61.75 Crore, Interest of Rs.34.46 Crore on
delayed payment to secured lenders (included in the Finance Cost) and
provision for MAT pertaining to earlier periods amounting Rs.25.92
Crore. The above results include both continuing and discontinuing
operations.
The Company fi led a Scheme of Compromise and Arrangement with certain
creditors u/s 391 of the Companies Act, 1956 during December 2011
before the Hon'ble High Court, Madras and pursuant to the directions of
the Hon'ble High Court, the meeting of the creditors of the Company was
held on 24 February 2012 at Chennai. The Scheme was approved by the
requisite majority of creditors and thereafter the Company has fi led a
Petition before the Hon'ble High Court, Madras for the sanction of the
Scheme and the Order is awaited.
OPERATIONS:
Fertilizer Division
The Nitrogenous Plants which recommenced its operations during October
2010 achieved a production of 6.204 Lac MT (recording 100% of its
re-assessed capacity). The Fertilizer division achieved a turnover of
Rs.3096.96 Crore.(including other income) earning an operational profit
(before exceptional items) of Rs.137.96 Crore. The results of the
Phosphatic division, till divestment during October 2011, are included
in the above results.
The production and sales performance of the Fertilizer Division are as
follows:
Qty in MT
Product Category 2011-12 2010-11
Production 620407 #297650
Urea
Sales 627442 290529
Production 106521* **31116
DAP
Sales 106579* 30974
Complex Production 124377* 175566
Fertilizer
Sales 127903* 171294
Production 490* 14528
SSP
Sales 8751* 5074
Alf Production 2248* 3388
3
Sales 2228* 4656
Gypsum Sales 85667* 205371
*Until divestment # Production recommenced during October 2010 **
Production recommenced during November 2010 Fertilizer Policy
The Government is proposing to implement "Modified NPS III Policy"
for Urea shortly and it is expected that all Naphtha and Fuel Oil based
plants producing Urea will be granted time till March 2014 to convert
to Natural Gas. Your Company has taken up with Department of
Fertilizers (DoF) for firm allocation of gas to your Company and also
for creating necessary gas transportation infrastructure in the State
of Tamil Nadu to facilitate gas connectivity to your Company. The
Company has engaged a leading Process Engineering Company to carryout
basic engineering for gas conversion, to make your Company ready to
receive the gas as and when the pipe line connectivity is established.
Pharmaceuticals Division
SPIC's Pharmaceuticals Division comprises of Penicillin-G (Pen-G),
Active Pharmaceutical Ingredients (APIs), Formulations and Industrial
Enzymes. Pen-G: The plant could not be restarted and the operations
were discontinued due to competition from cheap Chinese imports, low
market prices, high cost of inputs and non-imposition of anti-dumping
duty. The assets of the division at Cuddalore were taken over by Asset
Reconstruction Company (India) Limited (ARCIL) during the year. API:
The operations have not been carried out during the year owing to
environmental constraints and restrictions imposed by Pollution Control
Board. Formulations: Due to low demand for its products and uncertain
power situation, the operations have been discontinued. Enzymes: The
operations are being discontinued in view of uneconomical business size
and constraints of fund infusion for revival/restart-up of the
operations.
Agri-business Division
The Division achieved higher turnover of Rs.15.21 Crore as against
Rs.12.36 Crore in the previous year, due to increase in volume of high
breed seed business.
SUBSIDIARIES/JOINT VENTURES/INVESTMENTS SPEL Semiconductor Limited
(SPEL)
SPEL had accounted sales of Rs.80 Crore (excluding other income) with a
PAT of Rs.0.57 Crore for the financial year 2011- 12. According to the
Semiconductor Industry Association forecast, the year 2012 looks
promising with a 10% growth. Global semiconductor revenues are expected
to reach US$323.2 Billion up from US$302.2 Billion. SPEL is taking
steps to enhance its sales for the financial year 2012-13 by
exploiting the potential of the industry.
Tamilnadu Petroproducts Limited (TPL)
During the year, the Company achieved a turnover and a net profit of
Rs.1309 Crore and Rs.5.94 Crore as compared to Rs.1066 Crore and a
profit of Rs.29.47 Crore respectively during the previous year. The
Company declared a dividend of 5% during the year. LAB production was
maintained at high levels due to the installation of new molecular
sieves in 2010. Despite unstable crude prices and power shortage, the
reduction in energy consumption (due to energy audit, advance process
control, etc.) and optimal use of raw materials helped in controlling
the cost of production. The first phase of Prefrac revamp was completed
during March 2012 and the benefi t will be realised from the second
quarter of 2012-13. TPL continues to meet sizeable demand of the
domestic market for LAB and supplies to major international detergent
manufacturers. Epichlorohydrin (ECH) Unit performed reasonably well
with a capacity utilisation of about 85%. The increase in the crude
price was offset by increase in the sales realisation. TPL continues to
supply a substantial portion of its production to the joint venture
Company M/s Petro Araldite Private Limited. The imports of ECH and
Epoxy Resin from European markets add to the competition in the market.
Chlor Alkali Unit performed better with the capacity utilisation
exceeding 90%. The power shortage, increase in power cost, high crude
prices and fuel oil prices, adversely impacted the business.
Tuticorin Alkali Chemicals and Fertilisers Limited (TAC)
Since the restart of the plants last year, TAC continued the production
and fine tuned the operational parameters to bring down the production
cost. The Company produced 86,855 MT of Soda Ash and 78,350 MT of
Ammonium Chloride representing 75.7% capacity utilization. The Company
recorded a total income of Rs.217.49 Crore with a net loss of Rs.12.79
Crore. Competition from import touching an all time high has affected
the market. BIFR proceedings are in progress and a Draft Rehabilitation
Scheme (DRS) is under process.
SPIC Fertilizers And Chemicals FZE, Dubai (SFC FZE) and SPIC
Fertilizers and Chemicals Ltd., Mauritius (SFCL, Mauritius)
During the fi rst quarter of the Financial Year 2010-11, as part of
recovery process, the Jebel Ali Free Zone Authority (JAFZA) in Dubai,
had taken over the land, Plant & Machinery of SFC FZE and the Company
did not have any other option in the matter. Simultaneously, the Plant
& Machinery stored in the Ras Al Khaimah Port (RAK) were auctioned to
realise the storage charges payable to the RAK Port Authorities. The
Promoters viz., SPIC and the Emirates Trading Agency, Dubai have
jointly decided to close the operations of SFC FZE, Dubai.
SPIC PETROCHEMICALS LIMITED (SPIC Petro)
Consequent to the takeover of the assets and effects of SPIC Petro by
the Official Liquidator (OL) during May 2010, the Company ceased to be
a subsidiary of SPIC. On the basis of the Petition filed by ARCIL u/s
13(4) of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act 2002 (SARFAESI ACT), the Hon'ble
High Court of Madras, vide its Order dated 20 December 2010 directed
the OL to handover the possession of the assets and effects of SPIC
Petro to ARCIL. ArCIL took possession of the same during January 2011.
Meanwhile, Chennai Petroleum Corporation Limited (CPCL) has fi led an
application to set aside the above Order and in the meanwhile an
interim stay has been granted by the Hon'ble High Court of Madras
restraining ARCIL from selling the land belonging to SPIC Petro. ARCIL
filed a Counter against the Order.
PREFERENTIAL ALLOTMENT OF SECURITIES
During the year under review, at the request of Secured Lenders and in
line with the rework package approved by Corporate Debt Restructuring
Empowered Group, three Secured Lenders were cumulatively allotted
2,03,175 (14%) Secured Non-Convertible Debentures of the face value of
Rs.100/- each, amounting to Rs.2.03 Crore by conversion of part of
their secured debt. These debentures are redeemable in seven equal
quarterly instalments commencing from 31 March 12.
GOING CONCERN
The financial statements of the Company have been prepared on a going
concern basis, despite the erosion of net worth due to the reasons as
explained in Note 30 of Notes on Accounts.
DIVIDEND
In view of the accumulated losses, the Board of Directors is not in a
position to recommend dividend on the Preference and Equity Share
capital of the Company.
SUBSIDIARY COMPANIES
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance Sheet, Statement of
Profit and Loss and other documents of the subsidiary companies are not
being attached with this Annual Report. However, the financial
information of the subsidiary companies is disclosed in the Annual
Report in compliance with the said Circular. The Company will make
available the said documents to any member of the Company, who may be
interested in obtaining the same. The said documents will also be kept
open for inspection by any member of the Company / its Subsidiary(ies)
at the Office of the Company, SPIC House, 88 Mount Road, Guindy,
Chennai - 600 032. and that of the respective subsidiary Companies. The
consolidated financial statements include the financial results of its
Subsidiary Companies.
DISCONTINUED OPERATIONS
The operations of Pen-G Unit was discontinued due to low sales
realisation, increased cost of inputs, rejection of anti-dumping duty
and the eventual take over of its assets at Cuddalore by ARCIL. The
operations of Active Pharmaceutical Ingredients Unit have not been
carried out due to reasons, inter alia, including environmental
constraints, the restrictions imposed by Pollution Control Board and
the uneconomical business size. Consequently, the operations of the
connected Research & Development was also closed. The Formulations Unit
discontinued its operations due to low demand in the market and
uncertain power situation. The SMO Division and the Phosphatics
Business of the Company were divested, pursuant to the approval of
CDR-EG (Empowered Group) and the consent of the shareholders obtained
through postal ballot.
PUBLIC DEPOSITS
As on 31 March 2012, there were no outstanding public deposits and the
overdue unclaimed deposits covering 15 depositors, amounted to Rs 3.33
lac.
HUMAN RESOURCE DEVELOPMENT
The Company, as always, places great emphasis on its human capital, and
the need to retain and develop talent in realising Corporate
objectives. The Company provides a conducive and challenging work
environment and opportunities for professional development of its
employees.
INDUSTRIAL RELATIONS
Industrial Relations in the Company has been cordial during the year
under review. A memorandum of settlement u/s 12 (3 ) of the Industrial
Disputes Act, 1947, has been entered into with SPIC Employees Union in
September 2011 .
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the requirements of Section 217(2AA) of the
Companies Act, 1956, the Directors of the Company declare that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31 March 2012.
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the annual accounts on a going concern
basis for the reasons stated in Note 30 of the Notes on Accounts.
DIRECTORS
Dr A C Muthiah resigned as Chairman and Managing Director of the
Company with effect from 16 November 2011. The Board places on record
the guidance, advice and valuable contribution made by Dr A C Muthiah
during the long tenure of his association with the Company. The Board
of Directors at its Meeting held on 16 November 2011, elected Thiru
Ashwin C Muthiah as the Chairman of the Company.
Thiru M Jayasankar, Director who retires by rotation at this Annual
General Meeting, being eligible, offers himself for reappointment. In
accordance with Clause 49 of the Listing Agreement, particulars
relating to the appointment of Thiru M Jayasankar, seeking
re-election/appointment at the ensuing Annual General Meeting are
furnished in the annexure to the Notice.
Thiru K K Rajagopalan was co-opted as Additional Director and
designated as Whole-time Director of the Company with effect from 16
November 2011 and a resolution seeking his appointment as the
Whole-time Director is being placed before the shareholders in this
Annual General Meeting of the Company.
During April 2012, ARCIL withdrew the nomination of Thirumathi Neeta
Mukerji from the Board and the Board places on record its appreciation
for the contribution made by Thirumathi Neeta Mukerji during her
tenure.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange is presented in a separate section forming part of the Annual
Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS21 on Consolidated
financial statements read with Accounting Standard AS23 on Accounting
for investments in associates in Consolidated Financial Statements and
AS27 on Financial reporting of interests in Joint Ventures, the audited
Consolidated Financial Statements are provided in the Annual Report. As
Jebel Ali Free Zone Authorities (JAFZA) had taken over the assets of
SFC FZE, Dubai, SFCL Mauritius lost control over its subsidiary SFC FZE
Dubai. Therefore financial statements of SPIC's Subsidiary Company,
SFCL, Mauritius have not been considered for consolidation. However,
full provision has already been made in the earlier years.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
In terms of Section 217(1)(e) of the Companies Act, 1956, read with
Rule-2 of the Companies (Disclosure of Particulars in the report of
Board of Directors) Rules 1988, information relating to conservation of
energy is set out in the annexure forming part of this Report. The
Company has no information to provide in respect of technology
absorption, foreign exchange earnings and outgo and research and
development.
PARTICULARS OF EMPLOYEES
None of the employees of the Company was in receipt of remuneration in
excess of the amount prescribed by Section 217 (2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules,1975, as
amended.
COST AUDITOR
Thiru P R Tantri, Cost Accountant, Bengaluru was appointed as the Cost
Auditor of the Company for the financial year 2011-12 pursuant to
Section 233B of the Companies Act, 1956 to carry out the audit of your
Company's cost records. The Cost Audit report for the year ended 31
March 2011 certified by Thiru P R Tantri was filed on 29 September 2011
with the Ministry of Corporate Affairs.
ACKNOWLEDGEMENT
Your Company is grateful for the co-operation and continued support
extended by the Department of Fertilizers, Ministry of Chemicals and
Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of
Agriculture, Ministry of Corporate Affairs and other departments in the
Central Government, the Government of Tamilnadu, other State
Governments, Tamilnadu Industrial Development Corporation Limited,
Tamil Nadu Electricity Board, ARCIL, Financial Institutions and Banks.
The Directors appreciate the dedicated and sincere services rendered by
all employees of your Company.
On behalf of the Board
Place: Chennai ASHWIN C MUTHIAH
Date 30 May 2012 Chairman
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