On behalf of the Board of Directors of your Company I have the pleasure in presentingthe 43rd Annual Report on the business and operations of the Company together with theAudited Financial Statements including Consolidated Audited Financial Statements of theCompany for the Financial Year 2016-2017 and the Auditors' Reports and comments on theaccounts by the Comptroller & Auditor General of India (C&AG).
During the year 2016-17 Company achieved a turnover of ' 7663.22 crore as against '7793.91 crore achieved during the previous year. The turnover was lower by ' 130.69 croremainly due to fall in gas price to USD 8.04/MMBTU during the year as compared to USD9.96/MMBTU during Corresponding Period of Last Year (CPLY) i.e. decrease of 19.28%.
During 2016-17 Company has achieved highest Profit Before Tax of ' 324.88 crore andProfit After Tax of ' 207.33 crore during the previous ten years.
During the financial year 2016-17 the Company has achieved the ever best production ofurea (38.10 LMT) with an overall capacity utilization of 118% surpassing the previous bestperformance of 37.99 LMT during financial year 2015-16. The urea production during 2016-17includes ever best annual production of 5.68 lakh MT at Bathinda and 10.58 lakh MT atVijaipur-I corresponding to a capacity utilization of 111.1% and 122.4% respectively.
Further all the Units of the Company achieved ever lowest energy consumption exceptmarginally higher at Vijaipur-I in 2016-17 due to consistent and optimum operation of theplants.
The energy consumption per MT of Urea at NFL plants during 2016-17 is as follows:
|Units ||Pre-set Norms (w.e.f. 1.06.2015) || |
| || ||2016-17 ||2015-16 |
|Nangal ||7.095 ||7.012 ||7.012 |
|Panipat ||7.614 ||7.112 ||7.259 |
|Bathinda ||7.479 ||6.925 ||7.003 |
|Vijaipur I ||5.904 ||5.783 ||5.750 |
|Vijaipur II ||5.569 ||5.364 ||5.410 |
Your Company's key financial parameters during the year 2016-17 and important financialhighlights are as under:-
|Particulars ||2016-17 ||2015-16 |
|Sale of urea in (LMT) ||37.58 ||36.41 |
|Sale quantity of DAP (LMT) ||2.14 ||0.51 |
|Sale of urea (Net of Excise Duty) ||2045.73 ||1983.21 |
|Subsidy on urea ||4721.39 ||5381.20 |
|Net Sales of urea ||6767.12 ||7364.41 |
|Sale of other products including subsidy on imported DAP (Net of Excise Duty) ||896.10 ||429.50 |
|Net Sales ||7663.22 ||7793.91 |
|Other Income ||44.59 ||46.53 |
|Total Income ||7707.81 ||7840.44 |
|Total Expenses ||7108.01 ||7236.94 |
|Earnings Before Interest Depreciation and Taxes (EBIDTA) ||599.80 ||603.50 |
|Interest ||189.75 ||228.42 |
|Depreciation ||85.17 ||86.66 |
|Profit Before Tax (PBT) ||324.88 ||288.42 |
|Provision for tax ||116.72 ||89.80 |
|Profit After Tax (PAT) (Total Comprehensive Income) ||207.33 ||192.20 |
RESERVES Capital Reserve
The balance as at 31st March 2017 amounted to ' 2.51 crore which is at the same levelas was in the previous year.
Debenture Redemption Reserve
The debenture redemption reserve stood at Nil as on 31.03.2017 as compared to ' 10.04crore as on 31.03.2016. The reduction of ' 10.04 crore during the year was on account ofredemption of 3rd instalment of non-convertible bonds.
Corporate Social Responsibility Reserve
CSR Reserve stood at ' 2.50 crore as on 31.03.2017 as compared to ' 4.01 crore on31.03.2016. The reduction of ' 1.51 crore (net) during the year is on account of amountutilized for CSR expenditure.
No amount was transferred during the year to General Reserve from the surplus. Furtheran amount of ' 10.04 crore was transferred to General Reserve from the DebentureRedemption Reserve. The General Reserve as on 31.03.2017 stood at ' 332.89 crore ascompared to ' 322.85 crore as on 31.03.2016.
The balance retained in the surplus as at 31st March 2017 is ' 790.83 crore as comparedto ' 668.56 crore for the previous year. No provision was made for dividend and DividendDistribution Tax during the year.
Board has not recommended payment of dividend for the year 2016-17 considering thevarious capex requirements in line with the guidelines on Capital Restructuring of CPSEsissued by Department of Investment and Public Asset Management (DIPAM).
Foreign Exchange Earnings/Outgo
The foreign exchange earnings by way of trade margins during the year was 'NIL'. Theforeign exchange outgo by way of imports and other expenses amounted to ' 519.12 crore.
Long Term Loans
Long term loan as on 31st March 2017 was ' 980.88 crore. The outstanding Rupee TermLoan and External Commercial Borrowings stood at ' 769.85 crore USD 32.15 millionrespectively.
Short Term Loans
Short Term borrowings of ' 3153.73 crore (previous year ' 4295.32 crore) as on 31stMarch 2017 were outstanding.
Debt Equity Ratio
Debt equity ratio as on 31st March 2017 has reduced to 2.26:1 as compared to 3.62:1 ofprevious year due to repayment of long term loans. State of affairs of the Company
Detailed analysis with regard to production & sales performance thereof has beenmade in Management Discussion & Analysis Report. However a brief on production &sales performance etc. is given below:-
During the year your Company achieved ever highest Urea production of 38.10 LMT withan overall capacity utilization of 118% surpassing the previous best production of 37.99LMT achieved during 2015-16. The Urea production during 2016-17 included ever bestproduction from Bathinda and Vijaipur-I.
During the year your Company achieved Urea sale of 37.58 LMT as compared to 36.41 LMTof the previous year higher by 1.17 LMT (3%). Gross sale value of Urea including subsidywas ' 6767.12 crore as compared to ' 7364.41 crore of the previous year mainly due to fallin gas price during the year.
The company reccorded ever best sale of Nitric Acid of 66783 MT during 2016-17surpassing previous best of 55195 MT achieved during CPLY. Besides this 9293 MT ofAmmonium Nitrate was also produced and sold during 2016-17 after re-commencement of itsproduction in April 2016 at Nangal Unit after a gap of around 2 years. The turnover ofindustrial products increased to Rs. 190.67 crore during 2016-17 as compared to Rs. 145.32crore during CPLY primarily due Ammonium Nitrate and increase in sale of Nitric Acid.
Trading of DAP and Agricultural Products (Pesticides Seeds Bentonite SulphurCompost Bio-fertilizers etc.)
Sale value of traded products during 2016-17 was Rs. 705.43 crore as against Rs. 284.18crore achieved during CPLY. The higher sale of traded products was mainly on account ofhigher purchase and sale of 2.14 LMT of imported DAP and Bentonite Sulphur (by Rs. 269.54crore) as compared to 0.52 LMT. Sale of seeds during the year was Rs. 14.92 crore asagainst Rs. 16.80 crore achieved during CPLY. The Company also registered a turnover ofRs. 1.09 crore from sale of compost and Rs. 0.5 crore from sale of industrial chemicalsduring the year.
NFL is organizing Agriculture Extension Services with the objective to educate farmerson judicious use of fertilizers along with technical knowhow on improved and scientificmethods of cultivation enhancing farmers' knowledge about latest developments in farmingsector thus helping them to increase productivity.
Dealers/Retailers are important link between company and farmers and key change agentsin motivating the farmers to use fertilizers in a balanced manner and adopting IntegratedNutrient management.
36 Dealers'/Retailers' Orientation Programmes were conducted during the year and morethan 2500 dealers/retailers were facilitated by upgrading their knowledge regardingfertilizer/Agro products and improved farm practices so that latest information can bedisseminated to farmers at point of sale to the farmers.
It is essential to educate the farmers on issues related to soil testing soil healthbalanced fertilization etc. to optimize farmer's crop yield and farm income. 84 farmertraining programmes were organized during 2016-17 and more than 5000 farmers benefited.During these educational programmes farmers were sensitized towards soil fertility statusincluding deficiency of various nutrients their remedy to increase fertilizer useefficiency and maximize yields.
During the year 2016-17 87 and 85 demonstrations of Biofertilizers and City Compostrespectively were carried out at farmers field to demonstrate the effect of Biofertilizers and City Compost on crop growth and yield as compared to farmers' ownpractices. These demonstrations are being carried out on long term basis.
During the year 2016-17 under the initiative of Government of India Company has opened100 Kisan Suvidha Kendras (KSKs) at various locations in its marketing territory.
During the year 2016-17 Company has adopted 10 villages (5 each in Haryana and MadhyaPradesh) for promotion of city compost under CSR974 MT of city compost was supplied inthese villages for conducting the demonstrations on wheat & mustard crops. Thesedemonstrations on long term basis have been laid out in 10 adopted villages followed bySoil Testing farmer education programmes and field days to educate the farmers on use andadvantage of City Compost.
NFL is making all efforts in rendering advisory services to the farmers by conductingSoil testing. It helps to identify problematic soils their nutritional status textureand structure thus helps in identification of soil and crop specific solutions. Based onthe analysis farmers are advised on soil fertility management through rational use ofmanure fertilizers and other inputs to make agriculture more productive and sustainable.During the year more than 30000 soil samples were analyzed for major and micro nutrientsand recommendations given through six static and four mobile soil testing laboratories.NFL has also upgraded its Soil Testing Labs at Barabanki and Nangal by installation ofAtomic Absorption Spectrophotometer (AAS) for micronutrient analysis.
Agricultural Exhibitions and Krishi Melas aim to bring stakeholders from alldisciplines of Agriculture like farming livestock dairy import and export poultry andhorticulture sectors under one roof and provide opportunity to demonstrate their productsexchange their views and share ideas for the growth sustainability and development ofthese vital sectors of our economy. Participation in agro exhibitions and university Kisanmelas is very effective way to communicate directly with the farmers and also to interactwith scientists and experts from various agricultural fields. During the year 2016-17 NFLparticipated in 51 Krishi Melas/agriculture exhibitions organized by leading agricultureuniversities agriculture department in Punjab Haryana UP Uttarakhand MP and Rajasthanwherein more than one lakh dealers/farmers participated.
During the year 2016-17 under farm forestry programme 16790 no. of saplings of fruitand commercially valuable plants like Neem Eucalyptus etc. were planted nearby farmerfields and in common areas in the adopted villages.
The details of the projects including capital expenditure envisaged are given in theManagement Discussion & Analysis Report.
Management Discussion & Analysis Report
Management Discussion & Analysis Report covering business prospects includingmodernization diversification investments marketing plans raw materials humanresource internal management controls including financial performance review governmentpolicies and other factors having impact on the performance of the Company operations andfuture outlook of the Company is appended as Annexure-1 to this report.
Business Responsibility Report
As required under Regulation 34 of SEBI (LODR) Regulations 2015 the BusinessResponsibility Report of the Company for the Financial year ended March 31 2017 isappended as Annexure-2 to this report. Business Reponsibility Policy is available on thewebsite of the company at www.nationalfertilizers.com.
The company is committed to maintain the highest standards of Corporate Governancebeing the fountain head of value creation for all stakeholders especially shareholders.The Company has in place a well defined "Corporate Governance Mechanism" whichconsiders the interest of all stakeholders. Pursuant to SEBI (LODR) Regulations 2015 andDPE Guidelines on Corporate Governance a report on Corporate Governance forms part ofthis report as Annexure-3.
There are no significant and material orders passed by the regulators or Courts ortribunals impacting the going concern status and Company's operation in future.
The statutory auditors of the Company have examined and certified your Company'scompliance with respect to conditions enumerated in SEBI (LODR) Regulations 2015(erstwhile Clause 49 of the Listing Agreement) and DPE guidelines on Corporate Governance.Statutory Auditors Certificate on Corporate Governance and explanations of the Managementto Statutory Auditors' observations forms part of this report as Annexure-4.
The Right to Information Act 2005
In consonance with the spirit of Right to Information Act 2005 the Company has creatednecessary mechanism as required under the Act. The Public Information Officers and theAppellate Authorities are effectively responding to the requests and appeals of theapplicants. The names of all PIOs/Appellate Authorities/Transparency Officers aredisplayed on the Company's website. During the year 291 applications were received andthe information was provided to the applicants within the prescribed time limit.
Pursuant to the provisions of Sections 177(9) and (10) of the Companies Act 2013 aVigil Mechanism for employees and others to report genuine concerns has been established.
Whistle Blower Policy
Your Company believes in transparency and propriety in all its business dealings totake this object further Company has put in place a Whistle Blower Policy providing for amechanism to the employees and other stakeholders to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct or Ethics Policy. ThePolicy provides for adequate safeguards against victimization of whistle blowers. Thepolicy is reviewed periodically. No employee or other stakeholders were denied access tothe Audit Committee.
With the commitment to maintain the highest standard of transparency and governanceyour Company has entered into an integrity Pact with
Transparency International and has also appointed Independent External Monitorspersons of impeccable integrity to oversee the implementation and effectiveness of theintegrity Pact to bring more transparency in the contracting and procurement operations.
Vigilance Division of the Company is headed by CVO. The CVO is assisted by a team ofofficers drawn from various functional departments. Vigilance set up is operational inCorporate Office all manufacturing Units as well as Zonal Marketing Offices.
Promotion of good governance remains the core area of vigilance. Apart fromstreamlining the systems and providing flexibility to the units to perform better effortswere made to build confidence across the organization to facilitate faster decisionmaking. Awareness is an important cornerstone for good governance. An enlightened employeecontributes in achieving the organizational goal as well as in system improvements.
Efforts have been initiated to shift the working of the Vigilance wing of NFL fromroutine works approach to a proactive initiative taking approach. The roles andresponsibilities and delivery of vigilance officers at CO and in the field have beenreviewed for the purpose of improving the quality and focused output.
Quality of scrutiny of contracts and purchase orders needs to improve so as to help insuggesting and effecting required systematic improvements and enforcement in the company.Contracts and Purchase Orders awarded in 2016-17 by Limited Tender Enquiry approach andalso through open tenders are being scrutinized to understand the trends and practicesvis-a-vis provisions in the Purchase and Marketing manuals so as to suggest and effectimprovements in quality of tenders in NFL.
Vigilance Awareness Week was observed during October 2016 by giving special emphasison theme of the year 'Preventive Vigilance as a tool of Good Governance' given by CVC. Asdesired by CVC debate competitions were organized involving youth and college students toensure that vigilance becomes a point of discussion among the youth.
The Department of Public Enterprises Gol in order to improve accountability and givinghigher autonomy to Public Sector Undertakings introduced the Concept of MoU during earlynineties.NFL signed the first Mou with the Department of Fertilizers (DoF) for the year1991-92. The Company had been awarded "Excellent rating " for the 12th time in arow from 2000-01 to 2011-12.
NFL has received "Very Good" rating under MoU for the year 2015-16.Companysigned MoU for 2016-17 with DoF on 30.06.2016 which is the 26th year of the Company underMoU system.
Awards & Accolades received during 2016-17
First prize "National Safety Award for the year 2014" to Panipat Unitfrom Ministry of Labour & Employment for lowest average accident frequency rate.
First prize "National Energy Conservation Award-2016" to Panipat Unitin Fertilizer sector from Bureau of Energy Efficiency (BEE) Ministry of Power (Gol).
"Best Technical Innovation Award -2016" to Vijaipur Unit in fertilizerindustry from FAI.
"Environment Protection Award-2016" to Vijaipur Unit from FAI.
"Good Performance Award for Excellence in Cost Management - 2015"toNFL under the category of Public-Manufacturing (Large) Sector from Institute of CostAccountants of India (ICAI).
First Prize in the category of Best House Journal for itsmagazine"VANI" by Standing Conference of Public Enterprises (SCOPE) in aceremony held.
Corporate Office Noida received award (Shield & Certificate) for effectiveimplementation of Official Language from Town Official Language Implementation CommitteeNoida.
National Safety Council of India has announced to award NFL Panipat Unit withGolden trophy- "Sarvashreshtha Suraksha Puraskar for the year 2016."
4th"Governance Now PSU Award- 2016"for "Value Growth".
Corporate Social Responsibility
The Company through its CSR initiatives continues to enhance value creation in thesociety and in the community in which it operates through its services conduct &initiatives so as to promote sustained growth for the society and community infulfillment of its role as a Socially Responsible Corporate.
Company has formed a Committee of Directors to guide the CSR activities. Theconstitution of the committee is given in detail in the Corporate Governance Report.Company follows a well formulated CSR policy to ensure that CSR activities are undertakenin a systematic and methodological manner as per the DPE guidelines Companies Act 2013and the Companies (CSR) Rules 2014. CSR Policy is available on the website of the companyat www.nationalfertilizers.com.
During the year 2016-17 the Company incurred an expenditure of ' 2.62 crore towardsCSR initiatives. Company has undertaken various activities such as construction oftoilets AAS equipment for soil testing installation of solar lights cancer awarenessemployment enhancing and vocational training programmes distribution of limbs and aids topersons of special ability training programme for women in beauty culture & cuttingand stitching etc. A detailed report on the Corporate Social Responsibility is given inthe Annexure-5 to the report.
Research and Development
In Compliance with the guidelines on Research & Development (R&D) notified bythe Department of Public Enterprises the Company has an R&D Policy and R&D Planduly approved by its Board of Directors.
Further in order to promote research in the field of fertilizers Department offertilizers in assistance with Fertilizers PSUs has set up a research institution viz.Indian Council for Fertilizers and Nutrient Research (ICFNR) which would be exclusivelydevoted to promotion of research in fertilizers. The office of ICFNR has been housed inthe premises of NFL's corporate office at Noida. To start with NFL RCF and FAGMIL wouldcontribute '5 crore towards seed money required for ICFNR.
ICFNR Shall be working on R&D in the areas of fertilizers manufacturing technologyuse of raw materials and innovation in fertilizer products through partnership andcollaboration with various research institutes fertilizers industry and otherstakeholders.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and outgo
Disclosure in terms of the Companies (Account) Rules 2014 in respect of Conservationof Energy Technology Absorption and Foreign Exchange Outgo are given in the Annexure-6.
Safety Environment and Sustainable Development
Company has undertaken various initiatives for adopting best practices for healthsafety environment management and sustainable developments as detailed in the Annexure-7.
Particulars of Loans Guarantees Security and acquisition under Section 186 of theCompanies Act 2013
Particulars of loans given guarantees provided investments in securities andacquisitions made by the Company during the year under review are given in MBP-2 asAnnexure-8 to the Report.
Joint Venture /Associates Companies
Details of Joint Venture / Associates Companies pursuant 129(3) of the Companies Act2013 the statement containing the salient features of the financial statement of theassociate company/joint venture company is included the consolidated financial statementsas Annexure-9 hereto.
Related Party Disclosures
The particulars of contracts / arrangement entered into by the Company with relatedparties referred to in Section 188(1) of the Companies Act 2013 including arm's lengthtranscatons under third proviso thereto are disclosed on Form No.AOC-2 as Annexure-10.Related Party Trancations Policy of the Company is available atwww.nationalfertilizers.com.
The Chemicals fertilizer industry is operated in a hazaradous environment and facesmany risks including those related to health safety and environment in addition togeneral business and financial risks. In order to mitigate them the Company has acomprehensive Risk Management Policy which is regularly reviewed and a periodical reviewof the risks procedures and strategies is undertaken. Risks are anaylsed at the highestlevel by a Board level Audit Committee and efforts are made in a planned way to obviatethe risks either fully or to minimize their impact.
Adequacy of Internal Financial Controls
Details in respect of adequacy of internal financial controls with reference tofinancial statements are given in Management Discussion & Analysis Report.
Particulars of Employees
During the year under reviewnone of employees of the Company had drawn remuneration inexcess of the limits prescribed under section 134(3) (c) of the Companies Act2013 readwith Companies (Appointment of Managerial Personnel) Rules 2014.
Public Procurement Policy of Micro and Small Enterprises (MSEs) Order 2012
Public Procurement Policy of Micro and Small Enterprises (MSEs) was notified by theGovernment under the Micro Small and Medium Enterprises Development Act 2006 whichstipulates that 20% of total annual procurement of goods and sevices shall be made by allCentral Ministries/ Departments/CPSUs from Micro & Small Enterprises(MSEs.) Withinthis percentage a subtotal of 4% procurement is to be made from MSEs owned by SC/STentrepreneurs. This Policy has become mandatory w.e.f.01.04.2015. Requisite informationfor the year 2016-17 is annexed as Annexure-11 to this report.
Human Resource Management
The Company has a manpower strength of 3517 employees as on 31.3.2017 which comprisesof 1659 Executives and 1858 Non-Executives. Company promotes the employment of women andat present 207 women employees are on its roll which is 5.89% of the total work force.The detailed analysis with regard to human resource including training and executivedevelopment programme have been made in the Management Discussion and Analysis Report .
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 read with Rule 14 of the Rules issued thereunderyour Company confirms that no complaint/case has been filed/pending with the Companyduring the year 2016-17.
Internal Complaint Committees have been formed and functioning at Units and CorporateOffice Noida to assess complaints regarding Sexual Harassment at Work place. Trainingprogrammes / workshop to bring awareness among employees with regard to sexual harassmentat work place gender sensitization and women empowerment programmes are held in Units/Offices.
International Women's day was celebrated on 8th March 2017 in all Units and CorporateOffice Noida.
The Company is making all efforts for the propagation and implementation of OfficialLanguage policy of the Government of India. The quarterly meeting of Official LanguageImplementation Committee (OLIC) is regularly held in all the Units/Offices of the Companyunder the chairmanship of Head of the Unit/Office to review the progress of officiallanguage. In all 32 Meetings of OLIC were held during the year.
To promote Official Language 'Hindi' 35 Hindi workshops were organized during the yearin which 834 employees had actively participated. Hindi Pakhwada was organized in all theUnits/Offices of the Company to mark the Rajbhasha Diwas. During the year 47Programmes/Competitions were held in order to promote Rajbhasha and 1119 employeesparticipated in them. 36 employees were awarded cash prizes under the 'Cash IncentiveScheme' for doing their official work in Hindi.
During the year 2016-17 Corporate Office Noida has been awarded with ConsolationPrize Rajbhasha Shield and Citation Certificate by Town Official Language ImplementationCommittee Noida for doing excellent work in Hindi. Zonal Office Chandigarh has beenawarded First Prize Rajbhasha Shield and Citation Certificate by Official LanguageImplementation Committee Chandigarh for exceptional work in Hindi.
Initiatives taken for development of employees belonging to Scheduled Casts / ScheduledTribes / Other Backward Classes (SC/ST/ OBC categories) -
Company is committed to the development of employees belonging to reserved categories.An Implementation Cell is already functional in all Units / Offices of the Company tooversee the implementation of Presidential Directives on Reservation Policy for SCs/STs. ALiaison Officer of appropriate status has been appointed in each Unit/Office and ChiefLiasion Officer at CO Noida to ensure due compliance of orders and instructionspertaining to reservation for SCs and STs and other concessions admissible to them.Meetings were periodically held at Unit level as well as at Corporate level with the SC/STEmployees Welfare Associations by the Management for redressal of grievances of SC/STemployees. The programmes on implementation of Presidential Directives were held at Unitsfrom time to time and SC/ST employees were deputed for such programmes conducted byexternal agencies. During 2016-17 1785 man-days training (in-house as well as externaltraining programmes) was imparted to SC/ST employees. A statement showing representationof employees belonging to Scheduled Caste / Scheduled Tribes / Other Backward Classes /Persons with disabilities is appended as Annexure-12 to this report.
NFL has always tried to be in line with the latest digital technologies in itsday-to-day activities. Almost all the business applications are running in on-line mode.By hosting & implementing web-based Marketing Management & Information Systemmodule across the marketing network company had brought all field level activities likerake receipt/disposal warehousing sales & all kinds of accounting activities ondigital platform. This has brought in greater transparency in all kinds of marketing andaccounting transactions & has cut down the lead time to a great extent therebyreducing delays in closing of accounts.
Company has also adopted initiatives taken by Deptt. of Fertilizers (DoF) formonitoring movement and sales of the fertilizers from fertilizer manufacturer/importers tofertilizer wholesalers and from wholesalers to retailers across the country.
The company has adopted IT in various aspects of its working. The materials departmentof our organisation has adopted e-procurement and e-tendering for procurement process. Thecompany has also taken initiatives in inculcating e-payments in tendering procedures andhas adopted the system of Online test for recruitment wherever the recruitment is based onAll India Test.
NFL has also setup Video Conferencing Facility at all its Plants Zonal Offices &Corporate Office. Thereby we are conducting digital meetings at Plants & with vendors/ stake holders which helps in cutting cost and time. It has also been planned tointroduce video conferencing based seminars from single point for employees.
In order to have optimum utilization of MPLS VPN bandwidth & ILL bandwidth LinkLoad balancers are under installation at all locations of the company. In order tomitigate cyber threats intrusion prevention & ransom ware attacks UTM based securityappliances are already under installation.
Central Data Center of the company is also being upgraded to a Tier-II data center toprovide multiple redundancies for 99.98% uptime of business applications.
Statutory Auditors & Statutory Auditors Report
The Statutory Audit of your Company was conducted by Chartered Accountants firms M/s.HDSG & Associates and M/s. Chandiok & Guliani Joint Auditors appointed byComptroller & Auditor General of India (C&AG). Auditors' Report on the FinancialStatements including consolidated financial statements of the Company for the financialyear 2016-17 is attached.
Comments of C&AG
The review of Financial Statements including consolidated financial statements for theyear ended 31st March 2017 carried out by the Comptroller and Auditor General of India(C&AG) under Section 143(5) of the Companies Act 2013 forms part of this report.C&AG has not given any comments.
As prescribed under Section 148 of the Companies Act 2013 and the Companies (CostRecords and Audit) Rules 2014 the cost accounting records are being maintained by allthe Units of the Company. Cost Audit for 2016-17 was carried out by Cost Auditors asprescribed under the Companies Act 2013 and Rules framed thereunder. Consolidated CostAudit Report for the financial year 2015-16 was filed with MCA on 26.09.2016.
Your Company has an in-house internal Audit Department which is headed by GeneralManager. Company also engages professional Chartered Accountant Firms to carry out theInternal Audit.
Your Company has appointed M/s. Agarwal S. & Associates as Secretarial Auditors forthe year 2016-17. Secretarial Audit Report for the year 2016-17 and Management'sexplanation to Secretarial Auditors observations are annexed as Annexure-13 to thisReport.
The detailed disclosures have been made in the Corporate Governance Report.
Nomination & Remuneration Committee and Remuneration Policy
Disclosures regarding Nomination & Remuneration Committee and Remuneration Policyare given in the Corporate Governance report.
Policy for determining Material Subsidiary
The Policy has been uploaded on the website of the Company atwww.nationalfertilizers.com.
The details of Board Meetings and Meetings of Independent Directors are given in theCorporate Governance Report annexed to this report. Extract of Annual Return u/s 92(3) ofthe Companies Act 2013
The extract of Annual Return as provided under sub-section (3) of Section 92 in FormMGT-9 is annexed hereto as Annexure-14.
Vide notification dated February 16 2015 the Ministry of Corporate Affairs notifiedthe Indian Accounting Standards ("Ind AS") to be applicable to certain class ofcompanies including listed companies for the accounting periods beginning on or afterApril 1 2016 with comparatives to be provided for the period ending on March 31 2016.Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the CompaniesAct 2013. The standalone and consolidated financial statements for the financial yearended March 31 2017 forming part of this Annual
Report have been prepared in accordance with Ind AS with a transition date of April 12015. Explanations capturing areas of differences and reconciliations from Indian GAAP toInd AS have been provided in the notes to accounts to the standalone and consolidatedfinancial statements.
Company has not issued any Sweat equity shares in terms of Rule 8 of the Companies(Share Capital and Debentures) Rules 2014. Disinvestment of GOI Equity
To comply with SEBI norms disinvestment of 15 % Govt. of India equity was carried outon 26th & 27th July 2017 through Offer for Sale route thereby reducing GoIshareholding to 74.71%.
Investor Education and Protection Fund
During the year 2016-17 Rs.80085.00 have been transferred to Investor Education andProtection Fund on account of unpaid/unclaimed dividend on 02.11.2016.
Company's equity Shares are listed at National Stock Exchange of India Limited (NSE)and Bombay Stock Exchange Limited (BSE). As required under SEBI (LODR) Regulations 2015.Company has entered into new Listing Agreement with NSE and BSE. Other disclosuresregarding listing regulations have been made in Corporate Governance Report.
Company has paid requisite listing fee to the stock exchanges during the year 2016-17.
Code of Conduct
Board Members and the Senior Management Personnel have affirmed compliance with theCode of Conduct for the financial year ended 31st March 2017. Key Managerial Personnel(KMP)
In compliance with provisions of Section 203 of the Companies Act 2013 Company hasappointed KMPs. The details are as follows:-
Shri Manoj Mishra C&MD is acting as CEO and continuing as KMP
Shri Rajiv Kumar Chandiok Director (Finance) is acting as CFO and is continuing as KMP
Shri Devinder Singh Ahuja Director (Technical) has been appointed KMP w.e.f14.02.2017.
Shri Raj Kumar Company Secretary is acting as Compliance Officer and is continuing asKMP.
Shri M Sagar Mathews Director (Tech.) remained KMP upto 30.12.2016.
Board of Directors Changes in composition
1. Ms. Bhavnaben Kardambhai Dave (DIN: 07557056) was appointed as Part-timeNon-official Independent Director at the 42nd AGM held on 27.09.2016.
2. Shri Kuntal Sensarma (DIN:07626530)Economic Advisor Department of FertilizersMinistry of Chemicals & Fertlizers Government of India held the office of GovernmentNominee Director on the Board of the Company from 13.10.2016 to 08.12.2016.
3. Shri M. Sagar Mathews Director (Technical) National Fertilizers Limited ceased tobe Director with effect from 30.12.2016 on being relieved from the services of the Companyon attaining the age of superannuation.
4. Ms. Meenakshi Gupta (DIN: 07686646) Additional Secretary & Financial AdviserDepartment of Fertilizers Ministry of Chemicals & Fertilizers Government of Indiahas been appointed as a Part-time Government Nominee Additional Director with effect from11.01.2017 and shall hold office till the ensuing AGM.
5. Shri Devinder Singh Ahuja (DIN: 07687173) has assumed the charge as Director(Technical) with effect from 06.02.2017 and shall hold office till the ensuing AGM.
6. Shri Anil Verma (DIN: 02544789) has been appointed as a Part-time Non-officialIndependent Additional Director on the Board of the Company with effect from 14.02.2017and shall hold office till the ensuing AGM.
7. Dr. Ramesh Kumar Agarwal (DIN: 00601353) has been appointed as a part-timeNon-official Independent Additional Director on the Board of the Company with effect from14.02.2017and shall hold office till the ensuing AGM.
8. Shri Gurinderjit Singh Sandhu (DIN: 01790828) Part-time Non-official IndependentDirector ceased to be Director of the Company w.e.f. 20.02.2017 on completion of histenure of directorship.
9. Dr. Kalpana Saini (DIN: 07820260) has been appointed as a Part-time Non-officialIndependent Additional Director on the Board of the Company with effect from 18.05.2017and shall hold office till the ensuing AGM.
Details of tenure of directors are provided in the Corporate Governance Report.
Re-appointment and appointment of Directors at the AGM
Pursuant to the provisions of Section 152 of the Companies Act 2013 Shri Dharam PalGovernment Nominee Director will retire by rotation at the ensuing AGM and being eligiblehas offered himself for re-appointment.
Notice has been received u/s 160 of the Companies Act 2013 for appointment of Ms.Meenakshi Gupta Shri Devinder Singh Ahuja Shri Anil Verma Dr. Ramesh Kumar Agarwal andDr. Kalpana Saini as Directors at the ensuing Annual General Meeting. Brief resume of alldirectors is placed as Annexure-15 to the report.
Declaration by Independent Directors u/s 149(6) of the Companies Act 2013
All Independent Directors have given declaration that they meet the criteria ofIndependence as laid down in Section 149(6) of the Companies Act 2013 and SEBI (LODR)Regulations 2015.
Re-appointment of Independent Directors
As per Section 149(10) of the Companies Act 2013 none of the Independent Directorshas been reappointed on the Board of Company Disqualifications of Directors
None of the Directors have committed any disqualification as provided under Section 164of the Companies Act 2013.
Performance evaluation of Board and Directors
As per provisions of Section 134(3)(p) of the Companies Act 2013 a statementindicating the manner in which formal annual evaluation has been made by the Board of itsown performance and that of its committees and individual directors should form part ofthe Borad's Report of every listed Company.
However as per notification dated 5th June 2015 issued by the Ministry of CorporateAffairs Government of India Government Companies are exempted from complying withprovisions of Section 134(3)(p) of the Companies Act 2013. Your Company is a GovernmentCompany and the appointment tenure performance evaluation etc. of Directors is done byGovernment of India therefore such particulars have not been included as part ofDirectors' Report. Remuneration of C&MD Whole-time Directors and its employees isdetermined by Government of India.
NFL is a government company where the directors are appointed either by the Governmentof India or on the recommendation of the Government. The remuneration etc. of Directorsare decided as per DPE Guidelines. The tenure of the directors is also decided by theGovernment. In compliance of Section 178(1) of the Companies Act 2013 Company hasconstituted a Nomination and Remuneration Committee. Section 134(3)(e) requires theCompany to disclose the policy on directors' appointment and remuneration includingcriteria for determining qualification positive attributes independence of a directorand other matters provided under section 178(3) of the Act. Section 134(3)(p) of the Actread with requires the Company to disclose the manner in which formal annual evaluationhas been made by the Board of its own performance and that of its Committees andindividual directors. NFL being a government company is exempted from the provisions ofsection 134(3)(e) & (p) and section 178(2) & (3) of the Companies Act. SEBI (LODR)Regulation 2015.
Directors' Responsibility Statement
Pursuant to the requirement of Section 134(3)(c) of the Companies Act 2013 yourDirectors confirm that: -
a) i n the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed and no material departure has been made therefrom by the Company;
b) the Directors had selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year 2016-17and of the profit of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 and withapplicable powers for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; and
d) the Directors have prepared the Annual Accounts on a going concern basis.
e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Board of Directors acknowledge their gratitude for the valuable guidance andsupport received from the various wings of Government of India in particular Departmentof Fertilizers Fertilizer Industry Coordination Committee (FICC) various StateGovernments Financial Institutions Banks stakeholders and all others whose continuedsupport has been a source of strength to the Company.
Your Directors also acknowledge the suggestions received from Statutory AuditorsInternal Auditors Cost Auditors and Comptroller and Auditor General of India and aregrateful for their continued support and cooperation.
The Board would like to place on record its appreciation to the hard work commitmentand unstinting efforts put in by the employees at all levels.
|Registered Office: ||For and on behalf of the Board of Directors |
|Scope Complex Core-3 || |
|7 Institutional Area Lodhi Road || |
|New Delhi. ||(Manoj Mishra) |
|Date : 10th August 2017 ||Chairman & Managing Director |
| ||DIN: 06408953 |