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Rashtriya Chemicals & Fertilizers Ltd.

BSE: 524230 Sector: Agri and agri inputs
NSE: RCF ISIN Code: INE027A01015
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VOLUME 458338
52-Week high 106.45
52-Week low 40.50
P/E 28.77
Mkt Cap.(Rs cr) 5,285
Buy Price 95.75
Buy Qty 297.00
Sell Price 95.80
Sell Qty 618.00
OPEN 93.95
CLOSE 92.90
VOLUME 458338
52-Week high 106.45
52-Week low 40.50
P/E 28.77
Mkt Cap.(Rs cr) 5,285
Buy Price 95.75
Buy Qty 297.00
Sell Price 95.80
Sell Qty 618.00

Rashtriya Chemicals & Fertilizers Ltd. (RCF) - Director Report

Company director report

Dear Members

The Directors of your Company have pleasure in presenting this 38th AnnualReport on the working of your Company together with the Audited Accounts for the yearended 31st March 2016.

1.0.0 FINANCIAL PERFORMANCE

1.1.0 SUMMARY OF FINANCIAL PERFORMANCE

Rs. Crore

Particulars 2015-16 2014-15
Total Revenue 8761.64 7787.81
Total Operating Cost 8183.09 6903.11
Operational Profit 578.55 884.70
Depreciation/Impairment 145.13 258.12
Finance Cost 142.32 116.95
Profit/ (Loss) before tax 291.10 509.63
Provision for Tax (including deferred Tax liability/ Asset) 99.87 187.57
Net Profit / (Loss) Appropriations: 191.23 322.06
Dividend 60.69 99.30
Tax and Educational cess on Dividend 12.35 20.22
Balance Transferred to General Reserve 118.19 202.54

1.2.0 HIGHLIGHTS OF PERFORMANCE FOR THE YEAR 2015-2016

• Revenue for the year increased by 12.50% to ' 8761.64 Crore as compared to '7787.81 Crore in the previous year.

• Gross profit for the year decreased by 34.61% to ' 578.55 Crore as against '884.70 Crore of previous year.

• Profit before tax decreased by 42.88% to ' 291.10 Crore as compared to ' 509.63Crore in the previous year.

• Profit after tax decreased by 40.62% to ' 191.23 Crore as compared to ' 322.06Crore in the previous year.

The major factors contributing for reduction of the Company’s profitability are asunder:

i) Depressed sales of fertilizers both traded and manufactured owing to pooragro-climatic

conditions glut of fertilizers in the market and lower urea sales due to lowerallotment of imported urea.

ii) Provision made during the year towards pooled price differential for gas used inits non-Urea operations.

iii) Reduction in preset norms of Urea w.e.f. 1st June 2015 under the New Urea Policy2015 which were partially off-set by the increase in the savings rate at pooled price ofgas.

iv) Owing to depressed sales realizations of IPD products and higher cost of operationson account of increase in gas prices production of some products like Methanol SodiumNitrate/ Nitrite and Methylamines at Trombay and DMF & Formic Acid at Thal weresuspended.

v) Steep depreciation in rupee vis-a-vis US$ Gas Pool Differential payments and delaysin receipt of subsidy resulted in higher finance costs as compared to previous year.

vi) Falling IPP of Urea has impacted the operating margins of production of Urea beyondReassessed capacity.

1.3.0 MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA

As in the past several years your Company received ‘MoU Excellent’ ratingfor 2014-15 from Ministry of Heavy Industries and Public Enterprises

1.4.0 DIVIDEND

Although your Company has lined up a number of capex programmes which will entailsubstantial expenditure considering the consistent profits being made by the Companyyour Directors have recommended a dividend of ' 1.10 (i.e. 11%) per equity share (Previousyear '1.80 per equity share) for the financial year 2015-16. The total outgo on thisaccounts works out to ' 73.04 Crore ('119.52 Crore in the previous year) includingdividend distribution tax and education cess. The dividend payout is subject to theapproval of members at the ensuing Annual General Meeting.

1.5.0 APPROPRIATION TO GENERAL RESERVES

Your Company earned a net Profit after Tax of

' 191.23 Crore (' 322.06 Crore in the previous year). The dividend payout along withTax and education cess is ' 73.04 Crore (' 119.52 Crore in the previous year). The balanceamount of '118.19 Crore ('202.54 Crore in the previous year) is transferred to GeneralReserves.

1.6.0 AWARDS WON

As in the past your Company won many awards during the year 2015-16 some of which areas under:

• 13th National Award by Institute of Cost Accountants of India forexcellence in Cost Management;

• 2nd prize in National Energy Conservation Award-2015 from Ministry ofPower;

• The Fertiliser Association of India Award for "Best Production performanceof an operating fertilizer unit for nitrogen (Ammonia and Urea) for the year 2014-15;

• "Best Safety Practices-2015" Runner’s up award from NationalSafety Council Maharashtra Chapter;

• Indian Chemical Council Certificate of Merit for excellence in EnergyConservation and Management for the year 2014;

• First Prize for State Level Excellence in Energy Conservation & Managementfor the year 2014-15 from Maharashtra Energy Development Agency (MEDA) Government ofMaharashtra;

• 2nd Prize in ‘10th State level Energy Conservation Award2014-15’ in Fertilizer sector instituted by MEDA;

• Award for best production performance of an Operating Fertilizer Unit forComplex Fertilizer’ for the year 2014-15 from The Fertiliser Association of India;

• Golden Peacock Innovation Management Award" for excellence in"Innovation Management’’ for the year 2015.

• 16th Annual Greentech Environment Award for the year 2015 in Platinumcategory instituted by Greentech Foundation for outstanding performance in environmentmanagement in Fertilizer Sector;

• "Product Innovation Award for 2014-15" from Federation of IndianCouncil of Chambers of Commerce and Industries (FICCI) for Gypsum Sona (GEOLA) developedby R & D - Bioresearch;

• Performance Excellence Award for Innovative Industrial Engineering Practicesfrom Indian Institution of Industrial Engineering (IIIE) for 2014-15;

• Organizational Excellence Award by Quality Circle Forum of India;

• Excellence in Suggestion Scheme Award by Indian National Suggestions’Schemes Association;

• National Vigilance Excellence Award 2016 from Vigilance Study Circle Hyderabad;

• Vigilance Excellence Award from Institute of Public Enterprise Hyderabad;

• Award for best case study from Central Vigilance Commissioner at the Annualfunction of Vigilance Study Circle Mumbai.

2.0.0 OPERATIONAL RESULTS:

2.1.0 Production:

2.1.1 Fertilizers:

Your Company produced 31.83 lakh MT of fertilizers (25.46 lakh MT of Urea 4.62 lakh MTof Suphala 15:15:15 and 1.75 lakh MT of Suphala 20:20:0) during the year as against 32.59lakh MT of fertilizers (26.01 lakh MT of Urea 3.97 lakh MT of Suphala15:15:15 and 2.61lakh MT of Suphala 20:20:0) produced during the previous year. In terms of nutrients yourCompany produced 12.75 lakh MT of Nitrogen (N) 1.04 lakh MT of Phosphate (P2O5) and 0.69lakh M T of Potassium (K2O) during the year as compared to 13.08 lakh MT ofNitrogen (N)1.12 lakh MT of Phosphate (P2O5) and 0.60 lakh MT of Potassium (K2O) during the previousyear.

2.2.0 MARKETING PERFORMANCE

2.2.1 Fertilizer Division:

Your Company achieved sales volume of 33.75 lakh MT during 2015-16 as compared to 36.89lakh MT in the previous year. Your Company sold 26.52 lakh MT of Urea 4.36 lakh MT ofSuphala 15:15:15 1.86 lakh MT of Suphala

20:20:0 and 1.01 lakh MT of other bought out products such as DAP MOP SSP RajphosNPK etc. compared to 28.58 lakh MT of Urea 3.89 lakh MT of Suphala 15:15:15 2.55 lakhMT of Suphala 20:20:0 and 1.87 lakh MT of other bought out products during the previousyear. The total sale of manufactured fertilizers during 2015-16 was 30.88 lakh MT asagainst 32.62 lakh MT in the previous year.

Sales of fertilizers registered reduction of 8.52% over previous year owing to pooragro-climatic conditions and glut of fertilizers in the market.

2.2.2 Industrial Products Division:

Industrial Products Division achieved sales turnover of '1063 Crore as against '1125Crore during the previous year. Owing to depressed sales realizations of IPD products andhigher cost of operations on account of increase in gas prices production of someproducts like Methanol Sodium Nitrate/Nitrite and Methylamines at Trombay and DMF andFormic Acid at Thal were suspended which had an adverse impact on the profitability ofIPD products.

2.2.3 Exports:

Considering the nature of products manufactured by your Company and indigenous demandthe scope for export is very limited. High cost of production is the main restrainingfactor for venturing in the international market as it renders our products unviablecompared to lower cost of imports of similar products. However your Company has beensuccessful in popularizing our ABC brand in the overseas market through third partyexport. During F.Y.2015-16 your Company has done third party export of ABC to the tune of' 50.59 lakh as against ' 62.29 lakh during the previous year.

2.3.0 RISK MANAGEMENT

Pursuant to Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has framed Risk Management Policy for therisk assessment and minimization procedures. The Risk Management Policy developed with theobjective of having a balanced approach towards business plan and mitigating theassociated risks is in place. The system identifies better management practices to ensuregreater degree

of confidence amongst various stakeholders and facilitates good Corporate Governancepractice. All risks associated with Operations Environment Finance Marketing HumanResource Legal Information Technology security Projects etc. are continuouslymonitored. The degree of impact of the perceived risks financially their likely effect onthe assets facilities and third parties are assessed regularly. In order to mitigatelosses arising out of such perceived risks appropriate procedures are being adopted tocontain the risks. Also the practices adopted during emergencies including thecommunication system and mode of disseminating information are periodically reviewed andupdated to minimize the impact on the Company. Quarterly report in respect of the same ispresented to the Board.

2.4.0 MAJOR EXPANSION AND DIVERSIFICATIONS:

Your Company is planning to undertake major projects as under:

2.4.1 Additional Ammonia Urea project at Thal

Your Company has planned to expand the capacity of Urea at Thal by setting up onesingle stream Ammonia plant of capacity 2200 MTPD and one single stream Urea plant ofcapacity 3850 MTPD at the existing site at approximate cost of ' 5530 Crore. The projectis awaiting approval from Government of India.

2.4.2 Coal Based Fertilizer Plant at Talcher

Your Company along with Coal India Limited (CIL) GAIL (India) Limited (GAIL) andFertilizer Corporation of India Limited (FCIL) is contemplating to set up a fertilizercomplex comprising of 2200 MTPD ammonia plant 3850 MTPD Urea plant at Talcher Odishathrough coal gasification route as feed stock. Coal will be made available by CIL fromnearby coalfields. Land and certain facilities needed for the project will be provided byFCIL. The project will utilize state-of-the-art Coal Gasification Technology. A jointventure company "Talcher Fertilizers Limited" has been incorporated to executethe project.

The Ammonia Synthesis and Urea plants will be built on lump sum turn key basis forwhich prequalification bids have been invited and prequalified parties have beenshortlisted. Project capital cost is estimated to be approx. ' 8000 crore. Tender has beenissued to pre-qualified Lump Sum Turn Key (LSTK) vendors. Selection of Coal GasificationTechnology and Coal Block allocation is underway.

The project is of strategic importance for the country as it aims to make breakthroughfor an alternative source of feedstock in the form of abundantly available coal fromdomestic sources in place of natural gas. It will also aid much needed urea productioncapacity for the eastern part of the Country.

2.4.3 Sewage Treatment Plant (STP) at Trombay

Water situation is getting more and more difficult day by day. Ensuring wateravailability has become critical for the smooth functioning of the Trombay unit given thecompeting demand for water in the city. Recognizing this your Company is setting upadditional Sewage Treatment Plant (STP) adjacent to the existing STP plant with a capacityto treat 22.75 Million Litres per Day (MLD) of Municipal Sewage to produce about 15 MLD oftreated water. A portion of the treated process water will be supplied to Bharat PetroleumCorproation Ltd. on mutually agreed terms. Work order has been placed on LSTK contractorat a cost of '198 Crore and work is underway.

2.4.4 Solar Power Plant (PV Grid Connected) at Trombay

Your Company has set up 2 MWp Grid connected Photovoltaic Solar power plant within thefactory premises at Trombay Mumbai. The power generated is used for captive consumptionat Trombay unit.

This venture is in line with the Solar mission of Government of India and leadsRCF’s foray into generation of renewable energy resulting in to reduction in theoverall carbon footprint of the company.

2.4.5 Iran Project

Your company has been nominated by the Government along with Gujarat State FertilisersCorporation (GSFC) for the proposed 1.3 million tonne Urea plant in Iran for import ofUrea to India. M/s Faradast Energy Falat Company (FALAT) Iran has been shortlisted asprospective Iranian partner. The consortium is planning to set up an ammonia and Ureaplant in Chahbahar in Iran using natural gas as feedstock which is abundant in thatcountry with an estimated investment of USD 903 Million.

2.5.0 SUBSIDIARY AND OTHER JOINT VENTURE COMPANIES

A separate statement containing the salient features of financial statements of allsubsidiary/ joint ventures of your Company forms part of consolidated financial statementsin compliance with Section 129 and other applicable provisions if any of the CompaniesAct 2013. The financial statements of the subsidiary/joint ventures and relatedinformation are available for inspection by the members at the Registered Office of yourCompany during business hours on all days except Saturdays Sundays and public holidaysupto the date of the Annual General Meeting (AGM) as required under Section 136 of theCompanies Act 2013. Any member desirous of obtaining a copy of the said financialstatements may write to the Company Secretary at the Registered Office of your Company.The financial statements including the consolidated financial statements financialstatements of subsidiary/joint ventures and all other documents required to be attached tothis report have been uploaded on the website of your Company (www.rcfltd.com).

2.5.1 Subsidiary Company

Rajasthan Rashtriya Chemicals and Fertilizers Limited Jaipur

Rajasthan Rashtriya Chemicals and Fertilizers Limited (RRCFL) was a subsidiary of theCompany. Since the Company did not start its activities since inception the Board ofDirectors of RRCFL took a decision to close down the Company. Accordingly the name ofRRCFL has been struck off from the Register of Registrar of Companies on 24thNovember 2015 and said company is dissolved.

2.5.2 Joint Venture Company

2.5.2.1 FACT-RCF Building Products Ltd. Kochi

Your Company has formed a Joint Venture Company with Fertilizers and ChemicalsTravancore Limited (FACT) by incorporating FACT-RCF Building Products Ltd to set up aRapidwall project at Kochi. Both RCF and FACT have 50:50 equity holding in the Company.The plant is in operation. The Company is building up its customer base and is in theprocess of stabilising its operations by making special effort on marketing of theproduct. This project has very good potential and therefore RCF would continue to supportit in the coming years.

FRBL’s performance has marginally improved during the year and its operations areexpected to improve in future. Being a very novel concept acceptance of FRBL’sproduct in lieu of conventional items is taking time for sales to pick up and foroperations to completely turn around.

During the year FRBL earned a total income of ' 20.06 Crore as against ' 4.52 Croreduring the previous year. FRBL reported a Loss after Tax of ' 16.88 Crore during the yearas against ' 21.94 Crore in the previous year.

2.5.2.2 Urvarak Videsh Limited (UVL)

Urvarak Videsh Limited (UVL) was incorporated on 18th July 2008 as aSpecial Purpose Vehicle (SPV) with equity participation of Rashtriya Chemicals andFertilizers Limited(RCF) National Fertilizers Limited (NFL) and Krishak BhartiCo-operative Limited (KRIBHCO) with the object of setting up joint venture in India andabroad for manufacturing mining long term tie ups for Nitrogenous Phosphatic andPotassic Fertilizers and fertilizer raw materials including exploring the possibility ofmaking investments and rendering Consultancy services etc. The company explored manyalternatives to take up various projects but the same did not fructify due to want offunds as UVL business objective requires heavy capital investment. As the company couldnot take up any business and at the same time keeping the status of the company as activewas not serving any purpose the Board of UVL has decided to declare the company as aDormant company for the time being in terms of the provision of section 455 of theCompanies Act 2013. As and when the proper opportunity arises in future businessactivities can be started by the company by reverting its status as active company.

2.5.2.3 Talcher Fertilizers Limited (Erstwhile Rashtriya Coal Gas Fertilizers Limited)

Your Company has formed a Joint Venture company with Coal India Limited (CIL) GAIL(India) Limited (GAIL) and Fertilizer

Corporation of India Limited (FCIL) with the name Talcher Fertilizers Limited on 13thNovember 2015 for revival of FCIL’s fertilizer unit at Talcher by establishingand operating coal gasification based fertilizer complex. The equity participation by RCFCIL and GAIL is 29.67% each and FCIL is 10.99%. The company is yet to start itsoperations.

2.5.3 Consolidated Financial Statements

The Consolidated Financial Statements of your Company has been prepared by taking intoconsideration Joint Venture Companies i.e. FACT- RCF Buildings Products Limited UrvarakVidesh Limited and Talcher Fertilizers Limited (erstwhile Rashtriya Coal Gas FertilizersLimited).

The Consolidated financial statements have been prepared under proportionateconsolidated method along with Company’s standalone financial statements.

Summary of Financial Performance

Rs. Crore

Particulars 2015-16 2014-15
Total Revenue 8771.68 7790.06
Total Operating Cost 8189.64 6871.83
Operational Profit 582.04 918.23
Depreciation/Impairment 150.22 263.32
Finance Cost 146.74 121.59
Profit/ (Loss) before tax 285.08 533.32
Provision for Tax (including deferred Tax liability/ Asset) 99.87 187.57
Net Profit / (loss) 185.21 345.75

2.6.0 RESEARCH AND DEVELOPMENT

Your Company has taken up several Research and Development projects some of which arefor commercial scale design and engineering. They are as under:

2.6.1 Lab scale development of microbial biopesticide "Trichoderma viride"

Bio-pesticides are biological or biologically- derived agents that are usually appliedin a manner similar to chemical pesticides but achieve pest management in anenvironmentally friendly way. Bio-pesticides for use against crop diseases have alreadyestablished themselves on a variety of crops.

Pesticides based on microorganisms and their products have proven to be highlyeffective species specific and eco-friendly in nature leading to their adoption in pestmanagement strategies around the world.

Microbial pesticides used are bacteria viruses fungi nematodes etc. The fungi usedfor pest control are Trichoderma hazranium Trichoderma viride Tricoderma reseii and manymore. Trichoderma spp. is fungi from the Hypocreaceae family that are present in nearlyall soils. Laboratory scale development of this fungi as biopesticide was carried outsuccessfully. The product will be field tested during the years 201617 and 17-18 andcommercialized thereafter.

2.6.2 Development of Phosphogypsum based value added Soil Conditioner for increasingnutrient use efficiency.

Recent studies have suggested that the world will need to produce 60 to 100% more foodwhen the global population will reach 9 billion by 2050. This requires a radical change inthe way food is produced stored distributed and accessed.

Land degradation in the form of deletion of soil fertility erosion and water logginghas increased. With a view to make agriculture sustainable enhance the nutrient useefficiency an attempt was made to formulate recipe for blending organic matter and soilconditioner "gypsum" components together and standardise the combinations tomaximise the crop yield and nutrient use efficiency. Field trials in-house and inAgriculture Universities were conducted for evaluating nutrient use efficiency. Anincrease of 17% yield and increase of nutrient use efficiency to the extent 50% wasreported.

A product patent was applied and published for examination on 18th September 2015(Indian patent application No. 3248/Mum/2015- Plant Nutrient Composition).

The product was also bestowed with the prestigious FICCI "Innovators Award"for the year 2015.

2.6.3 Development of best nutrient package for pomegranate through specialtyfertilizers for enhancing fruit yield and quality

Pomegranate (Punica granatum L.) is grown in tropical and subtropical regions of theworld. It

is one of the commercially important fruit crops of India. The fruits are known fortheir sweetness and fine blend of acidity. Maharashtra alone has around 99000 hectarearea under this crop. Hence work on development and recommendation of the micronutrientmanagement for pomegranate was undertaken in association with Mahatma Phule KrishiVidyapeeth Rahuri Maharashtra in the year 2015-16 as an MOU item.

The yield increase was recorded to be around 20% through utilization of Biola Microlaand Sujala products. The recommendation of the nutrient package by Agriculture Universitywill now be disseminated among the farmers.

2.6.4 Development of Zinc solubilizing bacteria as biofertilizer

Zinc is one of the most important micronutrients required relatively in smallconcentrations in tissues for healthy growth & reproduction of plants. Plants must beprovided with essential nutrients in available form & in sufficient quantity not onlyfor their proper growth and development but also for their accumulation of essentialelements in proper amount in various parts of the plants.

With a view to provide the farming community with cheaper sources of zinc thedevelopment of Zinc solubilising bacteria as biofertilizer was undertaken. The bacteriaobtained through natural sources like zinc mines were successfully formulated asbiofertilizer. The product will be tested with Agriculture Universities and commercializedduring the year 2016-17. With the present scenario of zinc deficiencies in India theapplication of zinc solubilizing bacteria with cheap sources of zinc ores will reduce thecost of agri -inputs and provide sustainable solution to mitigate Zn deficiency.

2.6.5 Lab scale study for development of Nanotechnology based fertilizers

The world agriculture is facing problems like climate change soil degradationdesertification high energy cost and depleting natural resources.

Despite sizable increase in the use of chemical fertilizers over the years the gapbetween the nutrient removal and replenishment is significantly high in India. In order toaddress the National and Global needs the application

of Nanotechnology in agriculture has great potential.

Research and Development - Bioresearch has ventured into the area of Nano particles andits application in agriculture for increasing crop productivity and nutrient useefficiency. A research centre "Sarjana" dedicated to Nanotechnology research wasinaugurated in the Company. It is one of its kind among the Public sector enterprises inIndia.

A paper in the field of Nanotechnology regarding its applicability to biofertilizer waspresented by our Scientist at an International conference at Florida USA in October 2015.The paper was bestowed with the Best oral presentation award.

2.6.6 Commercialization of Micronutrient grade for Paddy Basel for Tamilnadu state

Micronutrients are essential for plant growth and play an important role in balancedcrop nutrition. They include Boron (B) Copper (Cu) Iron (Fe) Manganese (Mn) Molybdenum(Mo) and Zinc (Zn). They are as important to plant as primary and secondary nutrientsthough plants don’t require much of them. Lack of any micronutrient in soil can limitthe crop growth even if other nutrients are present in adequate amount. Thesemicronutrients are state specific.

The R & D department of your Company has developed micronutrient grade (No.XI) forPaddy crop basal application in solid form for Tamilnadu state. The product has beencommercialized successfully. During the year 2015-16 a quantity of 38.5MT wasmanufactured and marketed.

2.6.7 Feasibility study for new Biofertilizer plant

It is a need of the hour to adopt the Integrated Plant Nutrient Supply (IPNS) systemfor sustaining crop productivity. Integration of chemical organic and biological sourcesof plant nutrients and their efficient management have shown promising results insustaining productivity and soil health. Bio-fertilizers are living cells of differenttypes of micro-organisms which have an ability to mobilize nutritionally importantelements form non-usable to usable form from the soil. Company has a bio-fertilizers plantwith current installed capacity of 150 KL per annum. With positive outlook from governmentfor the promotion of biofertilizer in a big way the demand for these will increase. It isprojected that the coming years may see the growth @ 21.12% annually.

In the above context the feasibility study (technoeconomic) for 150 Kl capacitybiofertilizer facility was initiated. It is envisaged that the capital subsidy provided bystate government to the tune of ' 40 lakh will be utilized for the project. IRR &payback period for the project are 18.65% and 2.93 years respectively. This project wasalso included in the MOU for the year 201516.

3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL

Your Company is committed to ensuring clean environment beyond satisfying allstipulated requirements laid down by the statutory authorities around its operatingunits.

Your Company has established ISO 14001 compliant Environment Management System (EMS) atits two manufacturing units. The Systems are constantly upgraded and regular internalaudits and Management Reviews are carried out to ensure compliance and continuouslyimprove the system. Apart from Stack monitors which continuously monitor the emissionsfour fixed ambient air quality monitoring stations are in place at both Trombay and Thalto monitor ammonia NOx SO2 Particulate matter (PM10 & PM2.5) & metrologicalparameters.

The Effluent Treatment plants at Trombay and Thal have ensured that the environment inand around the Units are fully protected. Various schemes with state of the arttechnologies and modernisation schemes are implemented to reduce energy consumption andwastages of the scarce natural resources. The waste streams from the plants are recycled/reused for useful purpose.

Sludge generated in Effluent Treatment Plant Sulphur Sludge Generated in SulphuricAcid plant waste streams of effluents from complex fertilizer plants are recycled back inthe processes. 3- R strategy (Reduce Reuse and Recycle) is employed by way of recyclingthe sludge generated in ETP Sulphur sludge generated in Sulphuric Acid Plant to Suphalaplant for recovery of nutrients. Phosphogypsum from Phosphoric Acid Plant is used in-housein the manufacture of value added building materials viz. rapid wall panels and wallplaster.

The integrated Effluent Treatment Plant ensures that whatever effluent is dischargedfrom the factory meets the statutory requirements laid down by the Pollution ControlBoard. Trombay unit of the Company has taken up a massive plantation drive in factorypremises in residential colony and surrounding areas and planted app. 4000 numbers oftrees in the year 2015-16. In the Thal factory premises & in residential area duringthe year 2015-16 plantation of 2500 number of Fruit bearing trees Teak wood and otherspecies has been under taken .

For increasing awareness regarding environment public awareness campaign programmesare arranged by Trombay and Thal units.

4.0.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)

4.1.0 As part of its initiatives under "Corporate Social Responsibilities’the Company has undertaken several projects in the areas of rural development promotinghealth care and education aimed for the benefit of needy and for general good of thesociety. These projects are in accordance with Schedule VII of the Companies Act 2013 andthe company’s CSR policy. The report on CSR activities as required under theCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure -Iand forms an integral part of this report. During the year the company has spent ' 9.65Crore on CSR activities. The activities in brief are as under:

4.1.1 Education:

4.1.1.1 Schools:

Your Company supports schools at its two units which impart education in MarathiHindi and English mediums to students from Nursery to 10th Standard. Your Companyundertakes the upkeep maintenance and bears the deficit expenditure incurred by theschools located in Company’s residential colonies which are run by reputedEducational Institutions.

4.1.1.2 Scholarship to meritorious students:

Your Company offers a number of scholarships to students of SC/ ST/ OBC communities forpursuing higher studies. Company’s scholarship project for sending every year 10students to 6th Standard in Shivaji Military school in Pune and supporting the earlierbatches in their march to higher standards thereafter has received goodwill from all.

4.1.1.3 Supply of Mid-Day Meal:

Your Company is funding Mid-Day Meal Scheme for providing nutritious food to childrenstudying in twenty five unaided schools providing education to poor children in andaround Trombay area. The scheme is operated through an NGO ‘ISKCON Food ReliefFoundation’ which supplies good and healthy meal to the children on behalf of RCF. Inall 6600 students have availed the benefit of this nutritious midday meal.

4.1.1.4 Programme for underprivileged Children

Your Company has adopted the "Khel Khel Mein" programme of WockhardtFoundation for under privileged children of age group of 5 to 10 years by setting up sixcentres of edu-recreation with parallel learning in slums of Vashi Naka area near Trombayunit.

4.1.1.5 RCF SUPER- 30 programme

Your Company in association with Centre for Social Responsibility and Leadership(CSRL) has established a unit of Abhayanand Super 30 in Mumbai where about 30underprivileged talented students of Maharashtra state are provided 11 months of freeresidential coaching to enable them to get admission in IIT/NIT and other premierengineering colleges. This year 28 of these students were successful in the JEE mainsexamination.

4.1.1.6 Farmers’ Education:

Company has two farmers training institutes located in Thal and Nagpur. During theyear 6352 farmers attended & benefited from the training programmes conducted atthese two Farmers Training Centres. During the programmes training was imparted toupgrade their farm practices reduce their overheads and increase their wealth. Specialprogrammes designed for women farmers and the scheduled caste and scheduled tribes arealso organized on a regular basis so that they can join the bandwagon of thecountry’s agricultural renaissance.

Your Company’s efforts in rendering advisory services to farmers by conductingSoil diagnostics to optimize soil productivity are well appreciated.

Based on the analysis farmers are advised on soil fertility management throughrational use of manure fertilizers and other inputs to make agriculture more productiveand sustainable. During the year more than 140417 soil samples were analysed andrecommendations given through the twelve static and six mobile soil testing laboratories.

4.1.2 Supply of drinking water to the villages:

Your Company has been providing drinking water for more than 21 years to seven villagesaround Thal unit through pipelines laid down from the water reservoir in the unit andspent about '69.59 lakh on this account during the year. More than 15700 residents of thevillages got benefited of the scheme.

4.1.3 Community Medical Facility

4.1.3.1 Running of Mobile Medical Van

Your Company has engaged Wockhardt Foundation and administered free primary health carethrough mobile Medical Vans. A total of four Mobile medical vans are running in slums ofTrombay and villages of Thal and patients are benefited from free medical servicesincluding supply of medicines. Through this facility ailments like Blood pressure lowHaemoglobin Levels Oxygen saturation Malaria Hepatitis Dengue Typhoid Diabetesetc. are treated on regular basis through qualified Doctors. One medical van attends toapprox. 25000 patients per annum.

4.1.3.2 Running of pathology lab

M/s Wockhardt Foundation is also engaged in the running of Pathology lab in Chemburnear RCF township. Near about 28000 diagnostic tests were performed for needy patients.

4.1.3.3 Distribution of sanitary napkins (Moksha)

Your Company has engaged Wockhardt Foundation for extending the medical services forenhancement of female hygiene by free distribution of sanitary napkins (Moksha) throughmobile Medical Vans. Under this scheme during the year about 529000 sanitary napkinswere distributed.

4.1.4 Chembur Green Project

Your Company continued to support the Chembur Green project launched to establishgreenery in the eastern suburb of Mumbai by joining hands with Chembur Citizens’Forum an NGO to develop beautify and maintain N G Acharya Garden (Diamond Garden) atChembur for a period of 6 years. Your Company continued distribution of free saplings andrendering advice to various co-op. societies and also to individuals.

4.1.5 Contribution to "Jalyukta Shivar"

Under the national campaign of clean and green India your Company has contributed ' 75lakh to the "Jalyukta Shivar" scheme in response to the appeal from Govt. ofMaharashtra.

4.1.6 Rural Sports

Your Company has supplied sports material and organised sports for tribals of ThalVillages.

4.1.7 Livelihood enhancement projects

Your company has also supplied paddy fruits sapling and free fertilizers to nearbyneedy villagers.

4.1.8 Your company has constructed Bio toilets at gate No.2 Trombay for Truck Driversand cleaners through Wockhardt Foundation. Also constructed five toilets in the schoolwhere Mid Day Meal is provided. In association with World Confederation of Warriers andHeal Foundation Free Medical Check Up and Eye Check Up camps have been organized in theschool where RCF is providing Mid Day Meal.

5.0.0 MICRO SMALL AND MEDIUM ENTERPRISES

Government of India Ministry of Micro Small and Medium Enterprises vide order dated23rd March 2012 notified the public procurement policy in respect ofprocurement of goods and services produced and provided by Micro Small and MediumEnterprises. As per this directive every Central Ministry or Department or Public SectorUndertaking shall set an annual goal of procurement from Micro Small and MediumEnterprises from the Financial Year 2012-13 and onwards with the objective of achieving anoverall procurement of products produced and services rendered by Micro Small and MediumEnterprises to the extent of minimum 20% of total annual purchases during the period ofthree years. The directive also provides that the goals set with respect to procurement tobe met from Micro

Small and Medium Enterprises and achievement made thereto be incorporated in theirrespective Annual Reports. Your Company has achieved the set target under specific areas.

6.0.0 SUSTAINABLE DEVELOPMENT

6.1 Your Company has taken up several Sustainable development activities including thefollowing:

[i] Improvement of Road infrastructure- construction and repairs.

[ii] Building of Check Dams.

[iii] Prevention of soil erosion and watershed management.

6.1.1 Rapid wall Project

The Rapid wall project is an example of Company’s faith in sustainable developmentwherein a waste product generated from Phosphoric Acid Plant is converted into usefulbuilding material by adopting a novel technology.

6.1.2 New Sewage Treatment plant

Your Company and Bharat Petroleum Corporation Limited (BPCL) have signed an MOU forsetting up a new Sewage Treatment Plant (STP) at RCF Trombay at approx. cost of '198Crore. This Plant will be based on latest Membrane Bio-Reactor Technology with designcapacity to treat 22.75 Million Litres per Day (MLD) of Municipal Sewage to produce about15 MLD of treated water. The treated water shall be shared by RCF and BPCL. The project isbeing set up with active support from Municipal Corporation of Greater Mumbai (MCGM). Thisproject is a Sustainability Development Project as it will treat waste sewage generated inthe city and convert it in to treated water. The said project when operational will alsoreduce the load on MCGM Sewage Treatment facility to the extent of 22.75 MLD.

The said project when it goes on-stream will generate 15 MLD of treated water for usagein plant operation in RCF and BPCL thereby saving fresh water intake to that extent whichwill benefit about 30000 families in the city of Mumbai. Being sustainable developmentproject this project from your Company will be of great value to residents of Mumbai andSociety at large.

6.1.3 Solar Power Plant

In its bid towards India’s vision of achieving ecologically sustainable growthyour Company has already forayed into solar power generation.

Your Company has set up a 2 MWp ground mounted Photovoltaic Solar power plant withinthe factory premises in Trombay Unit. The project has been successfully commissioned on 6thJanuary 2016. Based on the average intensity of solar radiation the project is likely togenerate around 3 million units of power on annual basis. The power generated is used forcaptive consumption of the Trombay unit thereby reducing your Company’s power importto the equivalent extent.

Your Company has also installed 6 rooftop solar power generation facilities with anaggregate capacity of 84 KWp atop at its offices of Trombay Thal and marketing offices.

The totally green power generated by solar plant replaces the conventional powergenerated through burning of fossil fuels leading to reduction in overall Greenhouse gasemissions of the surroundings.

In addition to above your Company is in the process of setting up solar rooftopfacilities atop 5 locations at Thal and 1 at Trombay with an aggregate capacity of 1.29MWp.

Your Company is targeting to take up many more sustainable development activities inthe near future.

6.2 ANNUAL SUSTAINABILITY REPORT

Company has published during the year its Sustainability Report for the year 2014-15based on Global Reporting Initiative (GRI) guidelines and National Voluntary Guidelines(NVG) on ‘Social Environmental and Economic Responsibilities of Business’issued by Ministry of Corporate Affairs Govt. of India. The Report has been hosted on theCompany’s website.

The report provides Company’s economic environmental and social performance.Sustainability reporting is about organization’s progress vis-a-vis performancegoals not only for economic achievements but for environmental protection and socialwell-being. The report for 2015-16 would also be published soon.

6.3 WATER CONSERVATION

During the year your Company has consumed 8389070 m3 of raw water as against9378330 m3 during the previous year resulting in saving of 989260 m3 water at TrombayUnit.

BMC water consumption in this year has come down by 276400 m3 resulting in saving tothe tune of ' 2.20 Crore.

Your Company has reduced discharge of effluent in to sea by 84 621 m3 by adoptingadditional recycling methods . It has also saved the precious BMC water equivalent to '67.36 Lakh.

Your Company has increased the greenery (Horticulture Area) around the Trombay Unit forwhich reject water is used. Water from this network is also utilised for toilet/urinalflushing in Trombay Unit.

Your Company has strengthened and extended STP reject water network for scrubbers inANP and Suphala Plant. It is also utilised in cleaning and washing of equipment and tanksin these plants. This network also provides reject water for different purposes to ETPPAP SAP/CNA plants.

Your Company has optimised the following process parameter which has saved equivalentenergy and water in Ammonia & Urea Plants:

i. Strengthened the operation of MP Stripper in Ammonia- I Plant which is savingequivalent DM water.

ii. Job of CT fan adjustment and drift eliminator carried out in Ammonia V plant.

iii. Strengthened the operation of water scrubber in Urea Plant with recycle of waterfor scrubbing etc. helped in reducing water consumption.

7.0.0 VIGILANCE

Dr. A.K. Padhee Joint Secretary (DOF) is holding the additional charge of ChiefVigilance Officer of the Company . The position of CVO in the company is at par with theFunctional Directors. CVO is assisted by a team of Officers drawn from various functionaldepartments and is supported by a Deputy CVO in the rank of General Manager (Vigilance).The activities of Vigilance department cover Corporate Office

Trombay Unit Thal Unit and all the Marketing area offices situated accorss thecountry. In line with the CVC guidelines the thrust of the Vigilance in your Company isto bring greater transparency integrity and efficiency. The focus of Vigilance Departmentis on Preventive and Participative Vigilance.

This is done by keeping a careful watch on various activities through regularinspections and surprise checks. System improvements and corrective actions are takenwherever necessary. The theme that "All officers are Vigilance Officers" isimplemented in your company and alertness and support of all officers is taken in theimplementation of Vigilance. Vigilance has focused on spreading awareness on rules/regulations procedures and solicited information/ complaints from all regardingmalpractices/ corruption.

During the year Vigilance Department has actively contributed towards Good Managementin leveraging technology in all operations that helps in implementing robust e-governancein RCF in making the tender documents more transparent and relevant enhancedtransparency in existing system of dealing with our Dealers/ Vendors and accrued savingsby implementing e-procurement in your company thereby ensuring transparency in allprocurements. Vigilance Department has also ushered in an era of E Vigilance clearance forNOC for various issues to the employees.

8.0. 0 MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis report highlighting the industry structure anddevelopments opportunities and threats future outlook risk and concerns etc. is annexedas Annexure II and form an integral part of this report.

9.0. 0 PUBLIC DEPOSIT

Your Company has not accepted any deposits within the meaning of section 73 oftheCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

10.0. 0 OFFICIAL LANGUAGE POLICY

Your Company has fully endeavoured to implement the provisions of Official Language

Act 1963 and the policy of the Government. Publicity material and literature foremployees and farmers are made available in Hindi and other regional languages.

11.0.0 AUDITORS

11.1.1 STATUTORY AUDITOR

The Comptroller and Auditor General of India (CAG) has appointed M/s Kalyaniwalla& Mistry ( Firm Registration Number 104607W) and M/s N.B.S & Co. (FirmRegistration Number 110100W) as Joint Statutory Auditors of your Company for the FinancialYear 2015-16. The Auditors would be retiring at the conclusion of the Thirty Eight AnnualGeneral Meeting.

There is no Audit qualification for the year under review.

The Statutory Auditors for the Financial Year 2016-17 will be appointed by the CAG.However their remuneration is required to be fixed at the AGM by the members.

11.1.2 COST AUDITOR

Your Directors on the recommendation of Audit Committee has appointed Shri Rohit J.Vora (M5740) and M/s. Musib & Co.(F/15026) Cost Accountants as Cost Auditors toaudit the cost accounts of the Company for the year 2016-17 on a remuneration of ' 3.68lakh. As required under the Companies Act 2013 the remuneration payable to cost Auditoris required to be placed before the Members in a general meeting for their ratification.Accordingly a resolution seeking Member’s approval for the remuneration payable toShri Rohit J. Vora and M/s. Musib & Co. Cost Auditors forms part of the noticeconvening the Annual General Meeting for their ratification.

11.1.3 SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Bhandari and Associates a firm of Company Secretaries in Practice (C.P.No. 366) to undertake the Secretarial Audit of the Company. The Secretarial Audit Reportis annexed as Annexure III and forms an integral part of this Report.

EXPLANATION OR COMMENTS BY THE BOARD ON SECRETARIAL AUDIT REPORT

M/s. Bhandari and Associates Practising Company Secretaries Secretarial Auditor ofthe Company has made certain observations in their Secretarial Audit Report. The BoardComments in respect of the same is annexed as Annexure IV and forms an integral part ofthis Report.

12.0 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators/courts/tribunalsthat would impact the going concern status of the company and its future operations.

13.0.0 DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of section 134(3)(c) of the Companies Act 2013:

i] that in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

ii] 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 as at March 31 2016 and of the profit ofthe Company for the year ended on that date;

iii] that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv] the annual accounts have been prepared on a going concern basis;

v] that the Directors had laid down internal financial controls to be followed by the

company and that such internal financial controls are adequate and were operatingeffectively; and

vi] that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

14.0. 0 CORPORATE GOVERNANCE

14.1.0 As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015a separate section on Corporate Governance practices followed by the Company togetherwith a certificate of Compliance from the Practising Company Secretary forms an integralpart of this report.

14.2.0 COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OF PUBLICENTERPRISES

Government of India Department of Public Enterprises (DPE) has laid down certainparameters for the purpose of grading the Central Public Sector Enterprises on the basisof their compliance of guidelines on Corporate Governance and this report needs to besubmitted to the Government on quarterly/annual basis. Your Company has been largelycomplying with the Guidelines on Corporate Governance for Central Public SectorEnterprises laid down by DPE and regularly submits reports to the Government.

15.0. 0 INTERNAL FINANCIAL CONTROL OVER FINANCIAL REPORTING

Your Company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. Your Company’s internal financial controlover financial reporting includes those policies and procedures that:

(i) pertains to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of Management and Directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

16.0.0 DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year Shri Dharam Pal (DIN 02354549) has been appointed as GovernmentNominee Director in place of Shri Sham Lal Goyal (DIN 03342782) w.e.f.28thJanuary 2016.

Shri Manoj Mishra (DIN 06408953) has been appointed as Chairman and Managing Directorof the Company w.e.f. 15th June 2016.

Shri R. G. Rajan (DIN 01253189) ceased to be Chairman and Managing Director of theCompany w.e.f. 14th June 2016. The contribution of Shri R. G. Rajan to yourCompany has been immense. His guidance suggestions and advice has greatly benefited theCompany. The Board places on record its appreciation for the valuable contribution of ShriR. G. Rajan during his tenure as CMD of the Company.

Shri Ashok B. Ghasghase (DIN 06378677) ceases to be Director(Marketing) of the Companyon his superannuation w.e.f.1st July 2016.

The contribution of Shri Ashok B. Ghasghase to your Company has been immense. Hisguidance suggestions and advice has greatly benefited the Company. The Board places onrecord its appreciation for the valuable contribution of Shri Ashok B. Ghasghase duringhis tenure as Director (Marketing) of the Company.

The Board of Directors at their meeting held on 8th July 2016 has appointedShri Harin Pathak (DIN07552994) Shri Bharatkumar Barot (DIN 07552993) and Shri G. M.Inamdar (DIN 07552999) as an Independent Directors of the Company.

As per Section 152 of the Companies Act 2013 Shri Sushil Kumar Lohani (DIN 06912948)and

Shri Suresh Warior (DIN 06920261) Directors retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offer themselves for reappointment.

All independent Directors have given declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1) (b) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

17.0. 0 COMMITTEES OF THE BOARD

The Board of Directors has the following committees:

i. Audit Committee

ii. Stakeholders Relations Committee

iii. Share Transfer Committee

iv. Nomination and Remuneration Committee

v. Committee on Corporate Social Responsibility (CSR)

vi. Empowered Committee for Procurement.

The details of the committee alongwith their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.

18.0. 0 REMUNERATION POLICY

Department of Public Enterprises vide OM No. 2(70)/08- DPE(WC) dated 26th November 2008has fixed pay scales of Board Level and below Board Level executives and non-unionisedsupervisors.

19.0. 0 MEETINGS OF THE BOARD

Thirteen (13) Board Meetings were held during the year. The details of the number ofmeetings of the Board held during the financial year 2015-16 forms part of the CorporateGovernance Report.

20.0. 0 BOARD EVALUATION

Section 134(3) (e) of the Companies Act 2013 requires the Company to disclose itspolicy on director’s appointment and remuneration including criteria for determiningqualifications positive attributes independence of a director and other matter providedunder sub-section

(3) of section 178. Section 134(3) (p) of the Companies Act 2013 also requires thecompany to disclose the manner in which formal annual evaluation has been made by theBoard of its own performance and that of its committees and individual directors.

RCF is a government company where directors are appointed by the government of India oron the recommendation of the government. The remuneration etc. of Directors are decided asper the DPE guidelines. The tenure of the Directors are also decided by the government.

RCF being a government company has been exempted from the provisions of section134(3) (e) & p and section 178(2) & (3) ofthe companies Act 2013.

21.0. 0 PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN AND SECURITIESPROVIDED

Particulars of Loans given Investments made Guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the notes to the financial statements.

22.0. 0 VIGIL MECHANISM/WHISTLE BLOWER

POLICY

The details of Vigil Mechanism/Whistle Blower Policy are provided in CorporateGovernance Report.

23.0. 0 RELATED PARTY TRANSACTIONS

All contracts/arrangement/transactions entered by the Company during the financial yearwith related parties were in the ordinary course of business and on arm’s lengthbasis. There are no materially significant related party transactions made by the Companywith Promoters Directors Key Managerial Personnel or other designated persons which mayhave a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. None of the Directors has any pecuniary relationships or transactionsvis-a-vis the Company.

The details of the investment in equity made by the Company as on 31stMarch 2016 is as under:

Rs. Crore

1 FACT-RCF Building Products Limited *32.87
2 Urvarak Videsh Limited *0.18
3 Talcher Fertilizers Limited 0.02
Total 33.07

* Company has made full provision towards the value of investment.

The details of the advance given by the Company against equity pending for allotment ason 31st March 2016 is as under:

Rs. Crore

1 FACT-RCF Building Products Limited **2.36

** Company has made full provision towards the said amount.

The details of transactions with related parties are provided in the accompanyingfinancial statements. There are no transactions to be reported in Form AOC-2.

24.0. 0 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND 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 thereunderinternal complaint committee formed by your Company has received one complaint of sexualharassment at work place which was disposed off as per procedure laid down under the Actduring the year 201516.

25.0. 0 ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed to this Report as"Annexure V".

26.0.0 EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT- 9 asrequired under section 92 of the Companies Act 2013 is annexed as "AnnexureVI" and forms an integral part of this report..

27.0 ACKNOWLEDGMENT

Your Directors wish to gratefully acknowledge the valuable guidance and continuedsupport extended by Government of India and in particular the Department of Fertilizersand the Office of Fertilizer Industry Co-ordination Committee (FICC) Railways DPEmembers of MOU Task force and other Central Government departments and Agencies.

The Board also wishes to acknowledge with sincere gratitude the help and unstintedsupport from the Government of Maharashtra and other State Governments MSEB MIDCvarious Media Municipal Authorities Maharashtra Pollution Control Board Bankers to yourCompany Financial Institutions Dealers and Customers.

Your Board wishes to acknowledge gratefully the confidence posed unstinted supportand suggestions made to the Board by the esteemed share Owners of the Company. The Boardalso wishes to place on record the positive suggestions and guidance provided by theStatutory Auditors Cost Auditors and the Office of the Principal Director of CommercialAudit.

Last but not the least your Directors take pleasure in placing on record their deepappreciation of the excellent contribution made by the employees of your Company at alllevels without which your Company would not have achieved such good performance.

By order of the Board of Directors

[Manoj Mishra] Chairman and Managing Director

Place: Mumbai

Date : 8th August 2016