The Shareholders Madras Fertilizers Limited
Your Directors have pleasure in presenting herewith the 55thAnnual Report together with the Balance Sheet as at March 31 2021 and the Statement ofProfit & Loss for the year 2020-21.
SUMMARY OF FINANCIAL RESULTS
Rs. in Cr
|Particulars ||2020-21 ||2019-20 |
|Revenue from operations ||1532.79 ||1291.99 |
|Profit Before Interest Depreciation Exceptional items and Tax ||132.40 ||(1.25) |
|Finance Cost ||98.48 ||92.44 |
|Depreciation and Amortization Expenses ||31.14 ||31.57 |
|Exceptional items ||- ||- |
|Other Comprehensive Income ||(31.54) ||23.44 |
|Profit / (Loss) Before Tax ||34.41 ||(148.70) |
|Provision for Tax ||- ||- |
|Profit / (Loss) After Tax ||34.41 ||(148.70) |
|Cash Profit / (Loss) ||65.55 ||(117.13) |
The Company's operations for the year ended with a profit of '34.41 Cr.
The Company has submitted a Revival Proposal to Department ofFertilizers Government of India for its consideration.
The Company does not propose to declare any Dividend to shareholdersduring the fiscal 2021 as per the Companies (Declaration and Payment of Dividend) Rules2014 due to huge accumulated losses C 853.37 Cr) and negative net worth (Rs. 695.23 Cr)as on March 31 2021.
HIGHLIGHTS OF PLANT PERFORMANCE
During the year 2020-21 480865 MT of Neem Coated Urea 53565 MTof NPK (17-17-17) and 156.40 MT of Bio Fertilizers have been produced against the previousyear production of 345150 MT of Neam Coated Urea 65000 MT of NPK and 46.40 MT of BioFertilizers.
Urea plant was operated consistently at a max load of 108% withRLNG as Feedstock and achieved 100% and above of Urea production for 225 Days during thisyear.
Urea production of 480865 MT in FY 2020-21 is the Second highestProduction since inception (Best: 486750 MT in the year 2011-12 & 2013-14).
Quarterly Production of 143169 MT of Urea during Jan-Mar 2021 isthe second highest in any quarter since inception (Previous 142498 MT during Oct-Dec 2010and Best 144763 MT during Jan-Mar 2011)
Average Specific Energy Consumption of Ammonia and Urea plant is10.3594 & 7.6375 GCal/MT respectively. Achieved the lowest energy consumption ofAmmonia and Urea for the day since inception on 10.11.2020 (8.968 GCal/MT of Ammonia and6.615 GCal/MT of Urea)
Despite countrywide lockdown due to COVID-19 pandemic situationsince March 25 2020 Urea production and timely distribution of fertilizer products wereensured as per GoI guidelines due to adequate and appropriate precautionary measures takenby the management.
The replacement of RO Stream membranes along with TTRO water forCW make up has made significant improvement in CW quality ie reduction in CW chloridecontent of CW from 2500 ppm to 1500 ppm and also frequent leaking / failure of CWexchangers is prevented. This has improved the on stream efficiency of the exchanger andultimately plant loads.
Consumption of Sewage water has been increased from 8751 KLPD to11224 KLPD ie 28.26% increase over the previous year.
Installation of CT Cells M & N: After commissioning of these2 cells the availability of total no. of fans has increased from 12 to 14 nos by whichplant load reduction during summer due to high cooling water temperature is totallyeliminated and taking preventive maintenance of fans becomes easy without affecting plantloads.
At the close of Mar 31 2021 2546 days were completed withoutany lost time accident covering 8.91 million man-hours (Previous best Achieved - 5.66million man-hours)
MEMORANDUM OF UNDERSTANDING
A MoU was signed with Department of Fertilizers (DOF)
Government of India for the year 2020-21 on Nov 10
2020 setting up targets for performance of the Company
in terms of static and dynamic parameters.
Achieved a sale of 479402 MTs of Vijay Neem Coated Urea withOne fourth contribution of market share 25.35% in Tamilnadu 7.89 % in MFL'smarketing territory which is 48% increase over previous year sale of 323764 MTs. (Totalconsumption 2020-21: 6068525 MT and CPLY : 5630671 MT).
Sold the total available quantity of 51868 MTs of Vijay17-17-17.
Overall Sold 531270 MTs of both NPK 17-17-17 and NC Ureaduring the year which is at par with the production under the challenged COVID-19 pandemicsituation and this is 37% higher than the previous year sale of 389281 MTs.
Record movement of 531270 MTs irrespective of pandemicconditions prevailed for the entire year which is 2nd best in last 10 years (542644 MTsin 2013-14).
Supplied 750 MTs of Vijay NC Urea to our extra marketingterritory Andaman & Nicobar Islands
Bio fertilizers Bio Pesticides & Organic Manures Sales
Sold 157.00 MT of Vijay Bio Fertilizers which is 240%increase over previous year sale of 46.40 MT
Sold 96.67 KL of Vijay Neem which is 32% increase overprevious year sale of 73.42 KL.
Under "Basket Approach" MFL sold 5046.28 MTs ofVijay Organic which is 80% increase over previous year sale of 2807.80 MT.
In addition to Organic Manure Under "Swachh BharatMission" Marketing of City Compost a product from Municipality/Factorywaste has been undertaken and 6403 MTs was sold.
With respect to City Compost sales MFL is proud to be a TOPPERin Tamilnadu sales and continuously maintaining its slot in TOP 10 position for 4thconsecutive year on All INDIA basis.
MARKET DEVELOPMENT & AGRO-SERVICE PROGRAMMES:
MFL's Marketing personnel have contacted 23127 farmers during the yearand continuously imparted knowledge to farmers on use of eco-friendly products for soilhealth soil fertility Soil vitality and balanced fertilization (Integrated NutrientManagement) by direct farmer contact soil sample collection method demonstrations andfarmer seminar in coordination with State/Central Agricultural extension departments.
Under corporate social responsibility to farming community Marketingpersonnel had collected 3810 soil samples got analyzed and communicated to the farmersabout the micro & macro nutrient recommendations of various crops to farmers duringthe year.
In pursuance to the Prime Minister's Mission on empowering the Farmersvide Supportive Schemes & Education on farming techniques MFL continues its serviceto the farmers through "Kisan Suvidha Kendra" at Gangavathy and Shimoga inKarnataka State. Farmer services like soil sample analysis and recommendation offertilizer dosage based on soil test report educating the farmers on weather cropInsurance and other improved farm technologies were offered.
In order to sustain sales thru PoS machines and to comply with PANIndia implementation through DBT MFL is educating the wholesalers and retailers onimportance of PoS sales consistently.
MFL procured 36 Nos of PoS devices for Andaman & Nicobar IslandAdministration and arranged for installation & imparted training to concernedofficials. Thereby the administration commenced the sale of Vijay NC Urea thru PoS devicesfor the first time after implementation of DBT in Jan'2018
ACTIVITIES AND ACHIEVEMENTS OF VIGILANCE DEPARTMENT DURING 2020-21
Complaints received were attended and reports submitted as perComplaints Handling Policy of the Company / Central Vigilance Commission (CVC) guidelines.
Continuously monitoring the progress of the DisciplinaryProceedings in respect of Vigilance Cases for timely completion.
Agreed List of Suspected Officers and List of Officers ofDoubtful Integrity were finalised and sent to DoF.
CVC Guidelines / Circulars on Tenders and DisciplinaryProceedings and other matters as and when received were communicated to Management fornecessary action.
CVO had four Structured Meetings with the CMD MFL on11.05.2020 05.08.2020 18.11.2020 & 27.01.2021 and pending issues were discussed andsuggestions given to the Management.
For all the Tenders with value more than Rs. 2 lacs e-Tenderingand e-reverse auction method is being followed.
Annual Property Returns of the Officers were scrutinized asper CVC guidelines.
For easy reference CVC Guidelines / Circulars on Tenderswere uploaded in MFL's Online Integrated System (OLIS).
MFL observed Vigilance Awareness Week 2020 from 27.10.2020to 02.11.2020 as directed by CVC. The following are the highlights:
On October 27 2020 in view of COVID situation IntegrityPledge was administered by CMD to Senior Management Officials at 11.00 hours in the lawnsof Administrative Building. All other employees took integrity pledge at their respectivework spots.
As a part of Vigilance Awareness Week 2020 celebration Essayand Slogan Competitions were held for the employees and their wards and the theme forthese competitions was "Satark Bharat Samriddh Bharat (Vigilant India - ProsperousIndia)".
As directed by Central Vigilance Commission a link was providedin the Company's web site to facilitate Citizens and Corporates to access the CVC websiteand to take e-Pledge. A total number of 295 employees have undertaken e-pledge and also atotal number of 115 Citizen have undertaken e-pledge.
On Oct 28 2020 a Workshop on Information Security wasconducted through webinar by CVO and the participants included Officers from all relevantdepartments such as from Finance IT Commercial Technical Services ProductionPersonnel Marketing etc.
Chief Manager - Distribution and Sales (i/c) participated in theWebinar conducted by Kendriya Vidyalaya Adilabad Telangana State as Chief Guest on28.10.2020. The webinar was about "Understanding Corruption & Measusres torestrict it". The Chief Manager presented a speech on measures taken by GoI to tacklecorruption and its implementation in PSUs like MFL.
On Nov 02 2020 a Keynote Address on "Satark BharatSamriddh Bharat (Vigilant India - Prosperous India)" was delivered by Shri J TVenkateswarlu CVO CPCL Chennai. While presenting the general concepts of preventivevigilance he also shared his experiences in CPCL. The session was highly interactive andwas attended by the CMD and Group Heads.
Banners were displayed in all the Regional Offices of MFL andall the staff of Regional Offices have taken e-pledge.
Prizes were distributed to the Winners of the VigilanceAwareness Week competitions on 23.11.2020 by Director - Technical.
In addition to the above MFL Vigilance organized twoWorkshops as detailed below :
On Sep 21 2020 a Preventive Vigilance Workshop covering keyareas was conducted by CVO in which all the Group Heads and Company Secretaryparticipated.
A Preventive Vigilance Workshop through Video Conference (VC) on"Public Procurement" to higher Management and relevant personnel was conductedon 04.03.2021. Shri Tushar Kant Mishra Executive Director (Materials & Contracts)Coal India Limited Kolkata was the Faculty.
Three important system improvements were suggested byVigilance and implemented by the Management in the area of tenders.
HUMAN RELATIONS AND INDUSTRIAL RELATIONS MANPOWER & TRAINING
The total strength of MFL as on 31.03.2021 is 539 against571 as on 31.03.2020.
During the year overall Industrial Relation situation in theCompany has been normal and cordial.
Covid-19 : Seamless Transport arrangements ensured as Covid-19restrictions continues.
SC / ST WELFARE ACTIVITIES
The Presidential Directives and various guidelines issued by theGovernment of India from time to time relating to the welfare of SC / ST employees arebeing scrupulously followed. A Liaison Officer for SC / ST has been posted to ensureimplementation of Government Directives and a SC/ST is Cell is functioning for redressingthe grievances of SC/ST employees.
Rs. 60000/- was granted for celebrating Dr. Ambedkar Jayanthi on15th April 2020 at our Board Room and conducted in a grand manner in commemoration ofNational Leader.
BC/MBC/OBC WELFARE ACTIVITIES
Rs. 30000/- was granted for celebrating Thanthai Periyar E VRamasamy's Birthday on 17th September 2020 in a grand manner in commemoration of NationalLeader.
OFFICIAL LANUAGE IMPLEMENTATION
The target fixed by Department of Official Language for lettercorrespondence in Hindi and other implementation programs is being taken care of. HindiFortnight was celebrated at Head Office and Regional Offices. Various competitions wereorganized and prizes were distributed. Efforts have been taken to improve the percentageof letter correspondence and Noting in Hindi.
INVESTOR RELATIONS CELL (IRC)
IRC is functioning in the Company under the Company Secretary to createawareness of the Company's strength and ensuring timely communication to shareholders.
Annual Evaluation of Board
MFL being a Government Company all appointments in the Board are madeby the Government of India Ministry of Chemicals and Fertilizers Department ofFertilizers. The performance of Directors are evaluated by the Ministry of Chemicals &Fertilizers Department of Fertilizers Government of India. As per Government of IndiaMinistry of Corporate Affairs notification dated 5th June 2015 clause (e) and (p) ofsub-section 3 of Section 134 of Companies Act 2013 relating to appointment remunerationand Annual evaluation of Board on its performance are not applicable to MFL. However thecompany is evaluating the performance of its Directors as per the guidelines issued bySEBI.
Meeting of the Board
During the year 2020-21 five meetings of the Board of Directors wereconvened and held. The details of the meetings of the Board of Directors are given in thereport on Corporate Governance which is part of this report. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013.
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197 (12) of the Companies Act2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 it is stated that no employee of your Company was inreceipt of remuneration for any part of the year at a rate which is more than Rs. 5 lacsper month.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 yourDirectors hereby state that
a) in the preparation of the annual accounts for the year ended March31 2021 the applicable accounting standards (Ind AS) had been followed along with properexplanation relating to material departures.
b) the directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the company for that year;
c) the directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;
d) the directors have prepared the annual accounts on a going concernbasis.
e) the directors have laid down internal financial control to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
f) the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Prevention of Sexual Harassment
Disclosures in relation to the Sexual Harassment of Women at workplace(Prevention Prohibition and Redressal) Act 2013 have been provided in the Report onCorporate Governance report.
Energy Technology & Foreign Exchange
The data on Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo in accordance with the provisions of Section 134 of CompaniesAct 2013 are given in the Annexure - I forming part of this report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required under ListingAgreement is enclosed as Annexure - II forming part of this report.
The Company is committed to maintain the highest standard of CorporateGovernance and adhere to the Corporate Governance requirements set out by SEBI. The Boardlays emphasis on transparency and accountability for the benefit of all stakeholders ofthe Company. The Report on Corporate Governance as stipulated under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and Business ResponsibilityReport have been enclosed as Annexure - III & IV forming part of the report.
Code of Conduct
Declaration affirming compliance with the code of conduct pursuant tothe provisions of Regulation 17(5) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") is enclosed as Annexure - V forming part of this report.
Extract of Annual Return
As provided under Section 92 (3) of the Act the form MGT-7 AnnualReturn is published in our website www. madrasfert.co.in.
a) The Comptroller & Auditor General of India have appointed M/sAnand & Ponnappan (MD 0327) as Statutory Auditors of the Company for the year 202122.
b) Mrs. Aruna Prasad (M No.11816) Cost Accountant has been appointed/ re-appointed as Cost Auditor of the Company for the year 2021-22.
c) In terms of the provisions of Section 204 of the Companies Act 2013and Rules framed thereunder a Secretarial Report in the prescribed format obtained froma Company Secretary in practice is required to be annexed to the Board's Report. In viewthereof your Board has approved the appointment of M/s. V Esaki & Associates(M.No.30353) Practicing Company Secretary as the Secretarial Auditor of your Company.The Secretarial Auditors' Report (Form No.MR-3) for the year 2020-21 is enclosed asAnnexure - Vi forming part of this report. Further in terms of SEBI LODRRegulations Secretarial Compliance Report has also been obtained from M/s. Esaki &Associates for the year 2020-21.
In line with the provisions of Section 177 of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 an AuditCommittee of the Board has been constituted. Details of Members / Meetings of the AuditCommittee are elaborated in the report on Corporate Governance. The Board has accepted allrecommendations of Audit Committee.
The Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe date of the balance sheet.
Contract or arrangement with Related Parties
The transactions entered with related parties for the year under reviewwere on arms length basis and in the ordinary course of business. The disclosure in FormNo.AOC-2 for the transactions with related parties during the period under review isenclosed as Annexure - VII of the report.
Corporate Social Responsibility (CSR)
As per Section 135 of Companies Act 2013 the CSR Committee of theBoard consisting of 3 or more directors out of which one director shall be an independentDirector. CSR Committee was present till June 05 2019. Further MFL is vigorouslyfollowing up with Department of Fertilizers Ministry of Chemicals & FertilizersGovernment of India for appointment of Independent Directors Once the IndependentDirectors are appointed by DOF GOI the Company will reconstitute the CSR Committee as perthe Companies Act 2013.
However the Company has carried out the following CSR activitiesduring the financial year 2020-21. The details are contained in the Annual Report on CSRactivities which is enclosed as Annexure - VIII forming part of this report.
Material changes and commitments
There were no material changes and commitments affecting the financialposition of the company between the end of financial year March 31 2021 and the date ofthe report.
As required by Regulation 17(8) of the SEBI Regulation a Certificateon the Financial Statements and Cash Flow Statement of the Company for the year endedMarch 31 2021 duly signed by the Chairman & Managing Director and General Manager -Finance & Accounts (A/C) was submitted to the Board of Directors at their meeting heldon June 23 2021 is enclosed as Annexure - IX forming part of this report.
Certificate from Company Secretary in Practice pursuant to Clause 10 ofPart C of Schedule V of SEBI (LODR) Regulations 2015:
The Certificate dated June 18 2021 received from M/s. V Esaki &Associates Company Secretaries confirming that none of the Directors on the Board of theCompany have been debarred or disqualified from being appointed or continuing as Directorsof the Company by the Board/ Ministry of Corporate Affairs or any such Statutory Authorityis enclosed as Annexure X.
MFL is having vigil mechanism for directors and employees to reporttheir concerns. The Directors and employees can approach Chairman of Audit Committee ofthe Board directly and report their concern in appropriate case. The vigil mechanism andwhistle blower policy is published in the website of the Company www.madrasfert.co.in.
Prevention of Insider Trading
No instances of insider trading have been reported on MFL shares tilldate. None of the directors and key managerial personnel is holding any shares in MFL. Acode of conduct of prevention of insider trading and code for corporate disclosure ispublished in the website of the Company www.madrasfert.co.in.
Your Directors wholeheartedly place on record their appreciation forthe continued and unstinted support of Department of Fertilizers Government of IndiaGovernment of Tamilnadu NICO Financial Institutions Banks Depositors and allstakeholders during the year. It is most appropriate to mention that the Directors conveytheir gratitude to the Department of Fertilizers for settlement of subsidy bills onpriority basis and to the dealers and farmers for their sustained support to Vijayproducts. Last but not the least that your Directors also place on record theirappreciation for the dedication commitment and sincere services rendered by the employeesfor sustained improvements.
| ||By order of the Board |
|Chennai ||U Saravanan |
|June 23 2021 ||Chairman & Managing Director |
| ||DIN 07274628 |