On behalf of the Board of Directors of your Company I have the pleasure in presentingthe 45th 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 2018-19 and the Auditors Reports and Comments ofComptroller & Auditor General of India (C&AG).
During the year 2018-19 Company achieved revenue from operations of Rs.12245.24 croreas against Rs.8954.36 crore achieved during the previous year. The turnover was higher byRs.3290.88 crore (i.e. 37%) mainly due to higher gross sale of urea (by 25% as compared toCPLY) owing to higher gas price inspite of lower sale quantity of manufactured Urea by0.18 LMT higher sale of other manufactured fertilizers higher sale of traded productssuch as Imported fertilizers (by 5.87 LMT) City Compost Seeds and Agrochemicals (by 65%as compared to CPLY) and higher sale of Industrial Products (by 16% as compare to CPLY) .The Company has achieved Profit before Tax of Rs.463.37 crore as compared to Rs.334.83crore of the previous year showing an increase by Rs.128.54 crore.
Energy consumption per MT of Urea at all units was within energy norms fixed by GOIunder New Urea Policy 2015. Nangal Panipat and Bathinda Units achieved ever lowest energyconsumption during 2018-19.
The energy consumption per MT of Urea at NFL plants during 2018-19 was as follows :
|Units ||Revised Energy Norms for 2018-19 ||Actual Energy |
| || ||2018-19 ||2017-18 |
|Nangal ||7.083 ||6.726 ||6.819 |
|Panipat ||7.592 ||6.695 ||6.761 |
|Bathinda ||7.459 ||6.720 ||6.859 |
|Vijaipur I ||5.896 ||5.891 ||5.753 |
|Vijaipur II ||5.500 ||5.426 ||5.372 |
Your Companys key financial parameters during the year 2018-19 and importantfinancial highlights are as under : -
Rs. in crore
|S. No. Particulars ||2018-19 ||2017-18 |
|01. Sale of Urea quantity in (LMT) ||38.98 ||39.16 |
|02. Sale quantity of other Fertilizers (LMT) ||9.97 ||3.93 |
|03. Sale of Urea ||2024.83 ||2096.60 |
|04. Subsidy on Urea ||7496.73 ||5528.63 |
|05. Total Sales of Urea (3+4) ||9521.56 ||7625.23 |
|06. Sale of other products including subsidy ||2692.47 ||1303.06 |
|07. Sales Turnover (5+6) ||12214.03 ||8928.29 |
|08. Sale of Services ||10.28 ||0.02 |
|09. Other Operating Revenue ||20.93 ||26.05 |
|10. Revenue from operations (7+8+9) ||12245.24 ||8954.36 |
|11. Other Income ||55.81 ||61.84 |
|12. Total Revenue (10+11) ||12301.05 ||9016.20 |
|13. Total Expenses ||11420.18 ||8418.50 |
|14. Earnings Before Interest Depreciation and Taxes (EBIDTA) ||880.87 ||597.70 |
|15. Interest ||316.36 ||189.57 |
|16. Depreciation ||101.14 ||73.30 |
|17. Profit Before Tax (PBT) (14-15-16) ||463.37 ||334.83 |
|18. Provision for tax ||164.92 ||122.06 |
|19. Profit After Tax (PAT) (17-18) ||298.45 ||212.77 |
|20. Other Comprehensive Income (Net of Tax) ||(2.37) ||(1.82) |
|21. Total Comprehensive Income (19+20) ||296.08 ||210.95 |
The balance as at 31st March 2019 amounted to Rs.2.51 crore which is at the samelevel as was in the previous year.
Corporate Social Responsibility
CSR Reserve stood at Rs.7.89 crore as on 31.03.2019 as compared to Rs.3.88 crore on31.03.2018.The reasons for the same are detailed in Report on CSR activities at Annexure-5.
No amount was transferred during the year to General Reserve from the surplus. TheGeneral Reserve as on 31.03.2019 stood at Rs.332.89 crore at same level as was on31.03.2018.
The balance retained in the surplus as at 31st March 2019 is Rs.1385.15 crore ascompared to Rs.1157.54 crore during the previous year.
Your Company paid interim dividend of Rs.1.09 per equity share in February 2019 andthe Board of your Company has recommended a final dividend of Rs.0.77 per equity share forthe financial year 2018-19. The dividend pay out is 30.57% of profit after tax and thetotal dividend pay out including dividend tax is 36.86% of profit after tax. The finaldividend shall be paid after your approval at the Annual General Meeting.
Major events during the year
State of affairs of the Company and Change in the nature of business
FY 2018-19 has emerged as best ever period in the 45 years history of the Company. Beit best ever production operation of the plants at lowest energy consumption best eversales or best ever turnover. The profit is also best ever over previous 15 years. TheCompany is in its best form these days and ready to push ahead with more vigour to achievegreater heights. Company has recorded ever best urea production of 38.59 lakh MT with acapacity utilization of 119.4 % (w.r.t. reassessed cap of 32.31 LMT/yr) that accounts for16.5% share in overall urea production in the country that was the culmination ofconsistent operation of plants and favorable urea policy of the GOI. Contribution ofNon-Urea business to the top line of the company increased to over 22% during the year ascompared to 15% of the CPLY. Company has also achieved a record sale of 48.95 lakh MT offertilizers during 2018-19.
The finest financial performance of the Company could be possible through energyefficient operation of the plants and several strategic initiatives undertaken in lastthree years such as import of fertilizers on large scale commencement of seedmultiplication programme to produce and sale of certified seeds trading of new moleculesof agro chemicals seeds and compost under Companys own brand. Your Company hasproduced
8500 MT of Bentonite Sulphur at Panipat Unit after commissioning of the plant inDecember 2017.
Your Company won Port handling operations at three ports for handling of Urea importedin Govt. account and it received 4.96 LMT of imported Urea at ports 3.75 LMT dispatchedand 3.71 LMT sold. GoI introduced 45 kg bag for Urea in place of 50 Kg to reduce theconsumption of Urea for balanced fertilization. After opening of its 4th Zonal office atHyderabad and signing of an agreement with BVFCL for marketing of its fertilizers inAssam your company has now become of Pan India Company in Fertilizer Sector.
Company has steadily transformed from single product to a multi-product Company and isable to provide major agro-inputs through its marketing network. NFL now has a big basketof varied products like Urea DAP MoP APS NPK Bio fertilizers Bentonite Sulphur CityCompost Seeds Agro chemicals to offer to farmers under one roof.
Your Company has also signed an MoU with RFCL to market RFCL Urea and other products.On the environment protection front your company has successfully met a challenge byachieving the strict NOx emission norms for Nitric Acid plant at Nangal imposed by Govt.by way of carrying out inhouse modifications which saved significant cost and time of yourcompany.
Regarding introduction of new products in its basket your company has added some newmolecules of Agro Chemicals (Insecticides Pesticides project for Germicides etc.) WaterSoluble Fertilizers Calcium Nitrate for trading. However your company could not proceedfurther on N2O4
ISRO at Vijaipur due to non-availability of prior authorization from US authorities forwaiver from US Sanctions and therefore this project has to be shelved by your company.
Material changes and commitments
No material changes and commitments have occurred between the date of the Balance Sheetand the date of the Boards Report affecting the financial position of the Company.
Details of revision of Financial Statements or Boards Report
Company has not revised Financial Statements or Boards Report in respect of anyof the three preceding financial years.
a) Brief history of the Company overview of the industry and important changes in theindustry during the last financial year
Brief history of the Company forms part of Board Responsibility Report attached to thisReport.
Overview of the industry and important changes thereof during the last financial yearforms part of Management Discussion & Analysis Report.
b) Brief description of business segments and geographic segments; Segment Results
In the light of present diversified business activities vis-a-vis IND AS 108 on SegmentReporting following operating segments have considered for Segment Reporting for theAnnual Accounts for the FY 2018-19: i) Production and Sale of own Fertilizers (UreaBio-fertilizer and Bentonite Sulphur). ii) Domestic Trading of Fertilizers (Indigenous andImported). iii) Production and sale / trading of other products (Industrial Products AgroChemicals Certified Seeds and City Compost).
c) External environment and economic outlook;
Details of external environment and economic outlook are given in Management Discussion& Analysis Report.
d) Induction of strategic and financial partners during the last financial year
No new strategic and financial partners have been inducted during the last financialyear.
Preference and Equity Shares
Company has not issued any equity shares or preference shares during the year.
Equity Shares with Differential Rights
During the financial year Company has not issued any equity shares with differentialrights as to dividend voting or otherwise.
Employees Stock Option
During the financial year Company has not issued any employees stock option.
Shares to Trustees for benefit of employees
Company has not introduced any scheme(s) for purchase / subscription of thecompanys shares to be held by trustees for the benefit of employees.
Other securities which carries right of conversion into equity shares
During the financial year Company has not issued any securities which carries a rightor option to convert such securities into equity shares.
Details of Deposits
The Company has not accepted any deposits during the year.
During FY 2018-19 the credit rating of the company was maintained with two creditrating agencies as under:
(Rs. in crore)
|Instruments ||ICRA || || |
India Ratings and Research
| ||Credit Rating ||Limits ||Credit Rating ||Limits |
|Long Term Fund based working capital facili- ties: || || || || |
|Cash Credit ||[ICRA] AA (Stable) ||5000 ||IND AA/Stable ||6000 |
|Term Loan ||[ICRA] AA (Stable) ||207 ||IND AA/Stable ||- |
|ECB ||[ICRA] AA (Stable) ||156 ||IND AA/Stable ||156 |
|Short Term Non-fund based working capital || || || || |
|facilities: || || || || |
|LC/BG ||[ICRA] A1+ ||3000 ||IND A1+ ||2000 |
|Commercial Paper ||[ICRA] A1+ ||6000 ||IND A1+ ||6000 |
There had not been any change in the Credit Rating of the company during the year.
Buy-Back of Securities
Company has not introduced Buy-Back of its securities during the year.
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
There was no disinvestment of GOI shareholding during the FY 2018-19.
Statement of deviation(s) or variation(s)
Company has not offered public issue rights issue preferential issue etc. during theyear and there is no requirement to submit statement of deviation(s) or variation(s).
Foreign Exchange Earnings/Outgo
The Foreign Exchange earned in terms ofactualinflowsduring the year were Rs.5.10 croreand the Foreign Exchange outgo during the year in terms of actual outflow amountedtoRs.2263.87 crore.
Borrowings Long Term Loans
To meet the funding requirement for energy saving and capex schemes Company hasentered into a Rupee Term Loan Agreement with SBI on 24.12.2018 for Rs.1044 crore. Longterm borrowings as on 31.03.2019 were Rs.341.49 crore which included outstanding againstRupee Term Loan of Rs.218.40 crore and external commercial borrowings (ECBs) of Rs.123.09crore.
Short Term Loans
Short Term borrowings of Rs.6122.11 crore (previous year Rs.2890.43 crore) as on 31stMarch 2019 were outstanding.
Debt Equity Ratio
Debt equity ratio as on 31st March 2019 has increased to 2.91:1 as compared to 1.54:1of previous year due to increase in borrowings.
The company has achieved Revenue from Operations of Rs.12245.24 crore during 2018-19 asagainst Rs.8954.36 crore during previous year and total income of Rs.12301.05 crore during2018-19 as against Rs.9016.20 crore during previous year as detailed below:
| || || ||Rs. in crore |
|Particulars ||2018-19 ||2017-18 ||Change |
|Sale of products (including subsidy) ||12214.03 ||8928.29 ||3285.74 |
|Sale of services ||10.28 ||0.02 ||10.26 |
|Other Operating revenue ||20.93 ||26.05 ||-5.12 |
|Revenue from operations ||12245.24 ||8954.36 ||3290.88 |
|Other income ||55.81 ||61.84 ||-6.03 |
|Total Revenue ||12301.05 ||9016.20 ||3284.85 |
Urea and other fertilizers
The Company has achieved the ever highest Urea production of 38.59 LMT with an overallcapacity utilization of 119.4% during 2018-19 against previous best production of 38.10LMT achieved during 2017-18 (CPLY).
On the sales front the company has achieved ever best sale of Fertilizers of 48.95Lakh MT which includes sale of 38.98 LMT of Urea 3.71 LMT of Imported Urea 6.05 LMT ofNon-Urea Fertilizers including 0.21 LMT of Compost during 2018-19 surpassing previous bestof 43.09 LMT during 2017-18 which includes sale of 39.16 LMT of Urea 3.81 LMT of importedFertilizers & 0.12 LMT of Compost 13.60% more than sale in previous year.
The detailed quantity break-up of sale of Urea and other fertilizers is as under:
| || || || ||Lakh MT |
|Particulars || ||2018-19 ||2017-18 ||Change |
|Urea (Manufactured) || ||38.98 ||39.16 ||(0.18) |
|Bentonite Sulphur || ||0.07 ||- ||0.07 |
|Bio-fertilizers || ||0.006 ||0.005 ||0.001 |
|Imported DAP || ||5.04 ||3.28 ||1.76 |
|Imported MOP || ||- ||0.27 ||(0.27) |
|Imported APS || ||0.26 ||0.26 ||- |
|Imported NPK || ||0.68 ||- ||0.68 |
|Imported Urea (Government Account) || ||3.71 ||- ||3.71 |
|City Compost || ||0.21 ||0.12 ||0.09 |
| ||Total Fertilizers ||48.95 ||43.09 ||5.86 |
The company registered a record sale of Nitric Acid of 70606 MT during 2018-19surpassing previous best of 69403 MT during 2017-18. The company also recorded ever bestsale of Ammonium Nitrate to the tune of 12929 MT during 2018-19 surpassing 11299 MTachieved during 2017-18. In terms of revenue generation from production and sale ofIndustrial products the Company achieved sale of Industrial Products (IP) comprising ofNitric Acid Sodium Nitrate & Sodium Nitrite etc. to the tune of Rs.201 crore during2018-19 against CPLY of Rs.173 crore.
The company sold 631 MT of Bio-Fertilizers (Solid & Liquid) to the tune of Rs.1.82crore during 2018-19 as against 496 MT of Rs.1.43 crore during CPLY.
Import & sale of Fertilizers
The Import of non-urea fertilizers undertaken by the Company has witnessed a growth of97% during 2018-19 over the CPLY. The company sold 5.98 LMT of imported non-Ureafertilizers including DAP APS NPK worth Rs.2173 crore during 2018-19 as against 3.81 LMTworth Rs.1102 crore during 2017-18.
Apart from the above NFL also sold 3.71 LMT of Urea imported in government account outof 4.96 LMT received at three ports during 2018-19.
Domestic Trading of Agro Products
The company has registered a total revenue of Rs.45.43 crore towards trading of variousagro products such as seeds pesticides & compost during the year against Rs.26.92crore during CPLY.
Gross Sale Composition
|Item || |
% of total Sale Composition
|% Increase / (Decrease) |
| ||2018-19 ||2017-18 || |
|Urea (manufactured) ||77.96 ||85.40 ||(8.72) |
|Non-Urea ||22.04 ||14.60 ||50.96 |
Owing to shift in strategy of the company the composition of gross sale of the companyhas undergone visible change. Against the Urea (main product) contribution of 94.49% inthe overall revenue of the company during 2015-16 Urea contribution has reduced to 77.96%while contribution of non-Urea business has increased to 22.04% during 2018-19.
Agriculture Extension Activities
Agriculture is the main source of livelihood for the farmers which include cropsanimals and allied activities. Agriculture Extension Activities are being undertaken byyour Company by educating farmers on efficient use of all agro-inputs along with totalknow-how on improved and scientific methods of cultivation.
Dealers/Retailers are important link between the Company and the farmers. They are keychange agents in motivating farmers to use fertilizers in a balanced manner. During theyear 2018-19 50 Dealers/Retailers Orientation Programmes were conducted andmore than 2400 dealers/ retailers were facilitated by upgrading their knowledge regardingfertilizers/agro products and improved crop practices so that latest information can bedisseminated to farmers at point of purchase. Information on Bio-fertilizers and CityCompost has also been given in each and every training program.
Your Company has always laid emphasis on upliftment of farming community by educatingthem on various aspects of crop production animal husbandry and other allied agriculturesectors. 42 Farmer Training programmes were organized during 2018-19 and more than 2800farmers got benefited. Through these educational programmes farmers were sensitized toissues related to soil fertility status including deficiency of various nutrients theirremedy to increase fertilizer use efficiency and maximize yields. The farmers have alsobeen educated on benefitsof long term usage of Bio-fertilizers and City Compost throughthese programmes.
Agriculture Universities Research Stations Krishi Vigyan Kendras (KVKs) are theknowledge centers for latest farming techniques new and high yielding crop varietiesinnovative technologies in agriculture and allied agriculture sectors etc. During theyear an opportunity was given to the farmers to practically visit the above places byorganizing farmers visit to nearby Agriculture University/Research Station/ KVK. More than550 farmers got benefitted through 9 programmes during the year 2018-19.
During the year 2018-19 92 and 88 demonstrations had been laid out at farmersfields and City Compost respectively on crop growth and yield as compared tofarmers own practices.
Your Company is playing a vital role in supporting farmers by undertaking soil analysisfor macro and micro nutrients through its 6 Static and 4 Mobile Soil Testing Labs (MSTLs)in various States. Based on the analysis farmers are advised on soil fertility managementthrough rational use of manure fertilizers and other inputs to make agriculture moreproductive and sustainable. During the year more than 24500 soil samples were collectedanalyzed for macro and micro nutrients and recommendations were given to the farmers. Tostrengthen the soil testing services Company has plans to purchase 05 new Mobile SoilTesting Labs for the States of UP MP Haryana and Telangana.
During the year 2018-19 your company continued its endeavour to render soil testingservices at all the farmers doorstep by organizing soil testing campaigns. Duringthese campaigns services of our Mobile Soil Testing Vans and laboratory staff weresuitably utilized for collecting soil samples by demonstrating the correct method ofsampling to the farmers and by offering on the spot soil analysis and advisory on thebasis of soil test results. Other than this 41Jeep campaigns were organised in the Statesof Punjab Haryana Rajasthan HP J&K UP Bihar & Jharkhand at more than 200places. Farmers were educated to adopt new techniques in agriculture like judicious use offertilizers pesticides bio-fertilizers etc. Jeep campaigns were also widely used forgiving information regarding new products launched by the company and to share itsbenefits to farmers. More than 30000 farmers got benefitted by these programmes.
Agricultural Exhibitions and Krishi Melas aim to bring stake holders 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 a very effective way to communicate directly with the farmers and also tointeract with the scientists and experts from various agricultural fields. During the year2018-19 your Company participated in 39 Krishi Melas/Agriculture Exhibitions organized byleading Agriculture Universities Agriculture Departments etc. in the States of PunjabHaryana UP Uttarakhand Bihar MP Rajasthan and J&K which was attended by more than45000 persons in related fields.
As per guidelines of Department of Fertilizers (DoF) and with the objective to provideall the agricultural inputs and services to the farmers under one roof along with soiltesting and advisory services 100 Kisan Suvidha Kendras (KSKs) were opened by yourCompany all across its marketing territory. Through these KSKs more than 4500 soil sampleswere collected analyzed through Companys Static and Mobile Soil Testing Labs andreports were given to the farmers. More than 75000 leaflets on NFL products and variouscrops were also distributed to farmers through programmes organized in these KSKs.
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 31st 2019 isappended as Annexure -2 to this Report. Business Responsibility Policy is availableon the website of the company at www.nationalfertilizers.com.
Details of stakeholders relationship are given in the Business ResponsibilityReport annexed to this report.
Details of customer relationship are given in the Business Responsibility Reportannexed to this report.
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 (asamended from time to time) and DPE Guidelines on Corporate Governance a report onCorporate Governance forms part of this report as Annexure-3.
Companys compliance ThestatutoryauditorsoftheCompanyhaveexaminedandcertified withrespect to conditions enumerated in SEBI (LODR)
Regulations 2015 and DPE guidelines on Corporate Governance. Statutory AuditorsCertificate on Corporate Governance and explanations of the Management to StatutoryAuditors observations forms part of this report as Annexure-4.
Visits of Parliamentary Committees during 2018-19
The following Parliamentary Committees visited and interacted with the Company duringthe year 2018-19:
1) Study visit of the Standing Committee on Chemicals and Fertilizers Lok Sabharegarding availability of Fertilizers in Nainital & Almora (Uttarakhand) and inDharamshala (Himachal Pradesh) during 6th to 11th June 2018.
2) Study visit of the Committee on Government Assurances (2017-18) Lok Sabha onInvestment in Fertilizer Sector and Revival of Fertilizer Plants in Kolkata (WestBengal) on 23-08-2018.
Material Orders of Regulators
Following regulatory orders issued for implementation could have impacted theoperations of the plants: 1.0 Revised Emission Norms for Nitric Acid Plant: emissionsCompany has already
Nitric Acid Plant at Nangal was commissioned in 1961 which is based on old technology.For reduction of NOx emissions significantly reduced to around 500-600 mg/Nm3. HoweverMoEF&CC vide installed NOx abatement plant in 1994. With this NOx 3 to limit of 400
Notification dated 29.12.2017 has amended emission standards (Oxides of Nitrogen asNO2) for Nitric Acid Plant from 1820 mg/Nm mg/Nm3 . The above limits are applicable w.e.f.01.04.2019. emissions within the prescribed limits.
In this context NFL has implemented in house modification and has been able to achieveNOx
2.0 Implementation of NUP-2015 Energy Norms:
Department of Fertilizers (DoF) vide letter dated 28.03.2018 has issued a notificationrevising Energy Norms under NUP-2015. The Target Energy Norms under NUP-2015 for NFLBathinda NFL Panipat NFL Nangal and NFL Vijaipur-I have been extended for further periodof 2 years till 31st March 2020 with a penalty of 2% & 5% for financial years 2018-19and 2019-20 respectively. The token penalty is equivalent to percentage energy differencebetween existing NUP Energy norms and Target Energy norms of NUP-2015. Beyond 31.03.2020the target energy norm for
Bathinda Panipat and Nangal Units will be 6.5 Gcal/MT of Urea till 31.03.2025 whereasfor Vijaipur-I it will be 5.5 Gcal/MT of Urea. To achieve these energy targets before 1stApril 2020 NFL is installing GTG-HRSG project at Bathinda Panipat and Nangal Unit at atotal cost of Rs.675 crore whereas various energy saving schemes are being implemented atVijaipur complex at a cost of Rs.234 crore. NFL has been requesting DoF for suitabledispensation for recovery of its investment or for continuation of its existing norms ashas been allowed by DoF to some of the fertilizer companies.
In case NFLs request is not finally agreed by DOF to extend its support forcontinuation of existing energy norms or suitable dispensation for recovery of investmentthe profitability of company would be adversely affected from April 2020.
3.0 Plastic Waste Management Rules 2016.
The Ministry of Environment Forests and Climate Change (MoEF & CC) Government ofIndia vide gazette Notification Dated 18 March 2016 has of local bodies Gram Panchayatand Waste generators as well as specified producers importers and brand owners forcollection and management of plastic waste.
Fertilizer industry falls under the category of brand owners as the fertilizer productsare sold in plastic bags that are multi-layered and composed of HDPE/HDPE lined withpolypropylene. Hence as per rules all the Brand Owners who introduce the products in themarket have to establish a system or plan for collecting back the plastic waste generateddue to their products. Therefore NFL has to make such plan within one year from the dateof notification of these rules and implement within two years thereafter.
Since fertilizer bags are sold through more than 2 lakh sales points in every nook andcorner of the country and are being used multiple times by the farmers for storage oftheir produce etc. collection of these bags is practically impossible.
Further amendment dated 27.03.2018 on the above rules defines alternate use forresource conservation. Considering that empty fertilizer bags are used multiple times bythe farmers the objective of resource conservation is being fulfilled. Based upon theabove as these rules apply to the complete fertilizer industry which is findingdifficultyin complying with the said notification Fertilizer Association of India (FAI)is taking up with
MoEF &CC to develop a common and practical approach for complying with the rules.
The Right to Information
In consonance with the spirit of Right to Information Act the Company has creatednecessary mechanism as required under the Act. The Public
Information Officers and Appellate Authorities are effectively responding to therequests and appeals of the applicants. The names of all PIOs/ Appellate Authorities/Transparency Officer are displayed on the Companys website. During the year 454 RTIapplications were received and were dealt with as per provisions under Right toInformation Act 2005.
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 a mechanism to the employees and other stakeholders toreport concerns about unethical behavior actual or suspected fraud or violation of Codeof Conduct or Ethics Policy. The Policy provides for adequate safeguards againstvictimization of whistle blowers. The policy is reviewed periodically. No employee orother stakeholders were denied access to the Audit Committee. Whistle Blower Policy isavailable on the website of the company at www.nationalfertilizers.com.
With the commitment to maintain the highest standard of transparency and governanceyour Company has entered into an integrity Pact with Transparency International and hasalso appointed Independent External Monitors (IEMs) as approved by CVC. StructuredMeetings are being held with IEMs on regular intervals and threshold value is Rs.1 crorefor signing of Integrity Pact for purchase/works contracts.
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. Efforts havebeen made during 2018-19 to fulfil the pending compliances regarding earlier reportedcases of irregularities in NFL and to pursue these cases towards logical conclusion.
Periodic vigilance reports Agreed list of officers List of officers of doubtfulintegrity observance of Vigilance Week in Units Zonal offices and Corporate Office havebeen complied with. Enforcement of transfer policy and rotation of officers on sensitivepositions has been taken up with the Management. Vigilance scrutiny has been taken up forwork orders and purchase orders awarded by various departments in the four units andcorporate office.
The working of the Vigilance Wing of NFL is being changed from routine works approachto a proactive and focused approach. The roles and responsibilities and delivery ofVigilance Officers at CO and in the field have been reviewed for the purpose of improvingthe quality and monthly output.
During the year 2018-19 three vigilance cases were disposed-off and there was onepending case as on 31.03.2019. The pending case relates to the execution of annual ratecontract maintenance at Panipat. However against Dealer Appointment case thematter is closed only for below Board level officials. For two Board level officers thecase is in progress.
The Department of Public Enterprises Gol in order to improve accountability and givinghigher autonomy to Public Sector Enterprises 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" consistently 12 timesin a row from 2000-01 to 2011-12. Based on financial performance and achievement of otherparameters laid down your Company is likely to be rated "Very Good" as per theMemorandum of Understanding (MoU) signed with the Government of India for the financialyear 2018-19. Company signed MoU for 2019-20 with DoF on 22.05.2019 which is the 29th yearof the Company under MoU system.
Awards & Accolades received during 2018-19
1. National Safety Award (Silver Trophy for year 2017) to Panipat Unit in Group-BChemical & Chemical produce.
2. "Best Turnaround Strategy Award" to NFL in Hindustan PSU Award 2018.
3. "Certificate of Appreciation" under Safety Award 2017 by National SafetyCouncil of India for achievement in Occupational Health and Safety to Nangal Unit.
4. "Greentech Platinum Award" in fertilizer sector for outstandingachievement in environment management to Vijaipur Unit.
5. "Certificate of Appreciation" to Bathinda Unit from NSCI in recognition ofappreciable achievements in Occupational Safety & Health during the assessment periodof three years i.e. from 2014 to 2016.
6. "Golden Peacock Award" to Nangal Unit for Energy Efficiency for the year2018 by Institute of Directors (IODs).
7. "Best PSU Award 2018" to NFL in recognition of Best-Ever performance overlast three years in fertilizer sector in the category of Manufacturing Processing& Generation.
8. "Golden Peacock Award-2018" to Nangal Unit for Energy Efficiency in thecategory of Chemicals & Fertilizers Industry conferred by Institute ofDirectors.
9. "Fame Excellence Platinum Award for Environment Protection 2018" toVijaipur Unit by Foundation for Accelerated Mass Empowerment New Delhi a premierLeading Organization Committed to Environment Research Economic & SocialDevelopment.
10. National Safety "Runners up" Award to Panipat Unit by Ministry of Labour& Employment Govt. of India in the Category of Chemicals & Chemicalfactories for least average accident rate for the year 2016.
11. Five "Skoch Order of Merit" awards (Three in Energy Management and oneeach for Liquid material management and Safety) to Panipat Unit.
12. Best Performing PSU Award for Swachchta Activities during Swachchta Pakhwada 2018to NFL from Department of Fertilizers.
13. National Award in Cost Management from Institute of Cost Accounts of India to NFL.
14. Gold award in safety management system from Green Tech Foundation to Nangal Unit.
15. International Fertilizer Association (IFA) Excellence Award to NFL for itssustained efforts and performance in the area of Safety Health & Environment.
16. GOLD Safety Award to Nangal Unit from Green Tech Foundation in 17th Green TechOccupational Health & Safety Awards 2018 ceremony held in Guwahati.
17. Governance Now 6th PSU award to NFL for "Resilient Growth" under MiniRatna-I category.
18. Platinum award 2017-18 to Vijaipur Unit in the field of Health Safety &Environment from National Safety Council-MP Chapter Bhopal.
19. NFL Corporate Office received first prize amongst 78 Government Organizationslocated in NOIDA for progressive use Hindi.
20. Suraksha Puraskar 2018 (Bronze Trophy) to Vijaipur Unit from National SafetyCouncil of India for outstanding performance in the field of Occupational Health &Safety.
21. Appreciation Letter to Panipat Unit in Group B Category of Chemical & ChemicalProducts Manufacturer by National Safety Council Mumbai for the year 2018.
22. First prize in "Punjab State Safety Award 2018" to Nangal Unit forlargest reduction in accident frequency rate in Chemical Industry for more than 5lac man hours from Directorate of Factories Punjab and Punjab Industrial Safety Council.
23. "Punjab State Safety Award 2018" to Bathinda Unit in Chemical Industriescategory for reduction of accident rates for more than 5 lakh man-hours worked.
24. "EKDKN EXCEED GOLD AWARD" to Vijaipur Unit for Environment Preservation2018 by EK Kaam Desh Ke Naam New Delhi a premier leading Organization committed toEnvironment Research Economic & Social Development.
Initiatives under Corporate Social Responsibility
The company is implementing various developmental activities under its Corporate SocialResponsibility (CSR) and it shall:
a) Promote sustainable farming practice to boost crop productivity in rural Indiathrough its soil testing facilities and other advisory services;
b) Continue to take up wide range of welfare activities mainly focusing oneconomically socially and environmentally sustainable development ofunderdeveloped villages;
c) Work towards improving the quality of life by making the communities self-reliant inareas within which it operates;
d) Build lasting social capital through interventions in the infrastructurehealthcare education vocational domains and other social welfare initiatives forthe community residing in the vicinity of its plants and other places in India;
e) Undertake activities contributing towards improving the quality of life ofunderdeveloped sections of society at large; The Company allocated a CSR budget of Rs.630lakh for the FY 2018-19 and incurred an expenditure of Rs.228.81 lakh during the year. Outof this CSR projects amounting to Rs.572.58 lakh have been approved. These projects areat different stages of execution.
As per guidelines received from Department of Public Enterprises (DPE) Company adoptedAspirational district Guna (Madhya Pradesh) for CSR activities in 2018-19. Accordingly50% of total CSR budget i.e. Rs.315 lakh was allocated to district Guna. Currently anumber of projects are under implementation in District Guna (Madhya Pradesh). Thisincludes a project of Construction of 377 Toilets at the budget of Rs.253.70 lakh. Sincethe project is of high magnitude it is being implemented in three phases. The project islikely to be completed in two years duration.
A detailed report on the Corporate Social Responsibility is given in the Annexure-5to this report.
Research and Development
Development of Urea Ammonium Nitrate (UAN) application system for enhancement ofnutrient use efficiency under S&T project
NFL in association with Indian Agricultural Research Institute (IARI) undertook R&Dproject for development of applicator for UAN application.
Design of UAN applicator for Basal and Foliar application had been developed by IARI.Field trials conducted on Paddy crop Wheat crop and
Vegetables are successful. Final report of the project has been submitted by IARI on09.04.2019.
As per IARI report project has been successfully completed. The study on response ofwheat and paddy crop to UAN indicated comparative advantage in terms of yield nitrogenuse efficiency and fertilizer saving to the tune of 30 kg N / hectare to prilled Urea. UANas a fertilizer immense scope in improving crop yield and enhancing the Nitrogenefficiency. However for a developing country like India there is need to developinfrastructure and logistics for popularizing liquid fertilizers. The total cost of theR&D project is Rs.89.66 lakh.
Cow dung processing and its conversion bio- fortified fertilizer with enhancedfunctionality A Pilot Study
ICAR-National Dairy Research institute (NDRI) Southern Regional Station Bengaluruvide its letter dated 21.03.2018 submitted a research project proposal titled "Cowdung processing and its conversion to bio- fortified fertilizer with enhancedfunctionality: A pilot study" to NFL with budget requirement of Rs.129.74 Lakh. Pilotstudy will evaluate conversion & bio-fortification of cow dung for production ofquality bio-fertilizer and optimize conversion process of bio-fertiliser to a suitableform for longer storage and distribution.
Company has accorded approval for sponsoring the Pilot Study at ICAR NDRI southernregional station Bengaluru for project titled "Cow dung processing and itsconversion to bio- fortified fertilizer with enhanced functionality" with budgetestimates ofRs.129.74 Lakh spread over a period of three years. Agreement for the subjectR&D work had been signed between NFL and NDRI on 14.09.2018. A total payment of Rs.5.0Lakh has been made to NDRI for execution of the said R&D work.
The benefits envisaged from this Pilot Study include (a) Bio-fertilizer with enhancednutrient quality as an alternative to chemical fertilizer; (b) The Biological manure shallhelp rejuvenate the soil health; (c) Collateral benefits in the form of Environmentalprotection savings on subsidy and sustainable agriculture; (d) Dairy farmers to getbetter value for animal by-product thereby augmenting their income.
Setting up of Indian Council for Fertilizer and Fertilizer Technology Research (ICFFTR)for collaborative efforts in R&D with other Fertilizers CPSEs.
Indian Fertilizer industry is predominantly dependent on imports either for the rawmaterial & intermediaries or for finished products. Further for manufacturingtechnology also the country is completely dependent on big foreign players for thetechnology license for setting up of new plants as well as for technological up-gradationof existing plants. Country is having a number of research institutions doing research onthe subjects focused primarily on agriculture however there is no dedicated researchinstitution in the country which is exclusively devoted to areas e.g. research onfertilizer manufacturing technology development of alternate raw materials / feedstockindigenizing the available technology developing innovative fertilizer products to suitcountrys requirement etc. There is a growing need for setting up a National LevelResearch &
Development Centre exclusively devoted to promotion of research in fertilizer sector.
Keeping that in view Department of Fertilizers directed NFL RCF and FAGMIL to discussand explore the option of formation of a society for research and development in the fieldof fertilizer sector. Accordingly NFL along with RCF and FAGMIL being the founder membershave decided to form a society named "Indian Council for Fertilizers and FertilizerTechnology Research (ICFFTR)" to undertake research in the fertilizer sector.
To increase reach and to make the society rich in experience of different areas offertilizers other PSUs such as PDIL BVFCL FACT MFL FCIL and HFCL have also associatedas member in the proposed society. Subsequently Memorandum of Association (Bye-Laws) hasbeen prepared in consultation with all members. Society shall be headed by Secretary(Fertilizers) Govt. of India. Process of registration of ICFFTR is under progress.
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-6to this report.
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-7to this report.
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 as Annexure-8to this Report.
Joint venture /Associates Companies
Details of Joint Venture / Associates Companies pursuant to Section 129(3) of theCompanies Act 2013 the statement containing the salient features of the FinancialStatement of the Associate Company / Joint Venture Company is included in theConsolidated Financial Statements appended as Annexure-9 hereto.
Companies which have become or ceased to be subsidiaries associates and joint ventures
During the year 2018-19 Company has not acquired or formed any new subsidiaryassociate or joint venture. Similarly no subsidiary associate or joint ventures have beenceased by way of sale of shares amalgamation winding up etc.
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 armslength transactions under third proviso thereto are disclosed in Form No. AOC-2 as per Annexure-10to this report. Related Party Transaction Policy of the Company is available atwww.nationalfertilizers.com.
Capital Expenditure (CAPEX)
The achievement in CAPEX is Rs.202 crore in the year 2018-19.
The chemical fertilizer industry is operated in a hazardous environment and faces manyrisks including those related to health safety and environment in addition togeneralbusiness&financialrisks. 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 analyzed at the highestlevel by Risk Management Committee and Audit Committee of Directors and efforts are madein a planned way to obviate the risks either fully or to minimize their impact. During theyear The Risk Management Policy of the company has been reviewed and revised in view ofthe Changed Government Policies such as NIP 2008 NUP 2015 Gas pooling New Projectsexecuted / under execution by NFL and introduction of New Business Verticals at NFL.
The Company has put in place a mechanism whereby the quarterly Risk Assessment Reportis presented to Risk Management Committee Audit Committee and Board of Directors alongwith mitigation actions thereof after thorough review by Risk Assessment Committee chairedby C&MD.
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
As per provisions of section 197(12) of the Companies Act 2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 every listedcompany is required to disclose the ratio of the remuneration of each director to themedian employees remuneration and other prescribed details in the BoardsReport. 05.06.2015 issued by Ministry of Corporate Affairs these provisions are notapplicable to the Government Company.Asper Accordingly these particulars are not includedin the Boards Report.
Public Procurement Policy of Micro and Small Enterprises (MSEs) Order 2012
Public Procurement Policy for Micro and Small Enterprises (MSEs) was notified by theGovernment under the Micro Small and Medium Enterprises Development Act 2006 whichstipulates that 25% of total annual procurement of goods and services shall be made by allCentral Ministries / Departments /CPSEs from Micro & small Enterprises (MSEs). Withinthis percentage a sub total of 4% procurement is to be made from MSEs owned by SC/STentrepreneurs and 3% from MSEs owned by women. The requisite information for the year2018-19 is annexed as Annexure-11 to this report.
Human Resource Management
The Company has a manpower strength of 3333 regular employees as on 31.3.2019 whichcomprises of 1637 Executives and 1696 Non-Executives. Company promotes the employment ofwomen and at present 199 women employees are on its roll which is 5.97% of the total workforce. The detailed analysis with regard to human resource including training andexecutive development programme have been made in the Management Discussion and AnalysisReport.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
Policy on Prevention Prohibition and Redressal of Sexual harassment of women at workplace is in line with the requirements of the Sexual Harassment of women at Workplace(Prevention Prohibition & Redressal) Act 2013. The internal Complaints Committee(ICC) has been set up to redress complaints received regarding sexual harassment. Tenprogrammes related to Gender Sensitization and Prevention Prohibition and Redressal ofsexual harassment of women at workplace were held during the year 2018-19.
No complaint of sexual harassment was received in the year 2018-19.
Ten programmes related to Gender Sensitization and Prevention Prohibition andRedressal of Sexual harassment of women at work place were held during the year 2018-19.
International Womens day was celebrated on 8th March 2019 in all Units andCorporate Office NOIDA. Various programmes on the occasion were organized at Units &Head Office.
Implementation of Official Language Policy
Company is making all efforts for the propagation and implementation of OfficialLanguage policy of the Government of India. The quarterly OfficialLanguage ImplementationCommittee (OLIC) is regularly held in all the Units/Offices of the Company under theChairmanship meetingof of Head of the Unit/Office to review the progress of officiallanguage. In all 36 Meetings of OLIC were held during the year. To promote OfficialLanguage Hindi 37 Hindi workshops were organized during the year in which 867employees have 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 Hindi and 1377 employeesparticipated in them. 59 employees were awarded cash prizes under the Cash IncentiveScheme for doing their official work in Hindi. (Running Trophy) on 31 NFLCorporateOffice st January 2019 for the year 2017-18 from Town
Official Language Implementation Committee (TOLIC) Noida for doing excellent work inHindi. NFL Panipat Unit has been awarded03 rd Prize Rajbhasha Shield under theCategory of Region A Undertakings by Department of Official LanguageMinistry of Home Affairs for doing excellent work in Hindi during the year 2017-18. TheShield was presented to the Unit in "Regional Official Language Conference and PrizeDistribution Function held on 19.11.2018 at Chandigarh.
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 functional in all Units / Offices of the Company to oversee theimplementation of Presidential Directives on Reservation Policy for SCs/STs. LiaisonOfficer has been appointed in each Unit/Office and Chief Liaison Officer at CO Noida toensure due compliance of orders and instructions pertaining to reservation for SCs and STsand other concessions admissible to them. Meetings were periodically held at Unit level aswell as at corporate level with the SC/ ST Employees Welfare Associations by theManagement for redressal of grievances of SC/ST employees. The programmes onimplementation of Presidential Directives were held at Units from time to time and SC/STemployees were deputed for attending such programmes conducted by external agencies.During 2018-19 2695 man-days training (in-house as well as external training programmes)was imparted to SC/ST employees. A statement showing representation of employees belongingto Scheduled Caste / Scheduled Tribes / Other Backward Classes / Persons with disabilitiesis appended as Annexure-12 to this report.
Schedule of Compliances with Presidential Directive issued during financial year2018-19 and during last three year preceding the financial year 2018-19 is as below:
|Financial Year ||Content of Presidential Directives ||Compliance |
|2018-19 ||Presidential Directive for pay revision ||Complied |
|2017-18 ||NIL ||NIL |
|2016-17 ||NIL ||NIL |
|2015-16 ||NIL ||NIL |
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 and accountingtransactions & has cut down the lead time to a great extent thereby reducing delays inclosing of accounts.
Company has also adopted initiatives taken by Department 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 companyhas adopted IT in various aspects of its working. The materials department of ourorganisation 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.
In order to have optimum utilization of MPLS VPN bandwidth & ILL bandwidth LinkLoad balancers have been installed at various locations of the company. Data Center of thecompany has also being upgraded for maximum uptime of various business applications.
In order to integrate various business processes and further improved visibility andtransparency in the system your company is already in the process of selectingimplementation partner for ERP software.
AUDITORS Statutory Auditors
The Statutory Audit of your Company was conducted by Chartered Accountants firms M/s.HDSG & Associates and M/s. S. Mann & Company Joint Auditors appointed byComptroller & Auditor General of India (C&AG). Auditors Report on theFinancial Statements including consolidated Financial Statements of the Company for thefinancial year 2018-19 is attached. Statutory Auditors for F.Y. 2019-20 have yet to beappointed by C&AG. A Proposal authorising Board of Directors to decide & fixremuneration of Statutory Auditors to be appointed by the Comptroller and Auditor Generalof India for the F.Y. 2019-20 is placed for your approval.
Explanation in response to Auditors Qualification
Statutory Auditors of the Company have issued an Audit Report with Unmodified opinionon Audited Financial Results of the Company (Standalone & Consolidated) for thequarter and year ended 31st March 2019.
Comments of C&AG
The review of Financial Statements including consolidated Financial Statements for theyear ended 31st March 2019 has been carried out by the Comptroller and Auditor General ofIndia (C&AG) under Section 143(5) of the Companies Act 2013. C&AG has givenNil Comments. Copy of letters of C&AG is appended to the report.
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 2018-19 was carried out by Cost Auditors M/s K.G. Goyal & Associates M/s K. L. Jaisingh & Co. M/s Ravi Sahni & Co. &M/s Musib & Co. as prescribed under the Companies Act 2013 and Rules framedthereunder. M/s. Ravi Sahni & Co. acted as the Lead Cost Auditor. Consolidated CostAudit Report for the financial year 2017-18 was filed with MCA on 30.08.2018.
Company has an Internal Audit Department headed by an Executive Director. To carry outNon-technical Audit your company had appointed eight Chartered Accountant firms namelyM/s. G.S. Mathur & Co. M/s. Goyal Parul & Co. M/s. Laxmi Tripti &Associates M/s. Raj Har Gopal & Co. M/s. S.Tandon & Associates M/s. Chaturvedi& Co. M/s. Amit Ray & Co. and M/s.S.N. Kapur & Associates for the year2018-19. Technical Audit and EDP Audit was carried out by in-house internal audit teams.
Tenure of M/s Agarwal S. & Associates Practicing Company Secretaries was extendedfor undertaking Secretarial Audit for the year 2018-19 in terms of Section 204 ofCompanies Act 2013 and Rules made there under. Secretarial Audit Report for the year2018-19 and Managements explanation to Secretarial Auditors observations areannexed as Annexure-13 to this Report.Annual Secretarial Complance Report for theyear ended 31st March 2019 issued by Agarwal S. & Associates Practising CompanySecretaries under Regulation 24A of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed as Annexure-14 to this report.
Compliance with Secretarial Standards
The Company complies with all applicable Secretarial Standards issued by The Instituteof Company Secretaries of India.
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.
Stakeholders Relationship Committee
Disclosures regarding Stakeholders Relationship Committee and Remuneration Policy aregiven in the Corporate Governance report.
Corporate Social Responsibility and Sustainable Development Committee
Disclosures regarding Corporate Social Responsibility and Sustainable DevelopmentCommittee are given in the Corporate Governance report.
Companys policy on Directors appointment and remuneration
Ministry of Corporate Affairs has granted exemption vide notification No. GSR463 (E)dated 05.06.2015 to the Government Companies from the provisions of Section 134(3) (p) ofthe Companies Act 2013. Directors appointment and remuneration is decided by theGovernment. Keeping in view the exemption no Remuneration Policy has been formulated.
Board & Committee Meetings
The details of Board Meetings Committee Meetings and Meetings of Independent Directorsare given in the Corporate Governance Report annexed to this report.
Extract of Annual Return u/s 92(3) of the Companies Act 2013
The extract of Annual Return as provided under sub-section (3) of Section 92 of theCompanies Act 2013 in Form MGT-9 is annexed hereto as Annexure-15 to this report.
Investor Education and Protection Fund
The Company has complied with all the provisions relating to the Investor Education andProtection Fund (IEPF) under the Companies Act 2013 and The Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 made thereunder. Company Secretary is the Nodal Officer to deal with IEPF Authority and compliancesrelated thereto.
During the year 2018-19 Rs.93873.00 have been transferred to Investor Education andProtection Fund on account of unpaid/unclaimed dividend on 17.10.2018. Further pursuantto Section 124(6) of the Companies Act 2013 and Rules notified thereunder Company hastransferred 5689 shares against which dividend remained unclaimed/unpaid for consecutiveperiod of seven years to the demat account of IEPF. The details of the dividend andshares transferred to IEPF Account are available at the website of the Companywww.nationalfertilizers.com.
Companys equity Shares are listed at National Stock Exchange of India Limited(NSE) and Bombay Stock Exchange Limited (BSE). Other disclosures regarding listingregulations have been made in Corporate Governance Report.
Company has paid requisite listing fee to the stock exchanges during the year 2018-19.
Service to Shareholders
All matters relating to transfer/transmission of shares issue of duplicate sharecertificates payment of dividend de-materialization and re-materialization of shares andredressal of investors grievances are carried out by the Companys RTA i.e. M/s. MASServices Limited New Delhi.
Code of Conduct
Board Members and the Senior Management Personnel have affirmed compliance with theCode of Conduct for the financial year ended 31st March 2019. Code of Conduct has beenuploaded on the website of the Company at www.nationalfertilizers.com.
Corporate Policies & Codes
Details regarding corporate policies & codes are given in the Corporate GovernanceReport and also available on the website of the Company at www.nationalfertilizers.com.
Disclosure pursuant to FEMA Regulation
FEMA Regulations applicable to Companies owned or controlled by non-resident entity(s)are not applicable to NFL.
Key Business Development
Details of key Business Development of the Company are given in the ManagementDiscussion & Analysis Report annexed to this report.
Disclosure regarding frauds
No fraud has been reported by the Auditor to the Audit Committee or to the Boardduring the financial year 2018-19.
Details of the sickness of the Company Not applicable.
Key Managerial Personnel (KMP)
In compliance with provisions of Section 203 of the Companies Act 2013 Key ManagerialPersonnel (KMP) position as on 31st March 2019 as follows:
Shri Manoj Mishra Chairman and Managing Director.
Shri Rajiv Kumar Chandiok Director (Finance) & Chief Financial Officer*
Shri Devinder Singh Ahuja Director (Technical).
Shri Virendra Nath Datt Director (Marketing).
Shri Raj Kumar Company Secretary.
* Ceased to be Director (Finance) & CFO w.e.f. 28.06.2019.
Board of Directors Changes in Composition
Shri Virendra Nath Datt (DIN 07823778) was initially appointed as Director (Marketing)by Department of Fertilizers Ministry of Chemicals & Fertilizers Government of Indiavide Order No. 82/01/2018-HR-I dated 09.10.2018 further he was designated as KMP by theBoard of Directors with effect from 11th October 2018. Smt. Meenakshi Gupta (DIN07686646) ceased to be Non-Executive Director (Government Nominee) with effect from26.11.2018.
Shri Partha Sarthi Sen Sharma (DIN 03210350) was initially appointed as part timeGovernment Nominee Director by Department of Fertilizers Ministry of Chemicals &Fertilizers Government of India vide Order No. 130/8/2003-HR-I dated 21.12.2018 furtherhe was appointed as Additional Director under the category Non-Executive Director(Government Nominee) by the Board of Directors with effect from 28.12.2018.
Shri Rajiv Kumar Chandiok and Ms. Bhavnaben Kardambhai Dave ceased to be directorsw.e.f 28.06.2019 & 30.06.2019 respectively on completion of the term.
Details of tenure of directors are provided in the Corporate Governance Report.
Re-appointment of Directors at the AGM
Pursuant to the provisions of Section 152 of the Companies Act 2013 Shri DevinderSingh Ahuja Director (Technical) (DIN 07687173) and Shri Dharam Pal (DIN 02354549)Part-time Government Nominee Director will retire by rotation at the ensuing AGM and beingeligible have offered themselves for re-appointment.
Nomination and Remuneration Committee has recommended the appointment of Shri VirendraNath Datt and Shri Partha Sarthi Sen Sharma as director of the Company liable to retire byrotation in terms of Section 152 of the Act at the ensuing AGM.Notices have been receivedunder section 160 of the Companies Act 2013 regarding appointment of Shri Virendra NathDatt (DIN 07823778) and Shri Partha Sarthi Sen Sharma (DIN 03210350) as Directors at theensuing Annual General Meeting. Brief profile of the Directors is attached to theCorporate Governance 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 the Company during the FY 2018-19.
Disqualifications of Directors
None of the Directors have committed any disqualification as provided under Section 164of the CompaniesAct 2013.
Remuneration to Directors
Details of Remuneration to Directors and Company Secretary are given in the CorporateGovernance Report annexed to this Report.
Performance evaluation of Board and Directors
The details regarding performance evaluation of Board of Directors have been given inthe Corporate Governance Report.
Directors Responsibility Statement
Pursuant to the requirement of Section 134(3) (c) of the Companies Act 2013 yourDirectors confirm that: -
a) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed and no material departure has been made there from 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 atrue and fair view of the state of affairs of the Company at the end of the financial andof 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 andwith applicable powers 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 concern basis;
e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal adequate and were operating effectively; and
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 Secretarial Auditors and Comptroller and Auditor Generalof India and are grateful 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. Board also place on recordactive support and cooperation received from Employees Trade Union and OfficersAssociation for sustained improvements.
|Registered Office: ||For and on behalf of the Board of Directors |
|Scope Complex Core-III || |
|7 Institutional Area Lodhi Road New Delhi-110003. ||(Manoj Mishra) |
|Date : 02nd August 2019 ||Chairman & Managing Director |
| ||DIN: 06408953 |