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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 428196
52-Week high 100.15
52-Week low 42.10
P/E 9.41
Mkt Cap.(Rs cr) 4,436
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 81.80
CLOSE 82.75
VOLUME 428196
52-Week high 100.15
52-Week low 42.10
P/E 9.41
Mkt Cap.(Rs cr) 4,436
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

Dear Members

The Directors of your Company have pleasure in presenting this 42ndAnnual Report on the working of your Company together with the Audited FinancialStatements for the year ended March 31 2020.

FINANCIAL PERFORMANCE

Rs. in Crore

Particulars 2019-20 2018-19
Total Income (Net) 9826.60 8967.46
Total Operating Cost 9114.64 8444.11
Operational Profit 711.96 523.35
Depreciation/Impairment 171.04 155.69
Finance Cost 237.82 155.85
Profit before exceptional items 303.10 211.81
Net Exceptional Items (income) / Expense 100.17 (23.44)
Profit before Tax 202.93 235.25
Provision for Tax (including deferred Tax liability/ Asset) (5.22) 96.08
Net Profit Retained Earnings 208.15 139.17
Add / (less): Re-measurement of Defined Benefit Plan (13.87) (2.46)
Less: Dividend Paid (Previous Financial Year) 42.48 33.10
Less :Dividend Distribution Tax 8.73 6.81
Less: Balance Transferred to / (from ) General Reserve 143.07 96.80

During the year the major factors impacting your Company'sprofitability before tax are as under:

a. Your Company has recognized subsidy on account of revision in fixedcost as per modified NPS-III for existing Urea Units which resulted in higher operationalprofits as compared to previous year.

b. Higher sales & margins of Complex Fertilizers and tradedproducts also contributed to higher profitability.

c. However Lower energy efficiencies at Trombay and Unit adverselyimpacted Urea margins. Further your Company has crossed the reassessed level of productionof 17.07 LMT in respect of Thal Urea however falling IPP of Urea has impacted theoperating Margins of production of Urea beyond Reassessed capacity.

d. Higher borrowings firming up of interest rates and adverse impactof foreign exchange variation as borrowing costs resulted in a substantial increase infinance costs.

e. Company has accounted for fair valuation loss of Rs. 100.17 crore onvaluation of Transferrable Development Rights (TDR) held by the Company as exceptionalitem impacting the Profit before Tax adversely for the year.

MEMORANDUM OF UNDERSTANDING WITH GOVERNMENT OF INDIA

Your Company has been entering into a Memorandum of Understanding (MoU)with the Ministry of Chemicals & Fertilizers Government of India setting theperformance parameters and targets every year. Your Company has secured

"Very Good" rating for the year 2018-19 from "Poor"rating in 2017-18 signifying a marked improvement in performance. The performance ratingfor 2019-20 MoU is yet to be finalised by the Government of India and the Company expectsto achieve similar ratings this year.

DIVIDEND

Although your Company has lined up a number of capex programmes whichwill entail substantial expenditure considering the consistent profits being made by theCompany your Directors have recommended a dividend of Rs. 2.84 (i.e. 28.40 %) per equityshare (Previous year Rs. 0.77 per equity share) for the financial year 2019-20 which isthe highest in the history of RCF. The total outgo on this account works out to Rs. 156.68Crore (Rs. 51.21 Crore in the previous year including dividend distribution tax andeducation cess.)

The dividend payout is subject to the approval of members at theensuing Annual General Meeting.

APPROPRIATION TO GENERAL RESERVES

Your Company earned a net Profit after Tax ofRs. 208.15 Crore (Rs.139.17 Crore in the previous year). Remeasurement of defined benefit plans resulted inloss of Rs. 13.87 crore (previous year Rs. 2.46 crore). The dividend payout along with taxand education cess pertaining to FY 2018-19 was Rs. 51.21 crore (`39.91 crore pertainingto FY 2017-18). The balance amount of Rs. 143.07 crore (Rs. 96.80 crore in the previousyear 2018-19) was transferred to General Reserves.

AWARDS WON

As in the past your Company has won many awards during the year2019-20 some of which are as under:

Trombay Unit

? Greentech Environment Award - 2019 for outstanding achievements inEnvironmental Management.

? Trishul Quality Circle has won Gold Trophy in InternationalConvention on Quality Circle (ICQCC'19) in Tokyo Japan.

? 1st Prize towards Energy conservation award in HT Industrial consumercategory above 10 MVA during TPC's consumer meet 2019.

? "Certificate of Merit" at 14 th State Level EnergyConservation Award 2018-19 constituted by Maharashtra Energy Development Agency (MEDA).

? Mr. Vidyanand. R. Kudtarkar was awarded "Outstanding YoungChemical Engineer 2020 award" organized by ICT and IIChE.

? R&D Unit has been awarded Renewal of Recognition as"IN-HOUSE R&D UNIT" by the Ministry of Science & Technology New Delhifor the period from 01.04.2019 to 31.03.2022.

? FAI Award for best production performance in Complex Fertilizers forthe year 2018-19.

Thal Unit

? "Certificate of Excellence" in 14th state levelaward for "State Level Excellence in Energy Conservation & Management" forthe year 2018-19 from MEDA Govt. of Maharashtra.

? FAI Award for Excellence in Safety for the year 2018-19.

? I.C.C. Award for Excellence in Energy Conservation and Management forthe year 2018.

? National Safety Council India declared "Certificate ofAppreciation" for RCF Thal and "Certificate of Merit" for Heavy WaterPlant Thal.

? AERB Industrial Safety Award-2018 to Heavy Water Board Thal Unit atHyderabad.

? Award for Zero accident frequency rate and Longest accident free daysfor the year 2018 by National Safety Council -Maharashtra.

? NSC-MH Certificate of Merit for Zero accident frequency rate for theyear 2018 to Heavy Water Plant Thal.

Others

? ‘Training Provider of The Year' Award by National Awardsfor Excellence in Training and Development

? "Recognition of WIPS Activities Award" by Forum of Women inPublic Sector during 30th National Meet held at Hyderabad for its contribution towardsActivities of Women in Public Sector.

OPERATIONAL RESULTS Thal Unit

During the year the unit produced 20.22 lakh MT of Urea compared to19.84 lakh MT produced during the previous year. In terms of nutrients in the fertilisersthe unit produced 9.30 lakh MT of N during the year compared to 9.12 lakh MT duringprevious year.

Trombay Unit

The Trombay Unit produced 3.26 lakh MT of Urea & 5.71 lakh MT ofSuphala 15:15:15 during the year compared to 3.92 lakh MT of Urea & 5.61 lakh MT ofSuphala 15:15:15 produced during the previous year. In terms of Nutrient values the unitproduced 2.36 lakh MT of N 0.86 lakh MT of P2O5 and 0.86 lakh MT of K2O during the yearcompared to 2.64 lakh MT of N 0.84 lakh MT of P2O5 and 0.84 lakh MT of K2O respectivelyduring the previous year.

Industrial Products

Your Company produces industrial chemicals at its both units. Duringthe year your Company produced approx. 1.71 lakh MT of various major industrial chemicalproducts as against approx. 2.27 lakh MT during the previous year.

Your Company produces amongst others ABC Conc. Nitric Acid SodiumNitrate / Nitrite Methylamines Dimethyl Formamide Formic Acid Methyl Formate ArgonAN Melt etc.

MARKETING PERFORMANCE

Fertilizer Division

Your Company achieved sales volume of 33.01 lakh MT during 2019-20 ascompared to 30.49 lakh MT during the previous year. Your Company sold 23.57 lakh MT ofUrea 6.08 lakh MT of Suphala 15:15:15 and 3.36 lakh MT of other bought out products suchas DAP MOP etc. compared to 23.89 lakh MT of Urea 5.26 lakh MT of Suphala 15:15:150.01 lakh MT of Suphala 20:20:0 and 1.34 lakh MT of other bought out products during theprevious year. The total sale of manufactured fertilizers during 2019-20 was 29.65 lakh MTas against 29.15 lakh MT during the previous year.

During the year your Company has achieved highest over sale of 6.08lakh MT of Suphala 15:15:15 and 0.403 lakh of City Compost. RCF's sale of CityCompost is the highest among its industry peers.

Sale of manufactured fertilizers registered moderate increase of 1.72%over previous year.

Industrial Product Division

Industrial Products Division achieved sales turnover of Rs. 660.94Crore as against Rs. 955.16 Crore during the previous year. Your Company has registeredreduction in sales of IPD due to increase in gas price and increase in cost of productionvis a vis downward trend in selling price as a result of stiff competition and cheaperimports. The Formic Acid DMF and MF plants were started during the year. Sales of SNA 68& 72% Ammonia STP Water TMA Formic Acid was increased during the year.

Exports

Considering the nature of plants manufactured by your Company andindigenous demand the scope for export is very limited.

However your Company successfully exported consignment of 120 MTs ofSuphala 15:15:15 to Sharjah UAE during the year. The product has gained popularity indate farming in UAE. RCF earned valuable foreign exchange worth USD 46560 equivalent toINR 33.00 lakh from export of Suphala.

Your Company was also successful in popularizing its AmmoniumBicarbonate (ABC) brand in the overseas market through third party export. Duringfinancial year 2019-20 your Company has done third party export of ABC to the tune of Rs.63.66 lakh as against Rs. 41.32 lakh during the previous year in addition to direct exportof Suphala.

Import and Sale of Fertilizers

The import and sale of non-urea fertilizers undertaken by the companytripled during 2019-20 over the previous year. The Company sold 2.91 MT of importednon-Urea fertilizers including DAP NPK MOP and water soluble fertilizers during 2019-20as against 0.97 LMT the previous year. RCF also enhanced its footprint in sale ofbio-fertilizers during the year. Your Company sold 128 KL Biola in 2019-20 as against 68KL sold in the previous year. Other products such as Microla Sujala pH Balancer alsoregistered healthy volumes during the year. New products such as Organic Growth Stimulant(OGS) and Soluble Silica Fertilizer were launched during the year.

Agriculture Extension Activities

RCF has undertaken several agriculture extension activities so as toeducate the farmers on efficient use of agro-inputs and provide know-how on improved andscientific methods of cultivation contributing to increase in their farm yield. Some ofthe services so undertaken during the year are as under:

1. Soil SampleAnalysis: 69936 number of NPK and 14196 number ofMicro-nutrient analysis have been done and

Soil Health Cards distributed.

2. Kisan Suvidha Kendras: 150 Kisan Suvidha Kendras wereoperated at different districts for imparting

Agricultural extension services to the farmers at the field level

3. Farmer Training Centres are operational at Thal and Nagpurfor imparting residential training to farmers. A total of 86 programswereundertakenbenefitting3403 farmers during the year.

4. RCF Kisan Care Toll Free service 1800-22-3044 was operated forimparting critical information to the farming community.

5. RCF Sheti Patrika: 6 lakh copies of RCF Sheti Patrika(Marathi edition) covering the relevant subjects pertaining to Agriculture and alliedfields were distributed to farmers. Translated version of the same in Hindi and Kannadahave also been started as e-magazine.

6. Doordarshan: RCF sponsored and promoted popular TV programslike Krishi Samruddhichi Gurukilli for sharing of Agriculture Knowledge and RCF Suphala DDSahyadri Krishi Sanman Puraskar for motivating farmers.

7. Social Media: Information has been shared through SocialMedia (WhatsApp Facebook Twitter Instagram

You Tube) with handle @rcfkisanmanch.

8. Agricultural Extension Services: 286 field demonstrations259 soil testing days 600 farmers' meetings 35 krishi melas 19 veterinarycamp/rural benefit sports38exhibitionsetc.wereorganizedforthe of the farmers.

9. Doubling of Farmer's Income: RCF initiated a projectwith Bhama Farmer Producer Company involving a group of 25 farmers in Khed Taluka PimpriBlock Pune district Maharashtra in association with the Agriculture Department with theobjective of doubling farmer's income in accordance with the vision of Hon'blePrime Minister. The project involved hand holding and support to the farmers in terms oftechnical know-how soil analysis method demonstrations visit of experts etc.

The project has yielded positive results.

COVID 19 PANDEMIC IMPACT ANALYSIS

In the last month of FY 2020 the COVID-19 pandemic developed rapidlyinto a global crisis forcing Governments to enforce lock-downs of all economic activity.For the Company the focus immediately shifted to ensuring the health and well-being ofall employees and on minimizing disruption to services.

For the year ended March 31 2020 operations of your Company werescaled down during the last fortnight of the year due to disturbance in supply chainlogistics. The Company was quick in restoring the operations ensuring health safety andwell-being of its employees. This has resulted in minimal impact on the operations andresults for the year ended March 31 2020.

In India the agricultural sector has remained relatively insularduring COVID-19. The Government has classified agriculture and related industries underessential commodities to ensure food security and provide livelihood opportunities to therural workforce. Though the manufacture and transport of essential commodities likeFertiliser and Agrochemicals were exempted under the guidelines issued by the Ministry ofHome Affairs the industry faced challenges in the initial period affected by the labourshortage employee mobility and strict administrative checks impacting the raw materialhandling production and distribution. However the situation is fast normalizing and theindustry is now geared up to increase its production with support from the Centre and theState Governments.

For the financial year 2020-21 adverse impact of COVID pandemic onyour Company is anticipated in the following areas:

i) Manpower - Own employees as well as Contract labour downtime due tomovement restrictions and health issues.

ii) Delay in commissioning of projects and the ensuing benefits due todelayed supply of equipment's and restrictions in movement of personnel from foreigncountries / within India required for the project.

iii) Rationalization of Government expenditures may result in delayedsettlement of subsidies straining liquidity and working capital.

In order to lend support to Government's effort in containing theCOVID 19 pandemic and prevent further spread your Company has launched its own brand ofIPA based Hand cleansing gel - "RCF Saferola" in the market.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THECOMPANY

No material changes have occurred as at the end of the financial yearto which the balance sheet of the Company relates and the date of this report except theday to day challenges being faced by the company on account of COVID 19 pandemic.

RISK MANAGEMENT

Pursuant to Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has framed a Risk ManagementPolicy for risk assessment and minimization procedures. The Risk Management Policydeveloped with the objective of having a balanced approach towards business plan andmitigating the associated risks is in place. The system identifies better managementpractices to ensure greater degree of confidence amongst various stakeholders andfacilitates good Corporate Governance practice. All risks associated with OperationsEnvironment Finance Marketing Human Resource Legal Information Technology SecurityProjects etc. are continuously monitored. The degree of impact of the perceived risks isfurther graded into high medium and low and the probability of the occurrence of eachrisk is also classified on regular basis. In order to mitigate losses arising out of suchperceived risks appropriate procedures are being adopted to contain the risks. Also thepractices adopted during emergencies including the communication system and mode ofdisseminating information are periodically reviewed and updated to minimize the impact onthe Company. Quarterly report in respect of the same is presented to the Board. The Boardof Directors had constituted Risk Management Committee to identify elements of risk indifferent areas of operations and to develop policy for actions associated to mitigate therisks. The Committee on timely basis informs the Board of Directors about risk assessmentand minimization procedures which in the opinion of the Committee may threaten theexistence of the Company if any. The details of Risk Management Committee are included inthe Corporate Governance Report.

MAJOR EXPANSION AND DIVERSIFICATIONS

The status of major projects undertaken by your Company is as under:

PROJECTS COMPLETED

Sewage Treatment Plant (STP) at Trombay

Supply of water to industries in Mumbai particularly during summer isunreliable. Ensuring water availability is critical for the smooth functioning of theTrombay Unit. Knowing this your Company has set-up one more new Sewage Treatment Plant(STP) adjacent to the existing STP with a capacity to treat 22.75 Million Litres per Day(MLD) of Municipal Sewage to produce about 15 MLD of treated water. The plant has beencommissioned in January 2020. A portion of the treated water is supplied to M/s BharatPetroleum Corporation Ltd. (BPCL) on mutually agreed terms.

Ammonia V PAC & CO2 compressor internals & turbine replacementat Trombay Unit

With aim to reduce steam consumption the drive turbines of PAC and CO2Compressors are being replaced and revamp of PAC and CO2 compressors is carried out byreplacing the internals with improved design. The expected energy reduction is around0.199 Gcal per MT of Urea. Capital cost of the project is Rs. 57.62 Crore.

PROJECTS UNDER IMPLEMENTATION:

Schedule of projects under implementation is being hampered due tolockdown owing to COVID-19 pandemic outbreak.

The movement of project related Foreign personnel is also restricteddue to COVID-19 resulting in further delays.

Gas Turbine at Trombay

To meet the New Energy norms your Company is implementing variousenergy reduction projects. One of these project is installation of Gas Turbines Generator(GTG) of 2 x 25 MW along with Heat Recovery Steam Generator (HRSG) of 2 x 65 MTPHcapacity. This project aims to reduce the specific energy consumption in Ammonia and UreaPlants at Trombay. Work has been awarded to M/s Thermax on 18.04.2018 for implementing theproject on LSTK basis. Estimated project capital cost is about Rs. 427 Crore. ExpectedEnergy Saving is 0.30 Gcal/MT of Urea.

Trombay Urea-V Plant Revamp (Casale Scheme)

Urea-V plant revamp scheme is based on End-to-End survey conducted byM/s Casale SA Switzerland. The project has been taken-up with following objectives:

? Reduction in specific energy consumption of Urea.

? Plant capacity: 1350 MTPD on sustained basis.

? Improving the waste water quality to Boiler Feed Water grade.

Expected energy saving as result of this project is 0.19 Gcal/ MT ofUrea. Estimated project capital cost is about Rs. 137.03 Crore.

Trombay Ammonia V Plant Revamp (KBR Scheme):

Ammonia-V revamp project is being implemented as a part of energyimprovement schemes to meet the new energy norms for Trombay Unit. The estimated projectcost is Rs. 72.75 Crore. The Basic Engineering is being done by KBR USA and DetailEngineering is being done by PDIL. The scheme is envisaged to result in energy saving of0.25 Gcal/MT of Ammonia.

Variable frequency drive (VFD) for HP Ammonia Feed pump at Thal

Your Company has undertaken installation of variable frequency drive onHP Ammonia feed pumps for power saving at estimated cost of Rs. 6.60 Crore. Expectedsaving is 0.012 Gcal/MT of Urea.

Ammonia Refrigeration Compressor (ARC) - IV Project at Thal

With aim to reduce the specific energy consumption in Ammonia and UreaPlants at Thal by 0.05 Gcal/MT Your Company is installing new Ammonia RefrigerationCompressor (ARC)-IV. Estimated project capital cost is about Rs. 44.50 Crore. The projectis expected to be completed by September 2021.

PROJECTS UNDER CONSIDERATION

Organic Fertilizer plant at Trombay

Your Company is planning to setup an Organic Fertilizer plant using STP& ETP sludge and Gypsum sourced in-house at Trombay unit. The plant capacity will be10000 MT per year. The project shall serve dual purpose of marketing organic fertilizeras per Government mandate as well as the disposal/ management of STP & ETP sludge withthe manufacturing of value added product giving clean environment. Estimated projectCapital Cost is about Rs. 8 Crore.

New AN Melt Plant at Trombay

With an aim to reduce specific consumption of raw materials and improvethe energy efficiencyof the plant your Company is planning to set-up new AN Melt Plant atTrombay.

Revamp of ANP Granulation Section at Trombay

Presently ANP plant is not in operation due to economic unviability ofthe NPK 20:20:0 which is sold under brand name Suphala. Your Company is exploringpossibility of revamping ANP Granulation section for manufacturing other grades of NPKlike 12:32:16 10:26:26 and 20:20:0:13 etc.

ETP up-gradation at Thal

Upgradation of ETP for treating 9000 M3/day effluent at an estimatedcost of Rs. 71 Crore. Benefit of the project will be better environment management throughrecycling of treated effluent as a raw water to the tune of 5250 M3 per day from ThalUnit. Scheme will be completed by June 2022.

Motor Driven Nitrogen Compressor in Argon Plant at Thal

Existing steam turbine driven compressor will be replaced with motordriven at estimated cost of `20.78 crore to utilize power generated from GT. Savingexpected is Rs. 4.70 Crore per year. Scheme will be completed by August 2021.

JOINT VENTURE PROJECTS

Coal Based Fertilizer Plant at Talcher

Your Company along with Coal India Limited (CIL) Gas Authority ofIndia Limited (GAIL) and Fertilizer Corporation of India Limited (FCIL) is setting-up aCoal Gasification based fertilizer complex comprising of 2200 MTPD Ammonia plant and 3850MTPD Urea plant at FCIL Talcher Odisha. Land and certain facilities needed for theproject are provided by FCIL. The project will utilize state-of-the-art Coal GasificationTechnology from M/s Air Products (erstwhile M/s Shell Eastern). A joint venture company‘Talcher Fertilizers Limited' has been incorporated for establishing andoperating Coal Gasification based

Fertilizer complex.

The estimated Project capital cost is approx. Rs. 13277 Crore (RCFshare is Rs. 1184 crore on account of proposed equity participation). Letter ofIntent(LOI)forCoalGasification and Ammonia-Urea Plants was placed on M/s Wuhuan on11.09.2019 and on 19.09.2019 respectively. Other site activities are in progress.

The project is of strategic importance for the country as it aims tomake breakthrough for an alternative source of feedstock in the form of abundantlyavailable coal from domestic sources in place of natural gas. Success of this project isexpected to be a game changer and shall pave a way forward to the production of chemicalsand fertilizers from coal leading to lesser RLNG imports. It will also help in meetingmuch needed Urea production capacity for the eastern part of the Country.

Revival of Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) -Namrup Unit

The revival of BVFCL Namrup Unit is proposed to be carried out by JV ofNFL (35%) Oil India Ltd. (26%) RCF (17%)

BVFCL (11%) and Govt. of Assam (11%).

The proposed project entails setting up a Urea plant with an annualcapacity of 1.27 Million MT. The estimated Project Cost is approx. Rs. 7628 Crore. Thefeasibility study for the project is being carried out by PDIL.

SUBSIDIARY AND OTHER JOINT VENTURE COMPANIES

A separate statement containing the salient features offinancialstatements of all the joint ventures of your Company forms part of consolidatedfinancial statements in compliance with Section 129 and other applicable provisions ifany of the Companies Act 2013. The financial statements of the joint ventures andrelated information are available for inspection by the members through electronically upto the date of the Annual General Meeting (AGM) as required under Section 136 of theCompanies Act 2013. Any members seeking to inspect such documents are requested to writeto the Company at investorcommunications@rcfltd.com. The financial statements includingthe consolidated financial statements and all other documents required to be attached tothis report have been uploaded on the website of your Company (www.rcfltd.com).

JOINT VENTURE COMPANY

FACT-RCF Building Products Ltd. (FRBL) Kochi

Your Company has formed a Joint Venture Company with Fertilizers andChemicals Travancore Limited (FACT) by incorporating FACT-RCF Building Products Ltd. toset up a Rapidwall project at Kochi. Both your Company and FACT have 50:50 equity holdingin the Company. Production has been suspended owing to expected takeover of the Plant& Machinery by the ARC . The company is undertaking only project management servicesat present.

The unaudited financial statements of FRBL as at March 31 2020reported a loss of Rs. 14.53 crore thus resulting in accumulated loss of Rs. 136.57 crore

Urvarak Videsh Limited (UVL)

Your Company has formed a Joint Venture Company with NationalFertilizers Limited (NFL) and Krishak Bharti Cooperative Limited (KRIBHCO) byincorporating Urvarak Videsh Limited (UVL) to set up joint venture in India and abroad formanufacturing mining long term tie ups for Nitrogenous Phosphatic and PotassicFertilizers and fertilizer raw materials including exploring the possibility of makinginvestments 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 the Board of UVL had decided to declare the company as a Dormantcompany for the time being in terms of the provision of section 455 of the Companies Act2013 as the keeping the status of the company as active was not serving any purpose.

The unaudited financial statements of UVL as at March 31 2020 reporteda loss of Rs. 72317/- thus resulting in accumulated loss of Rs. 0.47 crore.

Talcher Fertilizers Limited (TFL)

Your Company has formed a Joint Venture company with Coal IndiaLimited (CIL) GAIL (India) Limited (GAIL) and Fertilizer Corporation of India Limited(FCIL) with the name Talcher Fertilizers Limited for revival of FCIL's fertilizerunit at Talcher by establishing and operating coal gasification based fertilizer complex.The equity participation of RCF CIL and GAIL is 29.67% each and that of FCIL is 10.99%.The company is yet to start its operations.

During the year your Company has infused Rs. 143.16 Crore in TFL.

The unaudited financial statements of the said Company as at March 312020 reported a loss of Rs. 3.03 crore thus resulting in accumulated loss of Rs. 21.73crore

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statement of your Company has been preparedby taking into consideration Joint Venture Companies i.e. FACT-RCF Building ProductsLimited Urvarak Videsh Limited and Talcher Fertilizers Limited.

The Consolidated financial statements have been prepared under equitymethod along with Company's standalone financial statements.

SUMMARY OF FINANCIAL PERFORMANCE

Rs. in Crore

Particulars 2019-20 2018-19
Total Income (Net) 9826.60 8967.46
Total Operating Expenses 9114.64 8444.11
Operational Profit 711.96 523.35
Depreciation/Impairment 171.04 155.69
Finance Cost 237.82 155.85
Share /(loss) of Associates/JVs (1.02) (6.25)
Profit/ (Loss) before Exceptional Item 302.08 205.56
Exceptional Item (income) / Expense 100.17 (23.44)
Profit/ (Loss) before Tax 201.91 229.00
Provision for Tax (including deferred Tax liability/ Asset) (5.22) 96.08
Net Profit / (loss) after tax 207.13 132.92

RESEARCH AND DEVELOPMENT

Your Company has taken up several Research and

Development (R & D) projects some of which are for commercialscale design and engineering. They are as under:

Launch of New Product "Organic Growth Stimulant"

In view to promote Integrated nutrient management system to enhanceyield the sustainability of the system and effectiveness of conventional mineralfertilizers an completely organic product has been developed and tested successfully onvarious crops. This product is very useful specifically in cash crops viz. Grapesoranges floriculture etc. along with all vegetables and cereals.

The organic product "RCF's Organic Growth Stimulant" waslaunched on November 21 2019 in the market adding one more value added product to thebasket of fertilizers and chemicals.

Launch of New Product "Soluble Silicon Fertilizer"

In recent years Silica (Si) has become more globally accepted as anagriculturally important addition. Beneficial effects of Si includes enhancing plantresistance and tolerance to various biotic and abiotic stresses. Si mitigates multipleabiotic stresses viz. salinity drought flooding freezing high temperature ultravioletradiation and mineral nutrient deficiency/toxicity stress. Contributes to increased foodsafety higher production with lower input costs and reduced negative impacts onenvironmental health. A silica product based on soluble silica and potassium mixture wasfield tested successfully on paddy and onion. This new product "RCF's SolubleSilicon Fertilizer" was launched on January 23 2020 in the market.

Patent application: Nanofertilizers "NanoNutrientcomposition"

Concrete efforts were made for the development of Nano organicfertilizers with biologically synthesized nanoparticles. This formulation"Nanonutrient Composition" was applied for Indian Patent on 17th October 2019.

Soil health management and Balanced Nutrition

Field trials were undertaken at Central Institute of Cotton Research(CICR) Nagpur for tesing three new products developed in-house. The products include aspecial mixture of micronutirent fertilizers for cotton biostimulant and bionanofertilizer in special delivery system. The products together address the requirement ofbalanced nutrition in cotton cultivation.All the products have shown positive impact onthe cotton crop and yield. With a few more trials the products will be available forcommercialization by 2021-22.

Collaborative Research in Nanotechnology

A MoU was signed with Indian Council of Agriculture Research(ICAR)-Central Institute for Research on Cotton Technology (CIRCOT) Mumbai forcollaborative research in the field of Nanotechnology. This collaboration will support RCFin its Nanofertilizer venture.

ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL

Your Company is committed to ensuring clean environment beyondsatisfying all stipulated requirements laid down by the statutory authorities meeting theexpectation of stake holders around its operating units.

Your Company has established ISO 14001 compliant Environment ManagementSystem (EMS) along with Safety Management System Quality Management System and EnergyManagement System. Certification for IFA Protect & Sustain Product Stewardship Systemof international standard for environment protection for Safety and product security atits both the manufacturing units. The Management Systems are constantly upgraded periodicaudits and Management Review conducted to ensure compliance and continual improvement.Apart from Stack monitors which continuously monitor the emissions four fixed ambientair quality monitoring stations are in place at both Trombay and Thal to monitorammonia NOx SO2 Particulate matter (PM10 & PM2.5) & metrological parameters.Both units of RCF are connected to MPCB and CPCB servers for continuous on line data ofstack and effluent parameters. As you are aware RCF uses clean fuel to reduce the GreenHouse Gas emission efforts are taken to minimize emissions with Reduce Recycle Reuseschemes.

The Effluent Treatment plants at Trombay and Thal have ensured that theenvironment in and around the operating units are fully protected. Environmental safety ofneighbours around operating units are taken care. Various schemes with state of the arttechnologies and modernization schemes are implanted to reduce energy consumption andwastages. The waste streams from the plants are recycled/ reused for useful purpose. As aproactive measure RCF has a Sewage treatment Plant to treat sewage of Mumbai city &use the purified water after treatment for industrial purpose thereby saving equivalentquantity of potable water for consumption by Mumbaikars. This year an additional stream ofSTP is commissioned.

Sludge generated in Effluent Treatment Plant Sulphur Sludge Generatedin Sulphuric Acid plant waste streams of effluents from complex fertilizer plants arerecycled back in the processes. 3- R strategy (Reduce Reuse and Recycle) is employed byway of recycling the sludge generated in ETP Sulphur sludge generated in Sulphuric AcidPlant is used in Suphala plant for recovery of nutrients.

The integrated Effluent Treatment Plant in Operating Units ensures thateffluent discharged from the factory meetsthe statutory requirements laid down by thePollution Control Board.

Trombay and Thal units have taken up a massive tree plantation drive infactory premises in residential colony and surrounding areas.

For increasing awareness regarding environment and safety publicawareness campaign programmes are arranged by Trombay and Thal units by providingdemonstrations to local youth college and school students housing societies Panchayatoffices ladies club members and household members in the adjoining localities.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As part of its initiatives under "Corporate SocialResponsibility' your Company has undertaken several projects in the areas of ruraldevelopment promoting health care and education aimed for the benefitof needy and forgeneral good of the society. These projects are in accordance with Schedule VII of theCompanies Act 2013 and the Company's CSR policy. The report on CSR activities asrequired under the Companies (Corporate Social Responsibility Policy) Rules 2014 isannexed as Annexure I and forms an integral part of this report. During the yearyour Company has spent Rs. 3.42 Crore on CSR activities. The activities in brief are asunder: a. Scholarship to meritorious students

Your Company has provided scholarships to 100 school students of SCcommunity from the Aspirational District Osmanabad of Maharashtra through Centre forStudies in Rural Development (CSRD). Similar scholarship scheme was also extended forThal Raigad Dist. Maharashtra. b. Supply of drinking water to the villages

Your Company has been providing drinking water for last 24 years toseven villages around Thal unit through pipelines laid from the water reservoir in theunit and spent about Rs. 82.52 lakh on this account during the year. More than 15700residents of the villages got benefited from the scheme.

c. Community Medical Facility- Running of Mobile Medical Van

Your Company in collaboration with Wockhardt Foundation is runningmobile medical vans at Thal Alibag Raigad Dist. Total two such medical vans were runningduring 2019-20.On an average seven villages were covered in weekly cycles by a Mobile vanand patients were benefitted from free medical services including supply of medicines.Through this facility ailments like Malaria Hepatitis Dengue Typhoid Diabetes etc.were treated on regular basis. The Medical Van is accompanied with one MBBS doctor and oneassistant. One medical van attends approximately 25000 patients per annum.

d. Rural Sports

Your Company has supplied sports material and organised district levelAdivasi Kabbadi Tournament wherein more than 1000 Tribals participated.

e. Livelihood enhancement projects

Your Company has also supplied paddy fruit saplings and freefertilizers to needy villagers near Thal

f. Aspirational District (Osmanabad)

Government of India has issued guideline to CPSEs related toutilization of CSR funds in a focussed manner towards national priorities by adopting atheme based approach. As per the DPE guidelines common theme identified for the year2019-20 was School Education and Health Care & Nutrition.

Your Company had selected Osmanabad which is one of the Aspirationaldistrict in Maharashtra Your Company has implemented following schemes in Osmanabad.

1) RCF provided finance assistance to Zilha Parishad Osmanabad forpurchase of Baby Warmers for Primary Health Centres.

2) Support to Masoom NGO for Girls Night School in Tuljapur inOsmanbad District.

3) Provided education material to Maharishi Vithal School in OsmanbadDistrict.

CPSE CONCLAVE "VISION 2022"

The Department of Public Enterprises (DPE) has embarked on acollaborative exercise for re-defining the role and functioning of Central Public SectorEnterprises (CPSEs) in the context of challenges and expectations emerging from broadvision of ‘New India-2022'. This exercise had culminated in the CPSE Conclave"New India - Vision 2022" held on April 9 2018 at Vigyan Bhavan New Delhiwhich was addressed by Hon'ble Prime Minister.

In line with the directions given by Hon'ble Prime Minister at theConclave DPE has prepared Broad Framework of Action Plan comprising of ObjectivesActionable Points Metric and Responsibility and have circulated the same amongst allCPSEs for developing Company specific actionable points and targets to be achieved by2022-23.

In line with above Your Company has prepared the Company specificactionable points with targets and has been working on achieving the same. The actionablepoints are pertaining to contribution towards minimizing the import bill of the Countrypromotion of R&D activities alignment of CSR activities with national prioritieshandholding of MSEs skill India movement sharing best practices & infrastructuresupporting start-ups reduction in wasteful expenditure increasing geo-strategic reach ofa Company.

The status of each and every actionable point is reviewed by managementon every fortnightly basis and by the Board of Directors in every Board meeting. Thestatus is also updated on "DRISHTI" dashboard every month.

EFFECTIVE IMPLEMENTATION OF PUBLIC PROCUREMENT POLICY FOR MICRO ANDSMALL ENTERPRISES (MSEs)

Government of India Ministry of Micro Small and Medium Enterprisesvide order dated March 23 2012 notified the public procurement policy in respect ofprocurement of goods and services produced and provided by Micro Small and MediumEnterprises and further amended it on 9th November 2018 vide Government oflndia Gazette Notification S.O. 5670(E) dated November 9 2018.

The Public Procurement Policy for Micro and Small Enterprises (MSE)order2012 mandates the 20% of Annual procurement by Central Ministries/ Departmnet andCPSEs from MSEs including 4% from MSEs owned by SC/ST entreprenurs w.e.f April 1 2015.

With amendment in Public procurement policy for Micro & SmallEnterprises (MSEs) order 2012 vide GoI Gazette Notification S.O. 5670(E) dated November9 2018 the percentage target of procurement of goods and services by GovernmentDepartments/CPSEs from MSEs is increased from 20% to at least 25% along with the provisionof minimum 3% reservation for women owned MSEs within this 25% reservation. This amendmentis made applicable from November 9 2018.

RCF has taken following actions to maximize procurements from MSEs:

1. Necessary provision has been made in all the tenders stating theeligibility and price preference extended to MSE's to participate in the tender.

2. Relaxation is given to MSE manufacturers in eligibility criteria incomparison to non-MSE bidders.

3. Provision of minimum 3% reservation for women owned MSEs withintotal 25% reservation is made effective from 09th Nov. 2018. Since then RCF has startedinclusion of this provision in all NITs/Tenders.

4. Special efforts like Women vendor meet was planned and executed.

5. For maximizing the procurements from MSEs RCF has taken followingmeasures

? Change in policy to open the gates further for MSEs.

? Encouraging more participation in GeM for MSE vendors.

? Conducting/ participating in awareness/ development programs for MSEvendors.

? Encouraging MSE vendors for TReDS payment system to help them managetheir working capital requirements.

With concerted efforts in the year 2019-20 RCF has been able toachieve 42.07% procurement from MSEs and 1.20% of procurement from MSEs owned by SC/STentrepreneurs out of total procurement of Goods and Services. The percentage ofprocurement from MSEs owned by women entrepreneurs was 1.35% out of total procurement. Thepercentage procurement is calculated excluding raw materials gas water electricitycatalyst & proprietary items which cannot be procured from MSEs.

SUSTAINABLE DEVELOPMENT

Your Company has taken up several Sustainable development activitiesincluding the following:

Sewage Treatment Plants

Your Company is running two Sewage Treatment Plants (STP) at TrombayUnit with each plant having capacity to treat around 22.75 Million Litres per Day (MLD) ofsewage received from MCGM which otherwise would have been drained in to the sea afterpreliminary treatment. The STP plants treat waste sewage generated in the city and convertit into treated water. Both plants generate about 30 MLD of treated water which is beingused in our plants as process water. A portion of treated water generated is supplied toM/s BPCL. During the year 2019-20 about 5814367 M3 of treated water wasgenerated at both STP plants.

Both STP plants of your Company are of great value to residents ofMumbai and society at large besides improving reliability of operations of RCF TrombayUnit.

Solar Power Plant

In its bid towards India's vision of achieving ecologicallysustainable growth your Company has forayed into solar power generation. Company has setup a 2 MWp ground mounted Photovoltaic Solar power plant in Trombay Unit in January 2016.In addition to this your Company has commissioned solar rooftop facilities at ThalTrombay and Soil Testing labs with an aggregate capacity of 2.01 MWp. The power generatedis used for captive consumption thereby reducing your Company's power import to theequivalent extent. During the year 2019-20 5295 MWh of solar power was generated. Thegreen power generated by solar plants replaces the conventional power generated throughburning of fossil fuels leading to reduction in overall Greenhouse gas emissions.

During 2019-20 2759 Solar Renewable Energy Certificates (RECs) weregenerated at RCF Trombay Unit. Out of these RECs your Company have earned about Rs. 43.89lakh by selling 1941 RECs.

VIGILANCE

Vigilance Department is headed by Shri Sameer Rastogi IFS who holdsthe charge of Chief Vigilance Officer of RCF. The CVO is assisted by a team of officersdrawn from various functional departments and placed in Corporate Office Mumbai and at RCFThal. The thrust of Team vigilance is to bring greater transparency fairness andefficiency in all type of transactions and execution of works in the company in line withthe Central Vigilance Commission's guidelines. Thus necessary measures are initiatedto review the activities of Corporate Office Trombay unit Thal unit and Marketingoffices situated throughout the country.

As part of Preventive Vigilance efforts are made to keep a watch onthe various activities through regular inspections and surprise checks. Systemicimprovements and corrective actions are suggested wherever necessary. We follow theideology that "All officers are Vigilance Officers" and the same is implementedin the company. Alertness and support of all officers is taken in implementation ofVigilance directives. The Vigilance Department has focused on spreading awareness onrules/regulations procedures and solicited information/complaints from all regardingmalpractices or corruption. The Vigilance Department has a complaint handling system andan online portal for lodging the complaints. Efforts are made to ensure speedy redressalof the complaints.

Vigilance Department has actively contributed towards e-governance byleveraging technology in all operations in RCF. Tender documents have been made moreobjective.

Transparency in existing system of dealing with the Dealers/ Vendorshas been enhanced by adopting e-procurement and e-payment. The Vigilance Department hasalso ushered in an era of e-clearances for issuing NOC for various purposes to theemployees like gratuity and visits abroad.

The Vigilance Department conducted the Vigilance Awareness Week from28.10.2019 to 02.11.2019. The activities during the week were designed to spread Vigilanceawareness among young citizens and our external partners.

Thus various competitions were held for school and college studentsfrom Mumbai Thal and some marketing places like Pune etc. and awareness programs wereconducted for external partners like vendors dealer contractors and farmers.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis report for the year underregulations 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 highlighting the industry structure and developments opportunities andthreats future outlook risk and concerns etc. is annexed as

Annexure II and form an integral part of this report.

PUBLIC DEPOSIT

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

OFFICIAL LANGUAGE POLICY

Your Company has fully endeavoured to implement the provisions ofOfficial Language Act 1963 and the policy of the Government. Publicity material andliterature for employees and farmers are made available in Hindi and other regionallanguages.

AUDITORS

a. Statutory Auditor

The Comptroller and Auditor General of India (CAG) has appointedM/s.Chhajed & Doshi (Firm Registration Number 101794W) and M/s.Ford Rhodes Park &Co. LLP (Firm Registration Number 102860W / W100089) as Joint Statutory Auditors of yourCompany for the financial year 2019-20. The Auditors would be retiring at the conclusionof the Forty Second Annual General

Meeting. There are no qualifications reservations or adverse remarksmade by Statutory Auditors in their report.

The Statutory Auditors for the financialyear 2020-21 will be appointedby the CAG. However their remuneration is required to be fixed at the AGM by the members.

b. Cost Auditor

Your Directors on the recommendation of Audit Committee has appointedMr. Rohit J. Vora Cost Accountant (Membership No. 05740) Mumbai as Cost Auditor to auditthe cost accounts of the Company for the year 2020-21 on a remuneration of Rs. 2.00 lakhexcluding applicable taxes. As required under the Companies

Act 2013 the remuneration payable to cost Auditor is required to beplaced before the members in a general meeting for their ratification.Accordingly aresolution seeking members' approval for the remuneration payable to Mr. Rohit J.Vora as Cost Auditor forms part of the notice convening the Annual General Meeting fortheir ratification.

c. Secretarial Audit

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

EXPLANATION OR COMMENTS BY THE BOARD ON SECRETARIAL AUDIT REPORT

Secretaries Secretarial Auditor of the Company has made the followingobservations in their Secretarial Audit Report:

a) The Board of Directors comprises of eight Directors constituting offour Executive Directors (including the Chairman & Managing Director); two NomineeDirectors (non-executive) and two Independent Directors. As per Section 149(4) of the Actat least one-third of the total number of directors should be independent directors andRegulation 17(1) of the Listing Regulations and DPE Guidelines on Corporate Governance forCentral Public Sector Enterprises the Chairman being an Executive Director at least halfof the board of Directors should be comprised of Independent Directors. Thus the Companydoes not have the requisite number of Independent Directors including independent WomanDirector on its Board.

b) Nomination and Remuneration committee ("NRC") is comprisesof three Directors constituting two non-executive Directors including one IndependentDirector and one Executive Director as on March 31 2020. Due to retirement of oneIndependent Director w.e.f. March 7 2020 the Company does not have requisite number ofIndependent Director in its NRC committee as on March 31 2020 as required under section178(1) of the Act and Reg. 19(1) of the Listing Regulations.

c) Corporate Social Responsibility Committee ("CSRcommittee") is comprises of two Directors constituting one non-executive Directorand one executive Director as on March 31 2020. Due to retirement of one IndependentDirector w.e.f. March 7 2020 the Company does not have requisite number of IndependentDirector in its CSR committee as on March 31 2020 as required under Section 135(1) of theAct.

Explanations on observations made by Secretarial

Auditors in seriatim are as under:

a. Your Company is a Central Public Sector Undertaking under theAdministrative control of the Ministry of Chemicals and Fertilizers Department ofFertilizer Government of India and its Directors on the Board are nominated/appointed bythe President of India. The Company is continuously pursuing with the Government of Indiafor the appointment of requisite number of Independent Directors including womanIndependent Director on the Board in order to comply with the provisions of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015.

b. Shri Suryanarayana Simhadri who is member of Nomination andRemuneration Committee ceased to be Independent Director of the Company on completion ofhis term on March 7 2020. Subsequently Nomination and Remuneration Committee wasreconstituted by the Board of Directors on May 8 2020 with requisite number ofIndependent Directors. Further Nomination and Remuneration Committee did not meet duringperiod on 08.03.2020 to 08.05.2020.

c. Shri Suryanarayana Simhadri who is Chairperson of CSR Committeeceased to be Independent Director of the Company on completion of his term on March 72020. Subsequently CSR Committee was reconstituted by the Board of Directors on May 82020 with requisite number of Independent Directors. Further CSR Committee did not meetduring period on 08.03.2020 to 08.05.2020. of

d. Secretarial Standards

During the year 2019-20 your Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS

There are no significant and material orders passed by the

Regulators/Courts/Tribunals that would impact the going concern statusof the Company and its future operations.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the informationand explanations obtained by them your Directors make the following statement in terms ofsection 134(3) (c) of the Companies Act 2013:

i] that in the preparation of the annual accounts for the year endedMarch 31 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

ii] the Directors had 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 as at March 31 2020and of the profit of the Company for the year ended on that date;

iii] that 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;

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

v] that the Directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and

vi] that the Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

CORPORATE GOVERNANCE

As per SEBI (Listing Obligations and Disclosure

Requirements) Regulations 2015 a separate section on CorporateGovernance practices followed by the Company together with a certificate from thePractising Company Secretary forms an integral part of this report.

COMPLIANCE OF CORPORATE GOVERNANCE GUIDELINES ISSUED BY DEPARTMENT OFPUBLIC ENTERPRISES

DPE Government of India has laid down certain parameters for thepurpose of grading the CPSEs on the basis of their compliance with guidelines on CorporateGovernance and this report needs to be submitted to the Government on quarterly/annualbasis. Your Company has been complying with the Guidelines on Corporate Governance forCPSEs laid down by DPE and regularly submits reports to the Government. DPE issued‘Excellent Rating' to your Company for the year 2018-19.

INTERNAL FINANCIAL CONTROL OVER FINANCIAL REPORTING

Your Company's internal financial control over financial reportingis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles.

Your Company's internal financial control over financial reportingincludes those policies and procedures that:

1 pertains to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions dispositions of the assets of the company;

2 provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of Management and Directors of theCompany; and

3 provide reasonable assurance regarding prevention or timely detectionof unauthorized acquisition use or disposition of the company's assets that couldhave a material effect on the financial statements.

KEY MANAGERIAL PERSONNEL

The following are Key Managerial Personnel of the Company

1. Shri S. C. Mudgerikar [DIN 03498847] Chairman & ManagingDirector (from 01.10.2019)

2. Shri Umesh V. Dhatrak (DIN 07718394) Chairman & ManagingDirector (upto 30.09.2019)

3. Shri Sudhir D. Panadare [DIN 07933191] Director (Technical)

4. Shri Umesh Dongre [DIN 08039073] Director (Finance) & CFO

5. Shri K. U. Thankachen [DIN 06946476] Director (Marketing)

6. Shri Jai Bhagwan Sharma [FCS 5030] Company Secretary

CHANGES IN THE BOARD OF DIRECTORS

Shri S. C. Mudgerikar [DIN 03498847] has been appointed as Chairman& Managing Director of the Company w.e.f. October 1 2019.

Smt. Shashi Bala Bharti (DIN 08770477) has been appointed as anIndependent Director of the Company w.e.f. June 25 2020.

Shri Umesh V. Dhatrak (DIN 07718394) ceases to be Chairman &Managing Director on the Board on his superannuation on September 30 2019 (closure ofbusiness hours).

Shri Suryanarayana Simhadri (DIN 01951750) Independent Director ceasedto be Director of the Company w.e.f. March 7 2020.

The Board has placed on record their appreciation of the Directors whohave ceased to be members of the Board for the valuable contribution made and theguidance/suggestion provided by them which has greatly benefited the company.

As per Section 152 of the Companies Act Ms Alka Tiwari (DIN: 03502306)and Shri K. U. Thankachen (DIN: 06946476) Directors retire by rotation at the ensuingAnnual General Meeting and being eligible offer themselves for reappointment.

DECLARATION OF INDEPENDENCE

All independent Directors of the company have given declarationconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Companies Act 2013 and Regulation 16(1) (b) of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015.

COMMITTEES OF THE BOARD

The Company's Board has the following committees:

i. Audit Committee

ii. Stakeholders Relationship Committee

iii. Share Transfer Committee

iv. Nomination and Remuneration Committee

v. Committee on Corporate Social Responsibility (CSR)

vi. Empowered Committee for Procurement.

vii. Risk Management Committee viii. Empowered Committee forProcurement of Urea on Govt. Account ix. Debenture Allotment Committee

The details of the committees along with their composition number ofmeetings held and attendance of each director at the meetings are provided in theCorporate Governance Report.

COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND RELATEDDISCLOSURES

As per notification dated 5th June 2015 issued by Ministryof Corporate Affairs provision of section 134(3) (e) of the Companies Act 2013 regardingdisclosure of its policy on Director's appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matter provided under sub- section (3) of section 178 of the Companies Act 2013are not applicable to a Government company.

Your Company being a Government company the above provisions are notapplicable to it.

Similarly section 197 of the Companies Act 2013 requiring disclosureof ratio of the remuneration of each director to the median employee's remunerationand other such details including the name and other particulars of every employee of thecompany who if employed throughout/ part of the financial year was in receipt ofremuneration in excess of the limits set out in the rules are not provided in terms ofsection 197(12) read with rule 5(1)(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 being not applicable to a Government company as pernotification dated June 5 2015 issued by Ministry of Corporate Affairs.

MEETINGS OF THE BOARD

Eleven (11) Board Meetings were held during the year. The details ofthe Board Meetings held during the financial 2019-20 are provided in the CorporateGovernance Report.

BOARD EVALUATION

Section 134(3) (p) of the Companies Act 2013 requires the Company todisclose the manner in which formal annual evaluation has been made by the Board of itsown performance and that of its committees and individual Directors. As per notificationdated June 5 2015 issued by Ministry of Corporate Affairs provision of section 134(3)(p) of the Companies Act 2013 shall not apply in case Directors are evaluated by theMinistry which is administratively in charge of the Company as per its own evaluationmethodology. Your Company being a Government Company the performance evaluation iscarried out by the Administrative Ministry (Ministry of Chemicals & Fertilizers)Government of India as per applicable Government Guidelines.

Your Company has evaluated the performance of the Independent Directorsfor the year 2019-20 as per regulation 17(1) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN ANDSECURITIES PROVIDED

Particulars of Loans given Investments made Guarantees given andSecurities provided along with the purpose for which the loan or guarantee or security isproposed to be utilized by the recipient are provided in the notes to the financialstatements.

CREDIT RATINGS

The Credit rating assigned by Rating Agencies for the various debtinstruments of the Corporation is provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

During the year under review none of employees of the Company haddrawn remuneration in excess of the limits prescribed under section 134(3) (c) of theCompanies Act 2013 read with Companies (Appointment of Managerial Personnel) Rules 2014.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The details of Vigil Mechanism/Whistle Blower Policy are provided inCorporate Governance Report.

RELATED PARTY TRANSACTIONS

All contracts/arrangement/transactions entered by the

Company during the financial year with related parties were in theordinary course of business and on arm's length basis.

There are no materially significant related party transactions made bythe Company with Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committeeand also before the Board for approval. None of the Directors have any pecuniaryrelationships or transactions vis-a-vis the Company.

The details of the investment in equity made by the Company as on March31 2020 is as under:'

Rs. in Crore

1 FACT-RCF Building Products Limited 32.87 *
2 Urvarak Videsh Limited 0.18 *
3 Talchar Fertilizers Limited 159.51
Total 192.56

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

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

INTER CORPORATE DEPOSIT

In connection with one time settlement entered into with Dena Dank theCompany had paid total Rs. 51 crore (Rs. 12 crore during the year 2017-18 and Rs. 39 croreduring the year 2018-19) to Dena Bank as one time settlement which includes an amount ofRs. 25.50 crore being the share of The Fertilisers and Chemicals Travancore Limited(FACT) the joint venture partner in FRBL. This amount is shown as interest bearing intercorporate deposit given. FACT shall repay the same in five annual equal instalmentscommencing from December 2020.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

Your Company has in place a Policy on Prevention

Prohibition and Redressal of Sexual Harassment of Women at Workplace inline with the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013.The Internal Complaints Committee (ICC) has beenset up to redress complaints received regarding sexual harassment.

During the year no complaint of Sexual Harassment of Women atWorkplace was received by the internal complaints committee formed by your Company underthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.

RIGHT TO INFORMATION(RTI)

In order to promote transparency and accountability an appropriatemechanism has been set up across the Company in line with the provisions of the Right toInformation Act 2005. Your Company has nominated CPIO/ACPIOs/ Appellate Authorities atits units/offices across the Company to provide information to citizens under theprovisions of the RTI Act.

During the year under review your Company has received 139 RTIapplications out of which 129 has been resolved.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3) (m) of the CompaniesAct

2013 read with Rule 8 of The Companies (Accounts) Rules 2014 isannexed to this Report as Annexure IV and form an integral part of this report.

EXTRACT OF ANNUAL RETURN

As per the requirements of section 92(3) of the Companies Act and rulesframed hereunder the extract of Annual Return in form MGT-9 is annexed to this Report as AnnexureV and form an integral part of this report. The same is available on theCompany's website http://www. rcfltd.com/index.php/en/investor-relations/annual-reports.

ISSUE OF NON- CONVERTIBLE DEBENTURES (NCDS) / BONDS ON PRIVATEPLACEMENT BASIS

Your Company has allotted 5000 6.59% Rated Listed SecuredRedeemable Non-Cumulative Taxable Non-

Convertible Debentures (NCDs) of face value of Rs. 1000000/- (RupeesTen Lakh only) each aggregating to Rs. 500 crore

(Rupees 500 Crore only) on private placement basis for cash at par indematerialized form (ISIN: INE027A07012) through BSE Electronic Book Platform (EBP) on5th August

2020.

The NCDs are for a tenure of Five years carrying interest @ 6.59% p.a.payable annually. NCDs are listed on National Stock Exchange of India Limited (NSE) andBSE Limited (BSE) on the Whole Sale Debt Market (WDM) Segment.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34 (2) (f) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Business Responsibility Report initiativestaken from an environmental social and governance prospective in the prescribed format isavailable as a separate section of the Annual Report and forms an integral part of thisreport. Business Responsibility Report is also available on the Company's websitewww.rcfltd.com .

ACKNOWLEDGMENT

Your Directors wish to gratefully acknowledge the valuable guidance andcontinued support extended by Government of India and in particular the Department ofFertilizers and the Office of Fertilizer Industry Co-ordination Committee (FICC)Railways DPE Members of MOU Task force and other Central Government Departments andAgencies. The Board also wishes to acknowledge with sincere gratitude the help andunstinted support from the Government of Maharashtra and other State Governments MSEBMIDC various Media Municipal Authorities Maharashtra Pollution Control Board FactoryInspectorate and IBR Bankers to your Company Financial Institutions Dealers andCustomers.

Your Board wishes to acknowledge gratefully the confidence posedunstinted support and suggestions made to the Board by the esteemed Share Owners of theCompany. The Board also wishes to place on record the positive suggestions and guidanceprovided by the Statutory Auditors Cost Auditors the Office of the Principal Director ofCommercial Audit and

Secretarial Auditor.

Last but not the least your Directors take pleasure in placing onrecord their deep appreciation of the excellent contribution made by the employees of yourCompany at all levels without which your Company would not have achieved such goodperformance.

.