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National Fertilizers Directors Report, NFL Reports by Directors
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National Fertilizers

BSE: 523630|NSE: NFL|ISIN: INE870D01012|SECTOR: Fertilisers
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Directors Report Year End : Mar '15    « Mar 14
To
 
 Dear Members,
 
 The behalf of the Board of Directors of your Company, I have the
 pleasure in presenting the 41st Annual Report on the business and
 operations of the Company together with the Audited Financial
 Statements for the Financial Year 2014- 2015 and the Auditors'' Report
 and comments on the accounts by the Comptroller & Auditor General of
 India (C&AG).
 
 I am glad to share with all of you that your Company has turned around
 and performed well in the year 2014-15. The Company has achieved
 highest ever annual production of 36.39 Lakh MT of urea with a capacity
 utilization of 102%.  This also includes record production of Neem
 Coated urea of 13.65 lakh MT, which is 37.51 % of total urea
 production.  Company has also excelled on marketing front by selling
 36.79 lakh MT urea. These numbers are healthy signs for better future.
 During the year, Company achieved highest ever turnover of Rs.8519.69
 crore. After having losses continuously for two years, the Company has
 been able to register profit before tax of Rs.44.72 crore. Your Company
 is the second largest domestic producer of Urea with a market share of
 16%.
 
 In order to augment the domestic urea capacity, the government is
 working towards the revival of closed fertilizer units.  In this
 direction, National Fertilizers Limited (NFL), Engineers India Limited
 (EIL) and Fertilizer Corporation of India Limited (FCIL) have formed a
 joint venture company for settling of new ammonia and urea plants at
 the existing site of Ramagundam Fertilizer plant in Telangana. The
 plant having a capacity of 1.27 million tonnes per annum of urea based
 on natural gas as feedstock is targeted to be completed in 2018. This
 initiative has been taken to increase the domestic urea manufacturing
 capacity in the country under the Make in India vision of the Prime
 Minister.
 
 Financial Highlights
 
 During the year under review, the Company achieved turnover of Rs.
 8519.69 crore (previous yearRs.8017.03 crore). The earnings before
 interest, depreciation and tax (EBIDTA) wereRs.418.64 crore (previous
 year Rs. 171.90 crore). The profit before tax (PBT) was Rs.44.72 crore
 (previous year loss Rs.161.16 crore) and the profit after tax was
 Rs.26.24 crore (previous year loss Rs. 89.71 crore). There is
 improvement in profitability as compared to previous year mainly as
 attributed to impact of modified NPS Stage-Ill policy, increased
 production and sale of urea and industrial products, receipt of past
 subsidy arrears, efficient energy consumption, decrease in depreciation
 charge pursuant to Companies Act 2013 etc. However, the above increase
 in profitability was partially off-set by decrease in contribution of
 urea beyond cut-off level at Vijaipur, increase in interest on working
 capital loans, salary and wages
 
 As per Income Tax Act, the liability under normal provisions of
 taxation is ''NIL''. Company has tax liability of Rs.10.80 crore under
 Minimum Alternate Tax. Company has been carrying forward business loss
 of Rs. 234.34 crore and unabsorbed depreciation of Rs. 142.05 crore as
 on 31st March, 2015 available for set-off against future taxable
 profits.  In respect of carried forward unabsorbed depreciation and
 business losses, Company has recognized deferred tax asset of Rs.127.93
 crore as on 31st March, 2015.
 
 Reserves
 
 Capital Reserve
 
 The balance as at 31st March 2015 amounted to Rs. 2.51 crore, which is
 the same as in the previous year.  Debenture Redemption Reserve
 
 The reduction of Rs. 7.53 crore is on account of redemption of first
 installmenton Non-Convertible Bonds.  Corporate Social Responsibility
 Reserve
 
 The reduction of Rs. 0.22 crore (Net) is on account of amount utilized
 for CSR expenditure.
 
 General Reserve
 
 An amount of Rs.1.62 Crore representing 10% of net profit for the year
 ended 31st March 2015 was transferred to the General Reserve from the
 Surplus.
 
 Surplus
 
 The balance retained in the surplus as at 31st March 2015 is Rs. 662.33
 Crore after providing for dividend for the year of Rs. 8.34 crore and
 dividend tax of Rs. 1.70 Crore thereon. The total amount of profits
 appropriated to dividend including dividend tax was Rs. 11.44 crore.
 
 Dividend
 
 Board has recommended a dividend of 1.70% for the financial year
 2014-15 on the paid up capital, amounting to Rs. 8.34 crore for
 declaration by shareholders.
 
 Foreign Exchange Earnings/Outgo
 
 The foreign exchange earnings by way of trade margins during the year
 was''NIL''. The foreign exchange outgo by way of imports and other
 expenses amounted to Rs.17.60 crore.
 
 BORROWINGS:
 
 Long Term
 
 Long term loan as on 31st March, 2015 was Rs. 2642.52 crore, out of
 which Rs. 1784.90 crore is classified under Long Term Borrowings and
 balance Rs. 857.62 crore under Other Current Liabilities.
 
 Short Term Loans
 
 Short Term borrowings of Rs. 5002.27 crore (previous yearRs. 4039.19
 crore) as on 31st March, 2015 were outstanding.
 
 Debt Equity Ratio
 
 Debt equity ratio as on 31st March, 2015 has increased to 3.65:1 as
 compared to 3.06:1 of previous year due to higher utilization of
 working capital and short term loans.
 
 Particulars of Loans given, Investment made, Guarantees given and
 Securities provided
 
 Particulars of Loans given, Investments made, Guaranties given and
 securities provided along with the purpose for which the loan or
 guarantee or security is proposed to be utilized by the recipient are
 provided in the notes to the financial statement.
 
 Joint Ventures/Associates Companies
 
 Details of Joint Venture /Associates Companies pursuant to Section 129
 (3) of Companies Act, 2013 the statement containing the salient
 features of the financial statement of associate company /joint venture
 company is included in the consolidated financial statements as
 Annexure hereto.
 
 Related Party Disclosures
 
 The particulars of contract/arrangements entered into by the company
 with related parties referred to in Section 188 (1) of the Company Act,
 2013 including arm''s length transactions under third privy so there to
 are disclosed in Form No. AOC-2 as Annexure. Related Party Policy is
 available atwww.nationalfertilizers.com.
 
 Operations
 
 Production
 
 Company during the year achieved ever best urea production of 36.39
 lakh MT (101.99% of installed capacity) against 36.36 lakh MT (101.92%)
 in the previous year. Neem coated urea production of 13.65 Lakh MT
 (37.51% of total urea production) was also the highest ever.
 
 Sales performance
 
 During the year Company achieved urea sale of 36.79 lakh MT compared to
 36.87 lakh MT of the previous year.  Company achieved sales turnover of
 Rs. 8519.69 crore (including subsidy of Rs. 6461.14 crore) compared
 toRs. 8017.03 crore of previous year (including subsidy of Rs. 6047.92
 crore).  The turnover of industrial products increased from Rs. 53.42
 crore in 2013-14 to Rs. 105.42 crore during 2014-15.
 
 Trading of Agricultural Products (Pesticides, Seeds, Bentonite Sulphur,
 Compost, Bio-fertilizers etc.)
 
 The sale of Bio-fertilizers was ever-best at 565 MT (valuing Rs.  3.16
 crore) against 539 MT (valuing Rs. 3.70 crore) of previous year.  The
 trading in Agra Products was ofRs. 18.52 crore against Rs. 36.60 crore
 in the previous year. Company also sold 866 MT (Rs. 2.08 crore) of
 Bentonite Sulphur during 2014- 15 against 1930 MT (Rs. 5.21 crore) of
 previous year.
 
 Agri Extension
 
 Your Company is playing a pivotal role in not only providing quality
 fertilizers to the farmers but also educating them on judicious use of
 fertilizers along with total know how on improved and scientific
 methods of cultivation to improve soil productivity. During the year,
 Company organized 51 farmer training programs, carried out 330
 demonstrations and participated in 32 krishi melas organized by leading
 Agriculture Universities. Company''s soil testing laboratory was
 upgraded for testing of micro-nutrients also. More than 39,000 soil
 samples for macro-nutrients and more than 2,000 samples for
 micro-nutrients were analyzed and recommendations given to the farmers.
 
 Mobile FMS (mFMS)
 
 The Mobile based Fertilizer Monitoring System (mFMS) introduced by
 Department of Fertilizer for tracking the movement of fertilizers from
 the Plant/Port to the farm gate has been successfully implemented by
 the Company.
 
 Projects
 
 Company has undertaken / envisaging various business development and
 energy saving projects, which have been discussed in the Management
 Discussion and Analysis Report. Abrief of the projects is as below:-
 
 Revival of Ramagundam Unitof FCIL:
 
 NFL & EIL has undertaken the revival of Ramagundam unit of Fertilizer
 Corporation of India Limited (FCIL). Plant is conceived with setting up
 of 2200 MTPD Ammonia plant and 3850 MTPDUrea plant at the existing
 Fertilizer complex of Ramagundam unit of FCIL through Joint Venture
 (JV) route with the equity participation by NFL (26%), EIL (26%), FCIL
 (11 %) & others (37%). Joint Venture Company has been formed with the
 name of M/s. Ramagundam Fertilizers and Chemicals Limited.
 
 Use of Pet Coke at Nangal
 
 Your Company has recently completed revamp of its three fuel oil based
 plants at Nangal, Panipat and Bathinda by feedstock changeover to
 natural gas. Due to this changeover front-end of these plants have
 become redundant.  Considering non-availability of domestic gas and
 steep increase in price of RLNG, Company is examining the feasibility
 of utilization of the redundant section for Petroleum Coke gasification
 as an alternate cheaper feedstock.
 
 Bentonite Sulphur Plant at Panipat
 
 Keeping in view the demand for Bentonite Sulphur, Company is planning
 to put a Bentonite Sulphur Plant of 8000 MTPY capacity at Panipat.
 
 Implementation of Enterprises Resource Planning (ERP)
 
 Company is in the process of implementation of ERP across the Company,
 which will help to integrate all the business functions, accurate and
 real time consolidation, enhance efficiency and productivity of
 employees in addition to other benefits like savings in inventory,
 improvement in sales realization, etc.
 
 Development of contain erterminal at Panipat
 
 Consequent to conversion of feed-stock from FO to NG, the extensive
 siding network has been rendered surplus at Panipat Unit. Company is
 exploring the use of surplus rail siding as contain erterminal.
 
 Commercial feasibility at Kharogoda
 
 Company plans to recover potash from salt in the little Rann of kutch.
 Central Salt and Marine Chemicals Institute has submitted its report
 for installation of 3000 MTPY at a cost of Rs. 3.82 crore. This is the
 first time recovery of production of MoP in the country.
 
 Production of water soluble fertilizer at Nangal
 
 Water Soluble Fertilizer is one of the fast growing fertilizers in the
 country. Nangal unit is under process of production of 10MTof Water
 soluble fertilizers. The production shall be increased to 3000 MT per
 year.
 
 Installation of large scale solar plant at Nangal, Panipat and Vijaipur
 
 The scheme is undertaken under National Solar Mission to promote
 ecologically sustainable growth. NFL is considering for installation of
 Mega Solar Power Plant for a total capacity of 65 MW.
 
 Energy Conservation Projects
 
 Company has taken various initiatives for energy conservation at its
 units which include:-
 
 (I) Purge Gas Recovery (PGR) Plant at Vijaipur-II at an investment of
 Rs. 29 crore. Installation of Vibro Prillerin Urea Prilling Tower at
 Panipat to improve the quality of urea.
 
 (ii) Hooking up of old synthesis converter (S-200) in parallel to new
 synthesis converter (S-300) at Bathinda and Panipat at an investment of
 Rs. 1.68 crore at each unit.
 
 Human Resource Management
 
 Company has a manpower strength of 3798 employees as on 31.3.2015,
 which comprises of 1771 Executives and 2027 Non-Executives. Company
 also promotes the employment of women. At present 212 women employees
 are on its roll, which is 5.58% of the total workforce. The detailed
 analysis with regard to human resource has been made in the Management
 Analysis and Discussion Report.
 
 Disclosure under the Sexual Harassment of Women at Workplace
 (Prevention, Prohibition and Redressal) Act, 2013.
 
 Pursuant to Section 22 of the Sexual Harassment of Women at Workplace
 (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of
 the Rules issued thereunder, your Company confirms that no complaint /
 case has been filed/pending with the Company during the year 2014-15.
 
 Official Language
 
 The Company is making all efforts for the propagation and
 implementation of official language policy of the Government of India.
 The quarterly meeting of Official Language Implementation Committee
 (OLIC) is regularly held in all the Units/ Offices of the Company under
 the chairmanship of Head of the Unit/Office to review the progress of
 official language. 32 Meetings of OLIC were held during the year.
 
 To promote Official Language ''Hindi'' 32 Hindi workshops were organized
 during the year in which 706 employees have participated. Hindi
 Fortnight was organized in all the Units/Offices of the Company to mark
 the Hindi Day. During the year, 48 Programmes/Competitions were held to
 promote Hindi and 869 employees participated. 54 employees were awarded
 cash prizes under the''Cash Incentive Scheme''for doing their official
 work in Hindi.
 
 In the series of ''A category Undertakings, NFL Panipat Unit has been
 awarded 2nd Prize - Rajbhasha Shield & Commendation Certificate by
 Ministry of Home Affairs, Govt, of India under Regional Rajbhasha
 PuruskarSammelan, Lucknowfor doing excellent work in Official Language
 Hindi during 2013-14.
 
 In the category of Small Offices & Undertakings, NFL State office,
 SHIMLA has been awarded 1st Prize by Town Official Language
 Implementation Committee (TOLIC) SHIMLA for doing excellent work in
 implementation of Official Language Hindi during 2013-14.
 
 Initiatives taken for development of employees belonging to Scheduled
 Casts / Scheduled Tribes / 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 the implementation of
 Presidential Directives on Reservation Policy for SCs/STs. Liaison
 Officer has been appointed in each Unit/Office to ensure due compliance
 of orders and instructions pertaining to reservation for SCs and STs
 and other concessions admissible to them.  Meetings were periodically
 held at Unit level as well as at corporate level with the SC/ST Welfare
 Associations by the Management for redressal of grievances of SC/ST
 employees. As a mark of respect to Dr. B.R. Ambedkar, his birth
 anniversary and Parinirvan Diwas were observed at all Units/Offices of
 the Company in a befitting manner. A stadium at Bathinda Unit,
 Multi-purpose Hall at Vijaipur Unit and one Bhawan at Panipat Unit were
 named after Dr. B.R.  Ambedkar. The programmes on implementation of
 Presidential Directives were held at Units from time to time and SC/ST
 employees were deputed for such programmes conducted by external
 agencies. During 2014-15,1947 man- days training was imparted to SC/ST
 employees. A statement showing representation of employees belonging to
 Scheduled Casts / Scheduled Tribes / Backward Classes / Persons with
 disabilities is appended as Annexure to this report.
 
 INFORMATION TECHNOLOGY
 
 Company is making optimum use of information technology in various
 business functions. Web based on-line Marketing Management &
 Information system is being effectively used by the entire Marketing
 and Finance team for various day-to-day business functions.
 Otheron-line applications are running across all plants and Corporate
 Office.
 
 Secured MPLS VPN interconnecting various plants, Zonal Offices and
 Corporate Office have been upgraded to speed up various on-line
 business applications, data replication, data sharing and e-mails
 amongst various offices of the company. Company has implemented
 Centralized Mailing solutions recently. Company is also in the process
 of setting up Video conferencing facility at Corporate Office and
 Units.
 
 Industrial Safety, Ecology & Pollution Control
 
 Company remained focused towards achieving sustained energy efficiency
 operations at its manufacturing facilities maintaining pollution free
 environment and process safety.  All manufacturing units continue to be
 ISO 9001-2008, ISO 14001-2004 and OHSAS-18001 certified which indicates
 Company''s commitment to Quality Management System, Environment
 Management System and Occupational Health and Safety System.
 
 Board Level Health and Safety Committee is meeting at regular intervals
 to address the health and safety issues at the Units. Quarterly review
 meetings are also conducted at all the units. Modern methods and latest
 technology such as ''International Sustainable Rating System'', Total
 Quality Management'' and ''Hazard and Operability Study'' are being
 implemented to improve process safety. At all the Units workshops on
 safety were conducted by in-house and outside experts. Monthly meetings
 of Central Safety Committee were also conducted at all the Units.
 
 Recognizing the need to balance human economic development with
 environment protection, Company has adopted the concept of sustainable
 development. A separate chapter annexed to this report deals at length
 with your Company''s initiatives and commitment to environment
 conservation and sustainable development.
 
 Corporate Social Responsibility
 
 Corporate Social Responsibility (CSR) is an evolving concept Company is
 operating its business in a socially responsible manner by considering
 the wider interests of the community and environment. Company has
 formed a Committee of Directors to guide the CSR activities. The
 Company has formulated a well laid out CSR policy which ensures that
 CSR activities/projects are undertaken by the Company in a systematic
 and methodological manner as perthe DPE Guidelines, Companies Act, 2013
 and Companies (CSR) Rules, 2014. The policy has been uploaded on the
 website of the company at www.nationalfertilizers.com under ''Company''
 link. In the year 2014-15, Company incurred an expenditure of Rs.36.74
 lakhs towards CSR initiatives. The core areas identified were
 construction of girls toilets, soil testing and solar lights in remote
 villages.
 
 The CSR Reserves at the beginning of the year were Rs.5.48 crore. An
 expenditure of Rs. 2 crore was earmarked for expenditure during the
 year. Actual expenditure was below the targets as the Company changed
 its core area of investment in CSR projects in line with the new
 initiatives of the Government of India with regard to ''Swachh Bharat''.
 Adetailed Report on Corporate Social Responsibility is annexed as
 annexure to the report.
 
 The Right to Information Act 2005
 
 In consonance with the spirit of Right to Information Act, the Company
 has created necessary mechanism as required under the Act. The Public
 Information Officers and an Appellate Authority are effectively
 responding to the requests and appeals of the applicants. The names of
 all PIOs/Appellate Authorities/Transparency Officer are displayed on
 the Company''s website. During the year, 180 applications were received
 and the information was provided to the applicants within the
 prescribed time limit.
 
 Vigil Mechanism
 
 In pursuant to the provision of Section 177 (9) and (10) of the
 Companies Act, 2013, a vigil mechanism for employees and others to
 reportgenuine concerns has been established.
 
 Whistleblower Policy
 
 Your Company relies in transparency and propriety in its business
 dealings. To take this object further, Company has put in place a
 Whistle Blower Policy providing for a mechanism to the employees and
 other stakeholders to report concerns about unethical behaviour, actual
 or suspected fraud or violation of Code of Conduct or Ethics Policy.
 The policy provides for adequate safeguards against victimization of
 whistle blowers. The policy is reviewed periodically.  No employee has
 been denied access to the Audit Committee. The policy has been uploaded
 on the website of the companyatwww.nationalfertilizers.com
 under''Company'' link.
 
 Integrity Pact
 
 Integrity Pact is a tool developed during 1990s by Transparency
 International to help governments'' businesses and civil society to
 fight corruption in the field of public contracting and procurement. To
 maintain the highest standard of transparency and governance, your
 Company has entered into an Integrity Pact with Transparency
 International. All contracts valuing above Rs. 1 crore are covered
 under the Integrity Pact. Company has appointed Independent External
 Monitors, persons of impeccable integrity, with the approval of Central
 Vigilance Commission, to oversee the implementation and effectiveness
 of the Integrity Pact.
 
 Vigilance
 
 In Vigilance the focus was on promoting good governance. Apart from
 streamlining the systems and providing flexibility to the units to
 perform better, effort was made to build confidence across the
 organization to facilitate faster decision making. Due thrust was given
 to maintain high degree of awareness amongst the employees. In order to
 impart proper training to the employees, a calendar has been prepared
 for organising training programme/workshops, relating to Vigilance
 activities at various offices/Units of the Company. Involvement of all
 employees in these programmes helps to create an environment of ethical
 growth in the Company. During the year, interactions were organized
 between the vigilance functionaries and the line managers on regular
 basis, with a view to understand the role of vigilance and to educate
 them on the policies, guidelines and procedures of the Company.
 
 Corporate Social Responsibility
 
 Corporate Social Responsibility (CSR) is an evolving concept Company is
 operating its business in a socially responsible manner by considering
 the wider interests of the community and environment. Company has
 formed a Committee of Directors to guide the CSR activities. The
 Constitution of the committee is detailed in the Corporate Governance
 Report. The Company has formulated a well laid out CSR policy which
 ensures that CSR activities/projects are undertaken by the Company in a
 systematic and methodological manner as per the DPE Guidelines,
 Companies Act, 2013 and Companies (CSR) Rules, 2014. The policy has
 been uploaded on the website of the company at
 www.nationalfertilizers.com under ''Company'' link. In the year 2014-15,
 Company incurred an expenditure of Rs.36.74 lakhs towards CSR
 initiatives. The core areas identified were construction of girls
 toilets, soil testing and solar lights in remote villages.
 
 Company has changed its core area of investment in CSR projects in line
 with the new initiatives of the Government of India with regard to
 ''Swachh Bharat''. A detailed Report on Corporate Social Responsibility
 is annexed as annexure to the report.
 
 The Right to Information Act 2005
 
 In consonance with the spirit of Right to Information Act, the Company
 has created necessary mechanism as required under the Act. The Public
 Information Officers and an Appellate Authority are effectively
 responding to the requests and appeals of the applicants. The names of
 all PIOs/Appellate Authorities/Transparency Officer are displayed on
 the Company''s website. During the year, 180 applications were received
 and the information was provided to the applicants within the
 prescribed time limit.
 
 Vigil Mechanism
 
 In pursuant to the provision of Section 177 (9) and (10) of the
 Companies Act, 2013, a vigil mechanism for employees and others to
 report genuine concerns has been established.
 
 Whistleblower Policy
 
 Your Company relies in transparency and propriety in its business
 dealings. To take this object further, Company has put in place a
 Whistle Blower Policy providing for a mechanism to the employees and
 other stakeholders to report concerns about unethical behaviour, actual
 or suspected fraud or violation of Code of Conduct or Ethics Policy.
 The policy provides for adequate safeguards against victimization of
 whistle blowers. The policy is reviewed periodically.  No employee has
 been denied access to the Audit Committee. The policy has been uploaded
 on the website of the companyatwww.nationalfertilizers.com
 under''Company'' link.
 
 Integrity Pact
 
 Integrity Pact is a tool developed during 1990s by Transparency
 International to help governments'' businesses and civil society to
 fight corruption in the field of public contracting and procurement. To
 maintain the highest standard of transparency and governance, your
 Company has entered into an Integrity Pact with Transparency
 International. All contracts valuing above Rs. 1 crore are covered
 under the Integrity Pact. Company has appointed Independent External
 Monitors, persons of impeccable integrity, with the approval of Central
 Vigilance Commission, to oversee the implementation and effectiveness
 of the Integrity Pact.
 
 Vigilance
 
 In Vigilance the focus was on promoting good governance. Apart from
 streamlining the systems and providing flexibility to the units to
 perform better, effort was made to build confidence across the
 organization to facilitate faster decision making. Due thrust was given
 to maintain high degree of awareness amongst the employees. In order to
 impart proper training to the employees, a calendar has been prepared
 for organising training programme/workshops, relating to Vigilance
 activities at various offices/Units of the Company. Involvement of all
 employees in these programmes helps to create an environment of ethical
 growth in the Company. During the year, interactions were organized
 between the vigilance functionaries and the line managers on regular
 basis, with a view to understand the role of vigilance and to educate
 them on the policies, guidelines and procedures of the Company.
 
 Secretarial Audit
 
 Secretarial Audit has been made mandatory for your Company from the
 Financial Year 2014-15. Secretarial Audit Report of Secretarial
 Auditors for 2014-15 and reply of management are annexed as Annexure to
 this report.
 
 Corporate Governance
 
 The Company is committed to maintain the highest standards of Corporate
 Governance being the fountain head of value creation for all
 stakeholders especially shareholders. The Company has in place a well
 defined Corporate Governance Mechanism which considers the interests
 of all stakeholders. A separate report on Corporate Governance forming
 part of this Board Report along with the Auditors'' Certificate is
 Annexed.
 
 Research and Development
 
 In compliance with the guidelines on Research & Development (R&D)
 notified by the Department of Public Enterprises, the Company has an
 R&D Policy and R&D Plan duly approved by its Board of Directors.
 
 Energy Conservation, Technology Absorption and Foreign Exchange
 Earnings and outgo
 
 Disclosures in respect of Conservation of Energy, Technology Absorption
 and Foreign Exchange Earnings and outgo are given in the Annexure.
 
 Public Procurement Policy of Micro and Small Enterprises (MSEs) Order,
 2012
 
 Public Procurement Policy for Micro and Small Enterprises notified by
 the Government of India, under the Micro, Small and Medium Enterprises
 Development Act, 2006, which came into effect from 1st April, 2012
 mandates that at least 20% of the total annual procurement of goods and
 services shall be made by Central Ministries / Departments / CPSUs from
 Micro and Small Enterprises. Within this mandated percentage, a sub
 target of 4% procurement is to be made from MSEs owned by SC/ST
 entrepreneurs. Requisite information for the year 2014-15 is annexed as
 Annexure to this report.
 
 Extract of Annual Return Under Section 92 (3) of the Companies Act,
 2013
 
 The extract of Annual Return as required under sub-section (3) of
 Section 92 in Form MGT-9 is annexed hereto as Annexure.
 
 Nomination & Remuneration Committee and Remuneration Policy
 
 The disclosures regarding Nomination & Remuneration Committee and
 Remuneration Policy are given in the Corporate Governance Report.
 
 Audit Committee
 
 The detailed disclosures has been made in the Corporate Governance
 Report.
 
 Board Meetings
 
 The details of Board Meetings and Meeting of Independent Directors are
 given in the Corporate Governance Report annexed as Annexure to this
 report.
 
 Performance evaluation of Board and Directors
 
 NFL is a government company where the directors are appointed either by
 the Government of India or on the recommendation of the Government. The
 remuneration, etc. of Directors are decided as per DPE Guidelines. The
 tenure of the directors is also decided by the Government. In
 compliance of Section 178(1) of the Companies Act, 2013, Company has
 constituted a Nomination and Remuneration Committee Section 134(3)(e)
 requires the Company to disclose the policy on directors'' appointment
 and remuneration including criteria for determining qualification,
 positive attributes, independence of a director and other matters
 provided under section 178(3) of the Act. Section 134(3)(p)of the Act
 read with clause 49 of the Listing Agreement requires the Company to
 disclose the manner in which formal annual evaluation has been made by
 the Board of its own performance and that of its Committees and
 individual directors. NFL is a government company, has been exempted
 from the provisions of section 134(3)(e)&(p) and section 178(2)&(3) of
 the Companies Act.
 
 Code of Conduct
 
 Board Members and the Senior Management Personnel have affirmed
 compliance with the Code of Conduct for the financial yearended 31st
 March, 2015.
 
 Directors and Key Managerial Personnel (KMPs)
 
 Shri Munikoti Niranjan Rao(DIN03521256) Independent Director ceased to
 be a Director of the Company on 5th May, 2014.
 
 Shri Suresh Chander Gupta (DIN02922231) Govt. Nominee Director ceased
 to be a Director of the Company on 22nd May, 2014.
 
 Shri Satish Chandra (DIN01970013) Govt. Nominee Director ceased to be a
 Directorw.e.f. 30th June, 2014.
 
 Shri Rajiv Yadav (DIN00322778) Special Secretary and Financial Advisor,
 Department of Fertilizers, Ministry of Chemicals & Fertilizers,
 Government of India was appointed as Additional Director on 17th July,
 2014 and has been appointed as Director at the AGM held on 5th
 September, 2014.
 
 Shri Rakesh Kumar (DIN06940386) was appointed as Additional Director on
 the Board on 4th August, 2014 and has been appointed as Director at the
 AGM held on 5th September, 2014.
 
 Shri Vikram Srivastava (DIN06541689)and Shri M. Raman (DIN01226770)
 were appointed as Part-time Non-official Independent Additional
 Directors w.e.f. 6th May, 2013 and were elected as Directors at the AGM
 held on 17th September, 2013 and their appointment as Independent
 Directors was made under the Companies Act, 2013 in the AGM held on 5th
 September, 2014 upto 5th May, 2016, and shall be eligible for
 reappointment through Special Resolution.
 
 Shri Gurinderjit Singh Sandhu, IAS (Retd.) (DIN01790828) who was
 appointed as Additional Director w.e.f. 21st February, 2014 and was
 appointed Independent Director in the AGM held on 5th September, 2014
 upto 20th February, 2017 and shall be eligible for reappointment
 through Special Resolution.
 
 Shri Rajiv Kumar Chandiok (DIN05146544) has joined as Director
 (Finance) on 10th February, 2015.
 
 Ms. Neeru Abrol (DIN01279485) retired as C&MD on 27th February, 2015 on
 attaining the age of superannuation.
 
 Shri Heera Lai Samariya(DIN00054859) Joint Secretary, Department of
 Fertilizers, was holding the additional charge of the post of C&MD
 during the period 2nd March, 2015 to 3rd June, 2015.
 
 Shri Manoj Mishra (DIN06408953) has joined as Chairman & Managing
 Director on 3rd June, 2015.
 
 Pursuant to the provisions of Section 152 of the Companies Act, 2013,
 Capt. Pavan Kumar Kaul, Director (Marketing) (DIN03438497) and Shri M.
 Sagar Mathews, Director (Technical) (DIN02820429) retire by rotation at
 the ensuing AGM and being eligible have offered themselves for
 re-appointment. Brief resume of all directors is as annexed as annexure
 to the report.
 
 Key Managerial Personnel (KMPs)
 
 Ms. Neeru Abrol, C&MD was KMP from 16.09.2014 to 27.02.2015. Shri Sunil
 Bhatia was CFO & KMP from 12.08.2014 to 25.03.2015. Shri Tek Chand,
 Company Secretary retired on 31.07.2014. Shri Raj Kumar has been
 appointed as Company Secretary & Compliance Officers w.e.f. 01.08.2014.
 Shri Heera Lai Samariya, C&MD remained KMP from 25.03.2015 to
 03.06.2015. Shri Rajiv Kumar Chandiok, Director (Finance) has been
 appointed CFO and KMP w.e.f. 25.03.2015. Capt. Pavan Kumar Kaul,
 Director (Marketing) and Shri M. Sagar Mathews, Director (Technical)
 have also been appointed KMP w.e.f. 25.03.2015. Shri Manoj Mishra, C&MD
 has been appointed KMP w.e.f. 04.07.2015. Disclosures have been made in
 the notes to the accounts.
 
 Declaration by Independent Directors u/s 149 (6)
 
 All Independent Directors have given declaration that they meet the
 criteria of independence as laid down under the Companies Act, 2013 and
 Listing Agreement.
 
 Directors'' Responsibility Statement
 
 Pursuant to the requirement of Section 134(3) (c) of the Companies Act,
 2013, your Directors confirm that: -
 
 a) in the preparation of the Annual Accounts, the applicable Accounting
 Standards have been followed and no material departure has been made
 therefrom by the Company;
 
 b) the Directors have selected such Accounting Policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year 2014-15 and of the
 profit of the Company for that period;
 
 c) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 2013 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities; and
 
 d) the Directors have prepared the Annual Accounts on a going concern
 basis.
 
 e) The Directors have laid down internal financial controls to be
 followed by the Company and that such internal financial controls are
 adequate and were operating effectively.
 
 f) The Directors have devised proper systems to ensure compliance with
 the provisions of all applicable laws and that such systems were
 adequate and operating effectively.
 
 Acknowledgements
 
 The Board of Directors acknowledge their gratitude for the valuable
 guidance and support received from the various wings of Government of
 India, in particular Department of Fertilizers, Fertilizer Industry
 Coordination Committee (FICC), various State Governments, Financial
 Institutions, Banks, stakeholders and all others whose continued
 support has been a source of strength to the Company.
 
 Your Directors also acknowledge the suggestions received from Statutory
 Auditors, Cost Auditors and Comptroller and Auditor General of India
 and are grateful for their continued support and cooperation.
 
 The Board would like to place on record its appreciation to the hard
 work, commitment and unstinting efforts put in by the employees at all
 levels.
 
                            For and on behalf of the Board of Directors
 
 Registered Office:                                       (Manoj Mishra)
 
 Scope Complex, Core 3,                    Chairman & Managing Director
 
 7 Institutional Area, Lodhi Road,                        DIN: 06408953
 
 New Delhi-110003 
 
 Date : 12th August, 2015
Source : Dion Global Solutions Limited
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