To the Members of Rashtriya Chemicals and Fertilizers Ltd,
The Directors of your Company have pleasure in presenting this 34th
Annual Report on the working of your Company together with the Audited
Accounts for the year ended 31st March, 2012.
1.0.0 FINANCIAL PERFORMANCE:
Summary of financial performance:
Particulars 2011-2012 2010-2011
Sales including Subsidy 6499.22 5574.10
Other Income 129.42 103.15
Total Income 6628.64 5677.25
Cost of Sales 6099.01 5200.25
Operational Profit 529.63 477.00
Depreciation 142.44 112.66
Interest (Net) 12.74 9.65
Profit/ (Loss) before tax 374.45 354.69
Provision for Tax (including
deferred Tax liability/ Asset) 125.22 109.57
Net Profit / (loss) 249.23 245.12
Dividend 77.24 60.69
Tax and Educational cess on 12.53 9.84
Balance Transferred to General 159.46 174.59
1.1.0 Highlights for the year 2011-2012:
Your Company achieved a turnover of Rs. 6499.22 crore compared to Rs.
5574.10 crore in the previous year. The turnover was higher by Rs.
925.12 crore during the year compared to previous year. The total
income from operations was Rs. 6628.64 crore as against Rs. 5677.25 crore
during the previous year. Your Company achieved a gross profit of Rs.
529.63 crore as against Rs. 477 crore in the previous year. The net
Profit before Tax at Rs. 3 74.45 crore as against Rs.354.69 crore
registered an increase of 5.57%. The Net Profit after Tax during the
year was higher at Rs. 249.23 crore as against Rs. 245.12 crore in the
previous year registering an increase of 1.68% over previous year.
Performance for the year 2011-12 was better as compared to previous
year which was due to higher realizations, as well as increased volume
of manufactured Complex fertilizers and Industrial products like
Ammonia. This increase is despite having a net foreign exchange
variance loss ofRs. 14.84 crore, higher operating and repairs &
Your Company received ''MOU Excellent'' rating for 2010-2011 and is
likely to get the same for 2011 -12 from Ministry of Heavy Industries
and Public Enterprises.
Although your Company has lined up a number of capex programmes which
will entail substantial expenditure, considering the consistent profits
being made by the Company, your Directors propose to pay higher
dividend at Rs. 1.40 per each equity share of Rs.10/-, as against Rs. 1.10
paid in the previous year. The total out go works out to X 89.77''crore
(Rs. 70.53 crore in the previous year) including dividend distribution
tax and education cess.
1.3.0 Appropriation to General Reserves:
Your Company earned a net Profit after Tax of Rs. 249.23 crore (Rs. 245.12
crore in the previous year). The dividend pay out along with Tax/cess
is Rs. 89.77 crore (Rs. 70.53 crore in the previous year). The balance
amount of Rs. 159.46 crore (Rs. 174.59 crore in the previous year) is
transferred to General Reserves.
3.0.0 ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL:
Your Company is dedicated to improve environmental performance through
continual improvement and is going beyond satisfying all stipulated
requirements laid down by the statutory authorities for environment
management and pollution control.
With an aim to sustaining the operations in an environment
friendly manner, your Company established, ISO 14001 compliant,
Environment Management System (EMS) at its two manufacturing units. The
Systems are constantly upgraded and the three separate systems, namely
Quality Management System (ISO 9001:2000), Environment Management
System (ISO 14001:2004) & Occupational Health and Safety Assessment
Series (OHSAS 18001:2007), are all brought under Integrated Management
System. Regular internal audits and Management Reviews are being
carried out to ensure compliance and continually improve the system.
Measures taken to conserve water have yielded not only savings but also
have further improved the environmental management. The state of art
Effluent Treatment plants and the Sewage Treatment plants at Trombay
have ensured that the environment in and around the Unit is fully
protected. Your Company''s Sewage treatment plant is highly acclaimed
by all.. Your Company is contemplating to install another plant.
Various schemes are implanted to reduce wastages of the scarce natural
resources. The waste streams from the plants are recycled/ reused for
useful purpose. Sludge generated in Effluent Treatment Plant, Sulphur
Sludge Generated in Sulphuric Acid plant, waste streams of effluents
from complex fertilizer plants are recycled back in the processes. The
integrated Effluent Treatment Plant ensures that whatever effluent is
discharged from the factory meets the statutory requirements laid down
by the Pollution Control Board.
In Trombay Unit of your Company, New granulation technology is adopted
in Ammonium Nitro phosphate plant to reduce dust emission. Capacity of
Sewage treatment plant is increased with installation of 5th RO. Your
Company has adopted the most effective system of environmental
management at its Trombay complex by process up- gradation, adoption of
cleaner technologies in new plants, suitable treatment of effluent &
continuous monitoring of emission & ambient air quality & by adoption
of reduce, recycle & reuse methodology. A scheme is under
implementation, to recover Ammonia from the condensate and further
improve quality of emission.
To check the effectiveness of the environmental management system and
ensure compliance with emission regulations, monitoring network has
been incorporated. Apart from Stack monitors, which continuously
monitor the emissions, four fixed ambient air quality monitoring
stations are in place to monitor ammonia, NOx, S02, Particulate matter
(PM10 & PM25) & metrological parameters.
During the process of converting raw materials into finished products,
certain residual chemicals are formed, which are either recycled or
converted into harmless chemicals as far as possible, before discharging
them into the atmosphere, giving due importance to cleaner environment.
Your Company has taken up the exercise of Greenhouse Gas (GHG)
Accounting, which is the process of estimating the Company''s total GHG
emissions in terms of equivalent tonnes of Carbon dioxide. This is
popularly known as Carbon Foot printing. Carbon Foot printing is
typically regarded as a primary step for undertaking structured
approach to managing company''s carbon risks. Total GHG emission in
Trombay unit has reduced by 7.1 % during the year under report, over
the emission during previous year. The reduction was mainly due to
reduction in specific consumption of energy in urea and reduction in
N2G emission from nitric acid plant. Total GHG emission at Thai unit
reduced by 1.3% during the year over that during previous year, mainly
due to the steps taken to reduce energy consumption of urea. The
specific energy reduced from 6.366 to 6.359 Gcal/MT of urea.
For increasing awareness regarding environment, public awareness
campaign programmes are arranged by Trombay unit.
4.0.0 PRINCIPLES OF GLOBAL COMPACT.
Your Company is a member of United Nations Global Compact and fully
supports the Ten Principles in the areas of human rights, lab our and
environment which are derived from the earlier declarations by United
Nations, ILO and other international organizations. Your Company has
posted a detailed write-up on its website www.rcfltd.com in this
5.0.0 CSR Activities:
5.1.0 in line with the CSR philosophy adopted, your Company undertook
several activities, aimed for the benefit of needy and for general good
of the society, during the financial year 2011 -12. Your Company
carried out many activities under CSR policy, and spent/committed about
Rs. 12.48 crore, which are briefly stated as under:
Your Company attaches utmost importance to Education of children and to
this end, supports schools, both at its Thai and Trombay units, to
cater to students from Nursery to 10th Standard. The schools admit
children from communities nearer to its two operating units.
Instructions are imparted in Marathi, Hindi and English medium. Your
Company has provided school buildings in the Company''s residential
colonies at Thai and Trombay and undertakes its upkeep, maintenance and
bears the deficit expenditure incurred by the schools. The schools are
entrusted to reputed Educational Institutions. Your Company also
supports the cause of education in the marketing areas. During the
year your Company spent an amount of Rs.3.14 crore under this activity.
18.104.22.168 Scholarship to meritorious students:
Your Company encourages students from SC/ ST/ OBC communities by
offering them scholarship for pursuing higher studies. During the year,
your Company spent Rs. 30 lakh.
22.214.171.124 Supply of Mid-Day Meal:
Your Company, through ''ISCKON Food Relief Foundation'' provided
nutritious mid-day meals to about 5000 children, studying in seven
unaided schools imparting education to the poor children, in Trombay
area at a cost of Rs. 80 lakh and proposes to cater to more students in
financial year 2012-13.
126.96.36.199 Farmers'' Education:
Your Company imparts farming education to increase productivity through
intensive and integrated extension activities in the field of
Agriculture, recommending balanced use of fertilizers and
simultaneously to extend the services as promoter, activator and
organizer of various socio- economic and educational activities to
improve the quality of life of various rural masses particularly small,
marginal and SC/ST families.
5.1.2 Supply of drinking water to the villages:
Your Company has been providing drinking water since more than 20 years
to seven villages around Thai unit through pipelines laid down from the
water reservoir in the unit and spent Rs. 64 lakh on this account during
5.1.3 Village Adoption:
Your Company provides support to needy people by providing tools,
tackles and training to enable them learn self-sustaining vocations and
improve their economic capabilities. An Expenditure of Rs. 10 lakh is
spent on the training imparted for improving their skills during the
financial year. Your Company sponsored games and sports such as Kabaddi,
5.1.4 Chembur Green Project:
Your Company continued to support the Chembur Green project, launched
to establish greenery in the eastern suburb of Mumbai. Your Company''s
efforts since more than 30 years has brought back the green forestry
amidst concrete jungle in the area. The development of traffic islands,
kitchen gardens, exhibitions, Rose shows and
other activities in schools and colleges have increased the environment
consciousness among the citizens. Your Company continues distribution
of free saplings and rendering advice to various co-op. societies and
also to individuals.
5.1.5. Service to Farmers:
188.8.131.52 Advice on Soil nutrients:
The services of your Company in respect of rendering Soil diagnostics,
as a means of advising farmers about use of proper dosage of
fertilizers in order to optimize soil productivity, are well
recognized. During the year, more than 70,000 soil samples were
analyzed and recommendations given through the five static and six
mobile soil testing laboratories. Your Company is taking steps to
supplement the sendee by adding six additional static and six mobile
testing laboratories to its existing infrastructure as a service to the
5.1.6 Farm practices:
Your Company continues to have grass root contact with farmers to
disseminate knowledge of proper farm practices to enhance their farm
income. In this regard, your Company undertook crop specific
development programs depending on the State/area. Your Company has
established several Farmers Service Centres for providing services such
as soil sample collection, arranging farmers meeting, film shows, and
exhibitions and for providing general guidance in the fields of
farming. Several farmers'' / dealers'' training programmes were conducted
during the year at the Company''s two Farmers Training Institutes.
5.1.7 Other activities:
Your Company has constructed a mini sports stadium along with
accessories and facilities in Jaleshwar, Balasore district to encourage
sports and culture of the area.
6.0.0 Sustainable Development
Your Company has taken up several Sustainable development activities
including the following:
[i] Improvement of Road infrastructure- construction and repairs.
[ii] Building of Check Dams.
[iii] Prevention of soil erosion and watershed management.
The Rapid wall project, which has been implemented, is an example of
Company''s faith in sustainable development wherein a waste product
generated from Phosphoric Acid Plant is converted into useful building
material by adopting a novel technology.
Your Company is also considering several major activities connected
with Green House Gas, sustainable electricity distribution based on
solar energy etc. Your Company has signed an agreement of Financial Aid
for rehabilitation of the existing Bio-gas plant in Shatabdi hospital
which is being coordinated through Rotary Club Chembur. Your Company is
targeting to take up many more sustainable development activities in
the near future.
In order to give more thrust to sustainable development, a Committee of
the Board has been formed to approve Sustainable Development plans and
to oversee Sustainable Development performance.
Your Company is planning to put up a new Sewage Treatment Plant of
similar capacity as that existing at Trombay unit as a part of
sustainable development plan to enable Mumbai city to have additional
potable water for its citizens as your Company would the recycling the
sewage water supplied by BMC and would be using that water for its use.
Vigilance Department is headed by a full time Chief Vigilance Officer
(CVO) deputed, from the All India Service, by Government of India. The
position of CVO is at par with the functional directors. CVO is
assisted by a team of senior officers drawn from various functional
departments. Vigilance Department is engaged in Vigilance activities at
Corporate Office, Trombay Unit, Thai Unit and also at the Marketing
Offices situated through out the country. The thrust of vigilance in
your Company is to bring out greater transparency, integrity and
efficiency in the functioning of various departments. Vigilance
Department emphasises on Preventive and Participative Vigilance.
Careful watch is kept on various activities through regular and
surprise inspections. System improvements and corrective action are
taken wherever necessary. All officials of the organization are
considered to be part of vigilance set up and their alertness and
support are taken in the management of vigilance. One of the prime
functions of vigilance is to spread awareness with reference to
vigilance issues and solicit information/complaints regarding any
During the year, the department had actively contributed in adoption of
Fraud Prevention Policy, Integrity Pact, and revision of manuals
relating to marketing, procurement and works contracts. As a result of
vigorous follow up, good progress has been achieved by your company in
E- conveyance by implementing E-tendering, E-reverse auction, E-Payments
8.1.0 Training and Development:
One of the strengths of your Company is its skilled and professional
man-power. This could be achieved by adopting good HR policies and
undertaking training and development of all employees. Training
imparted includes enhancing General Management skills of the employees
in various functions viz. Marketing, Finance, Commercial and Health
Quality Management Systems, Environment Management Systems,
Occupational Health and Safety Systems and 5 S Systems are given
focused attention. The work culture of your Company has been enhanced
by introducing the Six Sigma and Lean Quality Circles. System of
Mentorship for newly recruited Management Trainees has been instituted.
Training and Development programmes were conducted, in-house for the
employees of your Company at various levels. Besides this,
comprehensive Safety Management Programmes were carried out for
officers in Technical disciplines.
Your Company has been awarded, by World HRD Congress, with Global HR
Excellence Award, for Excellence in Training”. Your Company has
also been accorded the award for Best HR Strategic Plan” and
Outstanding Contribution of HR to Organization Development” in the
Indian Human Capital Summit 2011.
8.2.0 Industrial Relations:
Your Company maintained cordial Industrial Relations with all its
employees. All the issues are settled through regular discussions,
meetings and dialogues with the employees. Your Company has 4104
employees comprising of 1517 officers and 2587 workmen as on 31st
March, 2012 compared to 4238 employees (1541 officers and 2697 workmen)
as on the corresponding date of the previous year.
8.3.0. Welfare and Sports
Your Company undertakes several welfare schemes like education,
medical, transport, housing etc., according to the needs of the
employees. In regard to sports, your company is a prominent patron and
sponsored various sports events. Your company''s Football, Cricket,
Hockey, Kabbaddi and other teams continue to show excellent performance
at District, State and National levels and have brought laurels to your
company by winning several prizes.
8.4.0. Welfare / Employment opportunity to weaker section: The
guidelines in respect of reservation in recruitment and
promotion of SC/ST, OBC, Ex-servicemen and Persons with Disabilities
are followed by your Company. Your Company has 572 Scheduled Caste
(SC), 259 Scheduled Tribe (ST) and 341 OBC employees on its rolls.
During the year, your Company recruited 40 persons, including 2 persons
with physical disability, on regular employment. Due representation to
SC/ST/OBC was given in recruitments.
Your Company is committed to the welfare of the backward classes in
general and SC/ST employees in particular. Regular meetings are held
with SC/ST Employees Welfare Association to address grievances, if any,
and providing guidance for development.
Medical Camp is organized every year at Chaitya Bhoomi, Dadar on 6th
December, on the occasion of ''Mahaparinirvan Day''. Financial assistance
for making arrangement for medical camp and for medicines along with
the vehicles and Doctors are made available by your Company.
Your Company''s Thai Unit provides various amenities like water, road
for the nearby villages e.g. Thai, Navgaon, Boris, Gunjis etc. where
the majority of the population belongs to the SC/ST categories. The
facility continued during the year. Scholarships were given to
meritorious students of SC/ST community in the nearby villages of Thai.
Large number of SC/ST farmers have been trained in the programmes
conducted at the Company''s Farmers'' Training Centres at Nagpur and
9.0.0 PARTICULARS OF EMPLOYEES:
A statement providing the information as required under section 217 (2
A) of the Companies Act, 1956 is attached to this report as Annexure
10.0.0 OFFICIAL LANGUAGE POLICY:
Your Company has fully endeavored to implement the provisions of
Official Language Act 1963 and the policy of the Government. Publicity
material and literature for employees and farmers is made available in
Hindi and other regional languages.
Your Company was awarded the First prize by Mumbai Town Official
Language implementation Committee for excellence in implementation of
Official Language Policy. Your Company''s House Magazine, Darpan”
was also awarded first Prize in House Magazine competition organized by
Mumbai Town Official Language implementation Committee for the year
11.0.0 INTERNAL CONTROL SYSTEM:
Your Company has a well defined Internal Control System
i.e. adequate and commensurate with the size and nature of its business
comprising of an in-house Audit Department, which conducts internal
audit of various operational and financial matters on on-going basis.
Internal Audit group consists of adequate number of financial and
technical personnel. The recommendations and observations of the
Internal Audit Department are reviewed regularly by the Audit Committee
constituted by the Board of Directors. The performance of the
committee is regularly monitored by the Board of Directors.
Your Company has an effective budgetary control mechanism in place to
take care the detailed capex and operational budget. Appropriate
monitoring mechanism to compare the actual performance with the budget
ensures that necessary review is periodically undertaken.
As per the Government''s directive, your Company''s Cost Records in
respect of manufacture of Fertilizers and Sulphuric Acid for the year
ended 31st March, 2012 are being audited by M/s Rohit Vora & Co. and
M/s C.R.Musib & Associates, firms of Cost Auditors. The Cost Auditors
are likely to complete the audit by 31” July, 2012. The Cost Audit
Reports for 2010-11 were filed with the Ministry of Company Affairs on
29111 September,2011 for Trombay Urea and on 27th September,2011 in
respect of Sulphuric acid and Thai Urea as against the due date of 30th
13.0.0 DIRECTORS'' RESPONSIBILITY STATEMENT:
In terms of section 217 (2AA) of the Companies Act, 1956, your
Directors state that:
i] in preparing the annual accounts, the applicable accounting
standards have been followed,
ii] the accounting policies adopted have been consistently applied and
wherever necessary, made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit or
loss of the Company for the year,
iii] proper and sufficient care has been taken for maintaining adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safe guarding the assets of your Company and for
preventing and detecting fraud and other irregularities; and
iv] the annual accounts have been prepared on a going concern basis.
14.0.0 CORPORATE GOVERNANCE:
As per Clause 49 of the listing Agreement with the Stock Exchanges, a
separate section on Corporate Governance along with a certificate of
Compliance is annexed and forms part of this report.
15.0.0 CAUTIONARY STATEMENT:
Statements in the Management Discussion and Analysis describing the
Company''s objectives, projections, estimates and expectations may be
''forward looking statements'' and actual results may or may not be in
accordance therewith. Your Company''s performance is dependent on
several external factors such as effective monsoon, significant changes
in economic environment, Government Policies, fluctuations in prices of
raw material and finished products and also their availability etc.
which could adversely affect the operations of your Company.
Shri Manoj Priya demitted his Office as Director (Technical) on
30.09.2011 on attaining the age of superannuation. The contribution of
Shri Manoj Priya to your Company has been immense. His guidance,
suggestions and advice has greatly benefited the Company. Your
Directors place on record their appreciation of the contribution of
Shri Manoj Priya to your Company. President of India appointed Shri
C.M.T.Britto as Director (Technical), who assumed the office on
11.04.2012. Notice under section 257 of the Companies Act has been
received proposing the candidature of Shri C.M.T.Britto as Director of
As per Section 256 of the Companies Act, Dr V. Rajagopalan and Shri
Gautam Sen, Directors retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
The Comptroller and Auditor General of India (CAG) has appointed, M/s.
JCR & Company and M/s Nissim & Co, as Joint Statutory Auditors of your
Company for the Financial Year 2011-12. The Auditors would be retiring
at the conclusion of the Thirty fourth Annual General Meeting.
The Statutory Auditors for the Financial Year 2012-13 will be appointed
by the CAG. However, their remuneration is to be fixed at the AGM by
Your Directors wish to gratefully acknowledge the valuable guidance and
continued support extended by Government of India and in particular,
the Department of Fertilizers and the Office of Fertilizer Industry Co-
ordination Committee (FICC), Railways, DPE, members of MOU Task force,
and other Central Government departments and Agencies. ''
The Board also wishes to acknowledge with sincere gratitude, the help
and unstinted support from the State Governments, MSEB, MIDC, various
media, Municipal authorities, Maharashtra Pollution Control Board,
Bankers to your Company, Financial Institutions, Dealers and Customers.
The Board also wishes to place on record the positive suggestions and
guidance provided by the Statutory
Auditors, Cost Auditors and the Office of the Principal Director of
Last but not the least, your Directors take pleasure in placing on
record their deep appreciation of the excellent contribution made by
the employees of your Company at all levels, without which your Company
would not have achieved such good performance. ''
By order of the Board of Directors
Chairman and Managing Director.
Date : 30th May 2012