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Madras Fertilizers Ltd.


Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE414A01015 | SECTOR: Fertilisers

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

The Shareholders Madras Fertilizers Limited

The Directors have pleasure in presenting herewith the 52nd Annual Report together with the Balance Sheet as on March 31, 2018 and the Statement of Profit & Loss for the year 2017-18.


Rs. Cr







Profit Before Interest, Depreciation, Exceptional items and Tax









Exceptional items



Other Comprehensive Income



Profit / (Loss) Before Tax



Provision for Tax



Profit / (Loss) After Tax



Cash Profit / (Loss)



The Company’s operations for the year ended with a loss of Rs. 61.96 Cr (previous year profit Rs. 3.31 Cr - restated as per Ind AS). The total accumulated loss as of 31.3.2018 was Rs. 666.56 Cr (previous year Rs. 604.60 Cr).


Due to unfavourable pricing Policies and delay in stabilization of revamped Plant, the Company’s operations resulted in loss and the accumulated losses of the Company up to March 2009 stood at Rs. 793.93 Cr.

The Company’s operation became profitable, thereafter, due to amendments in policies and improvement in production performance. The Company’s operations resulted in profits to the tune of Rs. 413.21 Cr during the period from 2009-10 to 2013-14. The Company shall come out of sickness, once the draft rehabilitation scheme (DRS), proposed by the Company on 01.06.2017, based on the Study Report submitted by M/s. Projects & Development India Limited (PDIL) is approved by Department of Fertilizers, Government of India and the same is implemented.


The Company does not propose to declare any Dividend to shareholders during the fiscal 2018, as per the Companies (Declaration and Payment of Dividend) Rules, 2014, due to huge accumulated losses (Rs. 666.56 Cr) and negative networth (Rs. 492.03 Cr) as on March 31, 2018.


Achievements in Plant Production & Performance for the Current Year (CY) 2017-18 and Corresponding Period Last Year (CPLY) :

1. Urea Production (Production: Current Year (CY) : 418898 MT and Last Year (LY) : 468438 MT)

2. I ncrease in NPK Production by 27 % (Production: CY : 62110 MT and LY: 48895 MT)

3. Urea Specific Energy consumption for the month of March 2018 and IV quarter 2018 (6.979 & 7.105 Gcal/ MT) is the lowest against the MOU targets (7.298 & 7.311 Gcal/MT)

4. Since Inception the lowest specific energy consumption of 9.339 Gcal/MT Ammonia (Design: 9.461 Gcal) & 6.787 Gcal/MT Urea (Derived design: 7.004 Gcal) were achieved on Feb 04, 2018.

5. At the close of March 31, 2018, 1450 days were completed without any lost time due to accident covering 5.61 million man-hours.


Feed stock conversion project from high cost Naphtha to low cost RLNG in Ammonia Plant is at an advanced stage of completion.

From MFL, placing purchase orders for major equipment procurement are completed.

Gas conversion project is in progress in MFL and we will start taking gas after commissioning of IOCL RLNG terminal at Ennore.

MFL will be signing the Gas Transmission Agreement (GTA) and Gas Supply Agreement (GSA) with M/s Indian Oil Corporation Ltd (IOCL).


Fertilizer Sales

- The Company has sold 4,73,038.50 MT of Vijay Neem Coated Urea as compared to previous year’s sale of 4,35,538.75 MT.

- The market share of Vijay Neem Coated Urea in MFL marketing territory increased from 8.35% to 9.13% when compared to previous year.

- The Company also sold 73,953.55 MT of Vijay 17-17-17 as compared to previous year’s sale of 33,406.80 MT.

- Best ever Fertilizer Sale of 5,46,992.05 MT was achieved both for Vijay Neem Coated Urea and Vijay Complex put together in recent years.

During Kharif 2017, the agricultural season was fair when compared to CPLY. During south west monsoon season, Kerala, Tamil Nadu and Karnataka received marginally higher rainfall than normal. Telangana and Andhra Pradesh received normal rainfall. However, due to erratic and uneven rainfall and long dry spells crop coverage affected. The North East Monsoon was active only in Southern and Northern districts of Tamil Nadu whereas it was less in Central Districts of Tamil Nadu and other states resulting in lesser crop coverage. The crop coverage was 82% of normal area for the entire year.

Neem Pesticides, Bio-fertilizers & Organic Manure 60.12 KL of Eco-friendly Neem Pesticides was traded during the year.

The Company has sold 83 MT of bio-fertilizers during the year.

As part of “Swachh Bharat Mission”, the Company has sold 8620.05 MT of City Compost against DOF target of 7500 MT during the year and CPLY is 1705.88 MT. MFL stood 4th position in City Compost sales on all India Basis for the year 2017-18. Also sold 1683.60 MT of Organic Manure during the year as against 712 MT during the last year. MFL continues to promote the eco-friendly products like; Vijay Neem, City Compost and Vijay Organic. Our endeavor is to develop and sustain the eco-friendly agricultural environment.

During the year, MFL generated revenue of about Rs.2.55 Cr. by selling the By-product CO2.


MFL’s Marketing personnel have contacted 26782 farmers during the year and continuously imparted knowledge to farmers on use of eco-friendly products for soil health, soil fertility and vitality of soil health and balanced fertilization (Integrated Nutrient Management), by direct farmer contact, soil sample collection, demonstration method and farmer seminar in coordination with State Agricultural extension departments.

Under corporate social responsibility to farming community, Marketing personnel had collected 4357 soil samples, got analysed and communicated to the farmers about the micro & macro nutrient recommendations of various crops to farmers during the year.

In pursuance to the Prime Minister’s Mission on empowering the Farmers vide Supportive Schemes & Education on farming techniques, MFL established “Kisan Suvidha Kendra” at Gangavathy and Shimoga in Karnataka State during the year. Services to farmers like soil sample analysis and recommendation of fertilizer dosage based on soil test report, educating the farmers on weather, crop Insurance and other improved farm technologies were offered.

MFL conducted Direct Benefit Transfer (DBT) training programs to retail dealers in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Kerala and Puducherry in order to comply with PAN India implementation to effect sales through PoS machines to farmers as part of Government’s Policy of passing on subsidy to the direct beneficiaries.

Being Lead Fertilizer Supplier for Andaman & Nicobar, as a special assignment, MFL trained the Depot in charge officials of Agricultural department on DBT and completed the installation and deployment of PoS machines in Andaman & Nicobar Islands during Nov 2017, despite constraints on infra-structure like poor connectivity, lukewarm response of switching over to PoS machine sales etc.

As per DOF directive, MFL’s share of 1719 PoS machines at an estimated cost of Rs.3.30Cr. has been spent, in MFL marketing territory. Order has been placed for additional 92 machines for supply to Karnataka state to comply with DOF directive.

Effective Jan 1st 2018, entire MFL marketing territory is under DBT scheme.

ISO 9001 / 14001

The Company is committed to maintain the annual Quality / Environment objectives for all the functional areas. To achieve the said objective, the Company has renewed the EMS (ISO 14001 : 2015) and QMS (ISO 9001:2008) certification with the concerned Certifying Bodies.


In respect of MOU 2018-19, having completed PreNegotiation and inter-ministerial committee meeting, the MOU has been duly signed with Government of India on 26.06.2018 detailing necessary financial and production performance parameters to be achieved for the year 2018-19.


- Complaints received were attended and reports submitted as per Complaints Handling Policy of the Company / Central Vigilance Commission (CVC) guidelines.

- Continuously monitoring the progress of the Disciplinary Proceedings in respect of Vigilance Cases for timely completion.

- Agreed List of Suspected Officers and List of Officers of Doubtful Integrity were finalised and sent to DoF.

- CVC Guidelines / Circulars on Tenders and disciplinary proceedings and other matters as and when received were communicated to Management for necessary action.

- As per the Central Vigilance Commission, CVO had one Structured Meeting with the CMD, MFL on 25.01.2018 and pending issues were discussed and suggestions given to the Management. GM - Plant, GM - F&A, and GM - M&D (a/c) attended the said meeting.

- For all the Tenders with value more than Rs.2 lacs, e-Tendering and e-reverse auction method is being followed.

- Annual Property Returns of the Officers were scrutinized as per CVC guidelines.

- For easy reference, CVC Guidelines / Circulars on Tenders were uploaded in MFL’s Online Integrated System (OLIS).

- MFL observed Vigilance Awareness Week 2017 from October 30, 2017 to November 4, 2017 as directed by CVC. The following are the highlights:

- On October 30, 2017, Vigilance Awareness Week pledge was administered to all employees at 11.00 hours in the Administrative Building by Shri U Saravanan, Director Technical in the presence of CVO.

- On Oct 31, 2017, a Written Quiz Competition was conducted by MFL Vigilance Team for the Supervisory officials at the Training Centre. Around 15 Employees enthusiastically participated in the competition.

- On Nov 1, 2017, a Guest Lecture on “My Vision -Corruption Free India” was organised which was delivered by Shri R Mohanraja, IRPS, Principal Chief Personnel Officer, Integral Coach Factory, Chennai. In this lecture, he dealt at length the topic of Corruption, its ill-effects and ways to counter the same. The Lecture was well received by a house full attendance in the Training Centre Auditorium of MFL.

- Essay competitions (in English & Tamil) on the same topic, viz., “My Vision - Corruption Free India” was held for students of two neighbouring schools to create awareness and to involve the youth in Vigilance awareness.

- Prizes and Certificates were distributed to the Winners of the Vigilance Awareness Week competitions on 30.11.2017 by CMD.


Manpower & Training

- The total strength of MFL as on 31.03.2018 is 632 as against 684 as on 31.03.2017. 257 employees have been trained during the period Apr 2017 to Mar 2018 on Technical, Soft and Life skills for the enduring benefit and development of the Organisation.

Industrial Relations

- During the year, the overall Industrial Relation situation in the Company has been normal and cordial.

SC / ST Welfare Activities

- The Presidential Directives and various guidelines issued by the Government of India from time to time relating to the welfare of SC / ST employees are being scrupulously followed. A Liaison Officer for SC / ST has been posted at DGM level to ensure implementation of Government Directives.

- Rs. 30000/- was granted for celebrating Dr. Ambedkar Jayanthi on 16th April 2018 at MFL and conducted in a grand manner in commemoration of National Leader.

Official Language Implementation

Efforts are being taken to meet the target fixed by Department of Official Language for letter correspondence in Hindi and other implementation programs. Hindi fortnight was celebrated at Head Office and Regional Offices. Various competitions were organised and prizes were distributed.


IRC is functioning in the Company under the Chief Financial Officer (General Manager-F&A) & Company Secretary with members from various Groups to create awareness of the Company’s strength and ensuring timely communication to shareholders.


Government of India have appointed the following GOI Nominee Director in MFL Board :-

Shri Lalsanglur, IES (DIN 08118636) Economic Advisor, Department of Fertilizers in place of Shri Dharampal, IAS (DIN 02354549), effective April 10, 2018.

The Board placed on record the valuable and outstanding contribution made by the outgoing Director Shri Dharampal, IAS, during his tenure as Director on the Board for the substantial and sustainable development of the Company.


Annual Evaluation of Board

MFL being a Government Company, all appointments in the Board are made by the Government of India, Ministry of Chemicals and Fertilizers, Department of Fertilizers. The performance of Directors are evaluated by the Ministry of Chemicals & Fertilizers, Department of Fertilizers, Government of India. As per Government of India, Ministry of Corporate Affairs notification dated 5th June 2015, clause (e) and (p) of sub-section 3 of Section 134 of Companies Act 2013 relating to appointment, remuneration and Annual evaluation of Board on its performance are not applicable to MFL.

Meeting of the Board

During the year 2017-18, eight meetings of Board were convened and held. The details of the meetings of the Board of Directors are given in the report on Corporate Governance, which is part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act 2013.

Particulars of Employees and Related Disclosures

In terms of the provisions of Section 197 (12) of the Companies Act 2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is stated that no employee of your Company was in receipt of remuneration for any part of the year at a rate which is more than Rs. 5 lacs per month.

Directors’ Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors hereby state that

a) i n the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards (Ind AS) had been followed along with proper explanation relating to material departures.

b) “he 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 and of the profit and loss of the company for that year;

c) t he 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;

d) “ he directors have prepared the annual accounts on a going concern basis.

e) “he directors have laid down internal financial control to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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.

Energy, Technology & Foreign Exchange

The data on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 134 of Companies Act 2013 are given in the Annexure - I forming part of this report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report, as required under Listing Agreement is enclosed as Annexure - II forming part of this report.

Corporate Governance

The Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Board lays emphasis on transparency and accountability for the benefit of all stakeholders of the Company. The Report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been enclosed as Annexure - III forming part of the report.

Code of Conduct

Declaration affirming compliance with the code of conduct pursuant to the provisions of Regulation 17(5) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) is enclosed as Annexure - IV forming part of this report.

Extract of Annual Return

As provided under Section 92 (3) of the Act, the details of extract of the Annual Return in form MGT 9 is enclosed as Annexure V forming part of this report.


a) The Comptroller & Auditor General of India have appointed M/s J V Ramanujam & Co. (MD0377), Chartered Accountants, Chennai as Statutory Auditors of the Company for the year 2018-19.

b) Smt Aruna Prasad, Cost Accountant, has been reappointed as Cost Auditor of the Company for the year 2018-19.

c) I n terms of the provisions of Section 204 of the Companies Act, 2013 and Rules framed thereunder, a Secretarial Report in the prescribed format, obtained from a Company Secretary in practice, is required to be annexed to the Board’s Report. In view thereof, your Board at its 301st meeting held on 28th May 2018 has appointed Mr. V Esaki, Practicing Company Secretary, as the Secretarial Auditor of your Company. The Secretarial Auditors’ Report (Form No.MR-3) for the year 2017-18 is enclosed as Annexure - VI forming part of this report.

Audit Committee

In line with the provisions of Section 177 of the Companies Act 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 an Audit Committee of the Board has been constituted. Details of Members / Meetings of the Audit Committee are elaborated in the report on Corporate Governance. The Board has accepted all recommendations of Audit Committee.

Public Deposit

During the financial year 2017-18, the Company has not accepted any deposit from public. However, as on 31.3.2018, Rs. 7,62,054/- is lying in unclaimed matured fixed deposit account.

Contract or arrangement with Related Parties

The transactions entered with related parties for the year under review were on arms length basis and in the ordinary course of business. The disclosure in Form No.AOC-2 for the transactions with related parties during the period under review is enclosed as Annexure - VII of the report.

Corporate Social Responsibility (CSR)

The Company has constituted “Corporate Social Responsibility Committee” comprising of three independent directors. The Committee monitors CSR activities. The Company has carried out the following CSR activities during the financial year 2017-18:

- An amount of ‘.0.98 lakhs was spent towards cleaning and deepening work of pond at Kolathupalayam Village, Tondamuthur Block, Coimbatore District, Tamilnadu.

- An amount of Rs. 10,000/- was spent towards CSR activities for supplying 200 food packets to neighbouring village people who were affected by flood.

- Regular supply of potable water through pipelines from MFL to Harikrishnapuram (Manali), a neighbouring village (around 500 families) is ensured at a cost of Rs.5. 44 lakhs

The details are contained in the Annual Report on CSR activities is enclosed as Annexure - VIII forming part of this report.

Material changes and commitments

There were no material changes and commitments affecting the financial position of the company between the end of financial year (March 31, 2018) and the date of the report.

CEO/CFO Certification

As required by Regulation 17(8) of the SEBI Regulation, a Certificate on the Financial Statements and Cash Flow Statement of the Company for the year ended March 31, 2018 duly signed by the Chairman & Managing Director and General Manager (Finance & Accounts) & Company Secretary was submitted to the Board of Directors at their meeting held on May 28, 2018 is enclosed as Annexure - IX forming part of this report.

Vigil Mechanism

MFL is having vigil mechanism for directors and employees to report their concerns. The Directors and employees can approach Chairman Audit Committee of the Board directly and report their concern in appropriate case. The vigil mechanism and whistle blower policy is published in the website of the Company

Prevention of Insider Trading

No instances of insider trading have been reported on MFL shares till date. None of the directors and key managerial personnel is holding any shares in MFL. A code of conduct of prevention of insider trading and code for corporate disclosure is published in the website of the Company www.madrasfert.


Your Directors wholeheartedly place on record their appreciation for the continued and unstinted support of Department of Fertilizers, Government of India, Government of Tamilnadu, NICO, Financial Institutions, Banks, Depositors and all stakeholders during the year. It is most appropriate to mention that the Directors convey their gratitude to the Department of Fertilizers for settlement of subsidy bills on priority basis and to the dealers and farmers for their sustained support to Vijay products. Last but not the least that your Directors also place on record their appreciation for the dedication, commitment and sincere services rendered by the employees for sustained improvements.

By order of the Board

Chennai A B Khare

Aug 13, 2018 Chairman & Managing Director

Director’s Report