fertilizer corporation of india ltd Management discussions

THE FERTILIZER CORPORATION OF INDIA LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS 1.0 FINANCIAL RESULTS: The Corporation incurred a net loss of Rs.1298.31 crore in 2005-2006 as against Rs.1209.10 crore during 2004-2005. The loss has been arrived at after charging interest of Rs.1307.79 crore (previous year Rs.1203.40 crore) including penal interest on Government of India loans of Rs.832.96 crore (previous year Rs.721.82 crore) and after providing for depreciation of Rs.0.31 crore (previous year Rs.0.32 crore). The financial results are given below: (Rs./Crore) Year Operating Depreciation Interest Net Net loss Profit/Loss Profit/Loss after prior (+) (-) (+) (-) period adjustment 2005-06 (+)9.17 0.31 1307.79 (-)1298.31 (-)1299.01 2004-05 (-)5.38 0.32 1203.40 (-)1209.10 (-)1209.85 2.0 FINANCIAL RESOURCES: 2.1 SHARE CAPITAL: The subscribed capital and paid up capital remains Rs.750.92 crore. 2.2 LOAN: During the year the Corporation has not received any loan from Government for non-plan expenditure. The loan and interest payable position up to the year-end was as follows: Rs./Crore 2006 2005 From Government of India: Plan loan 385.78 385.78 Non-plan loan 2333.02 2333.02 Overdue interest 9325.03 8007.03 Total (a) 12043.83 10725.83 From Public Sector Undertakings/Financial Institutions: Loan 5.00 21.00 Overdue interest* (Up to 31.3.2000) 52.85 52.85 Total (b) 57.85 73.85 Grand Total (a+b) 12101.68 10799.68 * No further interest is provided on loans in view of severe financial constraints. 3.0 PRODUCTION PERFORMANCE: There was no production of urea at any of the plants during the year, due to the decision of the GOI for closure of the plants. 4.0 PLANT STATUS: Activities at plants are restricted to security arrangements and settlement of dues of employees. 5.0 MARKETING OPERATIONS: In view of decision for closure of all the fertilizer units of the Corporation and there being no production during the year, there is no marketing activity. All the marketing offices outside Delhi have been closed. 6.0 VIGILANCE DEPARTMENT - ITS ACTIVITIES AND ACHIEVEMENTS FOR THE YEAR 2005-2006: Vigilance Department is headed by Chief Vigilance Officer at the Corporate Office for attending to vigilance work with officers and staff posted in vigilance wings of Units/Offices of the Corporation. 7.0 USE OF HINDI AS OFFICIAL LANGUAGE: Annual programme and instructions and all other directives issued by the Government regarding progressive use of Hindi are complied with by the Corporation. How ever, due to closure of the company, these activities are kept limited. 8.0 INDUSTRIAL RELATIONS, HUMAN RESOURCE, WELFARE, SAFETY, PARTICIPATIVE MANAGEMENT ETC.: 8.1 The staff strength as on 31.3.2006 is 60 retained. They are on the rolls for looking after the safety and security of the properties of the Corporation and to discharge statutory obligations of the Company. Due to the closure of all Units, safety rules and procedures were followed to a limited extent for disposal of hazardous and inflammable materials. 9.0 EMPLOYMENT OF SCs/STs, EX-SERVICEMEN AND PHYSICALLY HANDICAPPED PERSONS: Governments directives with regard to reservation of posts for SCs/STs/Ex- servicemen, including physically handicapped, were kept in view. However, no recruitment has been made during the year. For and on behalf of the Board of Directors Sd/- Place: New Delhi (Sofia Dahiya) Dated: 30.8.2006 Director (Finance)