Today's Top Gainer
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Your Board of Directors have pleasure in presenting the 34th Annual Report on the business and operations of the Company together with audited financial statements for the financial year ended March 31, 2019.
1. Standalone Financial Results (Rs. in Lakhs)
|Revenue from Operations||1009451.69||746616.60|
|Profit before Exceptional Items and Tax from Continuing Operations||98996.41||72013.47|
|Profit before Tax from Continuing Operations||79269.17||72013.47|
|Profit for the Year from Continuing Operations||54527.50||47649.37|
|Profit from Discontinued Operations (after tax)||-||367.72|
|Profit for the Year||54527.50||48017.09|
|Other Comprehensive Income for the Year (Net of Tax)||(11135.38)||(2126.47)|
|Total Comprehensive Income for the Year||43392.12||45890.62|
|Retained Earnings-Opening Balance||198157.08||164699.30|
|Profit for the Year||54527.50||48017.09|
|Any Other Change||92.97||(24.70)|
|Cash Dividend (including Dividend Distribution Tax)||9533.55||9517.82|
|Transfer to General Reserve||5000.00||5000.00|
|Re-measurement Loss on Defined Benefit Plans||83.12||16.79|
|Retained Earnings- Closing Balance||238160.88||198157.08|
2. Operations and New Urea Plant
The Company had two Urea Plants (Gadepan-I and Gadepan-II) at the beginning of the Financial Year 2018-19. The Company has completed the implementation of the new Urea Plant ("Gadepan-III Plant") and commercial production of Urea commenced from Gadepan-III Plant with effect from January 1, 2019. The implementation of such a capital intensive plant with complex technology was very challenging. The management team has rose upto the occasion and completed Gadepan-III Plant within the scheduled time and estimated cost. It is heartening that Gadepan-III Plant has achieved all its efficiency and capacity parameters and running at its full capacity. As on March 31, 2019, the capital investment of the Company in Gadepan-III Plant stood at Rs. 5762.05 Crore.
Gadepan-III Plant is an important milestone in the journey of growth of your Company and its Benefits will accrue not only to the Company but the country as a whole. It will go a long way in taking the country towards self-sufficiency in Urea and thereby reducing the dependence of the country on imports. It will also Benefit the farming community immensely by increasing the availability of Urea manufactured in the country. The economic Benefits of Gadepan-III Plant will also flow in the form of additional revenue to the Government of Rajasthan and the Government of India. Further, the social Benefits in the form of new avenues of employment and availability of more resources for corporate social responsibility initiatives of the Company will add to the development and welfare of the community at large. The cumulative production and sales of Urea from Gadepan-I and Gadepan-II plants was higher in comparison to the previous year. In addition to this, the Urea produced from Gadepan-III plant has augmented the production and sales of Urea of the Company.
Apart from manufacturing Urea, the Company markets other branded Agri-inputs, mainly Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP), NPK Fertilisers, agrochemicals, seeds and micronutrients. There was some decrease in the volumes of DAP, MOP and NPK Fertilisers being marketed by the Company though the performance of some other products such as agrochemicals and seeds has improved. The implementation of Modified New Pricing Scheme Stage - III for payment on account of additional fixed cost to Urea Units by the Ministry of Chemicals and Fertilizers, Government of India, has been delayed inordinately. This delay has caused uncertainty in some of the aspects of aforesaid policy. Accordingly, the Company has provided for Rs. 19727.24 Lakhs during the Financial Year ended March 31, 2019, which has been shown as Exceptional Items.
The Company achieved higher revenue and Profits during the year under review in comparison to the previous year. This was mainly due to production and sales of Urea from Gadepan-III Plant, higher production and sales of Urea from Gadepan-II Plant and higher prices and better margins in some of the products marketed by the Company. The higher dividend income in comparison to the previous year has also contributed to the increase in Profit during the Financial Year 2018-19.
The detailed information on the business operations of the Company, the Industry in which the Company operates and other relevant information is given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
3. D ividend
The Board of Directors recommends dividend of Rs. 2.00 per equity share of Rs. 10 each @ 20% (Previous Year - Rs. 1.90 per equity share @19%) for the financial year ended March 31, 2019. The total outgo on this account will be Rs. 10035.22 Lakhs (Previous Year - Rs. 9517.82 Lakhs) including dividend distribution tax of Rs. 1711.06 Lakhs. The Dividend Distribution Policy of the Company is attached as Annexure "B" to this Report. There has been no change in this policy during the year under review. This policy is also available on the website of the Company and can be accessed at the weblink-http://www.chambalfertilisers.com/pdf/Final-Dividend-Distribution-Policy.pdf. The dividend recommended by the Board of Directors is in accordance with the Dividend Distribution Policy of the Company.
4. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, the rules framed thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the applicable Accounting Standards, the Company has prepared Consolidated Financial Statements. The Audited Consolidated Financial Statements alongwith Auditors Report and the Statement containing salient features of the financial statements of Subsidiaries/Joint Venture (Form AOC 1) forms part of the Annual Report.
5. Corporate Governance Report and Code of Conduct
Your Directors strive to maintain the highest standards of Corporate Governance. The Corporate Governance Report for the Financial Year 2018-19 is attached as Annexure "C" to this Report. All the Directors of the Company and senior management personnel have confirmed the compliance of Code of Conduct and Ethics of the Company. The declaration of the Managing Director confirming compliance with the Code of Conduct and Ethics of the Company is enclosed as Annexure "D" to this Report and Auditors Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "E" to this Report.
6. Subsidiaries and Joint Venture
The Company had seven subsidiaries and a joint venture as on March 31, 2019, the details of which are given below:
(i) CFCL Ventures Limited and its subsidiaries
CFCL Ventures Limited ("CVL") is a subsidiary of your Company in Cayman Islands and it operates business through its subsidiaries, namely, ISGN Corporation ("ISGN, USA") in USA and ISG Novasoft Technologies Limited ("ISGN, India") in India. ISGN, USA is engaged in designing, developing, marketing and distribution of software products for the mortgage lending industry in USA. The business includes licensing of the technology products as well as providing software as a service. This business is supported by ISGN, India, which is having its software development centre in India. ISGN, USA continued its focus in getting new customers from the residential mortgage market in addition to looking at operating efficiencies to reduce its operational cost. The performance of software business remained subdued during the Financial Year 2018-19.
Inuva Info Management Private Limited (Under Liquidation) ("Inuva"), is a subsidiary of ISGN, India. There has been no business activity in Inuva. During the year under review, the shareholders of Inuva had approved its voluntary liquidation in pursuance of the provisions of Insolvency and Bankruptcy Code, 2016 ("Insolvency Code") read with the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 ("Insolvency Rules"). Accordingly, Inuva is in the process of voluntary liquidation.
(ii) Other Subsidiaries
India Steamship Pte. Limited ("ISS, Singapore"), is a wholly owned subsidiary of the Company in Singapore and India Steamship Limited (Under Liquidation) ("ISS, India"), and Chambal Infrastructure Ventures Limited are wholly owned subsidiaries of the Company in India. During the year under review, there was no business activity in these subsidiaries. During the year under review, the shareholders of ISS, India had approved its voluntary liquidation in pursuance of the provisions of Insolvency Code read with the Insolvency Rules. ISS, India is in the process of voluntary liquidation. Further, the Board of Directors of ISS, Singapore and the Company as its shareholder had approved the closure and voluntary striking-o_ the name of ISS, Singapore from the register of Accounting and Corporate Regulatory Authority, Singapore. The process of voluntary striking-off / closure of ISS, Singapore is yet to be completed.
Your Company had also approved voluntary liquidation of its wholly owned subsidiary - India Steamship International FZE ("ISS, UAE") in United Arab Emirates and ISS, UAE was liquidated during the Financial Year 2018-19.
(b) Joint Venture : Indo Maroc Phosphore S. A.-IMACID ("IMACID")
IMACID is a joint venture of your Company in Morocco with Tata Chemicals Limited and OCP, Morocco and each partner is having equal stake in the joint venture (33.33% each). IMACID is engaged in the manufacture of phosphoric acid in Morocco.
The performance of IMACID is summarized below:
|Particulars||January 1, 2018 to March 31, 2019||January 1, 2017 to December 31, 2017|
|Production of Phosphoric Acid (MT)||472,138||409,160|
|Sales of Phosphoric Acid (MT)||481,808||408,213|
|Revenue||Moroccan Dirham 3409.55 Million (Rs. 247533.01 Lakhs)||Moroccan Dirham 2279.87 Million (Rs. 150851.90 Lakhs)|
|Profit after Tax||Moroccan Dirham 482.15 Million (Rs. 35004.36 Lakhs)||Moroccan Dirham 177.98 Million (Rs. 11776.21 Lakhs)|
. IMACID follows calendar year as its financial year. The financial results of IMACID for the calendar year 2017 had been considered for the purpose of preparation of the consolidated financial statements of the Company for the previous financial year. In order to align the financial reporting periods, the Company has considered financial results of IMACID for 15 months period ended March 31, 2019 for preparation of its consolidated financial statements for the financial year 2018-19. The financial performance of IMACID during the period ended March 31, 2019 was much better in comparison to the previous year due to higher production and sales at improved margins. The Company does not have any material subsidiary as per the provisions of the Listing Regulations.
The performance of the subsidiaries of the Company is summarized in Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section 129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the overall performance of the Company is also provided in Note no. 48 to the Consolidated Financial Statements.
The Company shall place the financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013 and shall provide a copy of these statements to any shareholder seeking it. These documents will also be available for inspection by members during business hours at the registered office of the Company at Gadepan, District Kota, Rajasthan, PIN - 325208.
Save and except voluntary liquidation of ISS, UAE, no other subsidiary, associate or joint venture has been acquired or ceased / sold / liquidated during the year under review.
7. Health, Safety, Quality and Environmental Protection
Your Company firmly believes that health and safety of people is of utmost importance. In order to maintain high standards of safe work practices, your Company has formulated a Health, Safety, Security, Environment & Quality Policy and senior management of the Company periodically reviews and assesses the adherence to the policy.
Your Company has established an Integrated Management System based on OHSAS-18001:2007, ISO-14001:2015 and ISO-9001:2015 and it has also adopted Process Safety Management and guidelines of British Safety Council. The details of various activities and achievements of the Company in the areas of health and hygiene, safety, environment protection and quality management are as under:
(a) Health & Hygiene
The Company believes that healthy and hygienic work environment not only Benefits the workforce but it also increases their productivity and works as a retention tool. There is a system in place in the Company for health assessment and occupational disease monitoring of employees and contractor workforce through periodic medical examinations and hygiene monitoring at work place. The health centre at Gadepan provides services round the clock to employees, their families, contractor workforce and villagers in the vicinity of the plants. Apart from regular doctors and trained nursing staff, specialist doctors like child specialist, eye specialist, dental surgeon, gynecologist, etc. visit the health centre. There are three ambulances available on round the clock basis at Gadepan. The Company also facilitates employees to consult a Company affiliated doctor to ensure the well-being of the employees. The Company continuously strives to maintain a neat and clean work place and adequate resources are made available to ensure hygienic working environment. The Company organizes periodic training and awareness programs related to health and hygiene through external experts. Various health camps and campaigns like pulse polio vaccination, blood donation, immunization programme for children and swine flu vaccination drives are also organized from time to time.
(b) Safety Management
There is a robust safety management system in place in your Company to ensure highest levels of safety of all the employees, contractor workforce as well as equipment and machinery. Gadepan-III Plant has some advanced safety features such as control room air conditioner system had been designed to handle leakage of Ammonia and some critical areas of the plant are equipped with automatic flooding system in case of fire.
The Company has taken various safety measures to prevent any mishap and respond to any accident that may occur in the fastest and most appropriate manner, like Hazard identification, risk assessment and mitigation procedures, safety work permit system, etc. A strong Process Safety Management system is also in place. Before executing any maintenance job, a cross functional team reviews the jobs from safety perspective and ensures that all recommended actions to prevent hazards are taken. Extensive trainings and drills are conducted by internal and external experts on rescue, work at height, working inside confined space, fire-fighting, emergency handling, electrical safety, material handling, road safety, use of breathing air sets, etc. To encourage safety awareness, schemes of "Near-Miss" & "Make-to Good" reporting are in place. In order to create more awareness on Safety & Environment, your Company organizes various programmes throughout the year like
National Safety Week, Road Safety Week, Fire Services Day, World Environment Day, Chemical Disaster Prevention Day, etc. involving employees, their families and contractor workforce.
Your Company has a well-Defined "Onsite Disaster Management Plan" and Mutual Aid and Response Group arrangement with neighboring industry. Regular mock drills, fire drills and table top drills are conducted to ensure its effectiveness. The Company provides help to all neighboring villages around Gadepan through district administration in case of any fire emergency.
(c) Environment Management
Environmental sustainability is paramount to any industry and your Company is conscious of its responsibility towards the impacts of its operations on the environment including with respect to resource consumption, waste generation and emissions to the atmosphere. The Companys investors, suppliers, customers, local communities as well as government and regulatory agencies are vital stakeholders in its efforts towards establishment of environment friendly manufacturing that minimizes waste and pollution.
The Company has a mechanism in place to ensure that all the environmental parameters are maintained within the permissible limits and a dedicated Environment Management Cell continuously monitors the environmental compliances. The new Urea plant of the Company is more energy efficient and consumes less natural resources. The Company has also installed a reverse osmosis-zero liquid discharge plant for treatment of effiuent, which has also resulted in less fresh water intake from the river. In order to treat the Urea contaminated effiuent, stripping unit with hydrolyser has also been installed in new Urea plant. Your Company has installed Bio-Methanation plant to handle the kitchen waste of plant canteens and bio-gas is being utilized in the kitchen facility of guest house at Gadepan.
The Company maintains a dense green belt at its Gadepan campus which is also a habitat to many species of birds. Regular plantation is done in the complex to provide a soothing and healthy environment for people to live and work. Only treated waste water is used in maintaining the green belt through irrigation network spread all over the complex. Use of polythene bags is strictly prohibited in the Gadepan campus.
(d) Quality Management
Your Company is ISO 9001:2015 Certified and quality is given very high priority. The quality assurance is ensured at all stages of manufacturing processes, maintenance and support services. The Company sources the products marketed by it from reputed suppliers and quality parameters are checked regularly. The quality reviews are regularly conducted and feedback from end users is accorded high value. The Company has a well-equipped laboratory at Gadepan with high quality instruments like high performance liquid chromatography, ion chromatograph, etc. for monitoring of critical quality parameters.
Your Company regularly participates in national and international benchmarking surveys and awards for independent assessment and opportunity for continual improvement. One of the Urea manufacturing plants of the Company (Gadepan I plant) won the Fertilizer Association of India Best Production Performance Award 2018 for a Nitrogenous Fertilizer Plant. The Company was also conferred with Environment Protection Award 2018 for a Nitrogenous Fertilizer Plant - Runner Up by Fertilizer Association of India.
8. Corporate Social Responsibility ("CSR")
As a part of long term strategy for sustainable development, your Company is working mainly in the areas of Education including Technical & Vocational Education, Rural Development, Healthcare, Employability and Empowerment and Soil Health. The CSR initiatives of the Company are directed towards upliftment of the society, especially the vulnerable and marginalized members of the society. The brief outline of the CSR initiatives of the Company is as under:
a) Pre-primary & School Education
A comprehensive school education program is being driven by the Company through 42 government schools and 41 Aanganwadi centers of District Kota and Baran in Rajasthan. The education program is creating an ecosystem for more than 7500 students to experience and receive quality academic support. With the aim to increase the outreach of the education program, additional 5 government aanganwadi centers and 5 government schools were adopted during the Financial Year 2018-19. Girl child education is one of the key target areas of education project. During the year under review, enrollment of girls in the adopted Government schools has reached to 53%. Digitalization of the education system in adopted schools is one of the major initiatives in recent years. During the Financial Year 2018-19, additional smart interactive classes were set up in 6 schools, taking the total number to 21 schools. The computer education is also given utmost importance in the adopted schools where students are learning to operate computer from class 1st itself. Apart from delivering quality educational services, the Company is also focusing on overall development of the said schools and Aanganwadis such as infrastructure development, teachers training, free coaching to meritorious students for higher education entrance exams, sports promotion, extra-curricular activities, etc. During the Financial Year 2018-19, 15 libraries were set up in adopted schools and the Company also facilitated installation of Reverse Osmosis Unit with water cooler facility in 10 adopted Government schools. CFDAV School is being run in collaboration with DAV College Trust and Management Society and over 65% students in this school are from nearby villages. In 24th State Level Bhamashah Awards 2018, the Company was conferred with Commendation Letter - Shiksha Vibhushan by the Government of Rajasthan for its contribution in the field of education in District Kota, Rajasthan.
b) Technical and Vocational Education
Your Company has adopted five Government Industrial Training Institutes (ITIs) i.e. ITI Sangod (2011-12), ITI Sultanpur (2014-15), ITI Baran (2015-16), ITI Jhalawar (2015-16) and ITI Khanpur (2017-18). The renovation and maintenance of the exterior of ITI Khanpur was completed during the year under review. The management of the Company is closely involved in the running of these ITIs to ensure the quality of education and availability of requisite infrastructure to the students. Total 1371 seats are being offered to rural youth under 10 different trades in the aforesaid ITIs. To promote digital learning, smart interactive classes were installed and digital methods were adopted to provide training to youth. Encouraged with the Digital India Mission, ITI Sangod has developed its own Android Application. To improve employability options of trainees, additional Certification courses are also being offered to students in the areas such as Fire and Safety, Occupational Health and First Aid and Spoken English & Personality Development. During the year under review, the Company has received commendation letter from the Government of Rajasthan for its contribution as industrial partner in development of aforesaid ITIs.
c) Rural Development Your Company believes that the process of inclusion can be accelerated through infrastructure development. The Company has continued to contribute towards building quality infrastructure facilities in the rural areas near its plants at Gadepan. In order to develop Gadepan as model village, pond renovation, cement concrete roads, storm water drain construction and plantation activities were completed during the year under review. To encourage community to avoid usage of polythene, various community sensitization drives were organized in the villages. For proper disposal of waste, a solid waste management system is being developed in the Gadepan Gram Panchayat.
Your Company has constructed community places such as Shed, boundary wall, playground, etc. and provided bore wells and submersible pumps in nearby villages during the year.
d) Health Care The health care initiatives aim to provide access to quality essential health services to rural population. The awareness campaigns, health care camps, etc. are a process in continuum. To create awareness amongst school students and trainees of ITIs, the students were trained on various health topics like First Aid training, Nutritional Awareness sessions, Menstrual Health & Hygiene and Physical Activity. The healthcare facilities were also extended in the remote villages of Tehri and Dehradun districts in Uttarakhand.
e) Employability and Empowerment In order to promote micro finance and self-help initiatives amongst women folks, 39 Self Help groups are operating in 8 villages. Further, 10 small village level livelihood clusters have been started to support various income generation activities of women. The Company has also facilitated augmentation of garment production house facility during the year under review to provide livelihood to 25 marginalized women. The Company is also facilitating the rural community to avail Benefits of various social security schemes such as pension, Ujjwala Yojana, Pradhan Mantri Jan Dhan Yojana, Jeevan Jyoti Beema Yojana, Jeevan Suraksha Yojana, etc.
f) Soil Health The Company is providing support to the farmers to adopt modern agriculture practices. Under soil health initiatives, the Company is running two agriculture development laboratories in Agra and Gadepan and three mobile soil testing vans in Rajasthan and Uttar Pradesh. Based on the soil test and analysis, necessary advice is being provided to the farmers to ensure optimum usage of farming inputs and ensuring maximum farm produce. The composition and terms of reference of Corporate Social Responsibility Committee are given in the Corporate Governance Report. The Annual Report on Corporate Social Responsibility Activities (including the details of the development and implementation of the Corporate Social Responsibility Policy) as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure "G" to this Report.
For the purpose of Section 135 of the Companies Act, 2013, the amount equivalent to 2% of the average net Profits of the Company made during the immediately preceding three financial years works out to Rs.1258.55 Lakhs. As against this, the Company had spent Rs. 1265.94 Lakhs on CSR projects / programs during the Financial Year 2018-19.
9. Directors and Key Managerial Personnel
The Board of Directors of the Company consists of eight directors. There are seven non-executive directors including four independent directors and a Managing Director. During the year, the Managing Director has not received any commission or remuneration from any subsidiary of the Company. Mr. Aditya Narayan (DIN: 00012084), ceased to be a Director of the Company upon completion of his tenure on September 18, 2018. Mr. Vivek Mehra (DIN: 00101328) was appointed as an Independent Director of the Company at the Annual General Meeting ("AGM") held on September 18, 2018 to hold office for a term of 5 (five) consecutive years from September 18, 2018 to September 17, 2023.
Mr. Shyam Sunder Bhartia (DIN: 00010484) is due for retirement at the forthcoming AGM and has offered himself for re-appointment. All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013, the rules framed thereunder and the Listing Regulations. In pursuance of the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Anil Kapoor, Managing Director, Mr. Abhay Baijal, Chief Financial officer and Mr. Rajveer Singh, Company Secretary are Key Managerial Personnel of the Company. During the year, there was no change in the Key Managerial Personnel. Four meetings of the Board of Directors were held during the financial year 2018-19.
Other information on the Directors and the Board Meetings is provided in the Corporate Governance Report attached as Annexure "C" to this Report.
A Certificate obtained by the Company from a company secretary in practice, confirming that none of the Directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Securities and Exchange Board of India /Ministry of Corporate Affairs or any such statutory authority, is enclosed as Annexure "F" to this Report.
10. Internal Financial Controls
The Company has internal financial controls commensurate to the size and nature of its business. The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business and operations including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The details of internal control system are given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.
11. Remuneration Policy
In pursuance of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Remuneration Policy. The Remuneration Policy, inter-alia, includes the appointment criterion & qualification requirements, process for appointment & removal, retirement policy, remuneration structure, etc. of the Directors including Managing Director and Whole Time Director(s), Key Managerial Personnel (KMP) and other senior management personnel of the Company. As per the Remuneration Policy, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with high level of ethical standards. In case of appointment as an independent director, the person should fulfill the criterion of independence prescribed under the Companies Act, 2013, rules framed thereunder and the Listing Regulations. The Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Managing Director and Whole Time Director(s) and payment of sitting fee & commission to the non-executive Directors and describes fundamental principles for determination of remuneration of senior management personnel and other employees which are as follows:
a) demand-supply relationship of the concerned job expertise;
b) need of organization to retain and attract talent and its ability to pay;
c) employees social aspiration for enhancing standard of living; and
d) compensation trends in the industries in which the Company operates.
The Remuneration Policy has been amended with effect from April 1, 2019. Apart from certain changes of clarificatory nature, the Remuneration Policy was amended mainly to the effect that Nomination and Remuneration Committee shall also recommend to the Board of Directors, all remuneration in whatever form payable to the Directors, KMPs and senior management personnel of the Company and the Board of Directors shall take into consideration the recommendations of Nomination and Remuneration Committee while considering the appointment and remuneration of Directors, KMPs and senior management personnel. The remuneration Policy of the Company is available at the website of the Company at the weblink http://www.chambalfertilisers.com/pdf/ REMUNERATION-POLICY.pdf.
12. Disclosures under the Companies Act, 2013, Rules thereunder and Secretarial Standards
a) Your Company has not issued any shares during the Financial Year 2018-19.
b) No significant and material orders have been passed by the regulators or courts or tribunals or statutory and quasi-judicial bodies impacting the going concern status and Companys operations in future.
c) All Related Party Transactions entered during the financial year 2018-19, were on arms length basis and in the ordinary course of business. No material Related Party Transactions (i.e. transaction(s) exceeding ten percent of the annual consolidated turnover of the Company as per last audited financial statements), were entered during the year by the Company. Accordingly, disclosure of contracts or arrangements with Related Parties as required under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.
d) The extract of annual return in Form MGT-9 is attached as Annexure "H" to this Report which is also available on the website of the Company at the weblink https://www.chambalfertilisers.com/annualreturns/. A Copy of annual return of the Company is also available on the aforesaid weblink.
e) The following information is given in the Corporate Governance Report attached as Annexure "C" to this Report:
i) The performance evaluation of the Board, the Committees of the Board, Chairman of the Company and the individual Directors;
ii) The Composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism.
f) The particulars of loans and guarantees given, security provided and investments made, if any, under Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.
g) During the year, the auditors, secretarial auditors and cost auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.
h) The Company has complied with the applicable Secretarial Standards prescribed under Section 118(10) of the Companies Act, 2013.
i) The Company has complied with the provisions relating to the constitution of Internal Complaints Committees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
j) There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year 2018-19 and the date of this report.
13. Directors Responsibility Statement Your Directors hereby state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
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 as at March 31, 2019 and of the Profit and loss of the Company for the year ended March 31, 2019;
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;
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 operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
14. Auditors and Cost Auditors
The Notes to the Financial Statements read with the Auditors Reports are self-explanatory and therefore, do not call for further comments or explanations. There has been no qualification, reservation, adverse remark or disclaimer in the Auditors Reports.
The shareholders of the Company, at the AGM held on September 15, 2017, had appointed M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016) as Auditors of the Company to hold office for a term of 5 (five) consecutive years from the conclusion of Thirty-second AGM of the Company held on September 15, 2017 till the conclusion of Thirty-seventh AGM of the Company. The maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is required by the Company in respect of production of fertilisers and accordingly such accounts and records are made and maintained by the Company. The Board of Directors of the Company has appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost accounts of the Company, as applicable, for the financial year 2019-20. As required under the Companies Act, 2013 and Rules framed thereunder, your Directors are seeking rati_cation from the members of the Company for the remuneration payable to M/s K.G. Goyal & Associates, Cost Accountants.
15. S ecretarial Audit
The Board of Directors of the Company had appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for the financial year 2018-19. The Secretarial Audit Report issued by the aforesaid Secretarial Auditor is attached as Annexure "I" to this Report.
There has been no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.
16. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The energy efficient operation of plants results into manifold Benefits in the form of saving of natural and financial resources and reduction of carbon footprint. The Company takes continuous initiatives to make its manufacturing facilities energy efficient. The new Urea plant of the Company is energy efficient in comparison to the existing plants. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure "J" attached to this Report.
17. Risk Management
Your Company has developed and implemented a Risk Management Policy. The Risk Management Committee of the Company periodically reviews all risks, finalise the risk document and monitors various risks of the Company including the risks, if any, which may threaten the existence of the Company. The composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report. The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk Management Committee, is also reviewed by the Audit Committee and the Board of Directors periodically.
During the year, the Company has not accepted any deposits from the public under Chapter V of the Companies Act, 2013. There was no public deposit outstanding as at the beginning and end of the financial year 2018-19.
19. Particulars of employees
Your Company believes that human resource is vital to the growth and sustainability of an organization. Your Company maintains very healthy work environment, promotes the culture of entrepreneurship at all levels in the organization and encourages the employees to contribute their best. The information required to be disclosed in pursuance of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure "K" to this Report.
20. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option Scheme 2010, as amended and revised from time to time ("ESOS 2010") for grant of stock options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each stock option when exercised would be converted into one fully paid up equity share of Rs. 10/- of the Company.
The Company has not granted any stock options during the year under review.
There has been no change in ESOS 2010 during the financial year 2018-19. ESOS 2010 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations") and implemented through CFCL Employees Welfare Trust ("Trust"). For the purpose of ESOS 2010, the Trustee of the Trust was holding 13,35,900 equity shares of the Company as on March 31, 2019 (16,96,900 equity shares as on March 31, 2018), being 0.32% of the paid up share capital of the Company. The ownership of these shares cannot be attributed to any particular employee till he / she exercises the stock options granted to him / her and the concerned shares are transferred to him / her. Hence, the concerned employees to whom the stock options were granted under ESOS 2010 cannot exercise voting rights in respect of aforesaid shares held by the Trustee of the Trust as such employees are not holders of such shares. The Trustee has not exercised the voting rights in respect of the aforesaid shares during the financial year 2018-19.
The disclosures required to be made under ESOP Regulations read with SEBI circular no. CIR/CFD/Policy Cell/2/2015 dated June 16, 2015 are given on the website of the Company at the weblink http://www.chambalfertilisers.com/pdf/esop-2019.pdf. The disclosures in respect of ESOS 2010 are also given in the notes to the Financial Statements.
21. Business Responsibility Report
In pursuance of the provisions of the Listing Regulations, the Business Responsibility Report for the financial year 2018-19 describing the initiatives taken by the Company from environmental, social and governance perspective forms part of the Annual Report.
22. Investor Service Centre
The in-house Investor Service Centre of your Company is located in the Corporate office of the Company at New Delhi which provides prompt and efficient service to the investors. The Company takes various initiatives for investor satisfaction such as reminders to investors about undelivered shares, unclaimed dividend, etc.
The equity shares of your Company are listed at National Stock Exchange of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock Exchanges for the financial year 2019-20. The members are requested to refer to general shareholders information given in Corporate Governance Report attached hereto.
The Board of Directors places on record its appreciation of the co-operation extended by all the stakeholders including the Department of Fertilisers, Government of India, Government of Rajasthan and other State Governments, Financial Institutions & Banks, investors and customers. The Board of Directors also convey its appreciation of the services rendered by each and every employee with utmost commitment and dedication.
|For and on behalf of Board of Directors|
|Place : New Delhi||Saroj Kumar Poddar|
|Date : May 16, 2019||Chairman|