national fertilizer ltd share price Directors report

To,

Dear Members,

On behalf of the Board of Directors of your Company, I have the pleasure in presenng the 49 Annual Report on the business and operaons of the Company together with the Audited Financial Statements including Consolidated Audited Financial Statements of the Company for the Financial Year 2022-23 and the Auditors Reports and Comments of Comptroller & Auditor General of India (C&AG).

During the year, company achieved the Pro t before Tax of Rs. 609.77 crore as against Pro t before Tax of Rs.144.82 crore during CPLY. PBT has increased mainly due to increase in profit on Urea due to energy norms extension, higherproducon and sale of Urea, sales of Bentonite Sulphur and industrial products.

The energy consumpon per MT of Urea at NFL plants during 2022-23 was as follows:

(Gcal/MT/Urea)

		Actual Energy
Units	Energy Norms for 2022-23 as per NUP-2015	2022-23	2021-22
Nangal	6.500	6.274	6.523
Panipat	6.500	6.334	7.048
Bathinda	6.500	6.357	6.559
Vijaipur I	5.860*	5.620	5.817
Vijaipur II	5.500	5.426	5.736

* As per DoF OM dated 18.11.2022.

Energy consumpon per MT of Ur ea at all Units was less than energy norms ll FY 2022-23 fixed by GOI under New Urea Policy 2015 with extension with extended period upto March, 2023 for Nangal, Panipat, Bathinda and Vijaipur-I Units.

Financial Highlights

Your Companys key financial parameters during the year 2022-23 and important financial highlights are as under:-

( Rs. in crore)

Sr. No. Particulars	2022-23	2021-22
01. Sale of Urea quanty in (LMT)	39.96	34.58
02. Sale quanty of tr aded Ferliz ers (LMT)	26.76	20.02
03. Sale of Urea own	2091.45	1807.11
04. Subsidy on Urea	17023.48	8764.85
05. Total Sales of Urea (3+4)	19114.93	10571.96
06. Sale of other products including subsidy	10238.27	5032.00
07. Sales Turnover (5+6)	29353.20	15603.96
08. Sale of Services	28.94	18.96
09. Other Operang R evenue	234.38	234.17
10. Revenue from operaons (7+8+9)	29616.52	15857.09
11. Other Income	192.62	25.61

 

		( Rs. in crore)
Sr. No. Particulars	2022-23	2021-22
12. Total Income (10+11)	29809.14	15882.70
13. Total Expenses	28544.89	15270.37
14. Earnings Before Interest, Depreciaon and Taxes (EBIDTA)[12-13]	1264.25	612.33
15. Interest	301.64	132.96
16. Depreciaon	352.84	334.55
17. Pro t Before Exceponal Item and Tax (14-15-16)	609.77	144.82
18. Exceponal Item	-	-
19. Pro t Before Tax (PBT) (17-18)	609.77	144.82
20. Provision for tax	153.67	36.62
21. Pro t Aer Tax (PAT) (19-20)	456.10	108.20
22. Other Comprehensive Income (Net of Tax)	3.56	1.90
23. Total Comprehensive Income (21+22)	459.66	110.10

RESERVES

Capital Reserves

The balance as at 31.03.2023 amounted to Rs.2.51 crore, which is at the same level as was in the previous year.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) fund stood at Nil as on 31.03.2023 as compared to Nil on 31.03.2022. Report on CSR is appended as Annexure- 5 forms part of this report.

General Reserves

During the year, an amount of 1.05 crore was adjusted from the General Reserve. The general reserve as on 31.03.2023 stood at 331.84 crore.

Surplus

The balance retained in the surplus as at 31.03.2023 is 1948.90 crore as compared to 1489.24 crore during the previous year.

Dividend

The Board of Directors declared interim dividend for the year 2022-23 1.53 (15.30%) per share which has been paid by the Company in June, 2023. Further, the Board of Directors has recommended Final Dividend of 1.26 (12.60%) per equity share of Rs.10 each on the paid up equity share capital of the Company for the Financial Year 2022-23 which shall be paid a er approval of the Shareholders at the Annual General Meeng.

Major events during the year

State of A airs of the Company and Change in the nature of Business

During the FY 2022-23, Company has achieved sale of ferlizers to the tune of 66.72 LMT comprising of 39.96 LMT of own Urea, 5.36 LMT of imported Urea and 8.39 LMT of RFCL Urea and 13.01 LMT of non-Urea Ferlizers and against corresponding period last year (CPLY) of 54.60 LMT that comprised of 34.58 LMT of own Urea, 8.86 LMT of imported Urea and 3.69 LMT of RFCL Urea, 7.47 LMT of Non-Urea Ferlizers. NFL has achieved growth of more than 22% in total ferlizer sale during the year with respect to CPLY. Further, sales con tribuon from other than own manufactured Urea of the company increased to around 35% during the year as compared to 32% of the CPLY.

Your Company has achieved the producon & sale of cer ed seeds to the tune of 1.60 Lakh Quintals. The sale of Bio-Ferliz ers & City Compost of 700 MT & 22071.25 MT respecv ely achieved during the year.

Your Company has achieved the ever highest producon of Urea of 39.35 LMT, ever highest sale of all ferliz ers of 66.72 LMT, ever highest sale of Agro-chemicals of 2213.758 KL/MT. Your company has achieved ever highest producon & sale of Bentonite Sulphur to the tune of 22302 MT & 20910 MT respecv ely. Vijaipur Unit dispatched ever highest Bio-ferliz ers to the tune of 756 MT. Your company has also sold 19,833 MT PDM (Potash Derived Molasses) during the year.

On the new investment front, your Company has commissioned its third Seed Processing Unit (SPU) at Indore in April 2023.

The seng up of an Agrochemicals plant at Bathinda is in advance stage and is likely to be commissioned shortly.

Your Company has also added some more products such as Potash derived from Molasses (PDM) in its basket during the year.

The revival of 2nd stream of Nitric Acid plant at Nangal completed during October 2022.

Your company has signed MoU for manufacture of Nano Ferliz ers with IFFCO. TEFR has been Finalized for manufacturing Nano Urea and EPMC consultants are being lined up. Public Hearing conducted on 27-04-2023 and revised EIA report is being submi ed to MoEF & CC for grant of Environment Clearance.

Material changes and commitments

No material changes and commitments have occurred between the date of the Balance Sheet and the date of the

Boards Report a ecng the financial posion of the Company.

Details of revision of Financial Statements or Boards Report

Company has not revised Financial Statements or Boards Report in respect of any of the three preceding financial years. Company has re-casted/restated Financial Statement as on 31.03.2022 and as on 01.04.2021.

General Information

a) Brief history of the Company, overview of the industry and important changes in the industry during the last financial year

NFL was incorporated on 23rd August 1974 at New Delhi. It has an authorized share capital of 1000 crore and paid up and subscribed share capital of 490.58 crore out of which Government of Indias share is 74.71% and 25.29% share is held by financial instuons, public & others.

The Company has ve gas based Urea plants viz. Nangal & Bathinda plants in Punjab, Panipat plant in Haryana and two plants at Vijaipur in Madhya Pradesh with a total annual revamped capacity of 35.68 LMT (Annual Re- assessed capacity - 32.31 LMT) of Urea. The company also has a Bio- Ferliz ers Plant at Vijaipur with annual capacity of 700 tonnes and a Bentonite Sulphur plant of 25000 MT per annum at Panipat Unit. It also manufactures other allied Industrial products like Nitric Acid, Ammonium Nitrate, Sodium Nitrate & Nitrite from its Nangal Unit and undertakes import & sale of other ferliz ers like DAP, MoP, NPKS along with domesc trading of various agro-inputs like cer ed seeds, agrochemicals, City Compost, SSP etc. through its exisng vast dealers network under single window concept. The Company has also been producing and selling its own cer ed Seeds under companys agship Seed Mulplic aon Program (SMP).

The Company has three Seed Processing Units (SPUs) at Bathinda, Panipat and one at Indore commissioned on April2023. The company also revived 2 Stream of Nitric Acid plant at Nangal on October2022. The Company is also seng up an Agrochemicals plant at Bathinda and doubling capacity of Bio-Ferliz ers plant at Vijaipur, which are expected to be commissioned in the F.Y. 2023-24.

Overview of the industry and important changes thereof during the last financial year forms part of Management Discussion & Analysis Report.

b) Brief description of business segments and geographic segments;

Business Segment

In the light of present diversi ed business acvies vis-a-vis IND AS 108 on Segment Reporng following operang segments have been considered for Segment Reporng for the Annual Accounts for the FY 2022-23:

i) Own Ferliz ers (Urea, Bio Ferliz ers and Bentonite Sulphur).

ii) Ferliz ers Trading (Indigenous and Imported).

iii) Other Products & Services (Industrial Products, Agro Chemicals, Traded Seeds, Seeds under Seeds Mulplic aon Programme etc.).

Geographic segments

The operaon of the company is conducted within India and there is no separate reportable geographic segments.

c) External environment and economic outlook;

Details of external environment and economic outlook are given in Management Discussion & Analysis Report.

d) Induction of strategic and financial partners during the last financial year

No new strategic and financial partners have been inducted during the last financial year.

Capital Structure

Preference and Equity Shares

Company has not issued any equity shares or preference shares during the year.

Equity Shares with Differential Rights

During the financial year, Company has not issued any equity shares with differenal rights as to dividend, vong or otherwise.

Employees Stock Option

During the financial year, Company has not issued any employees stock opon.

Shares to Trustees for benefit of employees

Company has not introduced any scheme(s) for purchase/subscripon of the Companys shares to be held by trustees for the benefit of employees.

Other securities which carries right of conversion into equity shares

During the financial year, Company has not issued any securies, which carries a right or opon to convert such securies into equity shares.

Details of Deposits

The Company has not accepted any deposits during the year.

Credit Rating

During FY 2022-23, the credit rang of the Company was maintained with two credit rang agencies as under:

Rated Amount ( Rs. in crore)

Instruments		ICRA				INDIA RATINGS
	Credit Ratings	Limits	Credit Ratings	Limits	Credit Ratings	Limits	Credit Ratings	Limits
	2021-22		2022-23		2021-22		2022-23
		Long Term Fund Based Working Capital Facilities
Cash Credit	[ICRA] AA-(Stable)	4000	[ICRA] AA-(Stable)	9000	IND AA/ Stable	4000	IND AA/ Stable	9000
Term Loan	[ICRA] AA-(Stable)	1044	[ICRA] AA-(Stable)	1044	-	-
ECB	[ICRA] AA-(Stable)	-			IND AA-/ Stable	-
		Short Term Fund Based Working Capital Facilities
Commercial Papers	[ICRA] A1+	4000	[ICRA] A1+	4000	[IND] A1+	4000	[IND] A1+
		Short Term Non Fund Based Working Capital Facilities
LC/BG	[ICRA] A1+	3000	[ICRA] A1+	9600	[IND] A1+	2000	[IND] A1+	9600

During the year, the Credit Rang of the Company had been reviewed by both the agencies and it was upgraded as shown above in the table.

Buy-Back of Securities

Company has not introduced Buy-Back of its securies during the year.

Sweat Equity

Company has not issued any Sweat equity shares in terms of Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014.

Disinvestment of GOI Equity

There was no disinvestment of Government of India Shareholding during the Financial Year 2022-23. However, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, Government of India had appointed Legal Advisors, Merchant Bankers and Selling Brokers for the disinvestment of 20% paid up equity capital in Naonal Ferliz ers Limited (NFL) out of Government of Indias Shareholding through the "O er for sale by promoters through the Stock Exchanges". In this regard, investor meet had been held from 12th December, 2022 to 15th December, 2022 in Singapore and from 16 January, 2023 to 17 January, 2023 in Mumbai.

Statement of deviation(s) or variation(s)

Company has not offered public issue, rights issue, preferenal issue etc. during the year and there is no requirement to submit statement of deviaon(s) or variaon(s).

Foreign Exchange Earnings/Outgo

The Foreign Exchange earned in terms of actual in flows during the year were 32.10 crore and the Foreign Exchange outgo during the year in terms of actual oulow amounted to 8425.84 crore.

Borrowings

Long Term Loans

To meet the funding requirement for energy saving and capex schemes, Company has entered into a Rupee Term Loan Agreement with SBI on 24.12.2018 for 1044 crore. Long term net borrowings as on 31.03.2023 were 534.71 crore outstanding against Rupee Term Loan. Further, the said term loan has been fully repaid on 09.05.2023.

Short Term Loans

Short Term borrowings of 3456.22 crore (previous year 2539.83 crore) were outstanding as on 31.03.2023.

Debt Equity Ratio

Debt equity rao as on 31.03.2023 has increased to 1.44:1 as compared to 1.37:1 of previous year due to increase in borrowings.

Revenue

The Company has achieved Revenue from Operaons of 29616.52 crore during 2022-23 as against 15857.09crore during previous year and total income of 29809.14 crore during 2022-23 as against 15882.70 crore during previous year as detailed below:

( Rs. in crore)

Particulars	2022-23	2021-22	Change
Sale of products (including subsidy)	29353.20	15603.96	13749.24
Sale of services	28.94	18.96	9.98
Other Operang r evenue	234.38	234.17	0.21
Revenue from operaons	29616.52	15857.09	13759.43
Other income	192.62	25.61	167.01
Total Revenue	29809.14	15882.70	13926.44

Urea and other fertilizers

Your Company has registered ever highest Urea producon of 39.35 LMT with an overall capacity uliz aon of 121.81% during 2022-23 against 35.23 LMT achieved during 2021-22 (CPLY).

Company achieved ever best Bentonite Sulphur producon of 22302 MT against CPLY of 17076 MT achieving a growth of around 31%.

On the sales front, the Company has sale of Ferliz ers of 66.72 LMT that includes sale of 39.96 LMT of own Urea, 5.36 LMT of Imported Urea, 8.89 LMT of RFCL Urea, 13.01 of Non-Urea Ferliz ers including 0.22 LMT (22071 MT) of Compost during 2022-23 surpassing previous best of 54.60 LMT during 2021-22 which includes sale of 34.58 LMT of own Urea, 8.86 LMT of Imported Urea, 3.69 LMT of RFCL Urea, 7.47 LMT of Non-Urea Ferliz ers including 0.27 LMT (26647 MT) of Compost.

The detailed quanty of br eak-up of sale of urea and other ferliz ers is as under:

(Lakh MT)

Product	2022-23	2021-22	Change
1.Manufactured
a) Urea	39.96	34.58	5.38
b) Bentonite Sulphur	0.21	0.17	0.04
c) Bio-Ferliz ers	0.01	0.01	0.00
2.Traded Goods
a) Imported	12.17	6.41	5.76
b) Indigenous	14.37	13.43	0.94
Total Fertilizers	66.72	54.60	12.12

Industrial Products

During the year 2022-23, the company produced & sold Industrial Products to the tune of 132271 MT & 139475 MT (comprising of Nitric Acid, Sodium Nitrite / Nitrate, Ammonium Nitrate and Ammonia) respecv ely against CPLY of 109973 MT & 146383 MT.

The Company registered sale of Nitric Acid of 81108 MT during 2022-23 as compared to previous sale of 64008 MT during 2021-22. The Company also recorded sale of Ammonium Nitrate to the tune of 26039 MT during 2022-23 as compared to sale of 24029 MT achieved during 2021-22.

In terms of revenue generaon from producon and sale of Industrial products, the Company achieved sale of Industrial-Products (IP) comprising of Nitric Acid, Sodium Nitrate, etc. to the tune of Rs. 748.71 crore during 2022-23 against CPLY of Rs. 569.15 crore during 2021-22.

Bio-Fertilizers

The Company sold 700 MT of Bio-Ferliz ers (Solid & Liquid) to the tune of Rs. 2.51 crore in F.Y. 2022-23 as against 745 MT of Rs. 2.53 crore during CPLY.

Import & sale of Fertilizers

The Company sold 12.17 LMT of imported non-Urea Ferliz ers including DAP, MoP, APS, NPK etc. worth Rs. 8224.01 crore during 2022-23 against 6.41 LMT worth Rs. 3265.85 crore during 2021-22. Apart from the above, NFL also sold 5.36 LMT of Urea imported in Government Account in FY 2022-23 against 8.86 LMT during 2021-22 .

Domestic Trading of Agro Products

The Company has registered total revenue of 288.12 crore towards trading of various agro products such as seeds, pescides & compost and RFCL ammonia during the year against 219.57 crore during CPLY.

Gross Sale Composi on

Item	% of total Sale Composition		% Increase/(Decrease)
	2022-23	2021-22
Urea (manufactured)	65.12	67.75	(2.63)
Other Products	34.88	32.25	2.63

Owing to progressive shi in strategy of the Company, the composion of gross sale of the Company has undergone visible change. Against the Urea (main product) contribuon of 94.49% in the overall revenue of the Company during 2015-16, Urea contribuon has reduced to 65.12% while contribuon of non-Urea business has increased to 34.88 % during 2022-23.

Agriculture Extension Activi es

Agriculture is the main source of livelihood for the farmers, which include crops, animals and allied acvies. Agriculture Extension Acvies are being undertaken by your Company by educang farmers on efficient use of all agro-inputs along with total know-how on improved and scien c methods of culv aon.

Dealers/Retailers are important link between the Company and the farmers. They are key change agents in mov ang farmers to use ferliz ers in a balanced manner. During the year 2022-23, 49 Dealers/Retailers Orientaon Programmes were conducted and more than 2100 dealers/ retailers were facilitated by upgrading their knowledge regarding ferliz ers/ agro products and improved crop pracces so that latest informaon can be disseminated at point of purchase to the farmers. Informaon on Bio-ferliz ers and City Compost has also been given in each and every training programme.

Your Company has always laid emphasis on uplimen t of farming community by educang them on various aspects of crop producon, animal husbandry and other allied agriculture sectors. 41 Farmer Training programmes were organized during 2022-23 and more than 2400 farmers got benefited. Through these educaonal programmes, farmers were sensiz ed to issues related with soil ferlity status including de ciency of various nutrients, their remedy to increase ferliz er use efficiency and maximize yields. The farmers have also been educated on benefits of long term usage of Bio-ferliz ers and City Compost through these programmes.

Agriculture Universies, Research Staons, KVKs are the knowledge centres for latest farming techniques, new and high yielding crop variees, innovav e technologies in agriculture and allied agriculture sectors etc. During the year with the objecv e to promote balanced and sustainable use of ferliz ers, soil analysis, methodology of applicaon of different ferliz er, new technologies etc., an opportunity was given to the farmers to pracc ally visit the above places by organizing farmers visit to nearby Agriculture University/Research Staon/ KVKs. More than 800 farmers got bene ed through 12 programmes during the year 2022-23.

During the year 2022-23, total 230 demonstraons had been laid out at farmers elds to demonstrate benefits of use of new Bio-ferliz ers (Zn/K solubilizing), City Compost, Bentonite Sulphur and water soluble NPK ferliz er on crop growth and yield as compared to farmers own pracces. 240 Field days were organized in the demonstraon elds and more than 12300 farmers got bene ed from such programmes.

Your Company is playing a vital role in supporng farmers by undertaking soil analysis for macro and micro nutrients through its 6 Stac and 5 Mobile Soil Tesng Labs (MSTLs) in various States. Based on the analysis, farmers are advised on soil ferlity management through raonal use of manure, ferliz ers and other inputs to make agriculture more producv e and sustainable. During the year, around 30000 soil samples were collected & analysed for macro and micro nutrients and recommendaons were given to the farmers.

During the year 2022-23, your Company connued its endea vour to render soil tesng ser vices at all the farmers doorstep by organizing soil tesng campaigns. During these campaigns, services of our Mobile Soil Tesng Vans and laboratory sta were suitably uliz ed for collecng soil samples by demonstrang the correct method of sampling to the farmers and by offering on the spot soil analysis and advisory on the basis of soil test results.

Other than this, 30 Jeep campaigns were organized in the States of Punjab, Haryana, Rajasthan, HP, UP, MP, AP and Telangana. Through these campaigns, farmers were given informaon on new products launched by the Company and its usage and benefits. More than 11,000 farmers got bene ed by these programmes.

Parcipa on in agr o exhibions and univ ersity Kisan Melas is very e ecv e way to communicate directly with the farmers and also to interact with sciens ts and experts from various agricultural elds. During the year 2022-23, your Company parcipa ted in 39 Krishi Melas/Agriculture Exhibions organized by leading Agriculture Universies, Agriculture Departments etc. in the States of Punjab, Haryana, UP, U arakhand, Bihar, MP, Chhasg arh, Rajasthan, AP and Telangana which was a ended by more than 77,000 farmers.

As per guidelines of Department of Ferliz ers (DoF) dated 24.08.2022 and with the objecv e to provide all the agricultural inputs and services to the farmers under one roof along with soil tesng and advisory ser vices, 22253 ferliz er retailer shops were allocated to your Company all across its markeng territory to convert the same into Pradhanmantri Kisan Samridhi Kendras (PMKSKs). Total 8719 PMKSKs has been converted into PMKSKs so far by pung up a fascia in the shops. However, installaon of Fascia, Smart TVs and other facilies as per DoF guidelines dated 24.08.2022 in the remaining retailers shops is under progress.

Your company has also signed a Memorandum of Understanding (MoU) with CSK H.P. Agriculture University, Palampur, H.P. for establishing NFL professor chair in the department of soil science with an objecv e of developing technologies on precision agriculture, judicious use of ferliz ers and improving scien c methods of culv aon to enhance soil health and producvity . The MoU also mandates to promote use of Ar cial Intelligence (AI), Informaon and Communicaon Technologies (ICT) for nutrient and water management.

As per Government direcons, ve Nos. of agricultural Drones were procured by NFL in the month of January 2023. Since installaon, NFL is organizing programs on regular basis in its Markeng territory to popularize the use of Agricultural Drone among the farmers and generate the awareness.

Projects

The details of the projects including capital expenditure envisaged are given in the Management Discussion & Analysis Report.

Management Discussion & Analysis Report

Management Discussion & Analysis Report covering business prospects including modernizaon, diversi caon, investments, markeng plans, raw materials, human resource, internal management controls including financial performance review, government policies and other factors having impact on the performance of the Company operaons and future outlook of the Company is appended as Annexure-1 to this Report.

Business Responsibility and Sustainability Report

SEBI vide circular no. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated 10.05.2021 had introduced the "Business responsibility and sustainability reporng by listed enes" , which introduces new reporng requirements on Environment, Social and Governance parameters [ESG parameters] called the Business Responsibility and Sustainability Report (BRSR). The reporng as r equired under Regulaon 34 of SEBI (L ODR) Regulaons, 2015 w as amended for the listed enes and the same shall be mandatory for the top 1000 listed companies (by market capitalizaon) with effect from the financial year 2022-2023.

Your Company in adherence to the circular had prepared the Business Responsibility and Sustainability Report for the financial year ended March 31, 2023 and the same is appended as Annexure-2 to this Report. Business Responsibility and Sustainability Policy is available on the website of the Company at www.naonalf erliz ers.com.

Stakeholders relationship

Details of stakeholders relaonship are given in the Business Responsibility and Sustainability Report annexed to this Report.

Customers relationship

Details of customer relaonship ar e given in the Business Responsibility and Sustainability Report annexed to this Report.

Corporate Governance

The Company is commi ed to maintain the highest standards of Corporate Governance being the fountain head of value creaon for all stakeholders especially shareholders. The Company has in place a well-de ned "Corporate Governance Mechanism" which considers the interest of all stakeholders.

Pursuant to SEBI (LODR) Regulaons, 2015 (as amended from me to me) and DPE Guidelines on Corporate

Governance, a report on Corporate Governance is appended as Annexure-3 which forms part of this Report.

The Secretarial Auditor of the Company have examined and cer ed Companys compliance with respect to condions enumerated in SEBI (LODR) Regulaons, 2015 and DPE guidelines on Corporate Governance. Secretarial Auditors Cer c ate on Corporate Governance and explanaons of the Management to Secretarial Auditors observaons during the year 2022-2023 is appended as Annexure-4 which forms part of this Report.

Parliamentary Commi ees during 2022-23:

The following Parliamentary Commi ee interacted with the Company during the year 2022-23:

1. Study visit of the Standing Commi ee on Chemicals and Ferliz ers to Srinagar, Pune, Mumbai and Ahmedabad from 10th June, 2022 to 15th June, 2022.

2. Study visit of Commi ee on Public Undertakings (COPU) to Chennai and Bhubaneshwar from 9 to 12th January, 2023 regarding Corporate Governance.

Material Orders of Regulators

Following regulatory orders issued for implementaon may affect/ have affected the operaons of the plants:

1.0 Amendment in import policy of Urea

Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce & Industry, Government of India issued a no c aon on 3rd November, 2021 regarding amendment in import policy condion of Urea [EximCode 31021OO0 ] in the ITC (HS) 2017, Schedule - I (Import Policy) with immediate effect.

According to the revised policy, import of urea was allowed through RCF and NFL subject to Para 2.20 of Foreign Trade Policy, 2015-2020. In addion, import of urea was also allowed through IPL for a period upto 31st March, 2022. However, import of Technical Grade Urea (TGU) meant for non-agricultural purpose/ industrial use/ NPK Manufacturing shall be "Free".

2.0 NBS rates for P & K fertilizers for Kharif 2022-23

In order to keep the P&K ferliz er prices a ordable to the farmers, DoF issued a no c aon on 27 thApril, 2022 and enhanced the subsidy rates for P&K ferliz ers under NBS policy for kharif 2022 (from 1 April, 2022 upto 30 September, 2022). The per kg NBS rates of N, P, K and S increased from Rs.18.789, Rs. 45.323, Rs. 10.116 and Rs. 2.374 during rabi 2021-22 to Rs. 91.96, Rs. 72.74, Rs. 25.31 and Rs. 6.94, respecv ely, for kharif 2022.

Accordingly, NBS rates per MT of DAP and MOP increased from Rs. 33,000 and Rs. 6,070 per MT during rabi 2021-22 to Rs. 50,013 and Rs. 15,186 per MT, respecv ely, for kharif 2022. NBS rates for NP/NPK grades of ferliz ers ranged between Rs. 27,947 per MT and Rs. 46,116 per MT for kharif 2022. However, subsidy on SSP and Potash Derived from Molasses remained unchanged at Rs. 7,513 per MT and Rs. 1,467 per MT, respecv ely, for kharif 2022. The per tonne addional subsidy for for ed ferliz ers with boron and zinc connued and remained unchanged at Rs. 300 and Rs. 500, respecv ely.

3.0 NBS rates for P & K fertilizers for Rabi 2022-23

As per OM dated 2 November, 2022, DoF revised the subsidy rates for P&K ferliz ers under NBS policy for rabi 2022-23 e ecv e from 1 October, 2022 upto 31 March, 2023. The per kg NBS rates for N has been increased while P, K and S reduced. The per kg NBS rates of N, P, K and S revised from Rs. 91.96, Rs. 72.74, Rs. 25.31 and Rs. 6.94 during kharif 2022 to Rs. 98.02, Rs. 66.93, Rs. 23.65 and Rs. 6.12, respecv ely, for rabi 2022-23.

Accordingly, NBS rates per MT of DAP and MOP reduced from Rs. 50,013 and Rs. 15,186 per MT during kharif 2022 to Rs. 48,433 and Rs. 14,188 per MT, respecv ely, for rabi 2022-23. NBS rates for NP/NPK grades of ferliz ers ranged between Rs. 26,864 per MT and Rs. 46,188 per MT for rabi 2022-23. However, subsidy on SSP and Potash Derived from Molasses remained unchanged at Rs. 7,513 per MT and Rs. 1,467 per MT, respecv ely. The per tonne addional subsidy for for ed ferliz ers with boron and zinc connued and remained unchanged at Rs. 300 and Rs. 500 respectiveely.

Summary of Changes in NBS Rates during FY 2022-23 and its impact on reduction of subsidy

	NBS ( Rs. Per Kg of Nutrient )
Nutrient	OM Dt 27.04.2022 Kharif-2022	OM Dt 02.11.2022 Rabi-2022-23	OM Dt 18.05.2023 Revised for	OM Dt 18.05.2023 Kharif-2023
			01.01.2023 to 31.03.2023
N	91.96	98.02	99.27	76.49
P	72.74	66.93	49.94	41.03
K	25.31	23.65	25.70	15.91
S	6.94	6.12	2.84	2.80

4.0 Guidelines relating to Potash Derived from Molasses (0-0-14.5-0) under NBS scheme

DoF issued an O ce Memorandum on 12 July, 2022 regarding the guidelines relang to Potash Derived from Molasses (0-0-14.5-0) under NBS scheme. The main points in the guidelines as stated below:

a) Manufacturers of granulated Potash Derived from Molasses shall be provided subsidy under NBS Scheme.

b) Granulated Potash derived from Molasses with a minimum 14.5% of K20 content as per FCO 1985 as amended from me to me will be allowed for claiming subsidy.

c) The subsidy on Potash Derived from Molasses will be inclusive of the freight subsidy.

d) With regard to markeng arr angement, the manufacturer of Potash Derived from Molasses shall be eligible for sale by entering into markeng arrangement with marketers under inma on to DoF and the ferliz er manufacturers including importers which are registered under the subsidy scheme of DoF shall be considered as marketer of Potash Derived from Molasses.

e) Regarding quality, manufacturer/marketer/retailer/dealer will be jointly liable for ensuring/ maintaining quality of the ferliz er as per the extant rules/ guidelines issued by DoF. Quality tesng will be done by the manufacturer in the NABL accredited labs/ State Government registered labs.

5.0 Implementation of One Nation One Fertilizer

DoF issued an OM on 24 August, 2022 to implement One Naon One Ferliz er by introducing Single Brand for

Ferliz ers and Logo under Ferliz er subsidy scheme namely "Pradhanmantri Bhary a Janurvarak Pariyojna (PMBJP).

The single brand name for Urea, DAP, MOP and NPKs, etc. would be Bharat Urea, Bharat DAP, Bharat MOP and Bharat NPK, etc., respecv ely, for all ferliz er companies, State Trading Enes and ferliz er Markeng Enes. A logo indicang Ferliz er Subsidy scheme namely Pradhanmantri Bhary a Janurvarak Pariyojna will be used on the respecv e ferliz er bags.

As per OM, the print will be done on one side of ferliz ers bag. Two-third of the Ferliz ers bag will be used for new brand and logo with Pradhanmantri Bhary a Janurvarak Pariyojna and one-third will be used for using Ferliz er companies name, logo and other informaon as required in different Rules & Regulaons, etc.

Further, on 1 November, 2022 DoF informed all ferliz er companies that the design of urea bag and logo forwarded earlier must be adopted by ferliz er manufacturers /importers within the following melines:

Sr. No. Type of fertilizer	Timeline
1. Imported Urea	30 th November, 2022
2. Indigenous Urea	30 th November, 2022
3. Imported P&K	30 th November, 2022
4. Indigenous P&K	31 th December, 2022

The release of ferliz er subsidy to companies will be considered only for ferliz ers dispatched in the new bags a er the aforesaid cut-of dates.

6.0 Implementation of NUP-2015 Energy Norms:

Department of Ferliz ers (DoF) vide le er dated 28-03-2018 issued a No c aon revising Energy Norms under NUP- 2015 for years 2018-19 and 2019-20. Through this no c aon, the Target Energy Norms under NUP-2015 for NFL

Bathinda, NFL Panipat, NFL Nangal and NFL Vijaipur-I were extended for further period of 2 years ll 31 March, 2020 with a penalty of 2% & 5% for financial years 2018-19 and 2019-20 respecv ely. Subsequently it was further extended ll 30 September, 2020 with a penalty of 10%. The token penalty was equivalent to percentage energy difference between exisng NUP Energy norms and Target Energy norms of NUP-2015.

However a er no c aon of DoF dated 31.03.2023, the target energy norm for Bathinda, Panipat and Nangal Units of 6.5 Gcal/MT of Urea has been implemented from 01.04.2022 whereas as per no c aon dated 18-11-2022 of DoF, target energy norms of 5.5 Gcal/MT of Urea for Vijaipur-I shall be implemented from 01.04.2023.

To achieve these energy targets, NFL installed of GTG-HRSGs at Bathinda, Panipat and Nangal Unit at a total project cost of Rs 690 crore whereas various energy saving schemes had been implemented at Vijaipur complex at a cost of Rs 235 crores.

The GTG-HRSG plants at Bathinda & Nangal units were put into connuous operaon. Similarly, at Vijaipur-I & II all the schemes and sub schemes for energy savings got completed by March, 2022.

The implementaon of energy savings schemes at all NFL units got severely delayed due to spread of Covid-19 w.e.f. March, 2022.

Although target norms for all the units have been enforced by DoF, but Vijaipur-I unit could not achieve the target energy norms of as 5.5 Gcal/per tonne of Urea as also envisaged in TEFR prepared by PDIL and its energy is expected to remain higher than norm. NFL has requested DoF that target energy norms for Vijaipur-I unit may kindly be reviewed.

7.0 Plastic Waste Management Rules 2016

The Ministry of Environment Forests and Climate Change (MoEF & CC), Government of India, vide Gaze eNo c aon dated 18 March, 2016 has specified rules for Plasc Waste Management. The Rules x the responsibility of local bodies, Gram Panchayat and Waste generators, as well as producers, importers and brand owners for collecon and management of plasc waste. However, subsequent amendments have also come in 2018 and later on Plasc Waste Management Rules were amended as Plasc Waste management Rules 2022.

Ferliz er industry falls under the category of brand owners as the ferliz er products are sold in plasc bags that are mul-la yered and composed of HDPE/HDPE lined with polypropylene. All the Brand Owners who introduce the products in the market have to establish a system or plan for collecng back the plasc waste generated due to their products. As per rules NFL has to register with Central Polluon Control Board (CPCB) and submit along with acon plan to comply with Extended Producer Responsibility (EPR) obligaon as menoned in the rule.

Accordingly, NFL applied for the registraon and a er approval NFL got registraon as a Brand Owner under PWM

Rules on 21.06.2022 with 01 year validity. The same shall be renewed every year.

CPCB awarded the registraon along with xing an EPR target (collecons & recycling of plasc waste) of 10914 MT (Cat-II)/ exible plasc in the FY 2022-23. To fulfill the EPR target, NFL engaged agencies to collect & recycle the plasc waste on behalf of NFL.

As of now NFL has completed its EPR obligaon under the rule for FY 2022-23. For the current year i.e. FY 2023-24, renewal of registraon shall be done shortly and according to the target fresh tender shall be oated to fulfill the statutory obligaon for the year.

The Right to Information

In consonance with the spirit of Right to Informaon Act, the Company has created necessary mechanism as required under the Act. The Public Informaon Officers and Appellate Authories are e ecv ely responding to the requests and appeals of the applicants. The names of all PIOs/ Appellate Authories/ Transparency Officer are displayed on the Companys website. During the year, 312 RTI applicaons were received and were dealt with as per provisions under Right to Informaon Act, 2005.

Vigil Mechanism

Pursuant to the provisions of Secons 177(9) and (10) of the Companies Act, 2013, a Vigil Mechanism for employees and others to report genuine concerns has been established.

Whistle Blower Policy

Company believes in transparency and propriety in all 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 behavior, actual or suspected fraud or violaon of Code of Conduct or E thics Policy. The Policy provides for adequate safeguards against vicmiz aon of whistle blowers. The policy is reviewed periodically. No employee or other stakeholders were denied access to the Audit Commi ee. Whistle Blower Policy is available on the website of the Company at www.naonalf erliz ers.com.

Integrity Pact

With the commitment to maintain the highest standard of transparency and governance, your Company has entered into an integrity Pact with Transparency Internaonal and has also appointed Independent External Monitors (IEMs), as approved by CVC. Structured Meengs are held with IEMs on regular intervals and threshold value is Rs. 1 crore for signing of Integrity Pact for purchase/works contracts.

Vigilance

Vigilance Division of the Company is headed by CVO. The CVO is assisted by a team of o cers drawn from various funconal departments. Vigilance set up is operaonal in Corporate O ce, all Manufacturing Units as well as Zonal Markeng Ofices.

Promoon of good governance remains the core area of vigilance. Awareness is an important cornerstone for good governance. An enlightened employee not only contributes in achieving the organizaonal goals but is also instrumental in system improvement.

As an e ort towards promong Prevenv e Vigilance, Workshops / Training Programs were conducted during the year in all O ces & Producon units. These training programmes focused on various issues related to manuals and procedures. In line with the guidelines of CVC & DoF with respect to Prevenv e Vigilance Module, two days training programmes were conducted for in service o cials working on sensiv e posts and also new appointees were sensiz ed on this.

Special Seminars on vulnerable area are being organized in all manufacturing Units and Zonal O ces involving officials at all levels who are dealing with Tenders.

Regular prevenv e vigilance acvies such as Scrunies, Surprise checks, Vigilance clearance for administrav e decisions, enforcement of Transfer Policy and Rotaon of Officers on Sensiv e Posts were also carried out in close coordinaon with the Management. At the same me, invesg aon of complaints received from various sources and follow up of pending departmental acon on previous invesg ated cases were also done with due diligence.

Periodic Vigilance Reports preparaon of Agreed List of Officers, List of Officers of Doubul Integrity, and observance of Vigilance Awareness Week in Units, Zonal O ces and Corporate O ce were the major acvies conducted during the year.

The working of vigilance wing of NFL is based on a proacv e, parcipa v e and focused approach. The roles and responsibilies of vigilance o cers are regularly monitored and reviewed to bring the focus on systemic improvements.

MoU

The Department of Public Enterprises, Government of India, in order to improve accountability and giving higher autonomy to Public Sector Enterprises, introduced the Concept of MoU during early ninees. NFL signed its first MoU with the Department of Ferliz ers (DoF) for the year 1991-92.

Based on financial performance and achievement of other parameters laid down, your Company has been rated "Good" as per the Memorandum of Understanding (MoU), signed with the Government of India for the financial year 2021-22. From the year 2021-22 and onwards, DPE has started data entry module of digital MoU Dashboard for CPSEs for entering data. Accordingly, MoU for the year 2022-23 was generated through online MoU portal a er entering requisite informaon. The Ministry and the CPSEs were requested to sign this system generated MoU. Further Company shall submit actual achievement against all the parameters for 2022-23 in the online MoU portal for evaluaon.

Awards & Accolades received during 2022-23

Bathinda Unit won award for Excellent Work in Hindi from Indian Language and Cultural Centre in Lonavala, Maharashtra.

Vijaipur Unit received FAME NATIONAL AWARD 2021-22 (PLATINUM AWARD) towards Excellence in Occupaonal Health and Safety in ferliz er industry.

Bathinda Unit has received 01 no. IV level award of "Prashansa Patra" for appreciable achievement in Occupaonal Health and Safety during assessment period of 2018-2020 by Naonal Safety Council, Mumbai for Safety Award-2021.

Nangal Unit received First prize for doing excellent work in Rajbhasha for the year 2021-22 from Town O cial Language Implementaon Commi ee (TOLIC).

NFL received First Prize from Ministry of Chemicals and Ferliz ers for Best Performance in Hindi. Shri Nirlep Singh Rai, CMD received this award from Shri Mansukh Mandaviya, Honble Minister of Chemicals and Ferliz ers and Health in Hindi Salahkar Sami meeng held in Delhi.

Bathinda Unit has received Gold Award in 12 Exceed Energy E ciency by Sustainable Development Foundaon (SDF) 2022 in July 2022.

Vijaipur Unit received "Grow Care India Training Excellence Awards 2022 under HR Category Gold Award" (GROW CARE INDIA HR AWARD 2022) and Gold Award under Grow Care India OHS Award 2022 in Ferliz er Sector.

NFL Bathinda Unit has been declared winner of 22 Greentech Environment Award 2022 for outstanding achievement in Environment Protecon.

Panipat Unit has secured the silver Award in the category of Environment Preservaon in the 12 Exceed Environment Award & Conference 2022 organized by Sustainable Development Foundaon.

Nangal Unit has received "WINNER" award for outstanding achievement in Environment Protecon category during 22 Genentech Environment Award 2022 held at Guwaha.

Nangal Unit has won the GOLD Award under Apex India Occupaonal Health and Safety, HR Business Excellence Award 2022 in Ferliz er Sector for "Outstanding achievement in Safety Management"

NFL Panipat received Green Crest Awards-2022 under "PLATINUM" category.

NFL Bathinda Unit has received 02 no. awards in November:-

Rajbhasha Shiromani Prize from the Indian Language & Culture Centre, New Delhi and

1 Prize for Excellence in Hindi from TOLIC (Narakas), Bathinda th

NFL received Eight Excellence "Awards during 16 Global" Communicaon Conclave organized by PRCI in Kolkata. Company received six awards for its various collaterals. In the individual category, Sh. B V Vi al, CGM (HR) and Sh. Sanjeev Randeva, DGM (CC & HR) received the awards.

NFL Nangal Unit has been selected for "Gold Award" under Apex India Green Leaf Award 2022 for Energy E ciency category in Ferliz er Sector.

NFL Vijaipur Unit has been selected for Gold Award in Ferliz er Sector for

Grow Care India Environment Award 2022.

Grow Care India Waste Management Award 2022.

Inivafives under Corporate Social Responsibility

Company is constantly working towards inclusive growth in society and is implemenng various developmental acvies under its Corporate Social Responsibility (CSR).

The company allocated a CSR budget of Rs.140.00 Lakh for the FY 2022-23 and incurred an expenditure of Rs.174.42 Lakh during the year. This included expenditure on schemes approved in previous years but carried forward in the year 2022-23.

In the year 2022-23, the focus of CSR acvies of the Company was on the theme given by Department of Public Enterprises (DPE) i.e. Health & Nutrion. For promong prevenv e Healthcare, the company undertook a project to run a Mobile Digital Health Clinic for prevenv e screening of the masses for the essenal metabolic vitals in slums and rural areas of Delhi-NCR. Also, the Company provided Digital Programmable Hearing Aids to the hearing-impaired persons from weaker secon of the society in Andhra Pradesh.

In addion, the Company undertook a project aimed at enhancing the Nutrion and Health of Government School Children through the "GiMilk Program" in Aspiraonal District Guna. Under this inia v e, a daily provision of 200ml of for ed, avored, and sterilized milk is supplied to school children throughout the enr e academic year.

The Company also distributed Long Lasng Inseccidal Nets (LLIN) of HIL in the rural areas of Punjab, Haryana, Madhya Pradesh & Telangana. These Mosquito nets would help in preven ng vector-borne diseases and safeguarding public health.

Further, the company has also undertaken a number of projects to promote school educaon among students from underprivileged secon of the society. The company has distributed Educaonal Material to the students from Government Primary Schools of remote villages near Delhi to promote regular a endance and increase interest in studies.

The Company has supported Government Schools in the vicinity of its plants with the provision of school desk & benches, IT enabled smart boards, RO Water facilies etc. In order to bring Divyangjan in mainstream of life, the Company has provided Braille Machines and special sports items to the blind students in Chandigarh.

A detailed report on the Corporate Social Responsibility is appended as Annexure-5 forms part of this Report.

RESEARCH & DEVELOPMENT

NFL had sponsored a research project tled "Cow dung processing and its conversion to Bio- for ed ferliz er with enhanced funconality: A pilot study" undertaken by ICAR-NDRI was spread over a period of three years (2018-21). The pilot study was successfully completed in December, 2021 & final project report was submi ed by ICAR-NDRI in January, 2022.

To further explore in R&D acvies, NFL is seng up an R&D centre at Nangal along with seng up of a pilot plant for trial producon of Nano ferliz ers and other agriculture based products etc. Procurement acon has been inia ted for required laboratory apparatus and other setup of R&D lab at Nangal. In addion to above, NFL is exploring signing up MoU with reputed instut es like Instut e of Nano Technology, Mohali and others in vicinity of NFL Nangal unit for R&D acvies in Nano Ferliz ers.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo

Disclosure in terms of the Companies (Account) Rules, 2014 in respect of Conservaon of Energy, Technology

Absorpon and Foreign Exchange Earnings and Outgo is appended as Annexure-6 forms part of this Report.

Safety, Environment and Sustainable Development

Company has undertaken various inia v es for adopng best pracces for health, safety environment management and sustainable developments and the details of the same is appended as Annexure-7 forms part of this Report.

Particulars of Loans, Guarantees, Security and acquisi?on under Section 186 of the Companies Act, 2013

Parcular s of loans given, guarantees provided, investments in securies and acquisions made by the Company during the year under review are given in Form MBP-2 and the same is appended as Annexure-8 forms part of this Report.

Joint venture /Associates Companies

Details of Joint Venture/Associates Companies pursuant to Secon 129(3) of the Companies Act, 2013 the statement containing the salient features of the Financial Statement of the Associate Company/Joint Venture Company is, included in the Consolidated Financial Statements is appended as Annexure-9 forms part of this Report.

Companies which have become or ceased to be subsidiaries, associates and joint ventures

During the year 2022-23, Company has not acquired or formed any new subsidiary, associate or joint venture. Similarly, no subsidiary, associate or joint ventures have been ceased by way of sale of shares, amalgamaon, winding up etc.

Related Party Disclosures

The parcular s of contracts/arrangement entered into by the Company with related pares referred to in Secon 188(1) of the Companies Act, 2013 including arms length transacons under third proviso thereto are disclosed in Form AOC-2 and the same is appended as Annexure-10 forms part of this Report. Related Party Transacon Policy of the Company is available at www.naonalf erliz ers.com.

Capital Expenditure (CAPEX)

The achievement in CAPEX is 160 crore excluding capital work in progress (CWIP) in the year 2022-23.

Risk Management

The chemical ferliz er industry is operated in a hazardous environment and faces many risks including those related to health, safety and environment in addion to general business & financial risks. In order to mig ate them, the company has a comprehensive Risk Management Policy which is regularly reviewed and a periodical review of the risks, procedures and strategies is undertaken.

To review the new risks evolved during the quarter along with mig aon acon undert aken as well as ancipa ted risks along with mig aon acons planned in future, the company has a two er system where quarterly risks report is first reviewed by the Risk Assessment Commi ee (RAC) and therea er final report is submi ed to Risk Management Commi ee (RMC) for its recommendaons before submission to Audit Commi ee and the Board of Directors. E orts are made in a planned way to obviate the risks either fully or to minimize their impact.

Under Risk Management policy, all the risks along with mig aon acons undertaken have been reviewed by Risk Assessment and Risk Management Commi ees. Some of the major risks having severe financial impact as iden ed by the company include disallowing of minimum fixed cost for Vijaipur-I Unit under MNPS III w.e.f. 02.04.2014 and outstanding subsidiary due to delayed subsidiary payment.

Internal Financial Controls

Details in respect of adequacy of internal financial controls with reference to financial statements are given in

Management Discussion & Analysis Report.

Internal Financial Reporting/ and Control

The Company has, in all material respects, an adequate internal financial controls system over financial reporng and such internal financial controls over financial reporng were operang e ecv ely as at 31.03.2023.

Particulars of Employees

As per provisions of secon 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneraon of Manag erial Personnel) Rules, 2014, every listed Company is required to disclose the rao of the remuneraon of each Director to the median employees remuneraon and other prescribed details in the Boards Report.

As per no c aon dated 05.06.2015 issued by Ministry of Corporate A airs, these provisions are not applicable to the Government Company. Accordingly, these parcular s are not included in the Boards Report.

Public Procurement Policy of Micro and Small Enterprises (MSEs) Order, 2012

Public Procurement Policy for Micro and Small Enterprises (MSEs) was no ed by the Government under the Micro, Small and Medium Enterprises Development Act, 2006 which spula ted that 20% of total annual procurement of goods and services shall be made by all Central Ministries /Departments /CPSUs from Micro & Small Enterprises (MSEs). Within this percentage, a sub total of 4% procurement is to be made from MSEs owned by SC/ST entrepreneurs. The requisite informaon for the year 2022-23 is appended as Annexure-11 forms part of this Report.

Procurement through GeM Portal

The total procurement through GeM portal during 2022-23 was Rs. 151.15 Crore.

Human Resource Management

The Company has manpower strength of 2964 regular employees as on 31.03.2023, which comprises 1454 Execuv es and 1510 Non- Execuv es. 197 women employees are on its roll, which is 6.65% of the total work force. The detailed analysis with regard to human resource including training and execuv e development programme have been made in the Management Discussion and Analysis Report.

Employee Strength: The Company had 2964 employees as at the end of FY 2022-2023 of which 1268 were SC/ST/OBC employees and 50 divyangjans.

Employee Benefits: The vision of the Company for its human resources is to create an enabling environment to enhance the efficiency of the organizaon. The aim is to encourage the employees to perform their best ability by a system of proper placements and incenv es, while creang an atmosphere of trust and a feeling that the organizaon cares about the wellbeing and personal aspiraons of the sta . This helps align personal aspiraons with professional goals and enhances efficiency. The Company runs mulple benefit schemes for its employees like Provident Fund, gratuity, pension, medical benefits, contributory pension scheme, concessional interest rates on loans, scholarships to employees children, execuv e health check-up etc. The Company also shares part of its profit with employees under its Performance Related Pay scheme in compliance with DPE Guidelines.

Human Rights: Recruitment policy of the Company does not permit any engagement of child labour, forced labour or involuntary labour, an independent Internal Complaint Commi ee has been constut ed at Corporate O ce and each Unit to promptly and appropriately handle complaints of sexual harassment at work places. The Company refrains from any discriminaon on the basis of caste, creed, gender or religion and strives to ensure a healthy work-life balance for its employees.

Employee Well Being: NFL believes that workforce is the greatest asset that propels the growth engine. Employees are considered as "Change Catalysts" and the Company nurtures and channelize the experse and talent of employees for growth performance, feedback, mov aon and training. The achievements and efforts are appreciated, acknowledged & rewarded.

On the health front also, Company looks a er each & every employee along with his / her dependents for protecon from unhygienic condions and treatment of various illnesses.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention,

Prohibi]on and Redressal) Act, 2013

Policy on Prevenon, Prohibion and Redressal of Sexual harassment of women at work place is in line with the requirements of the Sexual Harassment of women at Workplace (Prevenon, Prohibion & Redressal) Act, 2013. The Internal Complaints Commi ee (ICC) has been set up to redress complaints received regarding sexual harassment. No complaint of sexual harassment was received in the year 2022-23.

Details of proceedings pending under the Insolvency and Bankruptcy Code, 2016

During the year under review, no applicaon was made and no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the financial year 2022-23.

One-time Selemen t and Valuation

During the financial year 2022-23, no event has taken place that gives rise to reporng of details with respect to difference between amount of the valuaon done at the me of oneme selemen t and the valuaon done while taking loan from the Banks or Financial Instuons.

Implementation of Offcial Language Policy

The Company is making efforts for the propagaon and implementaon of o cial language policy of the Government of India. The quarterly meeng of O cial Language Implementaon Commi ee (OLIC) is regularly held in all the Units/O ces of the Company under the Chairmanship of Head of respecv e O ce/Unit to review the progress of use of Hindi in O cial work. Total 36 meengs were held during the year 2022-23.

To promote the use of Hindi, 36 Hindi Workshops were organized during the year in which 997 employees acv ely parcipa ted. Hindi Pakhwara was organized in all the Units/O ces of the Company to commemorate Hindi Diwas. During the year 57 programmes/compeons were organized for promong the use of Hindi and a total 1773 employees parcipa ted in them out of which 531 parcipan ts were awarded prizes. Besides, under Cash Incenv e Scheme 85 employees were given cash prizes for doing their o cial work in Hindi.

Two half yearly meengs were successfully conducted in compliances of the conduct and heading of Town O cial Language Commi ee (Undertaking), Noida on 22-07-2022 and 22-11-2022 by NFL, Corporate O ce through video conferencing under the Chairmanship of Chairman & Managing Director of NFL in which 68/77 nos. of nominated heads of members o ces and other O cial Language Officer a ended the meeng.

During the year 2022-23, the First Sub-commi ee of the Parliamentary Commi ee on O cial Language successfully conducted the Inspecon/T our programme regarding the use of O cial Language at Zonal O ce, Lucknow on 19.05.2022, Area O ce, Gorakhpur on 04.01.2023, Area O ce, Agra on 11.01.2023, Area O ce, Jodhpur on 13.01.2023 and Area O ce, Patna on 27.02.2023 respecv ely.

NFL, Corporate O ce, Noida was awarded First Prize for its excellent work in the eld of o cial language implementa on in the "Hindi Advisory Commi ee" meeting held in New Delhi on 23.06.2022 under the Chairmanship of the Honble Minister of Chemicals and Ferliz ers. Also, special honor was given to NFL O cial Language Officer in the said meeng. All Units/ O ces of NFL parcipa ted in the "Rajbhasha Sammelan" at Surat (Gujrat) organized by Department of O cial Language, GOI, from 14-15 September, 2022.

NFLs Bathinda Unit was awarded "Rajbhasha Shield" First Prize, under PSU category for its commendable work in the eld of o cial language during the year 2020-21 by TOLIC, Bathinda in November, 2022 and TOLIC, Chandigarh on 24.11.2022 bestowed NFLs Zonal O ce, Chandigarh with "Rajbhasha Shield" First Prize, under Board/ Corporaon/Undert aking category for its commendable work in the eld of o cial language during the year 2020-21.

The Ministry of External A airs, Government of India organized 12 World Hindi Conference from February 15 to 17 , 2023 at Nadi City, Fiji. In this conference, Hindi scholars, li erateurs, journalists, linguists and Hindi lovers from all over the world gathered on one pla orm. NFL, Corporate O ce, Noida was represented by senior o cials.

Inivafives taken for development of employees belonging to Scheduled Caste /

Scheduled Tribes /Other Backward Classes (SC/ST/OBC categories).

Company is commi ed to the development of employees belonging to reserved categories. An Implementaon Cell is funconal in all Units/ O ces of the Company to oversee the implementaon of Presidenal Direcv es on Reservaon Policy for SCs / STs. Liasion Officer has been appointed in each Unit / O ce and Chief Liasion Officer at CO, NOIDA to ensure due compliance of orders and instrucons pertaining to reservaon for SCs and STs and other concessions admissible to them. Meengs were periodically held at Unit level as well as at corporate level with the SC /ST Employees Welfare Associaons by the Management for redressal of grievances of SC /ST employees. A statement showing representaon of employees belonging to Scheduled Caste/Scheduled Tribes/Other Backward Classes/ Persons is appended as Annexure-12 forms part of this Report.

Presidential Direcfives

Schedule of Compliances with Presidenal Direcv e issued during financial year 2022-23 and during last three year preceding the financial year 2022-23 is as below:

Financial Year	Content of Presidential Direcfives	Compliance
2022-23	NIL	NIL
2021-22	NIL	NIL
2020-21	NIL	NIL
2019-20	NIL	NIL

Information Technology

Company has embarked on a journey to become an IT enabled organizaon to improve operaonal e ciencies and has made significant investments in digital assets and new technologies intending to address the companys future needs.

Major digital ini a ves include implementa on of centralized Dispatch Management System, Marke ng Management & Informaon System, Human Resource Management System, Employees Self Service portal and Online APAR system which are handled at Data Centre of Corporate O ce, Noida. Recently PRMS (Post-Rer ement Medical Scheme) portal has been made live for extending the medical benefits to the eligible ex-employees of NFL and their spouse.

In order to have secure access to business applicaons, SDWAN soluon has been implemented. To reduce the downme of internet access, redundant internet leased lines had been replaced at each Manufacturing Units, Zonal O ces and Corporate O ce, Noida. To prevent cyber threats, UTM based security appliances have been installed.

E-O ce applicaon has been implemented across the organizaon. This inia v e has given the twin benefit of being environment friendly (i.e. a step towards paperless o ce) and has resulted in reducon in le processing me, thus speeding up decision making.

To address the companys future needs, implementaon of ERP soluon SAP S4/HANA is under progress which is an integrated business soluon and will increase producvity , efficiency and will provide data on real me. The project is named as ‘SANGAM - Sow are Aligned for NFLs Growth and Modernizaon.

Material impact of CoVID-19 pandemic on operations and performance of the Company

During the FY 2022-23, there was no material impact of CoVID-19 pandemic on the operaons and performance of the Company.

AUDITORS

Statutory Auditors

The Statutory Audit of your Company was conducted by Chartered Accountants rms M/s. Arun K. Agarwal & Associates, Chartered Accountants and M/s Dhawan & Co., Chartered Accountants, Joint Auditors appointed by Comptroller & Auditor General of India (C&AG). Auditors Report on the Financial Statements including consolidated Financial Statements of the Company for the financial year 2022-23 is a ached.

Proposal authorising Board of Directors to decide & x remuneraon of Statutory Auditors appointed/to be appointed by the Comptroller and Auditor General of India for the F.Y. 2023-24 is placed for your approval.

Explanation in response to Auditors Quali cation

Statutory Auditors of the Company have issued an Audit Report with Unmodi ed opinion on Audited Financial

Results of the Company (Standalone & Consolidated) for the financial year ended 31.03.2023.

Comments of C&AG

The Financial Statement (Standalone and consolidated) of the Company are subject to comments of C&AG of India under Secon 143(6)(b) read with Secon 129(4) of the Companies Act, 2013 which shall be sent to shareholders separately.

Cost Auditors

As prescribed under Secon 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, the cost accounng records are being maintained by all the Units of the Company. Cost Audit for 2022-23 was carried out by Cost Auditors M/s K.G. Goyal & Associates, M/s Ravi Sahni & Co., M/s Ramanath Iyer & Co. and M/s R. K. Patel & Co., as prescribed under the Companies Act, 2013 and Rules framed thereunder. M/s Ramanath Iyer & Co. acted as the Lead Cost Auditor. Consolidated Cost Audit Report for the financial year 2021-22 was led with Ministry of Corporate A airs (MCA) on 07.09.2022.

Internal Auditors

Company has an Internal Audit Department headed by Deputy General Manager. To carry out Non-technical Audit, your company had appointed nine Chartered Accountant rms namely M/s. S.K.Mehta & Co, M/s. G.S. Mathur & Co., M/s. Raj HarGopal & Co., M/s J.Singh & Associates, M/s. Goyal Parul & Co., M/s. Chaturvedi & Co., M/s.S.N. Kapur & Associates, M/s. Amit Ray & Co., and M/s J.K.S.S & Associates for the year 2022-23. Technical Audit and IT/ EDP Audit were carried out by in-house internal audit teams.

Secretarial Auditors

M/s Kumar Naresh Sinha & Associates, Praccing Company Secretaries was appointed by the Board for undertaking the Secretarial Audit for the Financial Year 2022-23 in terms of Secon 204 of Companies Act, 2013 and Rules made there under. Secretarial Audit Report for the year 2022-23 and Managements explanaon to Secretarial Auditors observaons are appended as Annexure-13 which forms part of this Report.

Annual Secretarial Compliance Report for the Financial Year ended 31.03.2023 issued by M/s Kumar Naresh Sinha & Associates, Praccing Company Secretaries, under Regulaon 24A of SEBI (Lisng Obligaons and Disclosure Requirements) Regulaons, 2015 is appended as Annexure-14 which forms part of this Report.

Compliance with Secretarial Standards

The Company complies with all applicable Secretarial Standards issued by The Instut e of Company Secretaries of India.

Audit Commi ee

The detailed disclosures have been made in the Corporate Governance Report annexed to this report.

Nomination & Remuneration Commi ee and Remuneration Policy

Disclosures regarding Nominaon & Remuneraon Commi ee and Remuneraon Policy are given in the Corporate Governance Report annexed to this report.

Stakeholders Relationship Commi ee

Disclosures regarding Stakeholders Relaonship Commi ee are given in the Corporate Governance Report annexed to this report.

Corporate Social Responsibility and Sustainable Development Commi ee

Disclosures regarding Corporate Social Responsibility and Sustainable Development Commi ee are given in the Corporate Governance Report annexed to this report.

Companys policy on Directors appointment and remuneration

Ministry of Corporate A airs has granted exempon vide no c aon No. GSR463 (E) dated 05.06.2015 to the Government Companies from the provisions of Sec on 134(3)(p) of the Companies Act, 2013. Directors appointment and remuneraon is decided by the Government of India. Keeping in view the exempon, no Remuneraon Policy has been formulated.

Board & Commi ee Meetings

The details of Board Meengs, Commi ee Meengs and Meengs of Independent Directors are given in the Corporate Governance Report annexed to this report.

Annual Return u/s 92(3) of the Companies Act, 2013

The Annual Return of the Company will be made available on the website of the Company at

www.naonalf erliz ers.com.

Investor Education and Protection Fund

The Company has complied with all the provisions relang to the Investor Educaon and Protecon Fund (IEPF) under the Companies Act, 2013 and The Investor Educaon and Protecon Fund Authority (Accounng , Audit, Transfer and Refund) Rules, 2016, made there under. Company Secretary is the Nodal Officer to deal with IEPF Authority and compliances related thereto.

During the year 2022-23, an amount of 99,366 of unpaid/unclaimed dividend amount was transferred to Investor Educaon and Protecon Fund on account of unpaid/unclaimed dividend. Accordingly as per Secon 124(6) of the Companies Act, 2013 and Rules no ed thereunder, 13087 shares were transferred to demat account of IEPF. The details of the unpaid/unclaimed dividend and shares transferred to IEPF Account for the previous years are available at the website of the Company www.naonalf erliz ers.com.

Listing

Companys equity Shares are listed at Naonal Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Other disclosures regarding lisng regulaons have been made in Corporate Governance Report.

Listing Fee

Company has paid requisite lisng fee to the stock exchanges during the year 2022-23.

Service to Shareholders

All ma ers relang to transfer/transmission of shares, issue of duplicate share cer c ates, payment of dividend, de-materializaon and re-materializaon of shares and redressal of investors grievances are carried out by the Companys RTA i.e. M/s. MAS Services Limited, New Delhi.

Code of Conduct

Board Members and the Senior Management Personnel have a rmed compliance with the Code of Conduct for the financial year ended 31.03.2023. Code of Conduct has been uploaded on the website of the Company at www.naonalf erliz ers.com.

Corporate Policies & Codes

Details regarding various corporate policies & codes are given in the Corporate Governance Report and also available on the website of the Company at www.naonalf erliz ers.com.

Disclosure pursuant to FEMA Regulation

FEMA Regulaons applicable to Companies owned or controlled by non-resident enty(s) are not applicable to NFL.

Key Business Development

Overview of the Indian & Global ferliz er industry is given in the Management Discussion & Analysis Report annexed to this report.

Disclosure regarding Mis-appropriation of Funds

Statutory Auditors in its report emphasized regarding fraudulent misappropriaon of seed stock amounng to Rs. 0.64 crore by a Wheat Seed Producer under Warehousing and Processing of Wheat Seed Agreement with the Company during the year. The Company has led a police complaint in the matter.

Disclosure regarding frauds

No fraud has been reported by the Auditor to the Audit Commi ee or to the Board, during the financial year 2022-23.

Details of the sickness of the Company

Not applicable.

Management

Key Managerial Personnel (KMP)

In compliance with provisions of Secon 203 of the Companies Act, 2013, Key Managerial Personnel (KMP) posion as on 31.03.2023 is as follows:

Shri Atul Baburao Pal, had been appointed as Chairman & Managing Director (Addl. Charge) w.e.f. 01.09.2022. Shri Hira Nand had been appointed as Chief Financial Officer w.e.f. 24.05.2022. Shri Ashok Jha, Company Secretary. Further, Shri U. Saravanan has been appointed as Chairman & Managing Director w.e.f. 16.06.2023.

Board of Directors

Changes in Composi on

Shri Nirlep Singh Rai ceased to be C&MD w.e.f. 31.08.2022.

Shri Atul Baburao Pal was appointed as Addional Director [Director (Markeng)] w.e.f. 07.04.2022 in terms of DoF order 82/1/2021-HR- PSU (part) dated 25.03.2022 and was entrusted with Addional Charge of C&MD w.e.f. 01.09.2022 in terms of DoF order FI. No. 82/1/2014-HR-I dated 24.08.2022 for a period of three months which was extended for a period of three months w.e.f. 01.12.2022 vide DoF order 82/1/2014-HR-I dated 02.12.2022 which was further extended upto 15.06.2023 vide DoF order 82/1/2014-HR-I dated 27.02.2023. Further, Members of the Company appointed him as Director (Markeng), liable to rer e by rotaon through Postal Ballot resoluon passed on 25.06.2022. Shri Hira Nand was appointed as Chief Financial Officer w.e.f. 24.05.2022 & Addional Director [Director (Finance)] w.e.f. 17.06.2022 in terms of DoF order 82/3/2013-HR-PSU dated 17.06.2022. Further, Members of the Company appointed him as Director (Finance), liable to rer e by rotaon through Postal Ballot resoluon passed on 03.09. 2022.

Shri Rajan Kanwar was appointed as Addional Director [Director (Technical)] w.e.f. 21.10.2022 in terms of DoF order 82/1/2017-HR PSU-Part (1) dated 21.10.2022. Further, Members of the Company appointed him as Director (Technical), liable to rer e by rotaon through Postal Ballot resoluon passed on 24.12.2022.

Shri Dharam Pal, Government Nominee Director absents himself from all the Meengs of Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board. Accordingly, he has ceased to be Government Nominee Director of the Company w.e.f. 10.06.2022.

Ms. Neeraja Adidam was appointed as Government Nominee Director (part me Government Nominee Director) on the Board of the Company w.e.f. 14.10.2021 vice Shri Partha Sarthi Sen Sharma in terms of Order No. 95/1/2019-HR- PSU dated 29.09.2021 issued by Department of Ferliz ers, Ministry of Chemicals & Ferliz ers, Government of India. Further, members of the Company appointed her as Government Nominee Director, liable to rer e by rotaon through Postal Ballot resoluon passed on 25.06.2022.

Dr. Prathibha A. was appointed as part me Government Nominee Director w.e.f. 03.08.2022 in terms of DoF order 95/1/2019-HR-PSU dated 20.07.2022. Further, Members of the Company appointed her as Government Nominee Director, liable to rer e by rotaon in 48 Annual General Meeng held on 29.09.2022.

Dr. Poonam Sharma, Shri Ritesh Tiwari and Shri Kashi Ram Godara were appointed as Non-o cial Independent Directors on the Board of the Company w.e.f. 12.11.2021 in terms of Order No. 78/2/2006-HR-PSU (pt II) dated 05.11.2021 issued by Department of Ferliz ers, Ministry of Chemicals & Ferliz ers, Government of India. Further, members of the Company appointed them as Non-o cial Independent Directors, not liable to rer e by rotaon through Postal Ballot resoluon passed on 25.06.2022.

Dr. Venkata Sarvarayudu Thota was appointed as Non-o cial Independent Director on the Board of the Company w.e.f. 30.11.2021 in terms of Order No. 78/2/2006-HR-PSU (pt II) dated 05.11.2021 issued by Department of Ferliz ers, Ministry of Chemicals & Ferliz ers, Government of India. Further, members of the Company appointed him as Non-o cial Independent Directors, not liable to rer e by rotaon through Postal Ballot resoluon passed on 25.06.2022.

Shri Jyo Bhramar Tubid was appointed as Non-o cial Independent Director on the Board of the Company w.e.f. 21.04.2022 in terms of order 78/2/2006-HR-PSU (pt) dated 28.03.2022 issued by Department of Ferliz ers, Ministry of Chemicals & Ferliz ers, Government of India. Further, members of the Company appointed him as Non-o cial Independent Director, not liable to rer e by rotaon through Postal Ballot resoluon passed on 25.06.2022.

In addion to above, Shri U. Saravanan was appointed as Addional Director (Chairman & Managing Director) w.e.f. 16.06.2023 in terms of DoF order F. No. 82/1/2014-HR-I dated 15.06.2023 for a period with effect from the date of his assumpon of charge of the post ll the date of his superannuaon i.e. 31.01.2027 or unl further orders, whichever is earlier.

Details of tenure of Directors are provided in the Corporate Governance Report.

Re-appointment of Directors at the AGM

Pursuant to the provisions of Secon 152 of the Companies Act, 2013, Shri Hira Nand (DIN: 09476034) and Dr. Prathibha A. (DIN: 09692712), will rer e by rotaon at the ensuing AGM and being eligible have offered themselves for re-appointment.

Declaration by Independent Directors u/s 149(6) of the Companies Act, 2013

All Independent Directors have given declaraon that they meet the criteria of Independence as laid down in Secon 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulaons, 2015. In the opinion of the Board, the Independent Directors posses integrity and necessary experse & experience.

Re-appointment of Independent Directors

As per Secon 149(10) of the Companies Act, 2013, none of the Independent Directors have been reappointed on the Board of the Company during the FY 2022-2023.

Disquali cations of Directors

None of the Directors have commi ed any disquali caon as provided under Secon 164 of the Companies Act, 2013.

Remuneration to Directors

Details of Remuneraon to Directors and Company Secretary are given in the Corporate Governance Report annexed to this Report.

Performance evaluation of Board of Directors

The details regarding performance evaluaon of Board of Directors have been given in the Corporate Governance Report.

Directors Responsibility Statement

Pursuant to the requirement of Secon 134(3) (c) of the Companies Act, 2013, your Directors con rm that:

a) in the preparaon of the annual accounts, the applicable accounng standards had been followed along with proper explanaon relang to material departures;

b) the Directors had selected such accounng policies and applied them consistently and made judgments and esma tes that are reasonable and prudent so as to give a true and fair view of the state of a airs of the Company at the end of the financial year 2022-2023 and of the profit of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounng records in accordance with the provisions of the Act for safeguarding the assets of the Company and for prevenng and detecng fraud and other irregularies;

d) the Directors had prepared the annual accounts on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operang e ecv ely; and

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operang effecvtiely.

Acknowledgements

The Board of Directors acknowledge their gratude for the valuable guidance and support received from the various wings of Government of India, in parcular Department of Ferliz ers, Ferliz er Industry Coordinaon Commi ee (FICC), various State Governments, Financial Instuons, Banks, stakeholders and all others whose connued support has been a source of strength to the Company.

Your Directors also acknowledge the suggesons received from Statutory Auditors, Internal Auditors, Cost Auditors, Secretarial Auditors and Comptroller and Auditor General of India and are grateful for their connued support and cooperaon.

The Board would like to place on record its appreciaon to the hard work, commitment and unsn ng efforts put in by the employees at all levels throughout the year. Board also place on record acv e support and cooperaon received from Employees Trade Union and Officers Associaon for sustained improvements.