Dear Members,
Your directors present the 18th Annual Report on the business and operations of
NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED (NFCL) together with the Audited Financial
Statements of your Company for the year ended March 31, 2024, and other accompanying
reports, notes and certificates.
A.Business and Financial Highlights
The Standalone and Consolidated Financial Results of the Company for the year ended
March 31, 2024, prepared as per Ind AS reporting are as under:
Standalone Financial Results
Rs. in Crore
Consolidated Financial Results
Rs. in Crore
|
2023 2024 |
2022 2023 |
Particulars |
|
|
|
Current year |
Previous year |
| Net Sales/Income from Op- |
4,765.39 |
5,642.20 |
| erations |
|
|
| Other Income |
21.93 |
63.44 |
| Total Expenditure |
|
|
| a. Changes in inventories of |
10.83 |
(24.68) |
| finished goods, stock-in- |
|
|
| trade and work in progress |
|
|
| b. Cost of materials con- |
2,440.98 |
2,848.73 |
| sumed |
|
|
| c. Employee Benefits ex- |
97.50 |
98.93 |
| pense |
|
|
| d. Purchase of Stock-in- |
1.30 |
4.78 |
| Trade |
|
|
| e. Power and Fuel |
2,105.86 |
2,403.69 |
| f. Impairment losses |
634.07 |
675.19 |
| g. Other expenses |
265.59 |
230.93 |
| Total |
5,556.13 |
6,237.57 |
| Finance cost |
479.13 |
525.94 |
| Depreciation and amortiza- |
49.69 |
79.27 |
| tion |
|
|
| Profit/ (Loss) before excep- |
(1,297.63) |
(1,137.14) |
| tional items, and tax |
|
|
| Exceptional Items |
|
- |
| Profit/(Loss) before tax |
(1,297.63) |
(1,137.14) |
| Provision for tax |
- |
- |
| Deferred tax |
(13.74) |
(237.05) |
| Profit / (Loss) after tax |
(1,283.89) |
(900.09) |
| Other Comprehensive in- |
1.66 |
2.81 |
| come (net of tax) |
|
|
| Total Comprehensive income |
(1,282.22) |
(897.28) |
| Dividend equity shares |
- |
- |
| Tax on proposed dividend |
- |
- |
| Balance c/d to Balance Sheet |
(1,282.22) |
(897.28) |
| Paid Up equity share capital |
|
|
| (Face value of Re.1/- per |
59.81 |
59.81 |
| share) |
|
|
| Reserves excluding revalua- |
(3410.57) |
(2128.35) |
| tion reserve |
|
|
| Earnings per share (annual- |
- |
- |
| ized) in Rs. |
|
|
| Basic and Diluted |
(21.47) |
(15.05) |
|
2023 2024 |
2022 2023 |
Particulars |
|
|
|
Current year |
Previous year |
| Net sales/income from oper- |
4,765.39 |
5,642.20 |
| ations |
|
|
| Other income |
21.93 |
63.44 |
| Total expenditure |
|
|
| a. Changes in inventories of |
10.83 |
(24.68) |
| finished goods, stock-in- |
|
|
| trade and work in progress |
|
|
| b. Cost of materials con- |
2,440.98 |
2,848.73 |
| sumed |
|
|
| c. Employee Benefits ex- |
97.50 |
98.93 |
| pense |
|
|
| d. Purchase of Stock-in-Trade |
1.30 |
4.78 |
| e. Power and Fuel |
2,105.86 |
2,403.69 |
| f. Impairment Losses |
634.07 |
675.19 |
| g. Other expenses |
265.69 |
230.97 |
| Total |
5,556.23 |
6,237.61 |
| Finance cost |
479.13 |
525.94 |
| Depreciation and amortiza- |
49.69 |
79.27 |
| tion |
|
|
| Profit/ (Loss) before excep- |
(1,297.73) |
(1,137.18) |
| tional items and tax |
|
|
| Exceptional Items |
- |
- |
| Profit/ (Loss) before tax |
(1,297.73) |
(1,137.18) |
| Provision for tax |
- |
- |
| Deferred tax |
(13.74) |
(237.05) |
| Profit / (loss) after tax before |
(1,283.99) |
(900.13) |
| minority interest |
|
|
| Share of Loss transferred to |
- |
- |
| Minority Interest |
|
|
| Share of Loss from Associate |
- |
- |
| Company |
|
|
| Profit / (Loss) for the year |
(1,283.99) |
(900.13) |
| Other Comprehensive income |
1.66 |
2.81 |
| (net of tax) |
|
|
| Total Comprehensive income |
(1,282.33) |
(897.32) |
| Dividend-equity shares |
- |
- |
| Tax on proposed dividend |
- |
- |
| Balance c/d to Balance Sheet |
(1,282.33) |
(897.32) |
| Paid-up equity share capital |
|
|
| (Face value of Re.1/- per |
59.81 |
59.81 |
| share) |
|
|
| Reserves excluding revalua- |
(3,411.91) |
(2,129.58) |
| tion reserve |
|
|
| Earnings per share (annual- |
- |
- |
| ized) in Rs. |
|
|
| Basic and Diluted |
(21.47) |
(15.05) |
Financial Summary
The loss after tax for the year was Rs.1283.89 crores against Rs.900.09 crore for the
previous year. The loss before exceptional items for the period increased by Rs 160.49Crs.
The loss before impairment loss for the period increased by Rs 201.62 Crs mainly due to
accounting of Rs. 231.32 Crs revision in energy norms from Oct 2020 to March 2023 in the
previous year which is not there in the current year.
Share Capital
The Paid-up Equity Capital of the Company as on March 31, 2024, is Rs.59,80,65,003/-
consisting of 59,80,65,003 Equity Shares of Re.1/- each.
Transfer to Reserves
There has been no transfer to General Reserves during the Financial Year 2023-2024 in
view of losses incurred by the Company.
Dividend
The Board of Directors of your company, after considering the operational performance
and keeping in view the company's dividend distribution policy, has decided not to
recommend any Dividend for the year under review.
COMPANY' SAFFAIRS Plant Operations Urea
Your Company during the financial year 2023-24 manufactured 13.102 LMT of urea as
against 11.205 LMT in the previous year. The production for the year 2023-24 is less
compared to the usual level, owing to low load operation of the plants due to equipment
limitations.
Micro-Irrigation
Micro Irrigation Division had achieved a production of 92.4 Lakhs Meters in FY 2023-24
against 109.59 Lakh Meters during the previous year out of which PVC pipes production of
1.75 Lakh Meters in FY 2023-24 against 3.71 Lakhs Meters during the previous year.
Marketing Urea
Your Company achieved a sale of manufactured urea of 11.20 LMT compared to 9.18 LMT in
the previous year.
The total urea sales for both manufactured and imported urea was 11.20 LMT compared to
9.18 LMT of previous year.
Other Traded Products Traded Bulk Products
Your Company could not sell any of the Traded Bulk Products during the year. In the
previous year also, there was no sale of Traded Bulk Products.
Specialty Fertilizers
Your Company could sell 40.98 Mt of the Specialty Fertilizers during the year. In the
previous year, there was no sale of Specialty Fertilizers.
Micro-nutrients
Your Company could not sell any of the Micro-nutrients during the year. In the previous
year also, there was no sale of Mi-cro-nutrients.
Supplements and OSR
Your Company could not sell any of the Supplements & OSR during the year. In the
previous year also, there was no sale of Supplements & OSR.
Customized Fertilizers
Your Company could not sell any of the Customized Fertilizers during the year in
comparison with sales of 99 MT during the previous year.
Nagarjuna Brand
The Company has been using Nagarjuna Brand/ Trademarks under a License Agreement dated
January 29, 1998. The Company had defaulted in payment of royalty dues under the said
License Agreement. The Grantor had sent a notice for cancellation of the Royalty Agreement
as the Company has outstanding Royal payments. The granter had also claimed dues with RP
appointed by court in 2021 when the company was admitted to NCLT. However, upon stay from
NCLAT, and Agreement on settlement of outstanding dues, the Grantor had allowed
continuance of the Brand usage up to end of December, 2022. Consequent to expiry of brand
license, the Company is required to change the name of the Company.
Environment and Safety Environment
Your Company continues its mission of protecting the environment and has inculcated the
concept right down the organization. The statutory compliance on environmental matters is
being complied from time to time.
Health &Safety
By following the best practices and with adoption of international standards and
procedures, Plant Operations continued. Your Company as on March 31, 2024, completed
1,03,01,232 accident free man-hours by employees and contractors of the Company.
Further to strengthen the procedures and practices, MAH inspection at Ammonia Storage
Tanks and Cooling Towers Area, Safe Work Practices Audit, PPE Audit etc., were conducted.
Refresher Training has been given to Rescue Squad and basic Fire Fighting techniques to
Associates.
Change in the nature of business
During the year, there was no change in the nature of business of the company.
Material changes and commitments
The material changes and commitments affecting the financial position of the Company
which have occurred as at and post March 31, 2024, has been elaborated in the following
under Debt Resolution Proposal and SARFAESI Process by Assets Care and Reconstruction
Enterprise Limited (ACRE), the Secured Creditor.
Claims Against GAIL
After the GAIL pipeline accident in 2014, NFCL had initiated an Arbitration proceeding
against GAIL with a claim that there was no force majeure event and that GAIL was liable
for the financial losses suffered by the company on account of stoppage of natural gas
supplies from 27.6.2014 basis miss representations and gross negligence by GAIL.
The company had unfortunately lost the arbitration case with GAIL on 13.3.2023 wherein
the arbitrator concluded that that stoppage of gas was due to a force majeure event as
represented by GAIL.
Debt Resolution Proposal viz. sale of Ammonia/Urea and MI businesses with related
assets and liabilities.
NFCL a growing and profitable company in 2014 went into financial stress to due a GAIL
pipeline accident*. Subsequently the lenders and subsequently board and shareholders (as
per section 180 of the Companies Act, 2013) approved rectification of account as a
corrective action plan with funding to revive the company. The company could not be
revived due to various factors including inadequate funding approved for rectification of
account resulting in the lenders declaring default in 2018. The company had filed various
cases since 2018 against lenders for not implementing CAP with funding (there is no order
yet supporting the claims of the company). Various and significant efforts to revive the
company since 2018 failed to yield any results. The company via press came to know that
the erstwhile lenders of the company exited their debt through assignment of debt.
*The Company initiated arbitration on GAIL claim losses incurred on account of GAIL
pipeline accident which was dismissed by the arbitrator stating that it's a force majeure.
The Company received a mail correspondence along with a letter of intimation dated March
31, 2023 from M/s Assets Care & Reconstruction Enterprise Ltd (ACRE)(as a Trustee of
ACRE-112-Trust)thatall the consortium lenders have assigned to it, vide Assignment
Agreement dated March 29, 2023, entire fund based outstanding loans/financial assets along
with all its rights, titles, interest, underlying securities and guarantees thereof under
the relevant Financing Documents under section 5 of the SARFAESI Act, 2002.
SARFAESI Process by Assets Care and Reconstruction Enterprise Limited (ACRE), the
Secured Creditor
Consequently, ACRE, served notice under SARFAESI Act, on May 20, 2023, and the company,
without prejudice to the debt disputes, replied to the SARFAESI notice on July 17, 2023.
ACRE while disputing Company's claim had sought for a debt resolution vide letter dated
July 25, 2023. ACRE while disputing the companies claims had sought debt resolution
proposal from the company.
The company after failing to identify investors for the company for providing funding
for debt repayment/settlement and funding for CAPEX and working capital to turn around the
company, worked to identify strategic investors for core assets/business and non-core
assets to fund OTS to repay lenders. As per section 180 if the company wants to
voluntarily sell assets (without prejudice to the rights of the lenders), transfer, lease
and / or otherwise dispose of any assets of the company exceeding 20% of its net worth or
assets generating more then 20% income require members approval.
Consequently, the Board of Directors at their meeting held on August 14, 2023, and the
Members at their 17th Annual General Meeting held on September 15, 2023, took note of
ACRE's notice under the SARFAESI Actand approved: a) The sale of Ammonia/Urea and MI
businesses with related assets and liabilities to M/s. AM Green Ammonia (India) Private
Limited (purchaser company) via slump sale subject to certain Condition Precedents (CPs)
andsale/lease/ transfer dispose Non Core Assets. b) One Time Settlement (OTS) as debt
resolution with Asset Care and Reconstruction Enterprise Limited (ACRE) for an amount not
exceeding Rs 1500 Crores as full and final settlement towards of their total debts in
Nagarjuna Fertilizers and Chemicals Limited.
The sale and settlement proposal is subject to approval of lenders and any other
approvals and clearances s required for the transaction.
Further, the company had enumerated various risks for fulfillment of the above
approvals including initiation of SARFAE-SI process by lenders, delays in CP fulfillment
for slump sale which included energy claim approval and disbursal,lender not agreeing for
settling for lower amount than what's due while taking the approval from Board and
Members/Shareholders for OTS and funding for OTS (Slump Sale and Sale of Non Core Assets).
ACRE, while engaging with the company for OTS, was continuing to pursue the SARFAESI
process, consequent to serving notice under SARFAESI Act, on May 20, 2023., has
subsequently taken symbolic possession of the scheduled assets of the Company in its favor
on October 12, 2023.
Consequent to the approval of the Members/Shareholders for OTS and funding for OTS
(Slump Sale and Sale of Non Core Assets, the company on October 24, 2023, has formally
applied to ACRE without prejudice accepting the debt and sought permission to allow the
company (1) sell the core business via slump saleof Urea and MI businesses(2) to sellthe
noncore assets as in line with and for the amount approved by Acre and (3) provide a One
Time Settlement for an amount of Rs. 1500 crores as full and final settlement towards of
their total debtin NFCL.
Basis the proposal of the company for One Time Settlement as a debt resolution, ACRE
communicated to the company on October 31, 2023, that Settlement Amount proposed to be
paid by the Company is based on an offer to sell the ‘Urea' and ‘Micro
Irrigation Business' on a slump-sale basis which is subjective on several conditions'
precedents required to be fulfilled by NFCL before effectuating the sale and that as the
conditions precedents have either not been fulfilled as on that date by NFCL or are
contingent on various other events that the Settlement Proposal submitted to ACREtherefore
is tentative and not binding and thereforewas unable to consider and/ or appraise the
Settlement Proposal extended by the company at that point in time and hence it will
proceed with SARFAESI process initiated by it.
In relation to the CPs the most important CP is the energy claim reimbursement. The
Company, based on the developments on the claim with Government (DOF), stated that it was
optimistic and will continue to work to fulfill the Conditions Precedents (CPs) for Slump
Sale Transaction, Sell Non Core Assets and raise funds for One Time Settlement (OTS). That
company was optimistic and was working / pursuing on fulfilling the Conditions Precedents
(CPs) for the closure of Slump Sale Transaction with M/s. AM Green Ammonia (India) Private
Limited, Sell non core assets and to get ACRE to agree to One Time Settlement (OTS) for Rs
1500 Crs as debt resolution instead of Rs 3500 Crs plus being claimed by ACRE.
Notwithstanding despite efforts to speed up the energy claims the company could not
succeed and the lenders continued with the SARFAESI process.
In view of the above,while asking the company to continue and speed up closure of CPs
for the approved Slump Sale transaction, the Board of Directors on December 24, 2023,
without prejudice, considered and approved the company's initiative to engage and workwith
ACRE on a One Time Settlement under SARFAESI/directly (or a combination of both) if any in
parallel to the current efforts on the Slump Sale transaction to amicably settle debt.
The company had as part of CAP funding obtained the board and shareholders approval as
per section 180 for obtaining loans and mortgage of assets. The company is obligated to
service and repay debt once availed. Once the current and fixed assets are mortgaged to
lenders the company does not have rights over assets if the company is unable to service
and repay debt (and is in default) and the lenders require no approval of the company, its
board or shareholders to recover their dues under the provisions of law if there is an
event of default.
While Board or Member's approval was required to repay the debt as a matter of good
governance the company obtained the approval for and the amount approved by the board for
negotiations/debt settlement with ACRE is the amount equal to or lower than the amount
realized from sale of core and non-core assets and lower than the amounts due to ACRE.
Accordingly, the company engaged with and agreed to cooperate with ACRE vide OTS
Cooperation Agreement (Letter dated January 12, 2024) OTS amount is the amount realized
from the sale of assets (Core assets Rs.1350/- Crs and Non-core assets Rs.200/- Crs), as
sought by ACRE, without prejudice to the rights of the company and guarantors for a One
Time Settlement (OTS) under SARFAESI/directly. The final OTS amount was yet to be
determined and will be communicated by ACRE to the company as the sale process was yet to
be completed. Subsequently, ACRE,as part of the SARFAESI process after taking symbolic
possession of assets, has issued a Public Notice for physical auction for sale of Movable
and Immovable properties of the Company under SARFAESI Act, 2002, vide email to the
company dated January 17, 2024.
Simultaneously, JLL was appointed for sale of non-core assets. As per the mandate of
ACRE, JLL shortlisted the buyers for non-core assets and advances were deposited in to
fixed deposits lien marked in favor of ACRE, as sought by ACRE. Consequent to the issue of
Public Notice for physical auction for sale of Movable and Immovable properties of the
Company under SARFAESI Act, 2002,the Company has received email communication dated April
17, 2024, from ACRE that it has received an offer from a bidder above the reserve price
and the bidder has submitted an upfront amount of 25% of the purchase consideration, in
line with the terms of the sale andasked the company to deposit the
proceeds/advancesreceived from the sale of non-coreassets as mandated by ACRE into fixed
deposits lien marked in favor of ACRE.
While things stood thus, ACRE vide email dated May 31, 2024, has communicated to the
Company thatthe bidder, AM Green Ammonia (India) Private Limited, has made payment of
balance 75% of the total bid amount of lNR.1685 Crores and in terms of the provisions of
SARFAESI Act read along with the Rules, ACRE has issued sale certificates in favor of the
bidder AM Green Ammonia (India) Private Limited (“Bidder/Buyer”) for all the
secured assets forming part of the sale notice. The buyer has now become the legal and
rightful owner of the assets listed and requested to provide assistance in handing over
the physical possession ofthe secured assets sold to the buyer. The company basis the
approval of the Board of Directors on May 31, 2024handedover the physical, vacant, quiet
and peaceful possession of the Listed Secured Assets of the Company to AM Green Ammonia
(India) Private Limited (“Bidder/ Buyer”) ACRE, consequent to the sale of core
assets wrote to the company for payment of the remaining amount due to its account from
the sale of non-core assets. After obtaining NOC from ACRE, the company sought the payment
of the remaining amount from the buyers of the non-core assets in the name of the ACRE.
The buyers paid a total of Rs.221/- Crs from the sale of non-core assets to ACRE.
ACRE, consequent to recovery from sale of core assets (Urea and MI facilities),
non-core assets (all assets other than Urea and MI assets) amounting to Rs.1685 Crores and
Rs. 200 crores respectively totaling to Rs. 1885 crores and cutback due till June 30,
2024, towards full and final settlement of debt outstanding of Rs. 3858 Crores claimed by
ACRE as of 10th December 2023, has issued a No Due Certificate dated 11thJu-ly 2024,
confirming that NFCL stands unconditionally and irrevocably released and discharged of any
liabilities, dues, demands or claims in respect of the outstanding debt, other amounts due
and payable to ACRE, including release of all security created in favor of ACRE, personal
guarantees and pledge of shares of NFCL held by promoter (Amlika Mercantile Private
Limited).
NFCL does not have any term loans and working capital debt outstanding and is also not
in default with any secured lenders.
Company's Exit from Corporate Insolvency Resolution Process (CIRP) under IBC, 2016:
Hon'ble NCLT Hyderabad Bench, vide order dated August 27, 2021, has initiated Corporate
Insolvency Resolution Process (CIRP) against the company Amlika Mercantile Private
Limited, one of the Promoters of the Company appealed against the said order of
Hon'bleNCLT in Hon'ble NCLAT, Chennai. The Hon'bleNCLAT has since stayed the orders of the
Hon'ble NCLT, Hyderabad vide its orders dt.14.09.2021.
Hon'ble NCLAT, Chennai, vide order dated October 05, 2023, has allowed the appeal filed
by Amlika Mercantile Private Limited, Core Promoter of Nagarjuna Fertilizers and Chemicals
Limited by setting aside “the impugned order dated August 27, 2021, passed by Hon'ble
NCLT, Hyderabad Bench admitting the company into Corporate Insolvency Resolution Process
(CIRP) under Insolvency and Bankruptcy Code, 2016 Consequently,the Company has exited
Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016,
effective from October 05, 2023.
Subsidiaries, Joint Ventures or Associate Companies
During the year under review the company has only one subsidiary viz., Jaiprakash
Engineering and Steel Company Limited (JESCO) (a company incorporated under Companies Act,
1956 bearing CIN U00337KA1993PLC014694 having its Registered Office at 510, 3RD A Cross,
2nd Main,3rdBlock Rajmahal Vilas-II, Dollars Colony, Bangalore-560094, Karnataka. JESCO
couldn't implement the approved projects due to delayed approvals from Karnataka
Industrial Area Development Board (KIADB) / Government of Karnataka (GOK).
Further, GOK had issued GO taking back the land and allotted the JESCO land to Navy
Coast Guard. The matter is pending in the Court of Law.
In view of the non-execution of sale deeds and legal complications the Board of
Directors of your company, as a prudent measure, had written off entire investment in its
subsidiary during the Financial Year 2019-20 and the Members of the Company had approved
to sell, transfer, lease and/or otherwise dispose of the whole or substantially the whole
of the investment in JESCO.
After issuance of GO by Govt of Karnataka (KIADB) cancelling the allocation of land and
after prolonged litigation (due to lack of cash flows to support operations and financial
creditors), JESCO (a subsidiary of NFCL) with loans went into Voluntary Liquidation under
IBC with effect from April 25, 2022. As per IND AS accounting standards shares of JESCO
(part of non current assets) were accordingly fully provided for. The liquidator after
completing all formalities of voluntary liquidation proceedings had filed the petition for
dissolution of JESCO on 01.10.2023 with NCLT, Bangalore.
Subsequently, the company has been informed by JESCO that the Liquidator of JESCO is of
the opinion that the JESCO will not be able to pay its debts in full from the proceeds of
assets to be sold in the liquidation and accordingly, the liquidator has filed a Memo for
withdrawal from Voluntary Liquidation Proceedings and the same is dismissed By NCLT
Bangalore as withdrawn vide order dated 16/04/2024.
The Financial Statements for the year ended March 31, 2024, were prepared on
Liquidation basis - the values of the Assets are stated at Liquidation Value. Post the
sale of non-core assets on June 12, 2024 (which includes JESCO shares) NFCL is no longer
is a shareholder in JESCO.
The company has an Associate Company viz., K V K Raju International Leadership Limited
(a company incorporated under Companies Act, 1956 bearing CIN U51100TG1995PLC022410 and
having its registered office at Nagarjuna Hills, Punjagutta Hyderabad 500082, Telangana).
There are no changes in the status of subsidiaries or associates' companies during the
year under review.Further, there are no material fact that requires mention on the
performance and financial position of the Associate Companies.
Accounts of Subsidiaries
Consolidated financial statements incorporating the accounts of the Subsidiary Company
are enclosedalong with the financial statements of the Company.Jaiprakash Engineering And
Steel Company Limited (JESCO) is not a material subsidiary whose income or net worth in
the immediately preceding accounting year does not exceeds 20% of the consolidated income
or net worth respectively of the Company and its subsidiaries as per the thresholds laid
down under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(hereinafter referred to as “Listing Regulations”).
Statement containing salient features of the financial statement of Subsidiary /
Associate Company appears as Annexure I to this Report.
Except mentioned above regarding implementation of Voluntary Liquidation
ProcessbyJESCO, effective from 25th April, 2022, and appointment of Insolvency
Professional, as the Liquidator of JESCO and exit from the Liquidation Process, there are
no material fact that requires mention on the performance and financial position of the
Jaiprakash Engineering and Steel Company Limited.
The Financial Statements of the Subsidiary and Associate are available for inspection
by the Members at the Registered Office of the Company pursuant to the provisions of
Section 136 of the Companies Act 2013. The Company shall provide free of cost, a copy of
the financial statements of its subsidiary companies to the Members upon request. The
statements of the subsidiary's companies are also available on the website of the Company
at http://www.nfcl.in/inv_sub.htm.
DIRECTORS, BOARD COMMITTEES, KEY MANAGERIAL PERSONNEL AND REMUNERATION
Directors
Continuation of the Appointment of Mr. Sudhakar Kudva as an Independent Director after
attaining the age of 75 years.
Mr. Sudhakar Kudva (DIN: 02410695), was appointed as an Independent Director of the
Company, not liable to retire by rotation, for a period of five years commencing from June
17, 2023 up to June 16, 2028, by the Members at their 17th Annual General Meeting held on
September 15, 2023.
Mr. Sudhakar Kudva, will attain the age of 75 years on Decem-ber 06, 2025, during the
term of Independent Directorship of the Company.
In terms of Regulation17(1A) SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the appointment / continuation of the appointment of Mr. Sudhakar
Kudva, after the attainment of 75 years is subject to the approval of the Members by way
of Special Resolution Accordingly, the Board of Directors, considering the experience and
expertise and so as to utilize his services for the Company, have proposed to continue
Mr.Sudhakar Kudva (DIN: 02410695), as an Independent Director of the Company, after
attaining the age of 75 years still the completion of the term of Independent Directorship
till June 16, 2028, in compliance with Regulation 17(1A) SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The proposed appointment is being placed before the members at the 18th AGM for their
approval.
During the year under review there is no change in the Composition of Board of
Directors except mentioned above
Key Managerial Personnel
During the year under review there are no changes in the status of the Key Managerial
Personnel of the Company.
Executive Director
Mr. K Rahul Raju was re-appointed as the Managing Director of the Company for a period
of three years effective from August 01, 2020 and the term of appointment concluded on
July 31, 2023.
The Board of Directors at their meeting held on August 14, 2023, based on the
commendation of the Nomination and Remuneration Committee, have approved the
re-appointment of Mr. K Rahul Raju, as Managing Director, of the Company for a further
period of 3 years with effect from August 01, 2023 and payment of remuneration subject to
the prior approval of the Secured Creditors and the approval of the members of the Company
The Members at their 17th Annual General Meeting held on September 15, 2023 have approved
the reappointment of Mr. K Rahul Raju, for a further period of 3 years with effect from
August 01, 2023.
Key Managerial Personnel
The following are the Key Managerial Personnel of the Company as defined under Sections
2(51), 203 of the Companies Act, 2013 read with The Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2024: a)
Mr. K. Rahul Raju, Managing Director b) Mr. Sudhakar Rao Annam, Chief Financial Officer c)
Mr. Vijaya Bhasker M, Company Secretary
Retiring by Rotation
In terms of the provisions of Section 152 of the Companies Act, 2013 and Articles of
Association of the company, Mr. Uday Shankar Jha and Mr. Chandrapal Singh Yadav, retire at
the forthcoming Annual General Meeting and being eligible, offer themselves for
reappointment.
Mr. Uday Shankar Jha, subject to the appointment as a Non-Executive Director at the
ensuing Annual General Meeting, will attain the age of 75 years on June 16, 2025, during
the term of his Non-Executive Directorship.
In terms of Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the appointment / continuation of the appointment of Mr. Uday Shankar
Jha, after the attainment of 75 years is subject to the approval of the Members by way of
Special Resolution.
The Board of Directors considering the vast experience and expertise and so as to
utilize his services for the Company, have proposed to appoint Mr. Uday Shankar Jha as a
Non-Executive Director of the Company and continue the appointment as a Non-Executive
Director, after attaining the age of 75 years in compliance with Regulation 17(1A) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Board of Directors recommend the reappointment of Mr. Uday Shankar Jha and his
continuation after attaining the age of 75 years and Mr. Chandrapal Singh Yadav, as
directors liable to retire by rotation, for the consideration of the Members of the
Company.
Declaration by Independent Directors
The Independent Directors have submitted their declaration to the Board that they meet
the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and
Regulation 25 of Listing Regulations so as to qualify as an Independent Director of the
Company.
Meetings of the Board
The Board of Directors of the Company had met five times during the year on June 15,
2023, June 22, 2023 (Adjourned Meeting), August 14, 2023, October 09, 2023, November 14,
2023 and February 07, 2024
Remuneration and other particulars of the Directors/ Key Managerial Personnel/
Employees
The information relating to remuneration and other particulars of the Directors / Key
Managerial Personnel / Employees as required under Section 197(12) of the Companies Act,
2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 appears as
Annexure II(a) to this report. Personnel
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, a statement showing the names and other particulars of the
employees drawing remuneration in excess of the limits set out in the said Rules appears
as Annexure II (b) to this report.
Familiarization Program and Performance Evaluation
Details of the Familiarization Program and Performance Evaluation are incorporated in
the Corporate Governance Report.
COMMITTEES Audit Committee
The Audit Committee of the Board of Directors is in compliance with the provisions of
Section 177 of the Companies Act, 2013 and Regulation 18 of Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms of
reference are in compliance with the applicable provisions of the Law.
The Chairman of the Committee is Mr. Rajendra Mohan Gon-ela, an Independent Director as
on March 31, 2024,and the Committee consists of three Independent Directors, and one
Non-Executive Director. The Board has accepted all the recommendations made by the Audit
Committee.
The Committee meets periodically to review the internal audit report, quarterly
financial results and annual audited financial statements among others and recommends its
findings to the Board apart from taking action independently whenever required. The
Statutory Auditors, Company Secretary, Internal Auditor and Cost Auditors attend and
participate in the Audit Committee Meetings.
The Audit Committee comprises of
Name |
Directorship |
Category |
| Mr. Rajendra Mohan |
Independent Director |
Chairman |
| Gonela |
|
|
| Mrs. Lalitha Raghuram |
Independent Director |
Member |
| Mr. Sudhakar Kudva1 |
Independent Director |
Member |
|
Non-Executive |
Member |
| Mr. Uday Shankar Jha |
|
|
|
Director |
|
1 Inducted as a member with effect from June 17, 2023.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee was constituted with effect from April 22,
2014, in compliance with the provisions of the Companies Act, 2013 and Regulation 19 of
Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
The Company has adopted a Nomination and Remuneration Policy with effect from October
1, 2014, for determining, inter-alia, qualifications, positive attributes and independence
of a director, matters relating to the remuneration, appointment, removal and evaluation
of performance of the Directors, Key Managerial Personnel, Senior Management and other
employees.
The Nomination and Remuneration Committee comprises of:
Name |
Directorship |
Category |
| Mrs. Lalitha Raghuram |
Independent Director |
Chairperson |
| Mr. Rajendra Mohan |
Independent Director |
Member |
| Gonela |
|
|
| Mr. Uday Shankar Jha |
Non-Executive |
Member |
|
Director |
|
Stakeholders Relationship Committee
The Stakeholders Relationship Committee was constituted with effect from April 22,
2014, in compliance with the provisions of the Companies Act, 2013 and Regulation 20 of
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015. The Committee reviews and ensures Redressal of investors' grievances.
The Stakeholders Relationship Committee comprises of
Name |
Directorship |
Category |
| Mrs. Lalitha Raghuram |
Independent Director |
Chairperson |
| Mr. Rajendra Mohan |
Independent Director |
Member |
| Gonela |
|
|
| Mr. Uday Shankar Jha |
Non- Executive |
Member |
|
Director |
|
Corporate Social Responsibility (CSR) Committee
The CSR Committee comprises of three members, of which one is an Independent Director.
The Chairman of the Committee is an Independent Director.
The Corporate Social Responsibility Committee comprises of:
Name |
Directorship |
Category |
| Mrs. Lalitha Raghuram |
Independent Director |
Chairperson |
| Mr. K Rahul Raju |
Executive Director |
Member |
| Mr. Uday Shankar Jha |
Non-Executive |
Member |
|
Director |
|
Risk Management Committee
The Risk Management Committee was constitutedin compliance with the provisions of
Regulation 21 of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The committee comprises of three members, including one Independent Director. The
Chairman of the Committee is an Executive Director.
Name |
Directorship |
Category |
| Mr. K Rahul Raju |
Executive Director |
Chairman |
| Mrs. Lalitha Raghuram |
Independent Director |
Member |
| Mr. Uday Shankar Jha |
Non-Executive |
Member |
|
Director |
|
B. DISCLOSURES
Company Policy Matters
Your Company's endeavor has always been to maintain transparency and accountability to
its stakeholders. In this direction, various policies mentioned in the Corporate
Governance Report have been implemented to enable the stakeholders to appreciate the
various interventions the Company has taken. The implementation of these policies are
reviewed periodically by the Board of Directors and updated regularly.
The Company has set up a Grievance Redressal Mechanism for all its associates. The
Grievance Redressal Mechanism is aimed to redress the grievances of associates
expeditiously to ensure good working atmosphere and culture in the organization.
The Company has in place Policy on Bio-diversity, Gift Policy, Health Safety and
Environment Policy and Human Rights Policy.
Risk Management Policy
The Company had constituted Risk Management Committee-which frames, implements and
monitors Risk Management Plan of the Company and lays down procedures to inform the Board
of the risk assessment and risk minimization procedures in the Company much before it was
introduced as statutory compliance.
The Risk Management Committee is in compliance with the provisions of Regulation 21 of
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
The Company has an Enterprise Risk Management System set up as required by the Listing
Regulations.
As per the Enterprise Risk Management System, the risks of the Company are being
regularly identified/assessed and documented by way of individual profiles and risk
registers. The Company is also maintaining web-based risk management application by each
department/division at Plant as well as Corporate Office to manage and control the risk in
structured manner.
The Risk Management Organization Structure consists of Risk Management Steering
Committee (RMSC) at apex level, and at divisional level, Corporate Risk Management
Committee (CRMC) and Plant Risk Management Committee (PRMC) were formed to facilitate
monitoring and governance of the ERM process on an ongoing basis.
Periodical meetings of the CRMC and PRMC are being held wherein the critical,
cautionary and acceptable risks are presented by the departments through web-based RMS
application. During such presentations, various cross-functional deliberations take place
on the contributing factors and the control measures to mitigate the risks. The outcome of
CRMC and PRMC deliberations and the analysis of risks are presented to RMSC on a quarterly
basis.
Policy on Board Evaluation
The Policy on Board Evaluation was adopted with effect from October 01, 2014, by the
Board of Directors in compliance of Companies Act, 2013 and Listing Regulations.
The purpose of the policy is to assess the effectiveness of the Board as a whole,
Committees of Board and Individual Directors on regular basis and to take necessary steps
for improving the effectiveness of the Board.
The Nomination and Remuneration Committee has devised the methodology, identified
sample tools for evaluation and also laid down the parameters for evaluation of Board of
Directors, its Committees, Chairman, Managing Director and Individual Directors for the
year ended March 31, 2024.
The Nomination and Remuneration Committee at their meeting held on May 20, 2024 , had
approved the criteria for evaluation of the Board and its Committees and Individual
Directors for the Financial Year 2023-24.
The Board of Directors, based on the responses received from all the Directors,
evaluated the performance of the Board of Directors, its Committees, Chairman, Managing
Director and the individual Directors at their Meeting held on August 31, 2024. Further,
Independent Directors at their meeting held on August 31, 2024, have reviewed the
performance of Non-Independent Directors, Chairman and the Board as a whole.
In view of the evaluation not linked to payment of remuneration, as the Company has
opted only for payment of sitting fees, the evaluation has no financial implications on
the Company.
Whistle Blower Policy/Vigil Mechanism
The Company formulated the Whistle Blower Policy/Vigil Mech-anismin compliance with
Regulation 22 of Listing Regulations and Section 177(9) of the Companies Act, 2013.
The Policy aims to prohibit managerial personnel from taking adverse personnel action
against employees disclosing in good faith, alleged wrongful conduct on matters of public
concern involving violation of any law, mismanagement, and misappropriation of public
funds among others.
Employees / associates aware of any alleged wrongful conduct are encouraged to make a
disclosure to the Audit Committee. The Audit Committee periodically reviews the existence
and functioning of the mechanism. No personnel of the Company have been denied access to
the Audit Committee. The above mechanism has been appropriately communicated within the
Company across all levels and has been displayed on the Company's website. The Web link
for the same is http://nfcl.in/ corporate-governance/Whistle_Blower_Policy.pdf
Corporate Social Responsibility (CSR)
The Company has in place a CSR Policy in line with Schedule VII of the Companies Act,
2013. The Company has always desired to play a proactive role in societal development with
an intention to bring positive change in the lives of many. The CSR Policy may be accessed
on the Company's website at the link:
http://nfcl.in/company-policies/Policy%20on%20Cor-porate%20Social%20Responsibility.pdf An
initiative started in 2009 with the spirit of making a difference, haddeepened its roots
and bigger impact and changing many more lives. The dedicated support, strength,
initiative and encouragement from the associates to be part of this initiative gave
impetus to the movement.
The Company supports CSR activities through Nagarjuna Foundation and Nagarjuna
Education Trust which runs a school under the name of Akshara School and supports
Agricultural research and formal training through Nagarjuna Agricultural Research and
Development Institute.
During the year under review, the Company was not required to spend on CSR as the
company had been incurring losses for the past few years. The Annual Report on CSR
Activities carried out by the Company appears as Annexure- III to this Report.
The salient features of the policy on CSR appears as Annex-ure III(a) Corporate
Governance
Your Company driven by a desire to be more competitive and recognized globally, had
inculcated more than a decade ago rules defining ethical business, much before it was
introduced as statutory compliance.
Your Company firmly believes that building a culture of compliance is more than meeting
regulations and standards. Your Company has always proactively met mandated standards and
practiced Corporate Governance in spirit and not just as letter of the law.
The goal of the Company in the area of Corporate Governance is to ensure fairness for
every stakeholder; the company believes best practice Corporate Governance is critical to
enhance and retain investor trust and to perform with integrity. The Annual Report
contains a separate section on the Company's corporate governance practices, together with
a certificate from M/s. KBG Associates, Practicing Company Secretaries on compliance with
conditions of Corporate Governance as stipulated under Listing Regulations.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the ManagementDiscussion and Analysis in terms of theprovisions of
Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, is provided as a separate section in the
Annual Report.
Related Party Transaction
All related party transactions done by the Company during the financial year were at
arm's length and in ordinary course of business. During the financial year, your Company
has not entered into any material transaction as per the Listing Regulations with any of
its related parties which may have potential conflict with the interest of the Company at
large.
Disclosures pursuant to Accounting Standards on related party transactions have been
made in the notes to the Financial Statements(refer Note 33).All related party
transactions are placed before the Audit Committee and the Board for review and approval,
as appropriate. To identify and monitor significant related party transactions, the
Company has also framed a Policy on the Related Party Transactions and the same is
available on the Company's website. Web link for the same is
http://nfcl.in/pdfs/Policy_on_Related_Party_Transactions.pdf All the related party
transactions entered during the year were in Ordinary Course of the Business an don Arm's
Length basis. Particulars of Contracts or Arrangements with Related parties appears as Annexure-IV
to this report.
Particulars of loans, guarantees or investments
There are no loans, guarantees and investments under Section 186 of the Act as at the
end of the Financial Year 2023-24.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Disclosure in terms of Section 134(3)(m) read with Rule 8(3) of The Companies
(Accounts) Rules, 2014, in respect of conservation of energy, technology absorption,
earnings and outgo of foreign exchange is attached as Annexure-V to this Report.
Annual Return
The Annual Return of the Company for the year ended March 31, 2024, is placed on the
website of the Company. The web link for the same is
http://www.nfcl.in/inv_annualreturn.htm.
Compliance with Secretarial Standards
The Board of Directors affirms that the Company has complied with the applicable
Secretarial Standards issued by the Institute of Companies Secretaries of India SS-1
Meetings of Board of Directors and SS-2 General Meetings.
Significant and material orders passed by the Regulators or Courts or Tribunals
impacting the going concern status and Company's operations in future
There were no significant awards that have been passed by any Court or Judicial
Authority against the company during the Financial Year 2023-24 impacting the going
concern status and Company's operations in future.
Adequacy of Internal Financial Controls with reference to Financial Statements
The Company maintains all its records in SAP system and the workflow and approvals are
routed through SAP.
The Company's Internal Auditors scrutinize on periodical basis and ensure that the
internal controls and the work flow of the organization are being done through the
approved policies of the Company. In every quarter, the Internal Auditors present the
Internal Audit Report and Management comments on the Internal Audit observations to the
Audit Committee. The Board of Directors of the Company have adopted various policies like
the Related Party Transaction, Whistle Blower Policy etc., for ensuring the orderly and
efficient conduct of its business for safeguarding its assets, prevention and detection of
frauds and errors, accuracy and completeness of accounting records and timely preparation
of reliable financial information.
Details in respect of frauds reported by Auditors other than those which are reportable
to the Central Government
The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not
reported any frauds to the Audit Committee or to the Board of Directors under Section
143(12) of the Companies Act, 2013, including rules made thereunder.
Registrar and Share Transfer Agents
The Company has been functioning as Category II, Share Transfer Agent (in-house)
pursuant to the approval of the Securities and Exchange Board of India.
Deposits
The Company has not accepted any deposits falling under the ambit of Chapter V of the
Companies Act, 2013 and the Rules framed there under, during the year nor are there any
unpaid
/unclaimed deposits at the end of the year. Accordingly, no disclosure or reporting is
required in respect of details relating to deposits.
Maintenance of Cost records and accounts
The Company in terms of provisions of Section 148 (1) of the Companies Act, 2013, is
required to maintain cost records. Accordingly, the Company had maintained Cost Accounts
and Records for the year ended March 31, 2024.
C. AUDITORS AND AUDIT REPORT
Statutory Auditors
The Members of the Company at the 16thAnnual General Meeting held on November 29, 2022,
appointed M/s. P Murali & Co., Chartered Accountants (Firm Registration No. 007257S),
Hyderabad, Statutory Auditors of the Company for term of five years to hold office from
the conclusion of 16th Annual General Meeting till the conclusion of the 21st Annual
General Meeting.
Auditor's Report
M/s. P Murali & Co., Chartered Accountants, Statutory Auditors', have submitted the
Statutory Auditors Report for the year ended March 31, 2024, and have invited attention on
emphasis of matters in relation to:
Basis for Qualified Opinion:
Notes No: 14 and 26 in the standalone financial statements wherein the company
explained that the lenders (Banks) of the company have not implemented the Corrective
Action Plan (CAP) approved by them in the Joint Lenders Forum (JLF) meeting held in 2015
and though the company represented the matter to the lenders for necessary corrective
action, the same has not been rectified till date.
Management Explanation to Auditors' Qualification
Qualification on Note No. 14 & 26 to the standalone audited financial statements
discussed in detail on implementation of Corrective Action Plan is self-explanatory and
does not call for any further comments.
Emphasis of Matters: a) Note No 20.1: The Company has recognised Income from Urea
Operations, Income towards freight subsidy, Reimbursement claims towards additional fixed
cost, Input escalation/de-escalation during the quarter in terms of new Urea policy
(NUP)-2015 and Gas Pooling Policy for Fertilizer (Urea) Sector. Adjustments, if any,
required will be considered on notification of final prices. b) Note No 31: The Plant and
Machinery, buildings attached there to have been put to test for impairment as of 31st
March 2024 and management perceive that there is no further impairment loss required to be
recorded Impairment test of property (land) was carried out as of 30th June 2023 during
the year and recorded an impairment loss of Rs. 63,407.20 Lakhs as per the Registered
Valuer's Report dated 12th August 2023. The management is of the opinion that there is no
further impairment of land as at 31.03.2024. c) Note No 32.1: The claims as per the
International Arbitration Awards passed against the Company in September 2016 and October
2017, aggregating to USD 15,275,688, GBP 742,944 and EUR 455,000 and INR 221.39 Lakhs
(equivalent Aggregate amount of Rs. 14,150.09 Lakhs) and interest thereon as applicable
apart from costs, are continued to be shown as a contingent liability since the matter
being sub-judice. d) Note No 32.2 Claim from a related party asserting its right for
Royalty for the period from 29.01.1998 onwards, is being negotiated with the granter for
settlement. e) Note No 32.4: Hon'ble NCLT admitted a petition filed by an operational
creditor to initiate the CIRP against the Company under the provisions of the IBC 2016,
Amlika Mercantile Private Ltd (One the of Promoter of the Company) appealed against the
order of Hon'ble NCLT. The NCLAT has set aside the this CIRP proceedings under IBC and
currently the Company is out of CIRP. AMPL has claimed the legal expenses for the NCLAT
appeal filed on behalf of the Company and the Company is liable to reimburse the legal
expenses to AMPL.
Management Explanation to emphasis on the matter a) Emphasis of Matter given in
Note (a) of the Auditor's Report on standalone financial statements read with Note 20.1 of
Notes forming part of the standalone financial statements for the year ended March 31,
2024, are self-explanatory and do not call for any further comments. b) Emphasis of Matter
given in Note (b) of the Auditor's Report on standalone financial statements read with
Note 31 of Notes forming part of the standalone financial statements for the year ended
March 31, 2024, are self-explanatory and do not call for any further comments. c) Emphasis
of Matter given in Note (c) of the Auditor's Report on standalone financial statements
read with Note 32.1 of Notes forming part of the standalone financial statements for the
year ended March 31, 2024, are self-explanatory and do not call for any further comments.
d) Emphasis of Matter given in Note (d) of the Auditor's Report on standalone financial
statements read with Note 32.2 of Notes forming part of the standalone financial
statements for the year ended March 31, 2024, are self-explanatory and do not call for any
further comments. e) Emphasis of Matter given in Note (e) of the Auditor's Report on
standalone financial statements read with Note 32.4 of Notes forming part of the
standalone financial statements for the year ended March 31, 2023, are self-explanatory
and do not call for any further comments.
Cost Auditor's & Cost Audit Report Cost Auditor
In terms of Section 148 of the Companies Act, 2013 and the Rules made thereunder the
Company is required to undertake Audit of the cost accounts maintained by the Company by a
Cost Auditor.
The Board of Directors, on the recommendation of the Audit Committee, at their meeting
held on May 20, 2024, appointed M/s. D V & Associates as Cost Auditor, at a
remuneration of Rs.4 Lakh plus taxes as applicable and reimbursement of out-of-pocket
expenses for conducting the audit of cost records of the company for the Financial Year
2024-25.
The remuneration payable to the Cost Auditor for the Cost Audit undertaken / to be
undertaken is subject to ratification by the members of the company.
The Board of Directors recommends the remuneration payable to the Cost Auditor for the
Financial Year 2024-25, for the approval of the Members.
Cost Audit Report
M/s. D V & Associates, Cost Auditors have issued Cost Audit Report for Financial
Year 2023-24, which does not contain any qualification, reservation or adverse remarks.
Secretarial Auditor & Secretarial Audit Report Secretarial Auditor
The Board of Directors at their meeting held on May 20, 2024, pursuant to the
provisions of Section 204 of the Companies Act, 2013, have appointed Mr. C S S Krishna,
Partner, M/s.KBG Associates, Company Secretaries, Hyderabad as the Secretarial Auditor of
the Company to undertake Secretarial Audit for the Financial Year 2024-25.
Secretarial Audit Report
M/s.KBG Associates, Secretarial Auditor, have issued the Secretarial Audit Report for
the Financial Year 2023-24, which does not contain any qualification, reservation, or
adverse remark. The Secretarial Audit Report appears as Annexure-VI to this Report.
Internal Audit
The Company has well established system of Internal Audit which carries out audit on
Risk based Internal Audit framework covering the gamut of financial, marketing, plant
operations and service functions.
The Company's Internal Audit function has obtained Quality Management System ISO 9001,
certificate since December 2006 and the same was upgraded to ISO 9001:2015. A Chief
Internal Auditor of the Company has been appointed by the Board of Directors, in
compliance with the Companies Act, 2013 and Listing Regulations.
Remuneration Policy
The salient features of the policy on director's appointment and remuneration,
including criteria for determining qualifications, positive attributes, independence of a
director and other matters provided under Section 178(3) of the Companies Act, 2013,
adopted by the Board, appears as Annexure-VII to this report. We affirm that the
remuneration paid to the directors is as per the terms laid out in the nomination and
remuneration policy of the Company. The Nomination and Remuneration Policy may be accessed
on the Company's website at the
link:http://nfcl.in/pdfs/Nomination%20and%20Remunera-tion%20Policy%20-%20nfcl.pdf
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013
Your Company has in place Policy on Sexual Harassment at workplace in line with the
requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition
and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to
address complaints received regarding sexual harassment. All employees (permanent,
contractual, temporary, trainees) are covered under this Policy.
The Company has not received any complaints pertaining to sexual harassment during the
FY ended March 31, 2024.
D. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013 your Directors
hereby report that: (a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation relating to material
departures.
(b) The Directors had selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of the financial year and of
the profit and loss of the Company for that period; (c) The Directors had taken proper and
sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; (d) The Directors had prepared the annual
accounts on a going concern basis; (e) The Directorshad laid down internal financial
controls to be followed by theCompany and that such internal financial controls are
adequate and were operating effectively. (f) The Directors had devised proper systems to
ensure compliance with the provisions of all applicable laws andthat such systems were
adequate and operating effectively.
INDUSTRIAL RELATIONS
During the year, the industrial relations at all the works of the company were cordial
ACKNOWLEDGEMENT
Your directors place on record their gratitude to the Government of India, Government
of Andhra Pradesh, Government of Telangana and the Financial Institutions and Company's
Bankers for their assistance and cooperation.
Further, the Company places on record its sincere appreciation for the continuing
support and unstinting efforts of investors, dealers and associates and all stakeholders.
CAUTIONARY STATEMENT
The Board's Report may contain certain statements that the Company believes are or may
be considered to be forward looking statements within the meaning of applicable securities
law and regulations. All these forward-looking statements are subject to certain risks and
uncertainties, including but not limited to Government action, economic developments,
risks inherent to the Company's growth strategy and other factors that could cause the
actual results to differ materially from those contemplated by the relevant
forward-looking statements and the company is not obliged to update any such forwarding
looking statements.
|
By Order of the Board |
|
Uday Shankar Jha |
| Hyderabad |
Chairman |
| August 31, 2024 |
DIN: 00056510 |
|