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MADRAS FERTILIZERS LIMITED

MANALI, CHENNAI 600068

54th Annual General Meeting

Chennai

29thDecember 2020

CHAIRMAN’S SPEECH

SHRI U SARAVANAN

CHAIRMAN & MANAGING DIRECTOR

Dear Shareholders,
Ladies & Gentlemen,

Very Good Morning to all of you!

It gives me immense pleasure to extend a warm welcome to you all to the 54th Annual General Meeting of your company. The Directors’ Report and the Audited Accounts for the Financial Year ended March 31, 2020 have been with you and, with your consent; I shall take them as read.

In view of the massive outbreak of the COVID-19 pandemic, social distancing is a norm to be followed and pursuant to the Circulars issued by the Ministry of Corporate Affairs, AGM is being held through Video Conferencing (VC) or Other Audio Visual Means (OAVM).

Before I speak to you about the performance of your company, let me briefly highlight the economic scenario in which your Company is operating.

Economic Scenario

The important economic measures announced by the Government of India in 2019-20 were hike in minimum support price of agriculture crops, reduction in corporate tax rate, special programs for MSMEs and digital payment.

Fertilizers remain indispensable for agriculture productivity. In other words availability of sufficient Fertilizers were absolutely essential for sowings of Kharif and Rabi Crops. However, Agriculture and Fertilizers Sectors continue to face challenges due to COVID 19 pandemic.

During 2019-20, the country received very good rainfall with prolonged monsoon. Excessive rains received in North and Central Kerala, Kodagu, Chickamagalur and Hassan. Due to adequate water in Reservoirs, crop coverage of Rabi seasons was normal during summer in irrigated belt and good consumption of fertilizer was observed.

The consumption of Urea and NPK have increased in MFL’s territory because of favourable agricultural situation prevailed. The consumption of Urea has increased in MFL’s territory over Corresponding Period Last Year (CPLY) by 10.5% and NPK by 20.3% over CPLY.

Production Performance Highlights of MFL in Financial Year 2019-20

I am happy to say that your Company has, after a long awaited time, achieved and successfully completed the feedstock conversion from Naphtha to RLNG for Ammonia production.

Further, some of the activities undertaken to bring down energy levels are listed below:

• Installation of CT Cells M & N: After commissioning of these 2 cells during July 2019, the availability of Total Number of Fans increased to 14, High cooling water temperature problem totally eliminated even during summer and taking preventive maintenance of fans becomes easy without affecting plant loads;

• The replacement of RO Stream membranes along with TTRO water for CW make up from Oct 19, has made significant improvement in CW quality & Cooling Tower Cycles of Concentration which helped in reduction of chemical consumption and frequent leaking / failure of CW exchangers. This has improved the on-stream efficiency of the exchanger and ultimately plant loads;

• RLNG feed as fuel for 110 Boiler & PC Boiler in place of FO, has resulted in reduction of stack temperature, thereby boiler efficiency improved with good environmental conditions;

• Replacement of Urea Reactor Liner has improved the conversion ratio thereby reduction in energy & increase in on-stream efficiency of Urea plant;

• After Feed stock and Fuel conversion to reformers, burner conversion efficiency has increased excess air levels brought down which resulted in fuel consumption;

• Installation of Advance Process Control for Ammonia and Urea Plants have fetched considerable energy reduction to the tune of 0.2 Gcal per MT Urea;

Your Company’s operations ended up with a loss of ₹ 55.62 Cr during Fiscal 2019-20 as against a loss of ₹ 83.24 Cr in the previous year due to incurrence of huge interest cost and Complex Fertilizer Plants were not in line for the first two quarters owing to working capital crisis.

At the close of March 31, 2020, totally 2181 days were completed without any lost time accident covering 7.78 million man-hours (Previous best achieved was 5.66 millio man-hours).

Sales Performance

I am proud to state that your Company has achieved sales of 3.24 Lakh MT of Vijay Neem Coated Urea and 66,000 MT of Vijay 17-17-17, which is 139% increase over previous year.

Your company is taking up intensive promotional campaigns which help in improving our products’ branding.

Apart from selling agricultural inputs, farmer services like soil sample analysis and recommendation of fertilizer dosage based on soil test report, educating the farmers on weather, crop insurance and other improved farm technologies were offered.

As part of “Swachh Bharat Mission”, Marketing of City Compost, a product from Municipality / Factory waste has been undertaken and 12040 MT sold, which is 49% increase over previous year. With respect to City Compost sale, Your Company stood as topper in Tamil Nadu and has reached the 6th position on All India basis.

As part of the Government of India’s initiative, MFL organized Farmers Interactive Session in co-ordination with State Department of Agriculture.

During the countrywide lockdown due to COVID 19 pandemic from March 25, 2020, Your Company Plants were running successfully and products were transported and dispatched to dealer point with the support of Department of Fertilizers, Ministry of Chemicals and Fertilizers, Government of India and Government of Tamil Nadu. The above achievement could be made with sheer dedication of employees coupled with the appropriate and adequate precautionary measures taken by the Management.

Corporate Social Responsibility (CSR)

During the year 2019-20, your Company has spent a total sum of ₹ 9,24,000/- in various CSR activities viz., donations of food materials for flood affected public in Nilgiris District, contribution to Armed Forces Flag Day Fund, supply of potable water through pipelines to Harikrishnapuram Village in Manali and supply of school bags and kits to Students of Government School at Mathur.

Future Outlook

Dear Shareholders, your Company has submitted a Revival Proposal to Government of India through Department of Fertilizers, for its favorable consideration.

• Your Company has initiated the study of Business Diversification keeping in view of Atma Nirbhar Bharat Abhiyan. After in-depth deliberations, by an Expert Working Committee a report has been submitted in which three products have been emerged viz., Methanol, Liquid Nitrogen Production and Production of special grades of Complex Fertilizers. Subsequently, the High Level Execution Committee has been formed to explore the possibility of execution of above mentioned products in future.

• Further, your Company has, in addition to production of Complex fertilizers, also proposed to start trading of complex fertilizers to augment revenue.

• Your Company has awarded Energy Reduction scheme study to M/s HTAS to bring down energy further down to 6.3 Gcal per MT Urea;

• Replacement of E1901 (Ammonia condenser) and K1601 (Syn Gas compressor) intercoolers with Duplex tubes improved metallurgy to prevent frequent tube failures and improve on-stream efficiency of Ammonia Plant;

• Fuel conversion from FO to RLNG for Utility Boiler 2 for energy efficiency and environmental friendly;

• Installation of Dedicated RO Plant to improve water quality.

Acknowledgement

On behalf of the Board of Directors, I sincerely thank the shareholders, customers and all stakeholders for their continued support in the Company’s future endeavours.I would like to place on record the sincerity, hard work, commitment and dedication of the employees. I am grateful to the Government of India and the Government of Tamilnadu for their assistance and cooperation.

I also express my sincere thanks to SEBI, NSDL, Stock Exchanges, State Bank of India, Indian Oil Corporation and Institutions for the support and coordination given to the company regularly. It will certainly be our endeavor to put in our best efforts for sustained growth, expansion and prosperity of the Company benefitting all stakeholders.

I look forward to seeing you in person at the next year AGM.

Thank you and Jai Hind!

U Saravanan
Chairman & Managing Director