MADRAS FERTILIZERS LIMITED
MANALI, CHENNAI 600068
55th Annual General Meeting thru VC/OAVM
SHRI U SARAVANAN
CHAIRMAN & MANAGING DIRECTOR
Ladies & Gentlemen,
Very Good Morning to all of you!
I warmly welcome each one of you to the 55th Annual General Meeting of your Company. It is always a pleasure to connect with you all, and – although virtual – it is a privilege to host you today. I thank you for your continued trust, encouragement and unequivocal support to the Company and its Management
It is really appreciable that your Company is emerging stronger and healthier and is scaling new heights. I do have full faith in our team work and dedication. We are bouncing back to the old glorious days moving towards a bright and prosperous future.
The Directors’ Report and the Audited Accounts for the Financial Year ended March 31, 2021 have been with you and, with your consent, I shall take them as read. Before I speak to you about the performance of your company, let me briefly touch upon the current trends prevailing in the economic scenario and the Fertilizer Sector in which your Company is operating.
The Government of India has continued its focus on augmenting farmer income through various steps viz., increased allocation across the schemes to drive irrigation facilities, improve agricultural markets, augment the allied sectors supporting income, setting-up of Farmer Producer Organisations (FPOs), crop insurance schemes and income supplementation schemes. With these positive steps, a positive effect on fertilizer offtake is expected.
FERTILIZER SECTOR AND ITS DEVELOPMENT
Fertilizer sector is an important industrial sector that contributes mainly to achieve food security and sustainable agricultural development. Indian fertilizer sector witnessed a sustainable high growth in consumption. The Government has taken a number of initiatives for promoting balance fertilization to accelerate agricultural growth. Besides this, there have been efforts on the technological development in production processes that keep pace with the latest global production methods and environmental requirements.
Improvement in demand due to a good monsoon which resulted in higher sowing aided the increase in production. Overall fertilizer sales too have increased, buoyed by a good monsoon and harvest season. As overall cost of production of Urea produced using RLNG has seen decrease in the working capital intensity of the fertilizer manufacturers which will act as a relief for the fiscal spending of the government while disbursing the Urea subsidy.
The outlook for the fertilizer sector is positive on expectations of good monsoon. With lowering of the debt and the associated interest costs, the cash generation and the credit profile of the fertilizer sector would improve substantially. The underlying macros for the Indian fertilizer industry look promising despite the coronavirus pandemic.
MFL’s PERFORMANCE IN THE FINANCIAL YEAR 2020-21
I am happy to inform that your Company’s operations ended with a Profit of ₹ 2.87 Cr and Total Comprehensive Income of ₹ 34.41 Cr for the financial year 2020-21. Changeover of feedstock from Naphtha to RLNG resulted in reduction in cost of production of Urea which eventually resulted in the Company’s profit. Your Company has better cash flow control in place which assures seamless operation and allied functions of the Company.
During the year 2020-21, Your Company produced 480865 MT of Neem Coated Urea, 53565 MT of NPK (17-17-17) and 156.40 MT of Bio Fertiliser against the previous year production of 345150 MT of Neem Coated Urea, 65000 MT of NPK and 46.40 MT of Bio fertilizers. I am glad to say that Urea Plant was operated consistently at a maximum load of 108% with RLNG as Feedstock and achieved 100% and above of Urea production for 225 Days during this year.
I am happy to add that Urea production of 480865 MT in FY 2020-21 is the Second highest Production since inception compared to the previous best records of 486750 MT in the year 2011-12 & 2013-14. Quarterly Production of 143169 MT of Urea during the period January – March 2021 is the second highest in any quarter since inception.
The average specific energy consumption of Ammonia and Urea Plant is 10.3594 Gcal/MT & 7.6375 Gcal/MT respectively. Your Company achieved the lowest energy consumption of Ammonia (8.968 Gcal/MT) and Urea (6.615 Gcal/MT) for the day since inception on 10.11.2020. Your Company has improved operational facilities which ensure uninterrupted production and remains uninterrupted.
Despite countrywide lockdown due to COVID-19 pandemic situation since March 25, 2020, Urea production and timely distribution of fertilizer products have been ensured as per GOI guidelines due to adequate and appropriate precautionary measures taken by the Company.
I am happy to state that your Company achieved 4,79,402.325 MT of Vijay Neem Coated Urea sales which is 48% higher than the previous year sale of 3,23,764.200 MT and grabbed a market share of 25.35% in Tamil Nadu, 7.89% in MFL’s marketing territory. Your Company sold the total available quantity of 51,868.35 MT of Vijay 17-17-17.
Overall, your Company sold 5,31,270 MT of both NPK 17-17-17 & Neem Coated Urea during the year which was at par with the production under the challenged Covid-19 pandemic situations and this was 37% higher than the previous year sale of 3,89,281 MT.
I am happy to say that your Company has supplied 749.970 MT of Vijay Neem Coated Urea to extra marketing territory Andaman & Nicobar Islands during pandemic situations.
Your Company sold 5046.28 MT of Vijay Organic, which is 80% increase over CPLY of 2807.80 MT under “Basket Approach”. In addition to Organic Manure, under “Swachh Bharat Mission”, marketing of City Compost, a product from Municipality/Factory waste, has been undertaken and 6403 MT was sold. With respect to City Compost sales, MFL is proud to be a topper in Tamil Nadu sales and continuously maintaining its slot in Top 10 position for the fourth consecutive year on ALL INDIA basis.
Your Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. Good governance facilitates effective management and enables company to maintain a high level of business ethics and to optimize the value for all its stakeholders. I am pleased to inform that your company has achieved an “Excellent” grading in Corporate Governance for the year 2019-20.
Corporate Social Responsibility
The Company continues to involve in meaningful welfare driven initiatives through Corporate Social Responsibility that distinctively impact the quality of life in society and helping underprivileged people. In the wake of the COVID-19 pandemic, your Company prioritized response towards containing this global health crisis by strengthening the health system response, protection of health of employees and contract labourers.Your Company extended its support to the downtrodden people affected by COVID-19 in the neighbourhood areas under CSR program. Thus, during the year 2020-21, the Company incurred an expenditure of ₹ 15.54 lacs towards CSR activities.
Your Company is in the path of getting permission from the Department of Fertilizers to enter into the business of trading of Fertilizers to augment our revenue. Your Company is also concentrating on the concept of product diversification under which two new projects have been emerged which is under study of technical feasibility and financial viability. Energy saving projects which are underway will fetch huge profits to your Company once it is implemented.
Finally, I take this opportunity to thank the distinguished Board Members for their continued leadership and unwavering support to the Company and its employees. I also take this opportunity to convey my thanks and gratitude to the Department of Fertilizers for settlement of subsidy bills on priority basis and to the dealers and farmers for their sustained support to Vijay products. I wholeheartedly place on record my appreciation for the continued and unstinted support of Government of India, Government of Tamilnadu, NICO, Financial Institutions, Banks, Depositors and all stakeholders during the year.
Even amidst the 2nd wave of COVID-19 infections in India and thereafter, the employees of your company constantly worked closely to ensure uninterrupted operation of our Plant. The commitment and grit shown by employees, during these testing times, have been exemplary. I also place on record my appreciation to the employees for their dedication, commitment and sincere services rendered by them.
Last but not the least, I extend my gratitude to the various Government and Regulatory authorities, Company’s valued customers, suppliers, vendors and investors for their consistent and resolute co-operation and trust.
I wish and pray that this world emerges victorious from the crisis created by the COVID pandemic. I urge each and every one of you to stay safe and take care of your loved ones.
My Best Wishes to all of you!
Chairman & Managing Director
JAI HIND !