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Contents Director's Report Auditor's Report Balance Sheet Statement of Profit & Loss Cash Flow Statement Significant Accounting Policies Notes Forming Part of Accounts 01 21 27 28 29 30 34KRIBHCO SHYAM FERTILIZERS LIMITED. DIRECTORS' REPORT Dear Members Your Directors are pleased to present the Eleventh Annual Report on the business and operations of your Company together with the Audited Statement of Accounts for the Financial Year ended on March 31,2016. FINANCIAL RESULTS (Rin Lacs) Particulars Year ended 31.03.2016 Year ended 31.03.2015 Revenue from Operations & Other Income 189046.02 199835.15 Profit Before Interest, Depreciation & Tax 19174.31 2845.45, Less : Interest 1303.01 14856.83 Less : Depreciation 7993.20 7941.18 Profit (Loss) Before Tax (1831.92) 4144 Less: Tax Expenses 24.93 10.91 Profit/ (Loss) after Tax and carried forward (1856.85) 36.53 to Balance Sheet PERFORMANCE HIGHLIGHTS During financial year 2015-16, the Company produced 9.826 Lac MT of Urea and 5.809 Lac MT ‘of Ammonia with capacity utilization of 113.65% and 115.82% for Urea and Ammonia respectively. The Energy consumption figures for urea was 5,608 Gcal/MT and ammonia was 7.937 Gcal/MT. IPP production for the current year is 1.18 Lac MT. An unforeseen break down in Ammonia Plant in February, 2016 and break down in process air compressor resulted in reduced production. These breakdowns resulted in increased specific energy consumption, however the yearly energy consumption was less than the pre-set norms es per NUP-2015. During the year, your Company achieved excellent performance in its dispatch and sales operations. With the sincere efforts made by KRIBHCO's marketing department, 9.75 Lac MT Urea was dispatched to various destinations. A total of 9.69 Lac MT urea was sold in Financial Year 2015-16 which also includes opening stock as on 01.04.2015. The Financial Year 2015-16 ended with a loss of % 1856.85 lacs as against a nominal profit after 01 tax of € 36 lacs in 2014-2015. The fixed cost of the Company had increased over the period due to general increase in various rates, but the increase of 2 350 PMT in fixed cost reimbursement during the year has not fully compensated total fixed cost. FERTILIZER POLICY Govt. of has notified the policy on 2 April, 2014, whereby the fertilizer companies were entitled to an increase of % 350/. PMT or actual additional Fixed Cost during the period 2002-03 to 2012-13. The revision in fixed cost is towards increase in cost of four components viz salaries and wages, contract labour, selling expenses and repair & maintenance etc. This amount is receivable as on date. India NEW UREA POLICY 2015 The New Urea Policy 2015 has been announced effective from 01.06.2015. As per the new policy, KSFL falls under Group | of gas based urea units Revised energy norms applicable for the period 01.05.2015 to 31.03.2018 shall be the simple average of preset energy norms of NPS-lIIl and average actual energy consumption achieved during the years 2011-2012 to 2013-2014 or the 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. preset norm whichever is less. Targeted energy norm to be achieved for 2018-2019 onwards for KSFL shall be 5.5 Gcal per MT. For production beyond Reassessed Capacity, the units will be entitled to variable cost plus incentive equal to the lowest of the PMT fixed costs of all the indigenous urea units. The present lowest PMT fixed cost for indigenous urea units is around @ 2300/- PMT. All Urea production has to be mandatorily Neem -Coated -Urea. In view of the above new policy, energy norm for KSFLhas been reduced to 5.643 Gcal PMT as against the present pre-set norm of 5.712 Gcal PMT under NPS-Iil. However the actual energy is less than the revised norm and the Company is hopeful of achieving the target energy norm for the financial year 2018-2019 onwards. GAS POOLING ARRANGEMENTS GOI has implemented Gas Pooling system with effect from 01.06.2015. In view of this delivered pool Gas price is marginally higher than landed cost of the gas available to KSFL from the existing contracts. This has resulted in increase in working capital requirements to the Company and consequently increased the finance cost. OTHER ISSUES The issue relating to reimbursement of Marketing Margin on purchase of gas from RIL is expected to be resolved shortly in view of the direction given by Hon'ble Delhi High Court to the GOI. FUTURE OUTLOOK Outlook for FY 2016-17 is very positive. Company would continue to maintain a very high level of production and productivity. It is targeted to surpass all its previous records in respect of enerey consumption and achieve best ever specific energy consumption. Production target for FY 2016-17 has been set at 10,40,000 MT of Urea with an energy consumption of 5.495 Gcal/MT of Urea. To achieve these 11" Annual Report 2015-16 targets, a comprehensive Performance Plan has been prepared which sets performance para- meters and targets for each and every department and section. DIVIDEND The Directors of the Company do not recommend any dividend for the year 2015-15. FIXED DEPOSITS Your Company has not accepted any fixed deposits from the public during the year under review, SHARE CAPITAL The paid up Equity Share Capital as on March 31, 2016 was % 800.06 Crore. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on March 31, 2015, noneof the Directors of the Company hold shares or any convertible instruments of the Company. Krishak Bharati Cooperative Limited (KRISHCO), which was holding 85% of the paid up share capital of the Company at the beginning of the year, had further acquired approximately 7.5% equity shares of the Company from STL Fertilizers Put. Ltd on November 30, 2015. As on 31.03.2016, the shareholding ratio between KRIBHCO and STL Fertilizers Pvt Ltd is of 92.51:7.49. DIRECTORS Shri Rakesh Kamra (DIN 00874346) was on the Board of the Company as a KRIBHCO nominated Director since 01.01.2014 and was designated as Director (Finance) & CFO of the Company. On completion of 2 years term on 31.12.2015, he was discharged from his duties and responsibilities as Director (Finance) & CFO. Your Directors wish to place on record their gratitude and appreciation for his excellent performance during his tenure. In accordance with the provisions of Companies Act, 2013 and Company's Articles of Association, Shri N. Sambasiva Rao (DIN 06400663), Director of 02KRIBHCO SHYAM FERTILIZERS LIMITED. the Company retires at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board of Directors recommends his re-appointment for consideration of the shareholders. During the year under review Shri Vijai Narain Rai (DIN 00036496) and Smt. Nishi Arora Sabharwal (DIN 06963293) were re-appointed as non- executive Independent Directors of the Company, not liable to retire by rotation, to hold office for a further term of 1 year i.e. upto 19.03.2017. The shareholders of the Company in their meeting held on February 12, 2016, by passing a special resolution had approved the re-appointment of Shri Vijai_ Narain Rai and Smt. Nishi Arora Sabharwal as the Non-Executive Independent Directors of the Company. CORPORATE GOVERNANCE Your Company has followed good Corporate Governance Practices in accordance with the provisions of the Companies Act, 2013 and Rules made thereunder. The various details on Board Composition, Managerial Remuneration, meetings of the Board, about its Committees, Key Mana gerial Personnel etc. are given hereunder. Board Composition The Board of Directors of your Company comprises of eight members of which five are Non-Executive Directors, one Is Executive Director and two are Non-Executive Independent Directors including a Woman Director, The Chairman of the Company isa Non-Executive and is a KRIBHCO (Promoter) nominated Director. The appointment of Directors is being made by the resolutions of the Board of Directors and Shareholders of the Company. Managerial Remuneration The Non-Executive Directors are paid sitting fees for attending each meeting of the Board of Directors and Committees thereof. During the year none of the Directors have been granted any stock options, commissions etc. The remuneration 03 paid to the Executive Director is in accordance to the recommendation of the Nomination and Remuneration Committee to the Board of Directors and Shareholders of the Company. Meetings of Board The Directors of the Company met 5 times during the financial year 2015-16 on 12" June, 2015, 5" August, 2015, 26" November, 2015, 12" February, 2016 and 29" March, 2016. Committees of the Board Currently the Board has three Committees ~ Audit Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee Audit Committee The Audit Committee comprises of following three directors with Independent Directors forming a majority. © Shri V.N. Rai~Chairman; © Shri N. Sambasiva Rao~Member; * Smt Nishi Arora Sabharwal-Member The Audit Committee met 4 times during the financial year 2015-16 on 5" August, 2015, 26" November, 2015, 12" February, 2016 and 29" March, 2016. In accordance to the provisions of the Act, the Company has established a Vigil Mechanism and formulated a policy in order to provide a frame- work for responsible and secure Vigil Mechanism The Vigil Mechanism Policy is placed on the website of the Company at http://ksfl.in/coc.htm. NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee comprises of following three directors with Independent Directors forming a majority. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. ‘* Shri V.N.Rai-Chairman; © Shri N.Sambasiva Rao—Member; © Smt Nishi Arora Sabharwal-Member The Nomination and Remuneration Committee met 2 times during the FY 2015-16 on 12 June, 2015 and 26" November, 2015. In accordance to the provisions of the Act, the Company has formulated a Nomination and Remuneration Policy for its Directors, Key Managerial Personnel and Senior Management. The Policy is placed on the website of the Company at http://ksfl.in/coc. htm, CORPORATE COMMITTEE SOCIAL RESPONSIBILITY The CSR Committee comprises of following three directors of which one is an Independent Director. * Shri N.Sambasiva Rao-Chairman; © Shri V.P.Kaushik-Member; '* Sint Nishi Arora Sabharwal-Member Your Company has formulated a Corporate Social Responsibility Policy and the same is placed on the website of the Company at http://ksfl.in/coc.htm, In view of the accumulated losses. in the Company's financial statement, the Company has not undertaken any CSR activities, project or program during the year. Accordingly, No meeting of Corporate Social Responsibility Committee (CSR) held during the financial year 2015-16. KEY MANAGERIAL PERSONNEL During the year, Shri R. Venkataramanan has been appointed as Head of Finance and designated as Chief Financial Officer of the Company in place of Shri Rakesh Kamra w.e.f. 01.01.2016 in accordance to the provisions of section 203 of the Companies Act, 2013. 11" Annual Report 2015-16 The Key Managerial Personnel of the Company are as under: © Shri V.P, Kaushik~Managing Director; © Shri R. Venkataramanan ~ Chief Financial Officer; * Shri Bipin C. Phuloria~Company Secretary DECLARATION BY INDEPENDENT DIRECTORS. The Company has received necessary declarations from each Independent Director of the Company confirming that he/she met the criteria of independence as prescribed under section 149(6) of Companies Act,2013. BOARD EVALUATION During the year under review the Board has carried out an evaluation of performance of the Directors individually as well as evaluation of Board and its Committees, The evaluation process was carried by circulating evaluation forms listing out assessment criteria. The performance evaluation of the independent directors was carried out by the entire Board while the performance evaluation of each Director was carried out by all the Directors excluding the Director being evaluated.As per the ratingsgiven by the each Director in the evaluation form the performance of Board, its Committees, Chairperson and all the individual Directors was found to be satisfactory. The Directors expressed their satisfaction with the evaluation process. RISK MANAGEMENT Your Company has put in place proper and adequate systems and practices, policies relating to the identification, assessment, monitoring and mitigation of strategic, operational and environmental risks to achieve its business objectives. The systems are reviewed from time to time to identify the element of the risk and to take preventive action. The Company has also taken comprehensive Mega Risk InsuranceKRIBHCO SHYAM FERTILIZERS LIMITED. coverage for its assets. In addition to business risk, the safety of employees and workers is also of utmost importance in your Company. To make healthy and safe environment, the Company has implemented Occupational Health and Safety (OHS) and obtained OHSAS-18001 certification. INTERNAL FINANCIAL CONTROL Your Company has @ well-defined internal Control system that is adequate and commensurate with the nature of its business, size and complexity of its operations to ensure adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. The Company maintains its records in ERP system and the work flow and approvals are routed through ERP. The Company also have an effective budgetary control mechanism in place to take care of the capex and revenue expenditure. There is 2 monitoring system in place to compare the actual performance with the budget The Company's Internal Auditors scrutinize and sample check the internal controls and the work flow of the organization with the policies, procedures, manuals, approvals of the Manage- ment and Board of Directors of the Company. The report of the Internal Auditor with Management comments is submitted to the Audit Committee for its review. AUDITORS & AUDITORS REPORT M/s S.K.Mehta & Co., Chartered Accountants, who are the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received from the auditors a certificate to this effect that their re-appointment, if made, would be within the prescribed limits & conditions specified in sections 139 & 141 of the Companies ‘Act, 2013. The Board of Directors recommends their re-appointment. 05 The notes to the accounts in Auditors Report are self-explanatory and therefore, do not call for any further comments. COST AUDITORS Pursuant to Section 148 of the Companies Act, 2013 and the Rules made thereunder the Central Government has directed that the cost accounts maintained by the Company be audited by a Cost Auditor. For FY 2014-15, the Cost Auditor of the Company, M/s K.G. Goyal & Associates, Cost Accountant had filed the Cost Audit report on 16" September, 2015, which was within the due date of filing. For FY 2015-16, M/s Ravi Sahni & Associates, Cost Accountant were appointed as Cost Auditor of the Company with the approval of the Central Government who will file the Cost Audit Report for FY 2015-16 directly to the Central Government. For FY 2016-17, the Company is proposing to the Central Government for appointment of M/s Ravi Sahni & Associates, Cost Accountants as the Cost Auditor of the Company. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking member's ratification for the remuneration payable to M/s Ravi Sahni & Associates, Cost Accountants, Cost Auditors is included in the Notice convening the Annual General Meeting SECRETARIAL AUDITOR The Board has appointed M/s Agarwal S. & Associates, Practising Company Secretaries to conduct the Secretarial Audit for the financial year 2015-16 as required under section 204 of the Companies Act, 2013 and Rules made thereunder, The Secretarial Audit Report for the financial year ended March 31, 2016 is appended as Annexure 1 to this Report. The Secretarial Audit Report is self-explanatory and does not contain any qualification, reservation or adverse remark. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. INTERNAL AUDITORS M/s G. S. Mathur & Co., New Delhi have been appointed as Internal Auditors of the Company for the financial Year 2015-16. The Audit observations along with the Management action plan have been considered by the Audit Committee. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES Your Company does not have any Subsidiaries, Joint ventures or Associate Companies. LOAN, GUARANTEE OR INVESTMENTS. The Company has not either directly or indirectly given any Loan, Guarantee or made any Invest- ment in/to any other Body Corporate or to any person beyond the limit prescribed under Section 186 of the Companies Act, 2013. The details of investments are provided in the notes to the Financial Statements forming part of the Annual Report. PARTICULARS OF CONTRACTS OR ARRANGE- MENTS MADE WITH RELATEDPARTIES The details of transactions with Related Party are provided in the notes to the Financial Statements forming part of the Annual Report. ANNUAL RETURN In accordance with section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return as provided under Section 92 of the Companies Act, 2013, is appended as Annexure2 to this report CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the 11" Annual Report 2015-16 Companies (Accounts) Rules 2014, is appended as Annexure 3 to this Report SOCIAL COMMITMENTS Your Company is performing various activities for the development of communities, their welfare and for all round improvement in the quality of their life on a regular basis. Your Company is organizing regular medical camps at nearby villages, wherein the health check-up of the villagers are done by our medical team and necessary medicines are distributed to them on free of cost basis. Your Company is also operating a widow pension scheme to widows of nearby villages. Your Company is also extending its resources for providing relief in case of natural calamities such as floods, winters ete. and providing contribution for upkeep of park in nearby areas, HUMAN RESOURCES, INDUSTRIAL RELATIONS, & SOCIAL WELFARE During the year under review, many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Company to achieve higher productivity levels, The Company has continued to place great importance training development of human resources and accordingly considerable efforts were made in training and development of the potential of the employees. Towards this end apart from in-house training programmes, the employees were also nominated for attending external training programs and seminars in specified areas by leading agencies. on and The industrial relations between the management and its employees remained very harmonious and cordial during the year. The Company is continuing with its policy of extension of welfare activities so as to improve the working environment and living conditions of the employees. Various religious functions, yoga camp, health check-up, sports day, tournamentsKRIBHCO SHYAM FERTILIZERS LIMITED. were organized in the township from time to time so as to maintain harmonious & joyful atmos- phere. The school, hospital and other infrastructure facilities in the Company's township are being improved and adequate investments have been made wherever required ENVIRONMENT PROTECTION, HEALTH AND SAFETY Your Company continued to focus on the key areas of Environment Protection, Health and Safety and all the regulatory and legislative requirements are being complied. Trade and domestic effluent are treated in respective treatment plant. Due to effective environmental management system, the treated effluent, ambient air quality and stack emission are monitored and maintained as per standards. The Company operates an Environmental Management System which complies with the requirements of ISO-14001:2004 and the Quality Management System complies with the requirement of ISO 9001:2008 for the manufacture of fertilizer grade urea. The Company has obtained OHSAS-18001 certification and implementation of Occupational Health and Safety (OHS) is being done in the plant effectively to make healthy and safe environment ‘Annual Medical check-up of all the employees is a continuous process in compliance to the statutory requirements as well as the conditions of OHSAS 18001-2007. Various training programs related to rescue operations, emergency management, fire safety were organized in addition to mock drills to check the emergency preparedness. Further improvement in safety standards of Company in terms of infrastructure, skill of employees etc. is in progress to ensure zero accident. All Safety & Fire Systems including fire tenders at plant are in healthy condition. FAI ENVIRONMENT PROTECTION AWARD-2015 The commitment and whole hearted efforts of your Company towards continuously improving its o7 environmental performance was appreciated and was declared Runner-up for FAI Environment Protection Award in the nitrogenous fertilizer plants category for the year 2014-15. This award was given by Hon'ble Union Minister of Chemicals & Fertilizers, GOI, Shri Shri 0.P, Gupta, Sr. Vice President (Works) of the Company, in the presence of Hon'ble State Minister of Chemicals & Fertilizers, GOI, Shri Hansraj G. Ahir and Shri A.K. Bishnoi, Secretary (Fertilizer) on 2" December, 2015, at the FAI Annual Seminar at New Delhi. Ananth Kumar to PARTICULARS OF THE EMPLOYEES None of the employees of the Company will falls under the ambit of Rule 5(2) of the Companies {Appointment and Remuneration of Managerial Personnel) Rules, 2014. SIGNIFICANT AND MATERIAL ORDERS ‘There are no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. NO MATERIAL CHANGES AND COMMITMENTS HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT DISCLOSURE UNDER THESEXUAL HARASSMENT, OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 ‘The Company has in place an Anti Sexual Harass- ‘ment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are coveredunder this policy. No complaints were received during the year 2015-16. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. DIRECTORS RESPONSIBILITY STATEMENT As required under section 134(5) of the Companies ‘Act 2013, the Board of Directors of your Company confirms that: a. in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and feir view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for that period; ¢. the Directors have 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 your Company and for preventing and detecting fraud and other irregularities; d. the Directors have prepared the annual accounts on a going concern basis; Place: Noida Dated: 21* April, 2016 1L” Annual Report 2015-16 fe. the directors, in the case of e listed company, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; Not Applicable {the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. ACKNOWLEDGEMENT Your Directors have pleasure in recording their appreciation of the continued guidance & support provided by the Lenders, Department of Fertilizers (DOF)-Govt. of India, Reserve Bank of India, Company's Bankers, Government Agencies, Customers and Suppliers. Your Directors hereby wish to place on record their appreciation of the efficient and loyal services rendered by all staff and work force at all levels through their involvement, dedication and sincerity In achieving an all round success. This unstinted support has been and continues to be integral to your Company's ongoing growth. For and on behalf of the Board of Directors (Dr. Chandrapal Singh Yadav) ChairmanKRIBHCO SHYAM FERTILIZERS LIMITED. Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2016 {Pursuant to Section 204(1) of the Companies Act, 2013 and rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014) ANNEXURE -1 To, (ii) The Depositories Act, 1996 and the Regulations The Members, and Bye-laws framed thereunder; - Not Kribhco Shyam Fertilizers Limited Applicable 1, have conducted the Secretarial Audit of the (iv) Foreign Exchange Management Act, 1999 and compliance of applicable statutory provisions and the the rules and regulations made thereunder to adherence to good corporate practices by Kribhco the extent of Foreign Direct Investment, Shyam Fertilizers Limited (hereinafter called ‘the Overseas Direct Investment and External Company'}. Secretarial Audit was conducted in a Commercial Borrowings;-Not Applicable manner that provided me a reasonable basis for evaluating the corporate conducts / statutory (4) The following Regulations and Guidelines compliances and expressing my opinion thereon. Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, | hereby report that in my ‘opinion, the Company has, during the audit period covering the financial year ended on 31" March, 2016 complied with the statutory provisionslisted hereunder and also that the Company has proper Board-processes and Compliance-mechanism in place to the extent, it the manner and subject to the reporting made hereinafter: | have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31" March, 2016 according to the provisions of: (1) The Companies Act, 2013 (the Act) and the rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; -Not Applicable 09 prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act’): (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011; -Not Applicable (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;-Not Applicable (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; - Not. Applicable (4) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;-Not Applicable (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; -Not Applicable 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Agents) Regulations, 1993 regarding the Companies Act and dealing with client;-Not Applicable Transfer {g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and-Not Applicable (h) The Securities and exchange Board of India (Buyback of Securities) Regulations, 1998; -Not Applicable (vi) Compliances/ processes/ systems under other applicable Laws to the Company, as per compliance certificate submitted to the Board, are being verified on the basis of random sampling. [have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by the Institute of Company Secretaries of India- Applicable we 01" July, 2015, (ii) The Listing Agreements- Not Applicable. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. Place ; New Delhi Dated: April 13, 2016 | further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non- Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Generally, adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda Items before the meeting and for meaningful participation at the meeting. During the year, STL Fertilizers Pvt. Ltd., one of the Promoter had exercised its exit option for its 15% shareholding in the Company out of which approx. 7.59% shares were transferred to KRIBHCO on 30.11.2015. On transfer of balance shares of about 7.5% from STL Fertilizers to KRIBHCO on 13.04.2016, the Company becomes wholly owned subsidiary of KRIBHCO. Majority decision is carried through while the dissenting members! captured and recorded as part of the minutes. views are | further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines and the Company is in process of further reviewing & strengthening the same. For Agarwal S. & Associates, Company Secretaries, (Sachin Agarwal) FCS No. :5774 CP No. :5910 This report is to be read with our letter of even date which is annexed as “Annexure A’ and forms an integral part of this report. 11" Annual Report 2015-16 10KRIBHCO SHYAM FERTILIZERS LIMITED. To, The Members, Kribhco Shyam Fertilizers Limited ur report of even date is to be read along with this letter, 1. Maintenance of secretarial record is the responsibility of the management of the Company. Our Responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records We believe that the processes and practices, we followed provide a reasonable basis for our opinion Place : New Delhi Dated; April 13, 2016 nN SANNEXURE A” We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulation and happening of events etc. The Compliance of the provisions of corporate and other applicable laws, rules, regulations, standards are the responsibility of management. Our examination was limited to the verification of procedures on test basis. The Secretarial Audit Report is neither an assurance as to future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. For Agarwal S. & Associates, Company Secretaries, (Sachin Agarwal) FCS No, :S774 GP No, :5910 IL” Annual Report 2015-16FL KRIBHCO SHYAM FERTILIZERS LIMITED. ANNEXURE -2 Form No, MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31.03.2016 (Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014) I. REGISTRATION AND OTHER DETAILS: (i) CIN U24121D12005PLC143452 (il) | Registration Date 08.12.2005 (ii) | Name of the Company KRIBHCO SHYAM FERTILIZERS LTD. (iv) | Category/ Sub-Category of the Manufacturing / Urea Manufacturing Company (v)_| Address of the Registered ‘A-60, Kailash Colony, New Delhi ~ 110048 office and Contact Details Tel. -011-29243412 (vi)_| Whether listed Company No (vii) | Name, Address and Contact details Link Intime India Pvt Lid, of Registrar and Transfer Agent, ifany 44, Community Centre, 2" Floor, Naraina Industrial Area, Phase ~1, (Near PVR Naraina) New Delhi - 110028 Il, PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- S.No. Name and Description of main NIC Code of the 9% to total turnover products / services products / services of the company 1 Urea 0031021000 [ 97.3 IIL, PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: S.No. Name and CIN/GLN | Holding/ %ofshares | Applicable Address of Subsidiary | held Section the Company / Associate NIL NIL NIL NL NL NIL 11" Annual Report 2015-16 12KRIBHCO SHYAM FERTILIZERS LIMITED. IV, SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) (i) Category-wise Share Holding No.of shares Neid at the beginning of No. of shares held at the end of category of the year [As on 01.04.2015) the year (As on 31.03.2016) cree Shareholders Demat [Physical Total %of (Demat [Physical] Total %oF during Total Total | the year Shares, Shares, a) Individual/ HUF 0 ° oo 0 ° oo 0 b)CentralGovt | o ° ar) 0 ° oo 0 ¢) State Govt(s) 0 0 0 0 0 oO 0 0 0 4) Bodies Corp. | 12,00,22885 2 120022857 15 5,99,52,676 2 599,52,678, 7.49 ()7.51 eleanks/Fi | 0 ° oo o 0 a) 0 ON enetve) /68:00;34.281 5 68,00,34,286 5 74,01,04,460 5 74,01,04,465, 92.51 | (+)7.51 ‘rene 80,00,57,136 7 80,00,57,143 100 | 80,00,57,136 7 80,057,143, 100, Nl B. Public Shareholding (1) Institutions o o ar) o 0 an) o a) Mutual Funds | 0 0 0 o 0 ° 0 0 0 b)Ranks/Fl | oo ool oo o 0 (OO ¢) Central Govt (s)| ° ° oo ° ° oo ° 0) State Govt(s) o o oo 0 o oo 0 el Venture Capital ° o 0 0 ° ° 0) 0 0 1 pearance 00 0 0 0 0 0 0 g) Fils 0 oO 0 0 0 0 0 0 0 4 Capi ronds re ° ° oo ° ° oo ° i) Others (specify) | 0 oo oo oo «| 0) Sub-total (E)a)- 0 0 0 0 0 oO o| 0) 0 8 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. No.of Shares held at the beginning of No. of Shares held at the end of the year [As on 01.04.2015} ‘the year [As on 31.03.2016] % Category of Change Shareholders Demat | Physical] Total %of |Demat [Physical Total %eof | during Total Total_|the year Shares, Shares, 2. Non- Institutions 2) Bodies Corp. o ° a) o 0 a) 0 i) Indian o ° oo 0 0 oo 0 ii) Overseas 0 ° oo 0 0 a) 0 ») Individuals ° ° oo ° ° oo ° i) Individual ° ° oo ° ° oe ° Shareholders Holding Nominal Share Capital upto Rs. 1 lakh 1) Individual 0 o oo 0 0 oO 0 Shareholders Holding Nominal Share Capital in excess of Rs. Lakh «) Other (Specify) 0 ° ) o 0 Cn) ° tion Resident o ° oo o 0 oo ° Indians Overseas Corporate o ° ) o ° rr) ° Bodies Foreign Nationals 0 0 o Oo o 0 a) 0 Clearing Members o ° a) 0 ° oo 0 Trusts o ° a) 0 ° oo 0 Foreign Bodies - DR o o o 0 0 0 a) 0 ‘Sub-total (B)(2):- ° ° ° ° ° oo ° Total Public ° ° a) ° ° oo ° Shareholding (8)=(8)(4)+ (B)(2) C. Shares held by ° ° oo o o a) 0 Custodian for GDRs & ADRs GrandTotal _—_80,00,57,136 7 80,00,57,143 100 80,00,57,136 7 80,00,57,143, 100, Nil (asBec) 11" Annual Report 2015-16 14KRIBHCO SHYAM FERTILIZERS LIMITED. (ii) Shareholding of Promoters SINo, Shareholder’s | Shareholding at the beginning of the Shareholdingat the end of the year | 4 Name year change -————_——_—— in No. of Shares) % of total] %of | No.of Shares |%of | %6of Shares | share Shares of | Shares total | Pledged/ | holding the | Pledged/ Shares | encumbered | during company | encum- of to total shares | the bered to the year wtal company] shares 1 | Krishak Bharati | 68,00,34,286 85 0] 74,01,04,465| 92.51 0 |(#) 7.51 Cooperative Limited 2 | sti Fertilizers 12,00,22,855 5 15) 5,9952.676| 7.49 7.49 | (1751 Pvt. Ltd, 3 | Shyam Basie 2 0 0 Pr) oO} NL Infrastructures Projects Pvt. Ltd, Total | 80,00,57,143 100 15, 80,057,143] 100 7.49 | NIL (iii) Change in Promoters’ Shareholding (please specify, if there is no change) S.No| Name of the Share Holder Shareholding at the beginning| Cumulative Shareholding of the year during the year No.of %oftotal | No. of % of total shares | shares ofthe | shares shares of the company company STL Fertilizers Private Limited 1 _ | Atthe beginning of the year 12,00,22,855 15 | 12,00,22,855 15 2__| Transfer on November 30, 2015 {(6,00,70,179) (751) | 5,99,52,676 749 3_| Atthe end of the Year ~ | 5.9952.676 7.49 Krishak Bharati Cooperative Limited 1_| Atthe beginning of the year 68,00,34,286| 85 | 68,00,34,286 85 2__| Purchase on November 30, 2015 6,00,70,178 7.51 | 74,01,04,465 9251 3._| Atthe end of the year * ~ | 74,01,04,465 9251 {iv) Shareholding of Directors and Key Managerial Personnel ‘S.No Shareholding of each Directors and each ‘shareholding at the ‘Cumulative Shareholding key Managerial Personnel beginning of the vear__| during the vear Wo.of | Softotal | No. ofshares | %of total shares | shares ofthe shares of the compan) compan) 1_| Atthe beginningof the year Nil Nil Nil Nil 2 | Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (eg. allotment / transfer / bonus/ sweat equity etc): Nil Nil Nil Nil 3__| Atthe end of the year Nil Nil Nil Nil 15 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. (v). INDEBTEDNESS - Indebtedness of the Company including interest outstanding/accrued but not due for payment [Tin Lacs] Geposite Loans Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount 94,530.28 | 82,267.90 0 176,798.18 ii) Interest due but not paid ° ° oO o ii) Interest accrued but not due 475.06 99.93 ° 574.98 Total (isis) 95,005.34 | 82,367.83 ° 177,373.17 Change in Indebtedness during tthe financial year Addition 11,584.06 0 0 11,584.06 Reduction oO] 23,128.70 0 23,128.70 Net Change 11,584.06 | -23,128.70 0 ~11,544.64 Indebtedness at thi financial year i) Principal Amount 1,05,094.97 | 59,212.50 0 1,65,307.47 ii) Interest due but not paid 0 oO oO a li) Interest accrued but not due 494.43 26.63 oO 521.06 ‘otal (i+ii+ii) 1,06,589.40 | 59,239.13 ° 1,65,828.53 ‘VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: SN. | Particulars of Remuneration Name of MD/WTD/ Manager Total Amount Shri V. P. Kaushik - | Shri Rakesh Kamra— Managing Director | Director (Finance) & CFO (Apr'15 to Dec’15) 1 | Gross salary (al Salary as per provisions contained in section 17(1)of the | | 51,37,808.00, 11,52,000.00 | 62,89,808.00 Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 39,600.00 NIL 39,600.00 (€) Profits in lieu of salary under section 17(3) Income- tax Act, - - - 1961 Stock Option NIL NIL NIL ‘Sweat Equity wi Ni NIL Commission NIL NIL NIL = as % of profit = others, specify. 5 _| Others, please specify wit NIL NIL Total (A) 51,77,408.00 11,52,000.00 | 63,29,408.00 Ceiling as per the Act 139.16 Lacs 11" Annual Report 2015-16 16KRIBHCO SHYAM FERTILIZERS LIMITED. B. Remuneration to other directors: ‘SN. | Particulars of Name of Directors Total Remuneration Amount 1 [independent Shri Vijai Narain Rai ‘Smit. Nishi Arora Sabharwal Directors Fee “for attending 170000 170000 340000 Board /committee meetings ‘Commission NIL NIL Nit Others, please NE WIL nu] specify Total (1) 170000 170000/ 340000 2 | Other Non- Or. Shri Shri N. Shri Shri Executive Chandrapal_ | Waghji | Sambasiva | Rajan Alok Directors Singh Rugnath | Rao Chowshry | Tandon Yadav Boda Fee*for attending Board committee meetings 100000 g0000| __160000| __100000| _0000| 520000 Commission NIL. NIL NIL NIL NIL. NIL} Others, please specify NIL NL NIL NIL NIL nit Total (2) 100000 80000 160000100000] 0000, _$20000| Total =(1+2) 860000) Total Managerial Remuneration NIL NIL. NIL. NIL NIL nid ‘Overall Ceiling as per the Act * sitting fee does not include service tax paid by the Company . Remuneration to Key Managerial Personnel other than MD/Manager/WTD ‘S.N. | Particulars of Remuneration Key Managerial Personnel Managing [Director (F) | CFO Company | Total Director &CFO Uan'16 to | Secretary (Apr'ls to Mar’16) Dec’ 15) i. | Gross salary (@) Salary a per 51,37,808/-| _11,52,000/-| 9,48,599/-| 19,92,187/-| _92,30,504/- provisions contained in section 17(1) of the Income-tax Act, 1951 {b) Value of perquisites u/s 39,600/- NL §,100/- NL} 47,700/- 37(2) income-tax Act, 1963 {@) Profits in leu of salary Nit] iL iL iL iL under — section 17(3) Income tax Act, 1961. 2.__ | Stock Option Nit Ni NIL NIL Ni '3.__| Sweat Equity NIL NIL NIL NIL. NIL. 4 | Commission NIL NL NIL NIL NIL as % of profit NIL NL NIL NIL. NIL Tothers, specifya. NIL NIL NIL NIL. ‘iL 5. | Others, please specify NIL NL NIL NIL NIL Total | 51,77,408/-| _11,52,000/-| 9,56,699/-|_ 19,92,187/-| _92,78,294/-. 7 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. VIL. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Section of Brief Details of ‘Authority Appeal the Companies Description —_| Peralty/ [Ro/nett —_| made, Act Punishment/ /cOURT] ifany Compounding (give fees imposed Details) lA. COMPANY Penalty Nit Nik Nik Nik NIL Punishment NiL| NIL NIL NIL NIL ‘Compounding Nit| NIL NL NL NIL 'B. DIRECTORS Penalty Nit] NIL Nit Nit NIL Purishment Nit| NIL Nit NIL NIL Compounding Nit| NIL NIL NIL NIL C. OTHER OFFICERS IN DEFAULT Penalty Nit] NIL NIL NIL NIL Punishment Nit NIL Nit NIL NIL Compounding it NIL NIL NIL NIL (Dr. Chandrapal Singh Yadav ) Chairman DIN No.-.00023382 Kripheo Shyam Fertilizers Lid. Place : Noida ““KRIBHCO Bhawan” Date :21" April, 2016 11" Annual Report 2015-16 ‘Ac10, Sector-1, Noida (U.P.) 201301 18KRIBHCO SHYAM FERTILIZERS LIMITED. A. 19 Ker ANNEXURE -3 Disclosure of Particulars pursuant to Rule 8 of the Companies (Accounts) Rules 2014 CONSERVATION OF ENERGY (i) Steps taken or tmpact on conservation of energy: KSFL recognizes the importance of energy conservation and is fully committed to minimizing use of energy. Plant operations are continuously reviewed and modifications made to reduce energy consumption wherever possible. in continuation to our efforts for reducing the specific energy consumption for production of ammonia and urea, KSFL have implemented the following two major Energy Saving Schemes (ESS): (a)Replacement of Combustion Air Preheater with new Preheater of high efficiency Plate Type design for recovery of waste heat from flue gases in Primary reforming section of Ammonia Plant. (b} Installation of Vacuum Pre-concentrator in 21-Unit of Urea Plant for recovery of heat of condensation from condensation of decomposed gases of medium pressure section (ij)Steps taken by Company for utilizing alternate source of energy: We are exploring the possibility for installation of solar cells on roof top of Control rooms of the plant and utilization of generated power In our system to reduce power load on GTS. i) Capital Investment — on Conservation Equipment’: Energy %29.20crore TECHNOLOGY ABSORPTION: ()) The Efforts made towards Technology Absorption: Technical feasibility study was carried out by process licensor M/s Haldor Topose AS, (HTAS) Denmark in 2012 to revamp the existing Ammonia Plant with a view to enhance ‘Ammonia production capacity to 2000 MTPD and also to process sufficient CO2 to convert entire Ammonia into Urea. The recommendations made in this study are being implemented in phases. Some of the schemes like increase in size of process gas line from 10” to 12” has been already completed including making E-1211 (BFW preheater) in parallel configuration to avoid flow induced vibration in exchanger. M/s HTAS has also recommended replacement of Combustion Air Pre-heater (CAPH) for energy saving, New Combustion Air Pre-heater was commissioned in ATA in May'2015. Technical study for installation of Vacuum Pre- Concentrator (VPC) was also conducted by M/s Urea Casale, Switzerland and contract for engineering for installation of this equipment was awarded to them. Engineering work has since been completed, VPC was ordered on 04.07.2014 as per the specification given by M/s Urea Casale. VPC was received at site in the month of Oct'2015. After completing the erection of piping & structure work, VPC was commissioned in the month of Nov-Dec2015. ‘Scheme is finalized to install the VPC in 11-Unit also. The LP Steam saved will be utilized in Medium Pressure Section of both the units by installing MP Pre-decomposer in both the units. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. Ultimately we will save the HP Steam which will reduce the boiler load thus energy consumption. (li) The benefits derived like product improvement, cost reduction, product development or import substitution: Schemes indicated above are energy saving schemes which also provide flexibility in plant operation. Schemes implemented so far has, accordingly, resulted in gradual reduction in specific ‘energy consumption for production of Ammonia & Urea and have also resulted in sustained plant operation at higher loads. Accordingly company was able to achieve best ever daily specific enerey consumption of ammonia & urea both to a level of 7.50 Gcal/MT and 5.32Gcal/MT respectively. {Iii) In case of technology imported (imported during the last three years reckoned from the beginning of the financial year): {a) Details of the technology imported is being used in 21-Unit of Urea Plant for recovery of heat of condensation from decomposed gases of medium pressure section, (b) The year of Import: Order was placed on M/s Urea Casale for Design, Engineering & License to use the Vacuum Pre-concentrator in the FY 2013-14. Engineering work of M/s Casale completed in FY 2013-14 only. Vacuum Pre-concentrator was commissioned in Nov-Dec’2015 in 21-Unit of Urea plant and since then it is in operation. (c) Whether the technology been fully absorbed: Yes, it is absorbed from Dec'2015. (4) If not fully absorbed, areas where absorption has not taken place: NA Research and (iv) Expenditure incurred of Development Urea Casale design of Vacuum Pre-concentrator, we C. FOREIGN EXCHANGE EARNINGS AND OUTGO: 2015-16 2014-15 Foreign Exchange outgo 472.98 Lacs 210.97 Lacs Foreign Exchange earned NIL NIL Place : Noida Date :21° April, 2016 11” Annual Report 2015-16 ( Dr. Chandrapal Singh Yadav ) Chairman DIN No.- 00023382 Kribheo Shyam Fertilizers Lid, “"KRIBHCO Bhawan” ‘A-10, Sector-1, Noida (U.P) 201301 20KRIBHCO SHYAM FERTILIZERS LIMITED. INDEPENDENT AUDITORS’ REPORT To The Members, Kribheo Shyam Fertilizers Limited Report on the Financial Statements We have audited the accompanying financial statements of Kribhco Shyam Fertilizers Limited (‘the Company’) which comprises the balance sheet as at 31 March 2036, the statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts] Rules, 2014. This responsibi also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. 2 Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under the section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. ‘An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements that gave true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’ Directors, as well as evaluating the overall presentation of the financial statements. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED We believe that the audit evidencs we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statement. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at 31st March, 2016 and its loss and its cash flows for the year ended on that date, Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor's Report) Order, 2016 (‘the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A” , a statement on the matters specifiedin the paragraph 3 and 4 of the Order, to the extent applicable. 2. As required by section 143(3) of the Act, we report that: (a) We have sought and obtained all the information ‘and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) In our opinion proper books of account as required by law have been kept by the Company 50 far as it appears from our exemination of those books; od ‘The Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this Report are in agreement with the books of account ; Place : Noida Date :21" April, 2016 1L” Annual Report 2015-16 (6) te) (f (e) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014; On the basis of the written representations received from the directors as on 31" March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31° March 2016 from being appointed as a director in terms of Section 164 [2) of the Act; With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “annexure 8”; and With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i) The Company has disclosed the impact of pending litigations on its financial position in Note No. 2.39 to the financial statement. iiy The Company does not have any foreseeable losses on long-term contracts including derivative contracts, if any, in respect of which any provision is required to be made under the applicable law and Accounting Standards. ili) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. For S.K. MEHTA & CO. Chartered Accountants Firm Registration No. 000478N B. P. SAKENA Partner Membership No. 10568 22KRIBHCO SHYAM FERTILIZERS LIMITED. 0) (i) (iii) (iv) 23 ANNEXURE “A” TO THE AUDITORS’ REPORT (Referred to in our Report of even date to the members of Kribhco Shyam Fertilizers Limited) (2) The Company has maintained proper records showing full particulars, including quantitative details and situation, of its fixed assets. (b)_ The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in phased manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancy was noticed on such physical veri ication. (0) The title deeds of immovable properties are held in the name of Company. In our opinion, physical verification of inventory has been conducted by the management at reasonable intervals. No material discrepancy was noticed on such physical verification of Inventory. ‘As per the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited liability Partnerships or other parties covered in the Register maintained under section 189 of the Companies Act, 2013. Accordingly the clauses {ii) (a), (iit) (b) 8(ili) (cof the report are not applicable As per the information and explanations given to us, the Company has not given any loans, invastments, guarantees and security and as such the provisions of Section 185 & 186 of the Companies Act, 2013 are not applicable. Nature of the Dues ‘Stamp Duty on Deed of Mortgage ‘Amount (Net of Amount deposited uncer protest) Ww) (vi) (vii) (a) According to ssomoo The Company has not accepted any deposits from the public. Accordingly, the directives issued by RBI and the provisions of section 73, to 76 or any other relevant provisions of the Companies Act, 2013 & the rules framed there under are not applicable to the Company. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records prescribed under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. the information and explanation given to us, the Company is regular in depositing undisputed statutory dues with appropriate authorities including Provident Fund, ESI, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, VAT, Cess and other statutory dues applicable to the company and that there are no undisputed statutory dues outstanding as on 31" March, 2016 for a period more than six months from. the date they became payable, (b) According to the information and explanations given to us, following disputed demands of Excise Duty/ other statutory dues have not been deposited: Rin Lacs] Forum where dispute is pending Excise/ Service Tax 828.00 | FY. 2008-2009 Hon'ble High Court, Allahabad Income Tax 35.91 | CIT Appeals, Dethi Central Excise & Service Tax Appellate Tribunal, Delhi 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED (viii) As per the information and explanations (og) (x) (x given tous, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks or Government. The Company has so far not issued any debentures. As per the information and explanations given to us, the Company has not raised any money by way of initial Public offer or further Public offer (including debt instruments). Further in our opinion and according to the information and explana: tions given to us, on a overall basis, money raised by way of term loans have been applied for the purposes for which they were obtained According to the information and explanations given to us, no fraud on or by the Company by its officers or employees has been noticed or reported during the year under review. In our opinion, Managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Companies Act, 2013 Place : Noida Date :21" April, 2016 1L” Annual Report 2015-16 (xii) (xiii) (iv) (av) (xvi) The Company is not a Nidhi Company and as such this clause is not applicable. In our opinion all transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 and the necessary details have been disclosed in the Financial statements as required by the applicable Accounting Standards. The Company has not made any preferential allotment / private placement of shares or fully or partly convertible Debentures during the year under review. As such the compliance of Section 42 of the Companies Act, 2013 and the utilization of amount for the purpose funds are raised is not applicable. According to the information and explanations given to us, the Company has not entered into any non-cash transactions with Directors or persons connected with him and as such the compliance of provisions of Section 192 of the Companies Act,2013 are not applicable. The Companys not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934. For S.K. MEHTA & CO. Chartered Accountants Fire Registration No. 000472N B.P. SAXENA Partner Membership No. 10568 24KRIBHCO SHYAM FERTILIZERS LIMITED ANNEXURE “B” TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF KRIBHCO SHYAM FERTILIZERS LIMITED (Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act”) We have audited the internal financial controls over financial reporting of KRIBHCO SHYAM FERTILIZERS LIMITED (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date, Management's Responsibil Financial Controls ty for Internal The Company's management is responsible for establishing and maintaining internal financial controls based on “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safe guarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act,2013. Auditors' Responsibility Our responsibility is to express an opinion on the Company's financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Internal financial controls over 25 Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section143(10jof the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal contro! based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide @ basis for our audit opinion on the Company's internal financial controls system over financial reporting. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and cispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Place : Noida Date :21" April, 2016 1L” Annual Report 2015-16 Inherent Limitations of Internal Controls over Financial Reporting Financial Because of the inherent itations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”. For S.K. MEHTA & CO, Chartered Accountants Firm Registration No. 000478N B. P.SAXENA Partner Membership No. 10568 26KRIBHCO SHYAM FERTILIZERS LIMITED BALANCE SHEET AS AT MARCH 31, 2016 (% in Lacs) Particulars Notes March 31,2016 March 32, 2015 EQUITY AND LIABILITIES Shareholders’ Fund Share Capital 24 80,005.71 80,005.71 Reserves and Surplus 22 (14,967.03) (43,110.18) —— 65,038.68 5689553 Non-Current Liabilities Long term borrowings 23 61,000.00 61,855.17 Deferred tax liabilities (Net) 24 0.00 0.00 Other long term liabilities 25 1,085.58 1,023.60 Long term provisions 26 1,659.60 1511.26 63,745.18 5439003 Current liabilities Short term borrowings 20 99,452.30 109,896.62 Trade payables 28 7,862.81 10,671.28 Other current lia 29 9,751.90 9,653.21 Short term provisions 2.10 222.69 1,17,362.26 1,30.443.80 Total: 246,146.12 2,61,729.36 ASSETS Non-Current assets Fixed assets Tangible assets 24a 1,13,955.28 1,17,684.58 Intangible assets 2:12 2,046.50 2,204.03 233 609.58 2162082 116,611.36 22,509.43 Nor-current investments 2.14 5,250.25 5,250.25 Long term loans and advances 2s 337.21 379.45 Current Assets Inventories 2.16 9,471.43 7,261.40 Trade receivables 247 1,07,763.13 1,18,859.76 Cash & Bank Balance 2.18 223.25 645.15 Short term - loans & advances 2:19 6,403.75 6,737.93 Other current assets 2:20 85.74 85.90 1,23,947.30 133,590.23 Total: 2,46,146.12 2,61,729.36 Significant Accounting Policies 1 Notes forming part of accounts 2 The accompanying notes are an integral part of these financial statements. As per our report of even date FOR S.K.MEHTA & CO. FORAND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants [Firm Regn No.000478N| 5 SAXENA N. SAMBASIVA RAO RAJAN CHOWDHRY V. P. KAUSHIK Caer chip Nos0s6s Director Director Managing Director Place : Noida R. VENKATARAMANAN BIPIN C. PHULORIA Date : 21" April, 2016 Chief Financial Officer Company Secretary 21 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016 (@ in Lacs) Particulars Notes March 31,2016 March 31, 2015 INCOME Revenue from operations 224 1,89,708.75 2,01,147.52 Less : Excise duty 1,176.02 1,739.00 1,88,532,73 1,99,348.52 Other Income 2.22 513.29 486.63 Total Revenue 189,046.02 1,99,835.15 EXPENSE Cost of Materials Consumed 2.23 1,49, 334.66 1,52,862.95 ‘Changes in inventories of finished goods and 2.24 (2,223.26) 602.12 stock in process Employee benefits expense 2.25 4,872.81 5,056.30 Finance costs 2.26 13,013.01, 14,856.83 Depreciation and amortization expense 7,993.20 7,941.18 Manufacturing, Administration, Distribution and 2.27 17,904.94 18,165.94 other expenses Prior pariod adjustments(Net) 2.28 (19.44) 302.38 Total Expenses 1,90,877.92 99,787 71 Profit/|Loss) before Tax (@,832.92) 17.48 Tax Expense Current Tax- Current Year 0.00 9.25 - Earlier Years 24.93, 1.66 Deferred Tax 0.00 ___0.00_ 24.93 10.91 Profit/ (Loss) for the Year (1,856.85) 353 Earnings per equity share: (Par value € 10 each) Basic and diluted % 0.23 0.01 Significant Accounting Policies 1 Notes forming part of accounts 2 ‘The accompanying notes are an integral part of these financial statements. As per our report of even date FOR S.K.MEHTA & CO. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants (Firm Regn No.000478N} BP SAXENA N. SAMBASIVA RAO RAJAN CHOWDHRY V. P. KAUSHIK Riombership No.0568 Director Director Managing Director Place : Noida R. VENKATARAMANAN, BIPIN C. PHULORIA Date :21" April, 2016 Chief Financial Officer Company Secretary 1L” Annual Report 2015-16 28KRIBHCO SHYAM FERTILIZERS LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016 (Tin Lacs) Particulars 2015-2016 2014-2015 (A) cash Flow from Operating Activities Net Profit (Loss) Before Tax (4,831.92) anaa Adjustment for: Depreciation (incudng pcr period deprecation) 7983.20 322318 Provision for dimunitienin the value of fixed assets 25.04 2032 Provision for obsolete nor mowing inventories 0.00 $520 Interest and Hedging Cost Net) 13,013.01 1485683 (Prof) oss on sale /aerappine of fed assets (Net) 100 ae 08 {Profit} Loss on Sale of investments 0.00 (259) Ineres! income (366.01) (36464 Operating Profit before Working Capital Changes 19,834.72 72,96480 Adjustment for Inventories {2.230.031 1.08059 ‘rade and Other Receivables tans 48 (20/06830) Trade Payable, Provisions & Other Liabilities (2181.74) 472288 Cash Generated from Operations Te mea3 Saas Income Tax Pad (Net of Refunds) (537) 1959 Net Cash from Operating Activities (A) Tasas05 =a (8) cash Flow from investing Activites Purchase of Fixed Assets including CWALR (2,232.49) (2.70571) Proceeds rom Sale of Fined Asses 10.93 90 Proceeds Pom Sale of investments 0.00 234 interest Received 366.28 36445 Net Cash from Investing Actives -(8) (2.75530) 33202) (€) cash Flow from Financing Activities Proceeds Repayment) of longterm borrowings (2,086.40) (92400) Aepaymene of shore erm bortowings/eash ret 10,408.32 333531 Interest ad {sates atzr330) Net Cash from Financing Actvties-(C) (24,557.65) 590849) Net increae/{Decreas) in Cash & Cash Equivalents [A¥B#C] 421.50) 42283 Cath nd Coch Equivalent 2¢ atthe beginning of the year 645.35 prey {ash and Cash Equivalents as atthe clove ofthe yest 23.28 sa5as Net ncreave/{Occrease) in Cash and Cash Equivalents 23.50) az Note: (a) cash and cash Equivalents consist fash in hand an balances with banks. ash and cash quale ‘nuded inthe ca flow statement compre offoloing buoncesheetamountsasperte Ne, 2.18 oak soaeu “ash and Cash Equivalents ee ws Other Bank balance (Feed deposits) eres ae *Not available for use and includes amount deposited as securities with Government and other departments. lb) The ‘above cash flow statement has been prepared under the ‘Indirect Method! as set out in Accounting Standard-3 on cash flow statement as notified under Companies Act. le) Figures in brackets denote cash outflow As per our report of even date FOR S.K.MEHTA & CO. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants [Firm Regn No.000478N] Per eaXENA NN. SAMBASIVA RAO RAJAN CHOWDHRY V.P. KAUSHIK Ren, tip No.10568 Director Director Managing Director Place : Noida R. VENKATARAMANAN BIPIN C. PHULORIA Date :21" April, 2016 Chief Financial Officer Company Secretary 29 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES 14 1.2 1.3 Basis of Preparation of Financial Statements The financial statements are prepared under the historical cost convention on accrual basis and in accordance with generally accepted accounting principles in India and the relevant provisions of the Companies Act, 2013 including Accounting Standards notified thereunder. Use of Estimates The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognized in the year in which the results are known/materialized. Revenue Recognition {a) Sales Sale is recognized upon the transfer of significant risks and reward of ownership to the customers. Sales are stated at net of discount and rebates allowed. (b) Interest Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable. (c) Subsidy from Government of India (i) The Subsidy on Urea from the Government of India under Group Concession Scheme/Pricing Scheme are recognized as revenue on the 11" Annual Report 2015-16 basis of quantity sold. Further,subsidy is recognized based on management's estimation taking into consideration the guidelines, policies, instructions and clarifications given by the Department of _ Fertilizers, Government of India (GOI) from time to time and is further adjusted for input price escalation/de-escalation. (ii) Freight Subsidy is recognized on the quantity sold in terms of schemes notified by the Government of India(6Ol) (iii) Income from — scrap/salvage is recognized when sold. 1.4 Fixed Assets {a) Fixed assets are carried at cost less depreciation / amortization —_and impairment loss, if any. The cost of fixed assets includes cost of acquisition and directly attributable cost for bringing the assets in an operational condition for their intended use including pre- operative expenditure till commence- ment of commercial production and other incidental expenses subsequent there to up-to the date of stabilization of production but excluding refundable taxes and duties thereon, ifany. (b) Anintangible asset is recognized where it is probable that the future economic benefit attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Such assets are stated at cost less accumulated amortization. (c) Machinery Spares / Standby Equipments which can be used only in connection with an item of Fixed Asset and whose use is expected to be irregular are capitalized. 30KRIBHCO SHYAM FERTILIZERS LIMITED 15 1.6 31 (d) Capital work- in-progress is carried at cost. Borrowing Costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use All other borrowing costs are recognized as expenses in the period in which they are incurred. Depreciation / Amortization Depreciation: {a) Depreciation on Plant & Machinery has been provided on Straight Line Method, based on useful life technically assessed by Company based on report of independent expert. (b] Fixed Assets individually costing up to % 5,000/- are being fully depreciated in the year of acquisition. (c) Depreciation on Machinery spares / Standby Equipments has been charged over the residual life of related Plant and Machinery. (d Depreciation on other Fixed Assets has been provided on Straight Line Method based on useful life as specified in Schedule Il of the Companies Act, 2013 (e) Depreciation on assets discarded from active use and held for disposal is not being provided. Amortization: {a) Value of Leasehold Land and Site Development expenses is amortized over the period of lease. 1.7 1.8 19 (b) Intangible assets in the nature of Gas Price Right, Locational Benefits in term of present/future products as identified by the independent valuer in terms of its valuation report for the purpose of determining the fair value of individual assets taken over by the company in the year 2006 are amortized on straight line method basis over the period of twenty five years. (c) Intangible assets comprising of computer software are amortized on straight line method over a period of legal right or five years whichever is earlier on pro-rata basis Impairment of Assets The carrying amount of cash generating unit is reviewed at each balance sheet date where there is any indication of impairment based on interal/external indicators. An impairment loss is recognized in the statement of profit and loss where the cartying amount exceeds the recoverable amount of the cash generating unit. An impaired loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased. Catalysts Catalysts are charged to revenue over their estimated useful life. Value of Catalysts yet to be consumed in production process is considered as part of Inventories. Foreign Currency Transactions (a) Foreign currency transactions are recorded at exchange rates prevailing on the date of such transactions. (b) Foreign currency monetary assets and lities remaining unsettled at the year end are translated at the closing exchange 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED rate. Gain and losses on account of exchange difference either on settlement or translation is recognized in the statement of Profit & Loss. {c) Non-monetary items denominated in foreign currency are reported using exchange rate prevailing on the date of transactions. (d) In respect of forward contracts premium or discount arising at the inception of forward exchange contracts is amortized as an expense or income over the period of the contract. Forward contracts remaining unsettled at end of the year are reported at year end rates. Any profit or loss arising on cancellation or renewal of forward exchange contracts is recognized as income or expenses in the year in which such profit or loss arises. 1.10 Investments (a) Long-term Investments are stated at acquisition cost. Provision for diminution in the value of long-term investments is made to recognize a decline, other than temporary in the value of such investments. (b Current investments are valued at lower of cost and fair value determined on individual assessment basis. 1.11 Inventories Inventories are valued at lower of cost and net realizable value (a) Cost in respect of various types of inventories is computed as under: i) Raw materials, Packing materials, Chemicals & Catalyst in Stock, Stores and Spares at weighted average cost. 11" Annual Report 2015-16 (b) ii) Stock in process at direct cost and appropriate portion of overheads. lil) Finished goods at annualized cost of production Net realizable value of finished goods is Concession Price/Import Parity Price (IPP) determined in accordance with norms of Government of India less estimated costs necessary to make the sales. 1.12 Employees Benefits (a) Short term Employee Benefits are recognized as an expense on an undiscounted basis in the statement of Profit and Loss of the year in which the related service is rendered. (b) Liability for long term benefits such as Gratuity, leave — Encashment/ Compensated absences are recognized ‘on the basis of actuarial valuation made at the end of each financial year. (c) Gains and Losses arising out of actuarial valuation are recognized immediately in the Statement of Profit and Loss 1.13 Taxation (a) CurrentTax Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of Income Tax Act, 1961. However, where the tax is computed in accordance with the provisions of Section 115 JB of the Income Tax Act, 1961 25 the Minimum Alternate Tax (MAT), it is charged off to the statement of Profit and Loss of the relevant year. However, credit of MAT would be taken within the permissible time period when the company's profits would be subject to normal income tax rates. 32KRIBHCO SHYAM FERTILIZERS LIMITED. (b) 1.44 aas 1,16 33 Deferred Tax Deferred Income Tax (expense or credit recognized for the current year timing differences between taxable income and accounting income for the year and reversal of timing difference of earlier years. Deferred Tax Assets in respect of unabsorbed depreciation and tax losses are recognized to the extent there is virtual certainty of their realization against future taxable profits. However, in case of other items, recognition is done on the basis of reasonable certainty. Deferred Tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date Pre Project Expenditure The expenseson pre-feasibility study reports, market survey reports, techno-economic feasibility reports etc., on new projects is allocated to the fixed assets on completion of the projects. Where the projects are proved infructuous they are charged off in the year in which the decision is taken to scrap the same by the Competent Authority. Lease Assets taken on lease under which, all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating lease are recognized as expense on accrual basis in accordance with the terms of respective lease agreements Provisions, Contingent Liabilities and Contingent Assets (AS-29) (a) Provision is recognized when the Company has a present obligation as a result of apast event and it is probable that an outflow of resources will be (b) {c) 1.17 1.18 required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are determined based on management estimate required to settle the obligation at the balance sheet date and are not discounted to present value. Contingent Liabilities are disclosed on the basis of judgment of '_—the management / independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate. Contingent Assets are neither recognized nor disclosed in the financial statements Prior Period Income / Expenditure Income / Expenditure relating to prior period(s) which does not exceed ¥ 50, 000/- in each case is treated as Income / Expenditure for the Current Year Revenue Recognition in the Event of Uncertainty Following items are recognized when no significant uncertainty exists with regard to the amount to be realized and ultimate collection there of: (2) Claims for (i) Shortage/Damages on movement of fertilizers (ii) Under-charges on freight paid to Railways (iii) Rebate on freight from Railways ( (v) Insurance claims (vi) Refund of Purchase Tax, Sales Tax, Turnover Tax, Customs, Excise and Electricity Duties excess charged. ) Interest on overdue payments (b) Penalties and Compensation. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. NOTES - 2 : NOTES FORMING PART OF ACCOUNTS (Rin Lacs) Particulars March 31,2016 March 31, 2015 2.1 SHARE CAPITAL Equity Share Capital (a) Authorised 100,00,00,000 (PY. 100,00,00,000) Equity Shares of €10/- each _1,00,000.00 400,000.00 {b) Issued, Subscribed and fully Paidup 80,00,57,143 (PY. 80,00,57,143) Equity Shares of & 10/- each Fully Paid up Further Notes : (0) Ouring the period of five financial years immediately preceeding the Balance Sheet date, the company has not: ()) allotted any fully paidup equity shares by way of bonus shares; {ii) allotted any equity shares pursuant to any contract without payment being received in cash; (ii). brought back any equity shares (ll) The Company has only one class of equity shares having a par value €10/-per share. The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders, (ll) Details of Number of shares held by the Holding Enterprise ‘Number of Equity shares % of Holding Particulars March 31,2016 | March 31, 2015 | March 31, 2016 | March 31, 2015 Krishak Bharati Cooperative Limited. | 74,01,04,465 | 63,00,34,286 92.51 85.00 (iv) Details of Shareholders holding more than 5% shares in the Company Number of Equity Shares Percentage (%4) Peetioulars March 31,2016 | March 31, 2015 | March 31,2016 | March 31, 2015 Krishak Bharati Cooperative Limited. | 74,01,04,465 | 63,00,34,286 9251 85.00 STL Fertilizers Private Limited 5,99,52,676 | 12,00,22,855 7.48 15.00 2.2 RESERVES AND SURPLUS (Fin Lacs) Particulars March 31,2016 March 31, 2015 Deficit in Statement of Profit & Loss Balance as per last financial statements (13, 110.18) (12,929.26) ‘Add : Depreciation charges debited to reserve - (217.45) Profit/(Loss) for the year (1,856.85) 36.53 Net Deficit ) (13,110.18) 11" Annual Report 2015-16—- KRIBHCO SHYAM FERTILIZERS LIMITED. KSFL 2.3 LONG TERM BORROWINGS (Gin Lacs) Particulars Non-current portion Current Maturities 35 March 31, 2016 March 31,2015 March 31,2016 March 31, 2015 Secured Term Loans from Banks State Bank of India 20,000.00 23,000.00 2,000.00 2,000.00 (Reter note 1 below) State Bank of India 20,000.00 - = _ (Refer note 2 below) HFC Bank Ltd 21,000.00 23,000.00 2,000.00 2,000.00 (Refer note 3 below) Union Bank of India = 15,000.00 = — (Reter note 4 below) 61,000.00 {61,000.00 4,000.00 4,000.00, Unsecured Interest Free UP Trade Tax - 855.17 855.17 1,046.40 Loan in lieu of Trade Tax Deferment Scheme Less: 61,000.00 61,855.17 4,855.17 5,046.40 Amount disclosed under the head = = 4,855.17 5,046.40 "Other Current Liabilities" Total : 61,000.00 61,855.17 = = Secured Loan a) Securities for secured loan 1 Secured loans € 22000,00 lacs (Previous year %25000,00 lacs) from State Bank of India is secured by way of first par-passu charge on the entire fixed assets of the Company and second pari-passu charge on all the current assets of the Company by way of hypothecation of stocks , stores, book debts and other current assets and further guaranteed by Corporate Guarantee of holding enterprise-Krishak Bharati Cooperative Limited (KRIBHCO). ). Secured loans % 20000.00 lacs (Previous year & Nil) from State Bank of India is secured by way of first. pari-passu charge on the entire fixed assets of the Company and second pari-passu charge on all the current assets of the Company by way of hypothecation of stocks, stores, book debts and other current assets and further guaranteed by Corporate Guarantee of holding enterprise ~ Krishak Bhareti Cooperative Limited (KRIBHCO) ¥ 2300.00 lacs (Previous year % 2500.00 lacs) from HDFC Bank Ltd., Is secured by way of first pari-passu charge over the fixed assets of the Company and and second pari-passu charge on all the current assets of the Company by way of hypothecation of stocks . stores, book debts and other current assets and further guaranteed by Corporate Guarantee of holding enterprise-Krishak Bharati Cooperative Limited (KRIBHCO) Nil (Previous year for € 15000.00 lacs| from Union Bank of India is secured by way of second pari-passu charge on the fixed assets of the Company and further guaranteed by the Corporate guarantee of holding enterprise-Krishak Bharati Cooperative Limited (KRIBHCO) 11" Annual Report 2015-16—- KRIBHCO SHYAM FERTILIZERS LIMITED. KSFL b) Terms of Repayment of Loans i) State Bank of India | The loan is repayable in quarterly installments of & 5.00 Crores each starting from 30.06.2015 to 31.03.2017, quarterly installments of 12.50 Crores each from June, 2017 to March, 2020 and quarterly installments of %15 Crores each from June, 2020 to March, 2021. However & 10.00 crores each has been repaid in first two instalments of loan. iil) HOFC Bank Limited i) State Bank of india | Unsecured Loans The loan is repayable in quarterly installments of € 5.00 Crores each starting {rom 30.06.2015 to 31.03.2017, quarterly installments of % 12.50 Crores each from June, 2017 to March, 2020 and quarterly installments of € 15 Crores each from June, 2020 to March, 2022 The loan is repayable in 20 quarterly installments of ® 10.00 Crores each starting from 31.12.2017, The financial assistance has been provided by the Pradeshiya Industrial and Investment Corporation of Utter Pradesh Ltd.(PICUP), under Trade Tax Deferment Scheme of State Govt. of U.P. and is re-payable on 31st May, 2016.Bank Guarantee is provided by the company against the above loan. (Rin Lacs) Particulars March 31,2016 March 31, 2015 2.4 DEFERRED TAX LIABILITIES (NET) The Company estimates deferred tax/(charge) using the applicable rate of taxation based on the impact of timing difference between financial statements and estimated taxable income for the current year. Major components for Deferred tax liabilities and Deferred tax assets at year end are given as below. Deferred Tax Liabilities Difference of book depreciation and tax depreciation 18,997.68 18,944.95 Deferred Tax Assets Provisions allowable on payment basis under Income Tax Act 619.50 536.10 Other provisions 83.83 18.05 Unabsorbed depreciation 18,294.35 18,390.80 18,997.68 18,944.95 Net Deferred Tax Liability / (Asset ) 9.00 0.00 Deferred Tax Assets in respect of unabsorbed depreciation have been recognized to the extent of net deferred tax liability on the concept of virtual certainty, based on convincing evidences, as envisaged in Accounting Standard-22 (Accounting of Taxes on Income) and further clarifications/interpretations issued by The Institute of Chartered Accountants of India. 2.5 OTHER LONG TERM LIABILITIES Deposits from Customers 990.53 984.18 Deposits from Contractors/others 95.05 39.42 Total : 085.58 1023.60, 11" Annual Report 2015-16 36oe KRIBHCO SHYAM FERTILIZERS LIMITED KSFL (Rin tacs) Particulars March 31, 2016 March 31, 2015 2.6 LONG TERM PROVISIONS 27 37 For Employee Benefits Gratuity 1,258.83 1,130.61 Privileged / Earned / Sick Leaves 691.65 602.80 1,950.48 4733.41 Less: ‘Amount disclosed under the head "Short Term Provisions” Gratuity 159.62 114.76 Privileged / Earned / Sick Leaves 131.26 107.39 230.88 22215 Total : 1,659.60 4511.26 SHORT TERM BORROWINGS Working Capital Loans Secured State Bank of India 19,577.00 19,530.28 (Refer note 1 below) HDFC Bank 11,517.99 0.00 (Refer rote 2 below) The Saraswat Co-op Bank Lid. 9,999.98, 10,000.00 (Refer rote 3 below) 41,094.97 29,530.28 Unsecured From Banks 58,357.33 80,366.34 (Refer note 4 below) —_ —_ 358,357.33 80,366.34 Total : 99,452.30 1,09,896 62 Secured Loans 1 Cash Credit € 19577.00 lacs (Previous Year € 19530.28 lacs) from State Bank of India is secured by first pari-passu charge on all the current assets of the Company by way of hypothecation of stocks, store, book-debts and other current assets of the Company and further guaranteed by the Corporate Guarantee of holding enterprise-krishak Bharati Cooperative Limited (KRIBHCO). 2 Cash credit of € 1517.99 lacs (previous year © Nil) from HOFC Bank is secured by first exclusive charge by way of hypothecation of Company's entire current assets and further guaranteed by joint and several Corporate Guarantees of KRIBHCO and Shyam Basic Infrastructure Projects Put. Utd for % 100.00 crores and %25.00 crores has been guaranteed by KRIBHCO independently 3° Cash credit of € 9999.98 lacs (previous year F 10000 lacs) from The Saraswat Co-operative Bank Limited is secured by first pari-passu charge by way of hypothecation of Company's entire current assets and further guaranteed by Corporate Guarantees of holding enterprise-Krishak Bharati Cooperative Limited (KRIBHCO). Unsecured Loans: 4 All the unsecured loans of & 58357.33 lacs (Previous Year % 8036.34 lacs) are guaranteed by Corporate Guarantee of holding enterprise-Krishak Bharati Cooperative Limited (KRIBHCO) 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. (Rin Lacs) Particulars March 31, 2016 March 31, 2015 2.8 Trade payables For Goods and Services Related Party 1,205.31 2,965.09 Others 6,657.50 7,706.19 7862.81 WOp7Iz8 Refer Note No. 2.35 for breakup of dues payable 10 related parties, 2.9 OTHER CURRENT LIABILITIES Current maturities of long term borrowings 4,855.17 5,046.40 Interest accrued but not due on loans 521.06 57499 Deposits from Contractors and others 240.75 27931 ‘Advances from Customers 1,359.65 1,403.26 Other Payables Employees 386.97 18103 Others 1,955.82 1587.25 Statutory dues 432.48 580.97 2775.27 2343.25 Total Payable 9,751.90 965321 Refer note no. 2.35 for breakup of dues to related parties 2.10 SHORT TERM PROVISIONS Provision for Employee Benefits Gratuity 159.62 1477 Privileged / Earned / Sick Leaves 131.26 10739 290.88 T2776 Others a For Excise Duty on closing Stock 437 053 437 053 295.25 22269 11" Annual Report 2015-16 38a — A 2 a N = 5 & a a z a 8 = 5 = Z BSEOETT] ELL CH —ETSLG SHERI vo LewOR [RELESOZ WOT wot’? ereR'T ceTEE'LO'Z | HEAsNOINeG asva9cr't aUSEETT| 9eeze's6 Ore —SS90I_ Le vER'L eccos'ee | exvereOe WE eet LSE zever'so'z | +I [2vesb't RAE EYT - Reet yest zesyT 211 ONIOW wow pauny S959 wrap levee © ro wit ove |e wo sve 6rbor apuen seo sete fowet tz soz svest | sor = sz ez zor saneiuod sey ores, «| 0m © stot Sete) geuer © tSO tro) rez ewe squaweino 2040 ecvo ewes, «Ssfezas ore - act sete forte se seat g0ovt aunong gaumuuns T9'6RSE0'T wb'99'66 | (Z°096'T6 §TO'T vr'sor pO'RTH RO'6EO'be | 1L°9ES'TST 00°9 woz 6'9TS'E §—67ZEZZ'RB'T | MauyreN gweld swuowdynba » ave lowest evsee’z |eetey - - wee orose | gsraoe'z assey —gszee'z | Supung Avciveguoy: jesu6e't Te'TeeT es'eat't zest —Sz'ovO'T | 6arso0's wet Levee Supping Auoyeg- sup Scves'e — Oz"E08's OT'TrE'T SSTET sc'60z’t | Ofbee'6 OfbeL's quauidojaaag, aus 8 puejploysseat gt07 o10r__| 902 7 ; am, |e 7 : 50% Tetorew Mrespren | etovew resodia awounsnipy seo, "Te tosew | TFEMbIEW —[es0dna wounsniey suorippy "LO lUdy hesv yesy jordan fares suonajag aasoy adn = faesy ayes /suonajaq wv siassy jo uondiosog iiiwa W008 LN NOUVELNOWY / NOUVDSHEIG WOT SS0uS (s9e7 uly) SLISSV 3ISIDNVL TT'Z 11" Annual Report 2015-16 39a i E 2 a N al & & a a z ea a 8 = 5 = Z i] Jo Sua} U! ‘BUPeYepUN eIpu| Jo wawusano5 e “(1IGa) “PH epu) Jo syuawid Paynvapl se -2y9 syanpoud aumyny/quasaud Jo sue} Uy “ysopeid 1p ‘undueyelyoys Ie we} CDN JIN supe) po'g 24} BuLINb>e oY Jano uaye] sJasse jenpIAIpUI Jo anjen se} BuUlWa,p Jo asodund ayy Jo} yodas UOKeN|eA aq sjoalold S/W JaN|eA quapuadapur ayy Aq yauag [eUOREIO) WUBly Bud SED Jo BINJeU ayy UI SI JaSSE a[gIBUEWU 8410 210N tororz | ezoeeor c'est oo'eee'ot | zzoeser 1zB cozes'zr | sPaA snoinoig rovvec'e —osevo'e | ssvpsior eeust ecoee‘or | coteszt ovo eeosser | simon (wojaq sou 3924) arom’? wweus't | coosyor - wseer 05-9Se°0r | se'sap'er a6990'¢r sn0 sees es69 | vs seve eee | gover oo ezert aremyos seynduuoy roe woz ore. oz | proz TetmeW —Teuatew | emu lesodsig wawnsnipy seoq "Te ue | *TEGDIEW hesy wey oda foes /suonajea apsoy mdn |aesy foes fs SnIWANOOS GN, NOUWSIBOWY 3D01S SOUS sassy yo uod25aq (soe7 ul 3) SLISSV 31GIDNVINI ZT°Z 40 11" Annual Report 2015-16a a 5 A 2 a N = 5 & a a z a 8 = 5 = Z zs0z9r is's8y ss8 BOEOTZ TeTt0'r 2EEA snONOd 85°609 7S L65'E — sv9gst zerozs'z exo, 00'209 BL'SPLE — vr|azsit eervz eee - ~ ev9r ozs sBulpis Aemrey 9e-02z - - - ge0z7 weld euowury dusensy cd - - reve - 1910 seLez aese'e - ovser'r se 9ee't stuauudinbs 1ue\g est Cte = eres oT tOr (000) eo'b0r = vee Ste urpyna Asox204-uoN 8st wey - ogoe T6ez Suiping A1oye4 Sassy ajqyduey grog ‘Te ue, pasyerdes quaunsnlpy suonippy $102 ‘to wy sy junowy Jsuonenpea oer sieinomied (9erura) SSAYDOU NINYOM WildV2 £T'Z 11" Annual Report 2015-16 4= |) KRIBHCO SHYAM FERTILIZERS LIMITED. (in Lacs) Particulars March 31, 2016 March 31, 2015 2.14 NON CURRENT INVESTMENTS Long Term (Unquoted, Non Trade] In Bonds issued by Government of India 6.65% Fertilizer Company-Special Bond 2023 3,150.00 3,150.00 7.00% Fertilizer Company-Special Bond 2022 2,100.00 2,100.00 In Equity The Saraswat Co-operative Bank Limited 0.25 025 (2500 equity Shares @ Rs.10/- each) — a Total: 5,250.25 5,250.25 Investments have been valued as per Significant Accounting Policy na. 1.0 as disclosed in note 1 to the financial statements. 2.15 LONG TERM LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated) ‘Advances for Capital expenditure = se.16 Security Deposits 5.76 752 Advance Tax (Net of Provisions) 314.11 292.77 Other Loans and Advances Employees 21.00 Total: 337.21 379.45, Amount receivable from related parties, directors and officers & 2.66 Lacs (PY. € 2.66 Lacs} 2.16 INVENTORIES (As taken, valued and certified by the management) Stock in Process 47.45 Finished Goods 719.008 Finished Goods in Transit 127477 Packing Materials 12997 Catalyst in Use 999.73 Chemicals & Catalyst 168.54 Loose Tools 5.24 Stores & Spares 3,915.02 7,319.80 Less : Provision for obsolete, surplus and non moving items 58.40 Total: 726140 Inventory items have been valued considering the significant accounting policy ne 1.11 disclosed in Note No. 1 to these financial statement. 11" Annual Report 2015-16 42KRIBHCO SHYAM FERTILIZERS LIMITED. (in Lacs) Particulars March 31, 2016 March 31, 2015 2.16 INVENTORIES (Contd...) Breakup of Inventories Stock in Process ‘Ammonia 43.49 40.46 Urea 7 699 5146 2788 Finished goods Ammonia 215.01 465.90 Urea at Plant /Warehouse 1,469.39 253.18 1,684.40 71908 Finished goods in Transit Urea 2,527.00 Total: 2,527.00 1,274.77 2.17 TRADE RECEIVABLES (Unsecured, considered good, unless otherwise stated) Outstanding for the period exceeding six months from the date they are due for payment Claims due from Government of India 10,778.57 27.286.13 Others 26.69 26.60 {Refer note * bebw) es ns ae 2731273 Others: Claims due from Government of India 93,123.71 90,637.20 Others 3,837.16 909.83 (Refer note ** below) — = —91547.03 Total : * The above trade receivables includes & 22.71 lacs (PY.@ 22:71 lacs) from M/s B.S. Trading Co, Utarathand against whom a legal suit for recovery has been illed by the Company under Negotiable Instruments Act, 1881. A chil suit has also bon filed against M/s. B.S. Trading Co,, for recovery of tho outstanding with intorest. Tho suit was admitted and has been decided in favour of the Company and M/s B.S. Trading Co,, has been asked to deposit ® 30.00 lacs with the Company towards compensation ** Amount due from related party-RNIL (PY. €3.15lacs) 2.18 CASH AND BANK BALANCES a) Cash and Cash equivalents Balances with scheduled banks: Current / Cash Credit accounts Cheques / Demand Drafts on hand Cash in hand b) Other Bank Balances Fixed deposits* Total: * Not available for use and includes amount deposited as securities with Government and other departments. 43 103.59 45.73 1.81 567.86 395 2.07 71.27 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED (in Lacs) Particulars March 31, 2016 March 31, 2015 2.19 SHORT-TERM LOANS AND ADVANCES (Unsecured considered good unless otherwise stated) Advances to Employees 28.67 27.60 Contractors & Suppliers 76.61 93.13 Others: Balances with revenue authorities 2.93 23.33 Stamp duty paid under protest 5,770.43 5,770.43 Prepaid Expenses 85.24 108.42 Other Recoverable 439.87 719.02 6,298.47 6,617.20 Total: 6,403.75 6,737.93 2.20 OTHER CURRENT ASSETS Interest accrued : (On Govt. Bonds e181 a1.a1 On Fixed Deposits 3.93 4.18 Total: 2.21 REVENUE FROM OPERATIONS Sale of Products (Net of discounts / rebates) Concession / Price Support from Central Government (Net of recovery / adjustments) Total: Breakup of sales of products Urea Ammonia Electricity Total: Breakup of Concession / price support from Central Government Urea: Price Concession Freight Subsidy Total: 11" Annual Report 2015-16 57,816.34 131,892.41 189,708.75 52,617.88 4,992.31 206.15 57,816.34 1,21,007.97 10,884.44 131,892.41 65,616.96 1,35,530.56 201,147.52 56,332.70 9,093.35 190.91 65,616.96 1,22,584.35, 12,946.21 1,35,530.56KRIBHCO SHYAM FERTILIZERS LIMITED (in Lacs) Particulars March 31, 2016 March 31, 2015 2.22 OTHER INCOME Interest Income: From Banks 2.23 45 Government securities Gain on sale of investments Rentals / Compensation of Properties Other Non-Operating Income: Profit on disposal/retirement of fixed assets Insurance claim received Excess provisions written back Scrap Sales, Miscellaneous Total: COST OF MATERIALS CONSUMED Raw Materials - Fertilizers Raw Materials- Non Fertilizers Packing Materials Chemicals & Catalysts Power, Fuel & Water Total : Breakup of Raw Materials - Fertilizers Consumed Natural Gas Total: Breakup of Raw Materials - Non-Fertilizers Consumed Natural Gas Total: Breakup of Power, Fuel and Water Power - Natural Gas Fuel Water Charges Total: 5.48 8.83 2.91 36.46 56.12 109.80 84,343.55 150.82 3,188.36 1,307.50 60,344.43, 149,334.66 84,343.55, 84,343.55, 150.82 150.82 60,320.11, 87,289.82 477.77 3,692.98 1,184.74 60,517.65 152,862.96 87,289.82 87,289.82 wT W717 60,501.61 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED (in Lacs) Particulars March 31, 2016 March 31, 2015 2.24 CHANGES IN INVENTORIES OF FINISHED GOODS & STOCK IN PROCESS Closing Stock Finished Goods 4,211.40 1,993.85 Stock in Process 51.16 47.45, 4,262.56 2,041.30 Opening Stock — —— Finished Goods 1,993.85 2,602.08 Stock in Process 47.05, 41.34 2,041.30 Decrease / (Increase) in Inventories (2,221.26) 2.25 EMPLOYEES BENEFITS EXPENSE Salary, Allowances, Wages & Bonus 4,329.55 4,564.13 Contribution to Provident & other funds 249.62 241.46 Staff Welfare expenses 293.64 250.71 Total: 4,872.81 2.26 FINANCE COSTS Interest on: Rupee term loans 6,050.93 ‘On cash credit and short term Loans 6,865.82 12,916.75 14,785.16 Other Borrowing Cost: — ‘Other ancillary cost 96.26 71.67 __96.26 ___ 71.67 Total: 13,013.01 14,856.83, 11" Annual Report 2015-16 46KRIBHCO SHYAM FERTILIZERS LIMITED (in Lacs) Particulars March 31, 2016 March 31, 2015 2.27 MANUFACTURING , ADMINISTRATION, DISTRIBUTION AND OTHER EXPENSES Repairs and Maintenance: Stores & Other Consumables 71.73 87.17 Buildings 213.30 159.55, Plant, Machinery and Other Equipments 1,742.31, 1,404.21 ‘Others 3.89 1654.82 Insurance Charges 223.48, ‘Traveling Expenses: Directors 1.69 4.20 Others. 31.64 35.35 33.33 39.55 Printing and stationery 3.51 13.35 Rent, Rates & Tavas: Rent 23.60 21.30 Rates & Taxes 53.07 39.66 76.67 60.96 Communication Expenses 11.61 13.32 Publicity & Sales Promotion 0.69 1.02 Bagging Expenses 279.38 288.29 Freight Outward and Handling Charges 13,347.52 13,565.54 Warehousing Charges 45.57 48.51 Director Sitting Fees 11.43 3.37 Service Charges 1,321.51 1,488.09 Vehicle Running & Maintenance 88.37 105.05 Legal and Professional Charges 70.15, 52.09 Payments to Auditors 11.02 8.99 Bank Charges 32.47 68.54 Provision for obsolete / non moving inventories 0.00 29.20 Provision for dimunition in the value of fixed assets 25.44 80.32 Loss on sale of Fixed Assets 6.49 95.35 Foreign Exchange Fluctuation L79 Miscellaneous Expenses 324.31 Total: 18,165.94 Break up of Payment to Auditors Audit fee 10.08 8.99 Certification fee 0.94 = 11.02 8.99 2.28 PRIOR PERIOD ADJUSTMENTS (NET) income Others 22.52 = Expenditure 2252 = Depreciation & Amortisation 0.00 281.98 Others 3.08 20.40 3.08 302.38 Net expenditure / (Income) (19.44) 302.38 aT 11 Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. OTHER NOTES 2.29 CLAIM PENDING SETTLEMENT of Income Tax, based on the advise received During the year 2006-07, the Company had paid stamp duty of % 190.80 crores on transfer/registration of Assets acquired from Oswal Chemicals & Fertilizers Limited vide sale agreement dated 31° March 2006. The Company had paid the amount of stamp duty as finalized by Additional District Magistrate (F&R), Collector of Stamps, Shahjahanpur on total sale consideration of 1908 crores, The Company has filed an appeal before the Board of Revenue, Uttar Pradesh for refund of total Development Tax amounting to % 38.16 crores paid at the rate of 2% in respect of all assets and stamp duty amounting to % 19.54 crores paid on Leasehold Land, Site Development, Intangible Assets/Benefits and Current Assets, challenging the levy of the same, Upon dismissal of appeal by Board of Revenue, U.P, the Company has filed 2 writ petition before the Hon'ble High Court, Allahabad challenging the order passed by Board of Revenue. Hon'ble High Court has allowed the writ petition in part and the orders of ADM (F&R), Shabjahanpur and Chief Controlling Revenue Authority have been set aside. The matter has been remanded back to ADM (F&R), Shahjahanpur to decide the case afresh in the light of the observations made in the order of the Hor'ble High Court after giving opportunity of hearing to the Company. Pending final outcome, the sum of €57.70 crores paid by the Company (based on actual computation) has been disclosed as “Stamp Duty paid under protest” under the head of Short Term Loans & Advances in Note No. 2.19 of the Financial Statement. However, for the purpose 11" Annual Report 2015-16 from Tax Consultant, the Company has claimed the depreciation on the same in the Income Tax Return filed for the assessment years 2006-07 (revised), 2007-08 and thereafter. 2.30 Stamp Duty Collector Stamps/DM, Shehjahanpur passed an order dated 13/08/08 observing that the deed of mortgage executed on 31/01/2006 between Oswal Chemicals & Fertilizers Limited, UT! Bank Limited (Security Trustee) andthe Company, will attract stamp duty of & 190 crores (the amount revised from % 190 lacs to & 190 crores upon rectification application and subsequent order by Collector of Stamps) and also served an, order for recovery on the Company. Aggrieved by the order, the Company has preferred an appeal before the Chief Controlling Revenue Authority, Uttar Pradesh and filed stay petition before the Hon'ble High Court of Allahabad. In response, the Hon'ble High Court of Allahabad granted stay on recovery proceedings. The Chief Controlling Revenue Authority (CCRA) pronounced the judgment against the Company. The Company had filed a writpetition before the Allahabad High Court against the judgment of CCRA, The writ petition was admitted wherein it was decided that tll the next date of listing, the operation of the order passed by the Collector Stamp, Shahjahanpur and that of the CCRA shall remain stayed. The matter is pending as on balance sheet date Pending final award, based on legal opinion by an expert obtained by the Company, the Company has not made any provision in respect of aforesaid demand, however, the same has been disclosed as contingent liability in “Note No. 2.39”, 482.32 DISCLOSURE AS PER KRIBHCO SHYAM FERTILIZERS LIMITED. 2.31 Depreciation/ Amortization In respect of certain Plant & Machineries, useful life as technically determined by the Company is more than useful life as specified in Schedule ll of the Companies Act, 2013. Depreciation charge for the year would have been higher by € 5431.78 lacs (Previous Year by % 5434.38 lacs) in case Company adopts useful life as specified in Schedule Il of the Companies Act, 2013. ACCOUNTING STANDARD - 11 “EFFECT OF CHANGE IN FOREIGN EXCHANGE RATE” Amount of foreign exchange difference (net) debited to statement of profit and loss account is T4.91 lacs (Previous Year: 1.79 lacs). 2.33 DISCLOSURE AS PER ACCOUNTING STANDARD - 15 (REVISED) ON “EMPLOYEE BENEFITS” {a) Defined contribution to provident fund and employee pension scheme: The Company makes contribution towards Employees’ Provident Fund and Employees! Pension Scheme. In accordance with the provisions of these schemes, the Company is required to contribute a specified percentage of payroll costs, The Company has, during the year, recognized the sum of % 243.67 lacs (Previous year % 235.65 lacs) as expense towards contributions to these plans (b) Defined benefits towards retirement benefits: The summarized position of various defined benefits recognized in the Statement of Profit & Loss and Balance Sheet are as under: (Fin Lacs) Gratty [Unfunded] Teave Fneathment (Unfunded) | Particulars 2015-2016 | 2014-2015 | 2015-2016 | 2014-2015 (a) Changes in the present value of obligation Present value of obligation as on 01/04/2015 1130.61, 902.47 60280 415.95 Interest cost aan mR 4283 3485 Current service cost 7748 «2.05 e271 a7. Benefits paid (55.25) (44.97) (114.61) (130.36) Actuarial (Gain) / Loss 22.63 127,33 97.92 174,55 Present value of obligation as on 31/03/2016 325809 1,130.61 so.65 oxz.80 (b) Amount recognized in the balance sheet Present value of obligation as at the year end 1,258.83 1,130.61 691.65, 602.80 Fair value of plan assets as at the year end = = - - Liability recognized in the balance sheet 425883113061 sores 602.80 (©) Expenses recognized in the statement of profit & loss Current service cost 7138 62.06 e271 a7at Interest cost 3.71 mn 4283 34.85 Net Actuarial (Gain) / Loss. 22.63 127.33 97.92 174.55, Total expenses recognized in the statement of profit andloss 122.48 2aar 20246 297.21 (d) Principal actuarial assumptions Discount rete 7.80% 780% 50% 1.80% Future salary increase 7.00% 7.00% 7.00% 1.00% The estimate of future salary increases considered in actuarial valuation, by taking account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. 2.34 DISCLOSURE AS PER ACCOUNTING STANDARD ~ 17 ON “SEGMENT REPORTING” 1) The Company's primary business segment is manufacturing of Ammonia & Urea. Based on the guiding principles given in Accounting Standard 17 on “Segment Reporting”, this activity falls within a single primary business segment and accordingly the disclosure requirements of Accounting Standard 17 in this regard are not applicable Il) The operation of the Company is carried out within the country and therefore geographical segments are inapplicable. 2.35 DISCLOSURE AS PER ACCOUNTING STANDARD ~18 ON “RELATED PARTY DISCLOSURE” (a) | List of related parties with whom transactions have taken place during the year : i) | Key Management Personnel + MrV. P. Kaushik, Managing Director ‘+ Mr Rakesh Kamra, Director (Finance) & CFO upto 31.12.2015 + Mr.R Venkataramanan, Chief Financial Officer we.f 01.01.2016 + Mr Bipin C.Phuloria, Company Secretary Holding Enterprise + Krishak Bharati Cooperative Limit (Rin Lacs) {b) | Transaction with related parties 2015-2016 | 2014-2015 {i) Holding Enterprise - Sale of Goods 2,460.62 | 2,751.98 ~ Sale of Spares and Equipments 0.00 0.77 ~ Service charges paid/ payable 4321.51 | 1,447.71 ~ Reimbursement for salary & other expenses 3.53 11.96 - Amount paid/payable for Rent, Electricity & Other Services 26.53 24.18 Key Management Personnel ~ Remuneration 107.49 101.66 (Rin Lacs) ()_ | Outstanding balances as at the end of the year 2015-2015 | 2014-2015 Holding Enterprise ~ Amount Payable (Net) - For Goods & Services 1,205.31 | 2,965.09 ~ Other Payables 0.15 4.55 - Amount Recoverable ( Security Deposit) 2.66 2.66 11" Annual Report 2015-16 50KRIBHCO SHYAM FERTILIZERS LIMITED. 2.36 237 2.38 2,39 51 DISCLOSURE AS PER ACCOUNTING STANDARD — 19 ON “LEASES” ‘The Company's significant leasing arrangements are in respect of operating leases of premises for office of the Company. This leasing agreement is usually renewable on mutually agreed terms but is cancelable. These payments are shown as “Rent” in Note No.2.27 of "Manufacturing, Administration, Distribution and Other Expenses”. DISCLOSURE AS PER ACCOUNTING STANDARD ~ 20 ON “EARNING PER SHARE” Earning per share is calculated by dividing the profit/loss attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. St. No. Particulars 2015-2016 2014-2015 1 Profit/(Loss) after tax (2 in lacs) 1,856.85, 36.53 2. Weighted Average Number of equity shares 80,00,57,143 | 80,00,57,143 3. Face value per share () 10 10 4. Earnings per Share (Basic) = -0.23 0.01 DISCLOSURE AS PER ACCOUNTING STANDARD — 28 ON “IMPAIRMENT OF ASSETS” In accordance with Accounting Standard (AS) 28 on “Impairment of Assets”, the Company has assessed as on the balance sheet date whether there are any indications with regard to impairment of any of the assets. Based on such assessment, it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly, no impairment loss has been provided in the books of account. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS. a) Contingent Liabilities not provided for in respect of claimsnot acknowledged as debtsin respect of: (Fin Lacs) Sr.No. Particulars 2015-2016 2014-2015 1 | Stamp Duty on Mortgage 19,000.00 79,000.00 (Refer note no. 2.30 of Financial Statement) 2 _ | Disputed Trade Tax Matters NIL 1,304.88 3 _| Disputed income Tax Matters 60.11 24.20 4 _ | Disputed Excise/ Service Tax Matters 828,00 843.58 5 | Other Claims 33.56 33.56 6 _| Disputed liability relating to labour matters not ascertainable | not ascertainable (b) The Hon'ble High Court of Lucknow had given a judgment on 07.09.2012 wherein the sale of Reliance £25 to fertilizer companies was decided to be leviable with CST instead of VAT. State of U.P. had filed an SLP before the Hon'ble Supreme Court of India against this order of High Court of Lucknow which is admitted by Hon'ble Supreme Court. Matter is yet to be decided by Hon'ble Supreme Court. No effect of the same is given in the accounts pending final outcome of the case. 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. c) Capital Commitments (Rin Lacs} Particulars 2015-2016 2014-2015 Capital Commitments Estimated amount of contracts remaining to be executed on capital accounts (Net of Advances) 411.10 1,230.96 d) The Company has issued an undertaking of & 11,184.00 lacs to Department of Fertilizers, Ministry of Chemicals and Fertilizers, Government of india (GOI) in respect of pending dispute of GO! with Oswal Chemicals & Fertilizers Limited regarding subsidy of % 225 lacs on urea and payment of interest of % 10,959.00 lacs by Oswal Chemicals & Fertilizers Limited. An escrow account under joint operation of the Company and Oswal Chemicals & Fertilizers Limited has been opened for the purpose of meeting the claim of the Department of Fertilizers. The balance in the said escrow account adequately covers the amount of undertaking. 2.40 AMOUNT OF FOREIGN CURRENCY EXPOSURE NOT HEDGED BY DERIVATIVE INSTRUMENTS OR OTHERWISE Particulars | Currency Amount in Foreign Currency ‘Amount in Rupees in lacs 31.03.2016 31.03.2015 31.03.2016 31.03.2015 Trade Payables | EURO 15,197 Nil aaa Nil Other Payables usp 2,652 Nil 1.76 Nil 2.41 REMUNERATION TO MANAGING AND OTHER OPERATIONAL DIRECTORS (in Lacs) ScNo) Puirticulars 2015-2016 2014-2015 1. | Salaries & Allowance 72.10 75.85 Contribution to P.F. & Other Funds 3.24 3.24 Medical and Welfare Expenses 0.26 0.30 Total : 75.60 79.39 Note: The aforesaid remuneration does not include the value of leave encashment and gratuity since it is determined (on the basis of actuarial valuation for all employees, including directors. 2,42 Balances of some of the Contractors/ Customers/ Suppliers/ Receivables/ Payable and deposits with others are subject to confirmation/ reconciliation and consequential adjustments, if any, which in the opinion of management would not be material 11" Annual Report 2015-16 52KRIBHCO SHYAM FERTILIZERS LIMITED. 2.43 Information in respect of Micro, Small and Medium Enterprises as required by the Micro, Small and Medium Enterprises Development Act, 2006 as at (Tin Lacs) Sr. No. Particulars 2015-16 2014-15 1 | The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year: (i) Principal Amount Due (ii) Interest due thereon 2 The amount of interest paid by the buyer in terms of section 18, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year as ennounced by any dispute resolution council/authority 3 | The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act: () Payment made to supplier (Other than interest) beyond the appointed day during the year (ii) Interest paid to supplier on principal amount paid beyond the appointed day during the year (ii) Interest due and payable to supplier on principal amount paid beyond the appointed day during the year 4 | The amount of interest accrued and remaining unpaid at the end of each accounting year; and 5 | The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose ofdisallowance 2s a deductible expenditure under section 23. Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil The above information has been provided to the extent such parties have been identified on the basis of information available with the Company. 2.44 ADDITIONAL INFORMATION, TO THE EXTENT APPLICABLE a) Value of Imports calculated on CIF basis (Zin Lacs) Particulars 2015-2016 | 2014-2015 Capital Goods 103.18 107.73 Stores and Spares 369.80 R01 Total : 472.98 179.74 53 11" Annual Report 2015-16KRIBHCO SHYAM FERTILIZERS LIMITED. b) Analysis of Imported & Indigenous Spares consumption (Tin Lacs) Particulars 2015-2016 2014-2015, Value (8) | %ofTotal | Value(®) | %oof Total imported 60.04 6.17 39.46 441 Indigenous 912.70 93.83 855.79 95.59 Total: 972.74 100.00 895.25 | 100.00 ¢) Expenditure in foreign currency (on payment basis) (Rin Lacs) Particulars, 2015-2016 | 2014-2015 Fees for Technical Services Total : NIL. 31.23 NIL. 31.23 d) Earnings in Foreign Exchange: & NIL (Previous year % NIL) 2.45 STATEMENT OF MANAGEMENT (2) In the opinion of the management, the velue of any of the assets other than Fixed Assets and non-current investments on realization in the ordinary course of business will not be less than the value at which these are stated. (b) Balance Sheet, Statement of Profit & Loss and Cash Flow statement read together with the schedules to the accounts and notes thereon, are drawn up so as to disclose the information required under the Companies Act as well as give a true and fair view of the statement of affairs of the Company as at the end of the year and results of the Company for the year under review. 2.46 — Previous year’s figures have been regrouped/ rearranged wherever considered necessary for comparative purpose. FOR S.K.MEHTA & CO. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants [Firm Regn No.000478N] B. RSAXENA N. SAMBASIVA RAO Parenar Director Membership No.10568 Place : N. R, VENKATARAMANAN. Date : 21" April, 2016 Chief Financial Officer 11" Annual Report 2015-16 RAJAN CHOWDHRY V. P. KAUSHIK Director Managing Director BIPIN C. PHULORIA Company Secretary

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