SERIES I-2020 RASHTRIYA CHEMICALS AND ...Page 1 of 119 SERIES I-2020 RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED (A Government of India Undertaking) Registered Office: Priyadarshini,

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SERIES I-2020

RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED

(A Government of India Undertaking) Registered Office: Priyadarshini, Eastern Express Highway, Sion, Mumbai 400 022

Contact Person: Mr. S. Shivakumar, Deputy General Manager (CF) Tel: 022-2552 3048 ; Fax: 022-2404 5043

E-mail: [email protected]; Website: www.rcfltd.com CIN No.: L24110MH1978GOI020185 GSTIN- 27AAACR2831H1ZK

PRIVATE PLACEMENT OFFER LETTER FOR PRIVATE PLACEMENT OF ….% LISTED, SECURED, REDEEMABLE, TAXABLE, NON-CUMULATIVE, NON-CONVERTIBLE DEBENTURES (“BONDS”) OF RS. 10,00,000/- EACH (SERIES I-2020) AGGREGATING TO TOTAL ISSUE SIZE OF RS. 500 CRORE WITH A BASE ISSUE SIZE OF RS. 200 CRORE WITH AN OPTION TO RETAIN OVERSUBSCRIPTION OF 300 CRORE (“THE ISSUE”)

GENERAL RISK

Investment in debt and debt related securities involves a degree of risk and investors should not invest any funds in the debt instruments, unless they can afford to take the risks attached to such investments. Eligible Investors are advised to take an informed decision before taking an investment decision in this offering. For taking an investment decision the investor must rely on their examination of the Issuer, the Issue, this Information Memorandum including the risks involved. The Issue has not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document.

CREDIT RATING

The Bonds proposed to be issued have been assigned a rating of “[ICRA]AA-“ with Stable outlook by ICRA Limited vide its letter dated 10th July 2020 and “IND AA” with Negative outlook by India Ratings & Research Private Limited vide its letter dated July 16th 2020. Instruments with this rating are considered to have the high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agency and should be evaluated independently of any other ratings. Please refer to Annexure I and Annexure II for rating letters along with rating rationale for the above ratings.

LISTING

The Bonds are proposed to be listed on the Wholesale Debt Market (“WDM”) segment of NSE and BSE. NSE is the designated stock exchange for this issue.

Advisor-cum-Arranger to the Issue

Trustee to the Issue Registrar to the Issue Legal Advisor to the

Issue

SBI Capital Markets

Limited

202, Maker Tower ‘E’,

SBICAP Trustee Company

Limited

Apeejay House, 6th Floor,

3, Dinshaw Wachha Road,

Link Intime India Private

Limited

C 101, 247 Park, LBS Rd,

Surya Nagar, Gandhi

MV KINI & Co.

KINI HOUSE, 1st

Floor, 261/263, Near

Private & Confidential – For Private Circulation Only (This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus). This Disclosure Document is prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time.

Dated: [●]

http://www.rcfltd.com/

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Bid Open/ Bid

Close on

Issue Open/ Issue Close

on

Deemed Date of

Allotment Pay in Date

03.08.2020 03.08.2020 05.08.2020 05.08.2020

The issuer reserves its sole and absolute right to modify (pre -pone/ postpone) the above issue schedule without

giving any reasons or prior notice. The issuer also reserves its sole and absolute right to change the Deemed Date

of Allotment/Pay in date of the above issue without giving any reasons or prior notice.

Contents

1. General Disclaimer: .................................................................................................................... 7

2. Disclaimer of the Securities & Exchange Board of India (SEBI): .......................................... 8

3. Disclaimer of the Arranger to the Issue: .................................................................................. 9

4. Disclaimer of the Transaction Advisor: ................................................................................. 11

5. Disclaimer of the Stock Exchange: ......................................................................................... 13

6. Disclaimer of the Rating Agencies: ........................................................................................ 13

7. Disclaimer of the Trustees ....................................................................................................... 14

Forward Looking Statements .............................................................................................................. 15

Definitions and Abbreviations ............................................................................................................ 17

A. Issuer Information ........................................................................................................................ 20

Business carried on by the company and its subsidiaries........................................................... 20

Compliance Officer and Company Secretary of the Issuer ........................................................ 22

Contact Person .................................................................................................................................. 22

Chief Financial Officer of the Issuer............................................................................................... 22

Arranger(s) of the issue.................................................................................................................... 23

Registrar and Transfer Agent to Issue ........................................................................................... 23

Trustee for the Bondholders ............................................................................................................ 23

Credit rating agencies for the Issue ................................................................................................ 23

Auditors of the Issuer....................................................................................................................... 24

Cuffe Parade, Mumbai 400

005

Tel: 022 22178300

Fax: 022 2218 8332

Email: [email protected]

Website:

www.sbicaps.com

Churchgate, Mumbai – 400 020

Tel: (022) 43025514

Fax: (022) 22040465

Email:

[email protected]

m

Website :

www.sbicaptrustee.com

Nagar, Vikhroli West,

Mumbai, Maharashtra

400083

Tel: (022) 49186000

Fax: (022) 49186060

Email:

[email protected]

Citibank, D.N. Road,

Fort- Mumbai 400 001

Tel: (91)22 66664298 /

99 61 2527/28/29; (91)

22 66666577/78/79

Fax:(91) 222 261 2530

E-Mail:

[email protected]

Website:

www.mvkini.com

mailto:[email protected]

http://www.sbicaps.com/

http://www.sbicaptrustee.com/


Private & Confidential – Not for Circulation

Page 3 of 119

B. A Brief Summary of the business / activities of the Issuer and its line of business: .......... 24

1. Brief History of the Issuer since its incorporation................................................................ 24

2. Management perception of risk factors ................................................................................. 25

3. Corporate Structure: ................................................................................................................ 30

4. Project cost and means of financing, in case of funding of new projects ......................... 30

5. Dividend Policy: ....................................................................................................................... 30

6. Key Operational and Financial Parameters for the last 3 Audited years: ........................ 31

C. Details regarding the Directors of the Issuer (as on 31.03.2020) ............................................ 33

1. Details of the current Directors: .............................................................................................. 33

2. Details of change in Directors since last three years: ........................................................... 35

III. For the year 2018-19:....................................................................................................................... 38

IV. For the year 2019-20: ...................................................................................................................... 39

D. Details of shareholding of the Issuer as on 31.03.2020 ............................................................ 40

1. Details of Share Capital as on 31.03.2020: ............................................................................. 40

2. Shareholding pattern of the Issuer as on 31.03.2020: ........................................................... 40

3. List of top 10 holders of equity shares of the Issuer as on 31.03.2020: .............................. 41

4. Changes in the capital structure of the Issuer (RCF) on 31.03.2020, for the last five years:42

5. Details of any Acquisition or Amalgamation in the last 1 year: ........................................ 43

6. Details of any Reorganization or Reconstruction in the last 1year: ................................... 43

E. Details regarding Auditors of the Issuer:* ................................................................................ 44

1. Details of the current auditors of the Issuer:......................................................................... 44

2. Details of the change in auditors since last three years: ...................................................... 44

F. Details of Borrowings of the Issuer (RCF) as on 31.03.2020 ................................................... 45

1. Details of Bonds: ....................................................................................................................... 45

i. Foreign Currency Issuances as on 31.03.2020: ................................................................ 45

ii. Domestic Bond Issuances as on 31.03.2020 ................................................................ 45

2. Details of Secured Loan as on 31.03.2020 .............................................................................. 45

3. Details of Unsecured Loan as on 31.03.2020 ......................................................................... 47

4. List of top 10 Bondholders on 31.03.2020: ............................................................................. 47

5. The amount of corporate guarantee issued by the Issuer along with name of the

counterparty (including Subsidiaries, Joint Ventures, Group Companies, etc.) on behalf of

whom it has been issued .................................................................................................................. 47

6. Details of Commercial Paper outstanding as on 31.03.2020: .............................................. 48

7. Details of rest of the borrowings (including hybrid debt like FCCB, Optionally Convertible

Bonds /Preference Shares) as on 31.03.2020 ................................................................................. 48


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8. Details of all default (s) and /or delay (s) in payments of interest and principal of any kind

of term loans, debt securities and other financial indebtedness including corporate guarantee

issued by the issuer, in the past five years: ................................................................................... 48

9. Details of any outstanding borrowings taken/ debt securities issued where taken / issued

(i) for consideration other than cash, whether in whole or part, (ii) at a premium or discount, or

(iii) in pursuance of an option: ........................................................................................................ 48

G. Details of promoters of the Issuer .............................................................................................. 49

Details of the Promoter Holding as on 31.03.2020: ...................................................................... 49

H. Disclosures with regard to interest of directors, litigation etc. .............................................. 49

I. Abridged version of Audited Consolidated and Standalone Financial Information (Profit &

Loss statement, Balance Sheet and Cash Flow statement) for last three years and auditor

qualifications: ........................................................................................................................................ 69

1. Auditor’s Opinion Extracts: .................................................................................................... 77

K. Any material event/ development or change having implications on the financials/credit

quality (e.g. any material regulatory proceedings against the Issuer/Promoters, Tax litigations

resulting in material liabilities, corporate restructuring event etc) at the time of issue which may

affect the issue or the investor’s decision to invest / continue to invest in the debt securities. 89

L. Names of the Trustee and Consent thereof:.............................................................................. 89

M. Rating and Detailed Rating Rationale ....................................................................................... 90

N. Security : ......................................................................................................................................... 91

O. Stock Exchange where Bonds are proposed to be listed ......................................................... 91

P. Other Details ................................................................................................................................. 91

1. DRR Creation – ......................................................................................................................... 91

2. Issue/instrument specific regulations ................................................................................... 91

3. Application Process .................................................................................................................. 92

i. Who Can Apply ............................................................................................................. 92

ii. Documents to be provided by Investors .................................................................... 92

iii. Applications to be accompanied with Issuer Account Details ................................ 93

iv. How to Apply................................................................................................................. 93

v. Terms of Payment .......................................................................................................... 95

vi. Force Majeure ................................................................................................................. 95

vii. Applications under Power of Attorney ...................................................................... 95

viii. Application by Mutual Funds ...................................................................................... 96

ix. Application by Provident Funds, Superannuation Funds and Gratuity Funds ... 96

x. Acknowledgements ....................................................................................................... 96

xi. Basis of Allocation ......................................................................................................... 96

xii. Right to Accept or Reject Applications ....................................................................... 97

xiii. PAN /GIR Number ....................................................................................................... 97

xiv. Signatures ....................................................................................................................... 98


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xv. Nomination Facility ....................................................................................................... 98

xvi. Fictitious Applications .................................................................................................. 98

xvii. Depository Arrangements ............................................................................................ 98

xviii. Procedure for applying for Demat Facility ................................................................ 98

4. Others ......................................................................................................................................... 99

i. Right of Bondholder(s) .................................................................................................. 99

ii. Modification of Rights .................................................................................................. 99

iii. Future Borrowings ....................................................................................................... 100

iv. Notices ........................................................................................................................... 100

v. Minimum subscription ............................................................................................... 100

vi. Underwriting ................................................................................................................ 100

vii. Deemed Date of Allotment ......................................................................................... 100

viii. Credit of the Bonds ...................................................................................................... 101

ix. Issue of Bond Certificate(s) ......................................................................................... 101

x. Market Lot .................................................................................................................... 101

xi. Trading of Bonds ......................................................................................................... 101

xii. Mode of Transfer of Bonds ......................................................................................... 102

xiii. Common Form of Transfer ......................................................................................... 102

xiv. Interest on Application Money .................................................................................. 102

xv. Interest on the Bonds ................................................................................................... 102

xvi. Payment on Redemption ............................................................................................ 103

xvii. Right to further issue under the ISINs ...................................................................... 103

xviii. Right to Re-purchase, Re-issue or Consolidate the Bonds ..................................... 103

xix. Deduction of Tax at Source ........................................................................................ 104

xx. List of Beneficial Owners ............................................................................................ 104

xxi. Succession ..................................................................................................................... 104

xxii. Joint - Holders .............................................................................................................. 105

xxiii. Disputes and Governing Law .................................................................................... 105

xxiv. Investor Relations and Grievance Redressal ........................................................... 105

xxv. Material Contracts and Agreements involving Financial Obligations of the Issuer105

Q. Issue Details ................................................................................................................................. 107

Summary Term Sheet: .................................................................................................................... 107

R. Disclosures pertaining to willful default ................................................................................. 113

S. Additional Disclosures: ............................................................................................................. 113

T. DECLARATION ......................................................................................................................... 113

ANNEXURE I - Copy of Rating letter from ICRA Limited and India Ratings and Research Private

Limited ................................................................................................................................................. 115

ANNEXURE II – Debenture Trustee Consent Letter..................................................................... 115

ANNEXURE III – RTA Consent letter ............................................................................................. 115

ANNEXURE IV - Board Resolution Authorizing the Issue .......................................................... 115

ANNEXURE V - Shareholders’ approval obtained pursuant to section 180(1)(c) .................... 115


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ANNEXURE A .................................................................................................................................... 116

ANNEXURE B ..................................................................................................................................... 116

Disclaimers:


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THIS IS A PRIVATE PLACEMENT INFORMATION MEMORANDUM ISSUED IN

CONFORMITY WITH FORM PAS-4 PRESCRIBED UNDER SECTION 42 OF THE COMPANIES

ACT, 2013 AND COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES,

2014, THE COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES, 2014, SECURITIES

AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES)

REGULATIONS, 2008 ISSUED VIDE CIRCULAR NO. LAD-NRO/GN/2008/13/127878 DATED

JUNE 06, 2008, AS AMENDED FROM TIME TO TIME AND SUCH OTHER CIRCULARS

APPLICABLE FOR ISSUE OF DEBT SECURITIES ISSUED BY SEBI FROM TIME TO TIME.

1. General Disclaimer:

This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is

prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt

Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/ 2008/13/127878 dated June 06,

2008, as amended from time to time Form PAS-4 Prescribed under Sectiion 42 of the Companies Act,

2013 and Companies (Prospectus and Allotment of Securities) Rule, 2014, The Companies (Share

Capital and Debenture) Rules, 2014. This Disclosure Document does not constitute an offer to public in

general to subscribe for or otherwise acquire the Bonds to be issued by (“RCF”/“the “Issuer”/ the

“Company”). This Disclosure Document is for the exclusive use of the addressee and it should not be

circulated or distributed to third party(ies). It is not and shall not be deemed to constitute an offer or an

invitation to the public in general to subscribe to the Bonds issued by the Issuer. This bond issue is

made strictly on private placement basis. Apart from this Disclosure Document, no offer document or

prospectus has been prepared in connection with the offering of this bond issue or in relation to the

issuer.

The bond issue will be under the electronic book mechanism as required in terms of the Securities and

Exchange Board of India (“SEBI”) circular SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018

and (“SEBI”) circular SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 and any amendments

thereto (“SEBI EBP Circular”) read with “Operational Guidelines for BSE Electronic Bidding Platform”

issued by BSE vide their Notice No. 20180928-24 dated September 28, 2018 (“BSE EBP Operating

Guidelines”) and any amendments thereto. (The SEBI EBP Circular and the BSE EBP Operating

Guidelines shall hereinafter be collectively referred to as the “Operational Guidelines”).

This disclosure document and the contents hereof are restricted for only the Identified Investors who

have been specifically addressed through a communication by the Issuer, and only such Identified

Investors are eligible to apply for the Debentures. All Identified Investors are required to comply with

the relevant regulations/ guidelines applicable to them, including but not limited to the Operational

Guidelines for investing in this issue. The contents of this disclosure document and any other

information supplied in connection with this disclosure document or the bonds are intended to be used

only by those Identified Investors to whom it is distributed. It is not intended for distribution to any

other person and should not be reproduced or disseminated by the recipient.


Page 8 of 119

This Disclosure Document is not intended to form the basis of evaluation for the prospective

subscribers to whom it is addressed and who are willing and eligible to subscribe to the bonds issued

by RCF. This Disclosure Document has been prepared to give general information regarding the Bonds,

to parties proposing to invest in this issue of Bonds and it does not purport to contain all the

information that any such party may require. RCF believes that the information contained in this

Disclosure Document is true and correct as of the date hereof.

RCF does not undertake to update this Disclosure Document to reflect subsequent events and thus

prospective subscribers must confirm about the accuracy and relevancy of any information contained

herein with RCF. However, RCF reserves its right for providing the information at its absolute

discretion. RCF accepts no responsibility for statements made in any advertisement or any other

material and anyone placing reliance on any other source of information would be doing so at his own

risk and responsibility. Prospective subscribers must make their own independent evaluation and

judgment before making the investment and are believed to be experienced in investing in debt

markets and are able to bear the economic risk of investing in Bonds. It is the responsibility of the

prospective subscriber to have obtained all consents, approvals or authorizations required by them to

make an offer to subscribe for, and purchase the Bonds. It is the responsibility of the prospective

subscriber to verify if they have necessary power and competence to apply for the Bonds under the

relevant laws and regulations in force. Prospective subscribers should conduct their own investigation,

due diligence and analysis before applying for the Bonds. Nothing in this Disclosure Document should

be construed as advice or recommendation by the Issuer or by the Arrangers, if any to the Issue to

subscribers to the Bonds. The prospective subscribers also acknowledge that the Arrangers, if any to the

Issue do not owe the subscribers any duty of care in respect of this private placement offer to subscribe

for the bonds. Prospective subscribers should also consult their own advisors on the implications of

application, allotment, sale, holding, ownership and redemption of these Bonds and matters incidental

thereto.

This Disclosure Document is not intended for distribution. It is meant for the consideration of the

person to whom it is addressed and should not be reproduced by the recipient. The securities

mentioned herein are being issued on private placement Basis and this offer does not constitute a public

offer/ invitation.

The Issuer reserves the right to withdraw the private placement of the bond issue prior to the issue

closing date(s) in the event of any unforeseen development adversely affecting the economic and

regulatory environment or any other force majeure condition including any change in applicable law.

2. Disclaimer of the Securities & Exchange Board of India (SEBI):

This Disclosure Document has not been filed with Securities & Exchange Board of India (“SEBI”). The

Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or

adequacy of this Disclosure Document. It is to be distinctly understood that this Disclosure Document

should not, in any way, be deemed or construed to mean that the same has been cleared or vetted by

SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the

project for which the Issue is proposed to be made, or for the correctness of the statements made or


Page 9 of 119

opinions expressed in this Disclosure Document. The Issue of Bonds being made on private placement

basis, this Disclosure Document is not required to be filed with SEBI.

3. Disclaimer of the Arranger to the Issue:

The role of the Arranger in the assignment is confined to marketing and placement of the Bonds on the

basis of this Disclosure Document as prepared by RCF. The Arranger has neither scrutinized nor vetted

nor reviewed nor has it done any due-diligence for verification of the contents of this Disclosure

Document. The Arranger shall use this Disclosure Document for the purpose of soliciting

subscription(s) from Eligible Investors in the Bonds to be issued by the Issuer on a private placement

basis. It is to be distinctly understood that the aforesaid use of this Disclosure Document by the

Arranger should not in any way be deemed or construed to mean that the Disclosure Document has

been prepared, cleared, approved, reviewed or vetted by the Arranger; nor should the contents to this

Disclosure Document in any manner be deemed to have been warranted, certified or endorsed by the

Arranger so as to the correctness or completeness thereof.

Nothing in this Disclosure Document constitutes an offer of securities for sale in the United States of

America or any other jurisdiction where such offer or placement would be in violation of any law, rule

or regulation. No action is being taken to permit an offering of the bonds in the nature of debentures or

the distribution of this Disclosure Document in any jurisdiction where such action is required. The

distribution/taking/sending/dispatching/transmitting of this Disclosure Document and the offering

and sale of the Bonds may be restricted by law in certain jurisdictions, and persons into whose

possession this document comes should inform themselves about, and observe, any such restrictions.

The Issuer has prepared this Disclosure Document and the Issuer is solely responsible and liable for its

contents. The Issuer will comply with all laws, rules and regulations and has obtained all regulatory,

governmental, corporate and other necessary approvals for the issuance of the Bonds. The Issuer

confirms that all the information contained in this Disclosure Document has been provided by the

Issuer or is from publicly available information, and such information has not been independently

verified by the Arranger. No representation or warranty, expressed or implied, is or will be made, and

no responsibility or liability is or will be accepted, by the Arranger or their affiliates for the accuracy,

completeness, reliability, correctness or fairness of this Disclosure Document or any of the information

or opinions contained therein, and the Arranger hereby expressly disclaims any responsibility or

liability to the fullest extent for the contents of this Disclosure Document, whether arising in tort or

contract or otherwise, relating to or resulting from this Disclosure Document or any information or

errors contained therein or any omissions therefrom. Neither Arranger and its affiliates, nor its

directors, employees, agents or representatives shall be liable for any damages whether direct or

indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or

in connection with the use of this document. By accepting this Disclosure Document, the Eligible

Investor accepts terms of this Disclaimer Clause of Arranger, which forms an integral part of this

Disclosure Document and agrees that the Arranger will not have any such liability.

The Eligible Investors should carefully read this Disclosure Document. This Disclosure Document is for

general information purposes only, without regard to specific objectives, suitability, financial situations

and needs of any particular person and does not constitute any recommendation and the Eligible


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Investors are not to construe the contents of this Disclosure Document as investment, legal, accounting,

regulatory or Tax advice, and the Eligible Investors should consult with its own advisors as to all legal,

accounting, regulatory, Tax, financial and related matters concerning an investment in the Bonds. This

Disclosure Document should not be construed as an offer to sell or the solicitation of an offer to buy,

purchase or subscribe to any securities mentioned therein, and neither this document nor anything

contained herein shall form the basis of or be relied upon in connection with any contract or

commitment whatsoever.

This Disclosure Document is confidential and is made available to potential investors in the Bonds on

the understanding that it is confidential. Recipients are not entitled to use any of the information

contained in this Disclosure Document for any purpose other than in assisting to decide whether or not

to participate in the Bonds. This document and information contained herein or any part of it does not

constitute or purport to constitute investment advice in publicly accessible media and should not be

printed, reproduced, transmitted, sold, distributed or published by the recipient without the prior

written approval from the Arranger and the Issuer. This Disclosure Document has not been approved

and will or may not be reviewed or approved by any statutory or regulatory authority in India or by

any stock exchange in India. This document may not be all inclusive and may not contain all of the

information that the recipient may consider material.

Each person receiving this Disclosure Document acknowledges that:

1. Such person has been afforded an opportunity to request and to review and has received all

additional information considered by it to be necessary to verify the accuracy of or to supplement the

information herein; and

2. Has not relied on the Arranger and/or its affiliates that may be associated with the Bonds in

connection with its investigation of the accuracy of such information or its investment decision.

Issuer hereby declares that the Issuer has exercised due-diligence to ensure complete compliance of

applicable disclosure norms in this Disclosure Document. The Arranger: (a) is not acting as trustee or

fiduciary for the investors or any other person; and (b) is under no obligation to conduct any "know

your customer" or other procedures in relation to any person. The Arranger is not responsible for (a)

the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by

the Issuer or any other person in or in connection with this Disclosure Document; or (b) the legality,

validity, effectiveness, adequacy or enforceability of this Disclosure Document or any other agreement,

arrangement or document entered into, made or executed in anticipation of or in connection with this

Disclosure Document; or (c) any determination as to whether any information provided or to be

provided to any investor is non-public information the use of which may be regulated or prohibited by

applicable law or regulation relating to insider dealing or otherwise.

The Arranger or any of their directors, employees, affiliates or representatives do not accept any

responsibility and/or liability for any loss or damage arising of whatever nature and extent in

connection with the use of any of the information contained in this document. By accepting this

Disclosure Document, investor(s) agree(s) that the Arranger will not have any such liability.


Page 11 of 119

Please note that:

(a) The Arranger and/or their affiliates may, now and/or in the future, have other investment and

commercial Issuing, trust and other relationships with the Issuer and with other persons ("Other

Persons");

(b) As a result of those other relationships, the Arranger and/or their affiliates may get information

about Other Persons, the Issuer and/or the Issue or that may be relevant to any of them. Despite this,

the Arranger and/or their affiliates will not be required to disclose such information, or the fact that it is

in possession of such information, to any recipient of this Disclosure Document;

(c) The Arranger and/or their affiliates may, now and in the future, have fiduciary or other

relationships under which it, or they, may exercise voting power over securities of various persons.

Those securities may, from time to time, include securities of the Issuer; and

(d) The Arranger and/or their affiliates may exercise such voting powers, and otherwise perform its

functions in connection with such fiduciary or other relationships, without regard to its relationship to

the Issuer and/or the securities.”

4. Disclaimer of the Advisor to the issue: Rashtriya Chemicals and Fertilizers Limited (“RCF” or “The issuer” or “The Company”) is proposed to

come out with issue of bonds on a private placement basis. SBI Capital Markets Limited (‘SBICAP’ or

‘Advisor’) has been appointed by the Issuer as an advisor to the proposed issue of bonds. The Issuer

has prepared this Disclosure Document and the Issuer is solely responsible and liable for its contents.

The Issuer will comply with all laws, rules and regulations and has obtained all regulatory,

governmental, corporate and other necessary approvals for the issuance of the Bonds. The Issuer

confirms that all the information contained in this Disclosure Document has been provided by the

Issuer or is from publicly available information, and such information has not been independently

verified by the Advisor. The information contained in the disclosure document is for general

information purposes only, without regard to specific objectives, suitability, financial situations and

needs of any particular person and does not constitute any recommendation, and should not be

construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities,

if any, mentioned therein, and neither this document nor anything contained herein shall form the basis

of or be relied upon in connection with any contract or commitment whatsoever. This Disclosure

Document should not be construed as a recommendation on behalf of the Issuer or the Advisor or any

counterparty or any person that any recipient of this Disclosure Document should participate in any

facility/project. Each recipient of this Disclosure Document contemplating participating in the

proposed bond issue shall make, and shall be deemed to have made, its own independent assessment

of the financial conditions and affairs and its own appraisal of the creditworthiness of the Issuer. This

document does not solicit any action based on the material contained herein. Nothing in these materials

is intended by SBICAP to be construed as legal, accounting, technical or tax advice. This document has

not been approved and will or may not be reviewed or approved by any statutory or regulatory


Page 12 of 119

authority in India or by any Stock Exchange in India. This document may not be all inclusive and may

not contain all of the information that the recipient may consider material.

This document and information contained herein or any part of it does not constitute or purport to

constitute investment advice in publicly accessible media and should not be printed, reproduced,

transmitted, sold, distributed or published by the recipient without the prior written approval from

SBICAP. Neither this document nor any copy of it may be taken or transmitted into the United States,

Canada, or Japan or distributed, directly or indirectly, in the United States or Canada or distributed or

redistributed in Japan or to any resident thereof. The distribution of this document in other jurisdictions

may be restricted by law, and persons into whose possession this document comes should inform

themselves about, and observe, any such restrictions. Neither SBICAP and its affiliates, nor its directors,

employees, agents or representatives shall be liable for any damages whether direct or indirect,

incidental, special or consequential including lost revenue or lost profits that may arise from or in

connection with the distribution or use of this document. Further, no representation or warranty,

expressed or implied, is made or given by or on behalf of SBICAP or State Bank of India or its or their

affiliates, nor any person who controls it or them or any director, officer, employee, advisor or agent of

it or them, or affiliate of any such person or such persons as to the origin, accuracy, correctness,

authenticity, completeness or fairness of the information or opinions or projections/forecast contained

in this Disclosure Document or the underlying assumptions on which they are based and SBICAP or its

affiliates or such persons do not accept any responsibility or liability for any such information or

opinions and therefore, any liability or responsibility is expressly disclaimed. This Disclosure

Document is issued by the Issuer without any liability / undertaking / commitment on the part of SBI

Capital Markets Limited or State Bank of India or any other entity in the State Bank Group, except

where it is explicitly stated. Further, in case of any commitment on behalf of State Bank of India or any

other entity in the State Bank Group, such commitment is valid only when separately confirmed by that

entity.

SBICAP has not carried out any due – diligence independently in verifying the accuracy or veracity of

any data mentioned in this disclosure document. Nothing contained herein is or shall be relied upon as

a promise or representation regarding the historic or current position or performance of the Company

or any future events or performance of the Company.

Company agrees and understands that SBICAP is not a Registered Valuer pursuant to section 247 of

the Companies Act, 2013 and Rules made thereunder. The Valuation Report issued by SBICAP, under

this document, cannot be used by the recipient for the purposes that specifically require valuation from

a Registered Valuer under the Companies Act, 2013 or any other law that requires valuation from such

Registered Valuer.

Any report/Information Memorandum issued by SBICAP under this Transaction should not be used

for the purpose of debt syndication with any of the Banks, NBFC, or financial institutions. The report

should be used for the internal purpose of the Company and as agreed in the scope of work. The report

or any part thereof should not be issued to any third without the consent of SBICAP except as agreed

by Company and SBICAP.

This Disclosure Document is divided into chapters & sub-sections only for the purpose of reading

convenience. Any partial reading of this Disclosure Document may lead to inferences, which may be at


Page 13 of 119

divergence with the conclusions and opinions based on the entirety of this Disclosure Document. This

Disclosure Document is furnished on a strictly confidential basis and is for the sole use of the person to

whom it is addressed only in connection with the proposed facility/project. By accepting a copy of this

Disclosure Document, the recipient accepts the terms of this Notice, which forms an integral part of this

Disclosure Document.

5. Disclaimer of the Stock Exchange:

If required, a copy of this Disclosure Document may be submitted to Stock Exchange (s) for hosting the

same on its website. It is to be distinctly understood that such submission of the Disclosure Document

with Stock Exchange (s) or hosting the same on its website should not in any way be deemed or

construed that the Disclosure Document has been cleared or approved by Stock Exchange (s); nor does

it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of

this Disclosure Document; nor does it warrant that this Issuer’s securities will be listed or continue to be

listed on the exchange (s); nor does it take responsibility for the financial or other soundness of this

Issuer, its promoters, its management or any scheme or project of the Issuer. Every person who desires

to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent

inquiry, investigation and analysis and shall not have any claim against the exchange whatsoever by

reason of any loss which may be suffered by such person consequent to or in connection with such

subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any

other reason whatsoever.

6. Disclaimer of the Rating Agencies:

The ICRA Limited rating reflects ICRA’s current opinion on the likelihood of timely payment of the

obligation under rated instrument and does not contribute an audit of the rated entity by ICRA. ICRA

ratings are based on the information provided by the issuer or obtained by ICRA from sources it

considers reliable. ICRA does not guarantee the completeness or accuracy of the information on which

the rating is based. ICRA rating is not a recommendation to buy, sell or hold the rated instrument, it

does not comment on the market price or suitability for a particular investor. All ICRA ratings are

under surveillance. Ratings are revised as and when circumstances so warrant. ICRA is not responsible

for any errors and especially, states that it has no financial liability whatsoever to the subscribers / users

/ transmitters / distributors of this product. ICRA Ratings rating criteria are available without charge

to the public on the ICRA website www.icra.in

The India Ratings & Research Private Limited (IRRPL) rating reflects IRRPL’s current opinion on the

likelihood of timely payment of the obligation under rated instrument and does not contribute an audit

of the rated entity by IRRPL. IRRPL ratings are based on the information provided by the issuer or

obtained by IRRPL from sources it considers reliable. IRRPL does not guarantee the completeness or

accuracy of the information on which the rating is based. IRRPL rating is not a recommendation to buy,

sell or hold the rated instrument, it does not comment on the market price or suitability for a particular

investor. All IRRPL ratings are under surveillance. Ratings are revised as and when circumstances so

warrant. IRRPL is not responsible for any errors and especially, states that it has no financial liability

http://www.icra.in/


Page 14 of 119

whatsoever to the subscribers / users / transmitters / distributors of this product. IRRPL Ratings rating

criteria are available without charge to the public on the IRRPL websitewww.indiaratings.co.in

7. Disclaimer of the Trustee

Investors should carefully read and note the contents of the Disclosure Document/Disclosure

Documents. Each Prospective investor should make its own independent assessment of the merit of the

investment in Bonds and the issuer. Prospective investors should consult their own financial, legal, tax

and other professional advisors as to the risks and investment considerations arising from an

investment in the Bonds and should possess the appropriate resources to analyze such investment and

suitability of such investment to such investor's particular circumstance. Prospective investors are

required to make their own independent evaluation and judgement before making the investment and

are believed to be experienced in Investing in debt markets and are able to bear the economic risk of

investing in such instruments.

http://www.indiaratings.co.in/


Page 15 of 119

Forward Looking Statements

Certain statements in this Information Memorandum are not historical facts but are “forward-

looking” in nature. Forward-looking statements appear throughout this Information

Memorandum. Forward-looking statements include statements concerning the Issuer’s plans,

financial performance etc., if any, the Issuer’s competitive strengths and weaknesses, and the

trends the Issuer anticipates in the industry, along with the political and legal environment, and

geographical locations, in which the Issuer operates, and other information that is not historical

information. Words such as “aims”, “anticipate”, “believe”, “could”, “continue”, “estimate”,

“expect”, “future”, “goal”, “intend”, “is likely to”, “may”, “plan”, “predict”, “project”, “seek”,

“should”, “targets”, “would” and similar expressions, or variations of such expressions, are

intended to identify and may be deemed to be forward looking statements but are not the

exclusive means of identifying such statements. By their nature, forward-looking statements

involve inherent risks and uncertainties, both general and specific, and assumptions about the

Issuer, and risks exist that the predictions, forecasts, projections and other forward looking

statements will not be achieved. Eligible Investors should be aware that a number of important

factors could cause actual results to differ materially from the plans, objectives, expectations,

estimates and intentions expressed in such forward-looking statements. These factors include,

but are not limited, to:

i. compliance with laws and regulations, and any further changes in laws and regulations

applicable to India, especially in relation to the petroleum sector;

ii. availability of adequate debt and equity financing at reasonable terms;

iii. our ability to effectively manage financial expenses and fluctuations in interest rates;

iv. our ability to successfully implement our business strategy;

v. our ability to manage operating expenses;

vi. performance of the Indian debt and equity markets; and

vii. general, political, economic, social, business conditions in Indian and other global

markets.

By their nature, certain market risk disclosures are only estimates and could be materially

different from what actually occurs in the future. Although the Issuer believes that the

expectations reflected in such forward looking statements are reasonable at this time, the Issuer

cannot assure Eligible Investors that such expectations will prove to be correct. Given these

uncertainties, Eligible Investors are cautioned not to place undue reliance on such forward-

looking statements. If any of these risks and uncertainties materialize, or if any of the Issuer’s

underlying assumptions prove to be incorrect, the Issuer’s actual results of operations or

financial condition could differ materially from that described herein as anticipated, believed,

estimated or expected. All subsequent forward looking statements attributable to the Issuer are

expressly qualified in their entirety by reference to these cautionary statements. As a result,

actual future gains or losses could materially differ from those that have been estimated. The

Issuer undertakes no obligation to update forward-looking statements to reflect events or

circumstances after the date hereof. Forward looking statements speak only as of the date of this


Page 16 of 119

Information Memorandum. None of the Issuer, its directors, its officers or any of their respective

affiliates or associates has any obligation to update or otherwise revise any statement reflecting

circumstances arising after the date hereof or to reflect the occurrence of underlying events, even

if the underlying assumptions do not come to fruition.


Page 17 of 119

Definitions and Abbreviations

Allotment/ Allot/

Allotted The issue and allotment of the Bonds to the successful Applicants in the Issue

Allottee A successful Applicant to whom the Bonds are allotted pursuant to the Issue, either in full or in part

Applicant/ Investor

A person who makes an offer to subscribe the Bonds pursuant to the terms of this Disclosure Document and the Application Form

Application Form

The form in terms of which the Applicant shall make an offer to subscribe to the Bonds and which will be considered as the application for allotment of Bonds in the Issue

Articles Articles of Association of the Company as amended from time to time

AY Assessment Year

Base Issue

Secured, Redeemable, Non-Cumulative, Non-Convertible, Taxable bonds in the nature of debentures of Face Value of Rs. 10,00,000 each, aggregating to total issue of Rs. 500 crore with a base issue size of Rs. 200 crore and with a option to retain oversubscription of Rs. 300 crore.

Beneficial Owner(s)

Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Bond(s) as defined in clause (a) of sub-section of Section 2 of the Depositories Act, 1996)

Board/ Board of Directors

The Board of Rashtriya Chemicals and Fertilizers Limited or Committee thereof, unless otherwise specified

Bond(s) Secured, Redeemable, Non-Cumulative, Non-Convertible, Taxable bonds in the nature of debentures

Bondholder(s) Any person or entity holding the Bonds and whose name appears in the list of Beneficial Owners provided by the Depositories

BSE Bombay Stock Exchange Limited

BSE EBP Guidelines

Electronic Book Provider Platform of BSE for issuance of debt securities on private placement basis.

CDSL Central Depository Services (India) Limited

CMD Chairman cum Managing Director

C&AG Comptroller and Auditor General of India

Coupon / Interest Payment Date

As mentioned in the Summary Term Sheet

CVC Central Vigilance Commission

Debenture Trusteeship Agreement

The agreement executed between the Issuer and the Debenture Trustee for the purpose of the Issue

Deemed Date of Allotment

The cut-off date declared by the Issuer with effect from which all benefits under the Bonds including interest on the Bonds shall be available to the Bondholder(s). The actual allotment of Bonds (i.e. approval from the Board of Directors or a Committee thereof) may take place on a date other than the Deemed Date of Allotment

Depositories Act The Depositories Act, 1996, as amended from time to time

Depository A Depository registered with SEBI under the SEBI (Depositories and


Page 18 of 119

Participant) Regulations, 1996, as amended from time to time

Depository Participant

A Depository participant as defined under Depositories Act

DIN Director Identification Number

DP Depository Participant

DRR Bond/ Debenture Redemption Reserve

Eligible Investor QIBs, arranger (either on proprietary basis or otherwise as permitted under the BSE EBP Platform) and any Non-QIB Investors

First ISIN Circular

SEBI Circular CIR/IMD/DF-1/ 67 /2017 dated June 30, 2017 as amended

FIIs Foreign Institutional Investors

Financial Year/ FY

Period of twelve months beginning from April 1 of a calendar year and ending on March 31 of the subsequent calendar year

FIs Financial Institutions

FRN Firm Registration Number

GIR General Index Registration Number

GoI Government of India/ Central Government

GW Giga Watt

ICRA ICRA Limited

I.T. Act The Income Tax Act, 1961, as amended from time to time

IFSC Indian Financial System Code

India Ratings India Ratings & Research Private Limited

Issuer / RCF Limited/ Company

Rashtriya Chemicals and Fertilizers Limited incorporated under the

Companies Act, 1956 and having its registered office at Priyadarshini,

Eastern Express Highway, Sion, Mumbai 400 022.

Listing Agreement

Listing Agreement entered into/to be entered into by the Issuer with the BSE and/or the NSE, in relation to the listing of the Bonds, as per the format issued by Securities and Exchange Board of India in its circular dated October 13, 2015 (bearing reference CIR/CFD/CMD/6/2015) read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations (Listing Regulations), as amended from time to time.

Market Lot Means one Bond

MoF Ministry of Finance

NEFT National Electronic Funds Transfer

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

Non-QIB Investor

An Eligible Investor that is not a QIB, and is specifically authorized by the Issuer under the BSE EBP Platform, which shall include but is not limited to the following:

i. companies;

ii. gratuity funds and superannuation funds;

iii. provident funds and pension funds with corpus of less than Rs. 25

Crore;

iv. societies;

v. registered trusts;

vi. statutory corporations or undertakings established by central or

state legislature authorized to invest in the Debentures; and


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vii. other investor authorized to invest in Debentures in accordance

with applicable laws.

Operational Guidelines

Refers to, collectively the SEBI EBP Circular and the BSE EBP Operating Guidelines

Option to Retain Oversubscription

300 crore

PAN Permanent Account Number

QIB Qualified Institutional Buyer

R&TA Registrar and Transfer Agent

RBI Reserve Bank of India

Record Date As mentioned in the Summary Term Sheet

Registrar Registrar to the Issue, in this case being Link Intime India Private Limited

Rs. / INR Indian National Rupee

RTGS Real Time Gross Settlement

SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time

SEBI EBP Circular

Refers to SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI circular SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018

SEBI Debt Regulations

Securities and Exchange Board of India (Issue and Listing of Debt securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended from time to time

Second ISIN Circular

SEBI Circular CIR/DDHS/P/59/2018 dated March 28, 2018

Advisor Sole Advisor of the issue in this case being SBI Capital Markets Limited

TDS Tax Deducted at Source as per the provisions of the Income Tax Act and rules there under modified from time to time.

Tpa Tonne Per Annum

The Companies Act

Companies Act, 2013, as amended and to the extent notified by the Government of India and Companies Act, 1956 (to the extent applicable)

The Issue/ The Offer/ Private

Placement

Secured, Redeemable, Non-Cumulative, Non-Convertible, Taxable bonds in

the nature of debentures of Face Value of Rs. 10,00,000 each, aggregating to

total issue of Rs. 500 crores with a base issue size of Rs. 200 crore and with an

option to retain oversubscription of Rs. 300 crore.

Trustees Trustees for the Bondholders in this case being SBICAP Trustee Company Ltd.


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A. Issuer Information

Name and Address of the Registered and Corporate Office of the issuer

Name of the issuer Rashtriya Chemicals and Fertilizers Limited

Registered Office Priyadarshini, Eastern Express Highway, Sion, Mumbai 400

022

Corporate Office Priyadarshini, Eastern Express Highway, Sion, Mumbai 400 022

Telephone No. (022) 25523114

Fax No. (022) 24045043

Website www.rcfltd.com

E-Mail [email protected]

CIN L24110MH1978GOI020185

PAN AAACR2831H

Date of Incorporation

The Company was incorporated on March 6, 1978

Vision

To be a world class corporate in the field of fertilizers and chemicals with a dominant position in the Indian market, ensuring optimal utilisation of resources, taking due care of the environment and maximising value for our stake holders.”

Business carried on by the company and its subsidiaries

1. Company Overview

A. Brief summary of the business/activities of the Company & its line of business

Rashtriya Chemicals and Fertilizers Limited (RCF) a Government of India Undertaking is a

leading fertilizer and chemical manufacturing company with around 75% of its equity held

by the Government of India. It has two operating units, one at Trombay in Mumbai and the

other at Thal, Raigad district, about 100 KM from Mumbai. Government of India has

accorded "Mini-Ratna" status to RCF.

The Thal unit primarily manufactures urea and has an installed capacity of 2.0 million tpa.

The unit also manufactures some industrial products. The Trombay unit has a capacity to

manufacture various industrial products, 0.33 million tpa of urea, and 0.69 million tpa of

complex fertilizers. RCF has expanded its revenue stream and product portfolio through

traded sales of imported di-ammonium phosphate and muriate of potash. GoI holds 75 per

cent of RCF’s equity; financial institutions and the public own the remainder.

http://www.rcfltd.com/



Page 21 of 119

RCF is one of the earliest units set up in the country with a vision of growth in fertilizer

production for food security. It manufactures Urea, Complex Fertilizers, Bio-fertilizers,

Micro-nutrients, 100 per cent water soluble fertilizers, soil conditioners and a wide range of

Industrial Chemicals. It produces 23 lac MT Urea, 6.5 lac MT Complex fertilizers and 1.6 lac

MT of Industrial Chemicals every year. The company is a household name in rural India

with brands "Ujjwala" (urea) and "Suphala" (complex fertilizers —Suphala 15:15:15 and

Suphala 20:20:2 —also known as ammonium nitrate phosphate (ANP) which carry a high

brand equity. RCF has countrywide marketing network in all major states. Apart from the

own manufactured products, the Company is also engaged in marketing of SSP and

imported fertilizer inputs like, DAP, MOP & NPK fertilizers. Besides fertilizer products,

RCF also produces almost twenty industrial chemicals that are important for the

manufacture of dyes, solvents, leather, pharmaceuticals and a host of other industrial

products.

Chemicals essential for every industry from food and drugs to Synthetic fibres, from textiles

and cement to pesticides and paints; from explosives to specialty solvents and dye stock are

produced by RCF. RCF also pioneered the manufacture of basic chemicals such a Methanol,

Ammonia, Ammonium Nitrate, Sodium Nitrate, Sodium Nitrite, Ammonium Bicarbonate,

Methylamines, Dimethyl Formamide and Dimethyl acetamide, Formic Acid, Argon in

India. Today RCF is the only manufacturer of Dimethyl Formamide in India.

RCF has always striven for upkeep of the plants through modernizing and upgrading

technology. Revamping and de-bottlenecking is the secret that has kept the company

thriving for five decades. As part of modernization, RCF has recently modernized its

Ammonia – I, Nitric Acid, Methanol and ANP plants. This has facilitated plants to sustain

operations and meet technological challenges of improved efficiency, lower energy

consumption and maintain environmental norms. It has also resulted in company achieving

the highest standards of safety and product quality.

At the root of every successful product and project is a strong R&D base and its sound

planning, innovative ideas and perfect project management. Product development is a

continuous process at RCF. Advanced technical equipment and highly skilled technicians

enhance the values of innovation.

Since inception, RCF has successfully and safely operated two dozen chemical and fertilizer

plants for the past five decades at Trombay. The Company has operated plants at Thal for last

thirty years and maintained the quality of environment. This itself has been a huge challenge

and demonstrates company's commitment towards environment and concern about the

neighbourhood. RCF has spent more than Rs. 400 crore over the years in various pollution

abatement and environment improvement schemes. This includes massive drive for tree

plantation under "Chembur Green" Project. Complete transparency is maintained by the

Company in dissemination of environment related data and information. Through four

dedicated continuous Ambient Air Monitoring Systems located around the boundary of the

factory, real time emission levels are displayed through an illuminated board placed at the

entrance of the factory for public viewing. No wonder that the company is maintaining ISO

14000 accreditation for environment since fifteen years. Both the manufacturing units are

accredited with ISO 9000 for quality and OHSAS 18000 for Occupational Health and Safety.


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Subsidiaries – The Company has no subsidiaries

Joint Ventures – 3 Joint Ventures as follows :

Sr No

Name of Joint Venture Extent of Holding % on 31st

March 2020

1 FACT –RCF Building Products Ltd. 50.00%

2 Urvarak Videsh Limited 33.33%

3 Thalcher Fertilizers Limited 33.33%

Registered Office: Priyadarshini Building, Eastern Express Highway, Sion, Mumbai Maharashtra,

400022

Compliance Officer and Company

Secretary of the Issuer

Contact Person

Shri. Jai Bhagwan Sharma

Company Secretary

10th Floor, ‘Priyadarshini’

Eastern Express Highway

Sion, Mumbai – 400 022

Tel. (022) 25523114

Fax no (022) 24045043


Shri. Rupesh Tawde

Dy. Company Secretary




Tel. (022) 25523112

Fax no (022) 24045043


Particulars Details

Chief Financial Officer of the

Issuer

Shri. Umesh Dongre

Designation Director Finance




Tel no.: (022) 25523003

Fax no.:(022) 24045043 E-mail: [email protected]



Page 23 of 119

Advisor and Arranger to the issue

SBI Capital Markets Limited

202, Maker Tower ‘E’,

Cuffe Parade, Mumbai 400 005

Tel: 022 22178300

Fax: 022 2218 8332


Website: www.sbicaps.com

Registrar and Transfer Agent to

Issue

Link Intime India Private Limited

C-101, 247 Park, LBS Marg

Vikhroli (W)

Mumbai – 400083

Tel No. 022 49186000

Fax: 022 49186060


Trustee for the Bondholders

SBICAP Trustee Company Limited

Apeejay House, 6th Floor, 3,Dinshaw Wachha Road, Churchgate, Mumbai – 400 020 Mob:8879150014 Tel: (022) 43025514 Fax: (022) 22040465 Email : [email protected] Website : www.sbicaptrustee.com

Legal Advisor to the Issue MVKini Law Firm

KINI HOUSE, 1st Floor, 261/263, Near Citibank, D.N. Road, Fort- Mumbai 400 001

Tel: (91)22 66664298 / 99 61 2527/28/29; (91) 22 66666577/78/79

Fax:(91) 222 261 2530

E-Mail: [email protected]

Website: www.mvkini.com

Credit rating agencies for the Issue

India Ratings & Research Private

Limited

Address: 4th Floor, D South Block, #4, Rajiv Salai, Taramani, Chennai – 600 113

Tel no.: 044 4340 1727

Fax no.: 044 4340 1701

E-mail: [email protected]


http://www.sbicaps.com/






Page 24 of 119

Website: www.indiaratings.co.in

ICRA Limited

Address: Karumuthu Centre, 5th Floor, #634, Annasalai, Nandanam, Chennai – 600035

Tel no.: 044 42974320/ 300.

E-mail: [email protected] Website: www.icra.in

Auditors of the Issuer

Chhajed & Doshi Chartered Accountants

Firm Registration No.: 101794W

Address: 101, Hubtown Solaris, Near East West

Flyover, N.S. Phadke Marg, Andheri (W)

Mumbai – 400069

Tel No. 022 61037878 Fax: 022 61037879 Email: [email protected]

M/s Ford Rhodes Parks & Co. LLP Chartered Accountants

Firm Registration No.: 102860W/W100089

Address: Sai Commercial Building, 3rd Floor, 312/313 B.K. Devshi Marg, Govandi Mumbai- 400 088. Tel No. 022 67979820 Fax: 022 67979821 Email: [email protected]

B. A Brief Summary of the business / activities of the Issuer and its line of business:

1. Brief History of the Issuer since its incorporation

History

Year Event

1978

Formation and Registration of RCF upon reorganization of the erstwhile Fertilizer

Corporation of India into 5 fertilizer companies. It is engaged in Production &

Marketing of nitrogenous & complex fertilizers & industrial chemicals with its

manufacturing Units at Trombay & Thal & marketing offices in most of the States of

India.



http://www.icra.in/


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Year Event

1994 RCF had commissioned a Dimethyl Acetamide Plant at Thal

1995 Purge Gas recovery unit of the company was commissioned in December

1999

Installation of New Sewage Water Treatment plant of 5 MGD per day capacity at its Trombay Unit to augment its requirements of water and substituting costly process water purchased from BMC

1999 Liquid micronutrients were launched by the company under the brand name of MICROLA and also in the same year,

2001 Unit of the company situated at Raigad district received ISO14001 certification in June

2004 Obtained OHSAS 18001 (Occupational Health & Safety Assessment Series) in September

2005-06 R&D center of the company had developed micro nutrient fertilizers in tablet form for prime agriculture crops, horticultural plants, orchids, floriculture etc.

2007 RCF and Gas Authority of India Limited signed a MoU to set up coal gasification project at Talcher in Orissa

2013

Completed major revamp of its plants at Thal at a cost of Rs 489 crore which has increased its Urea capacity from 17 lakh MT to 20 lakh MT per annum. -RCF Signs MoU With Government of India

2014

Signed an MoU with Bharat Petroleum Corporation Limited for setting up of new Sewage Treatment Plant - Rashtriya Chemicals and Fertilizers Ltd has approved for setting up 2 MWp PV Grid Connected Crystalline Solar Power Plant at Trombay

2018

Commissioned a HRSG , Gas Turbine based Power Plant at Thal of 25W each for

generation of power for captive consumption, focusing on energy savings at project

cost of Rs. 363.80 crore

2019

Undertook setting up of a HRSG , Gas Turbine based Power Plant at Thal of 25W each

for generation of power for captive consumption, focusing on energy savings at

project cost of Rs. 363.80 crore

2020

Commissioned the New Sewage Water Treatment plant at a project cost of about Rs.191 crore , at Mumbai for augmenting process water requirements for captive consumption at its Trombay plant and for sale to Bharat Petroleum Corporation Ltd.

2. Management perception of risk factors

External Risk Factors

1. Dependence on imported Fertilizers/ Imported inputs


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India is one of the largest fertilizer consumers in the world as well as one of the major

importers, with demand outstripping capacities. While the demand for urea has remained

at ~30 million tonnes over the past few years, capacity is at ~26 million tonnes. With the

New Urea Policy, 2014 capacity is expected to increase by 23% by fiscal 2024. This is likely

to reduce import dependency in case of urea. Moreover, India does not have any

manufacturing capacities for muriate of potash (MOP) and further about 40% of

Phosphatic fertilizers are imported. As a result, the country is highly dependent on

imports of fertilizers/ imported inputs for NPK fertilizers.

2. Fluctuations in international raw material prices

The Indian fertilizer industry is not only dependent on imported fertilizers, but on imported raw materials as well. However, the latter requirement varies from company to company, depending upon the product mix. On this account, the Indian fertilizer industry is highly vulnerable to fluctuations in the international prices of key raw materials such as rock phosphate, phosphoric acid, ammonia, sulphur, sulphuric acid, etc. Also, Indian producers are at a cost disadvantage, as they have to incur huge freight and storage costs while importing rock phosphate, phosphoric acid, and liquid ammonia. The consolidated nature of global suppliers also adds to the domestic players’ disadvantage. The government covers the entire rise in costs for urea players in the form of subsidy. However, it provides only nutrient based (fixed) subsidy to complex players, making them more vulnerable. Although retail prices of complex fertilizers have become market driven with effect from April 1, 2010, offsetting the rise in raw material cost by hiking prices commensurately is not possible, as it would affect demand.

3. Dependence on gas prices

Effective from June 2015, Urea units are eligible for an Uninform delivered Gas Price, which is an average of the cost of domestically available natural gas and high-cost imported LNG, thereby levelling the cost of gas across plants. This has ensured availability of gas but has resulted in increase in working capital requirement of the Company, as it is a contributor to the Gas Pool account. Even though the government bears the burden of cost of gas as it is a pass through in Urea subsidy, some players benefit or lose out due decrease/increase in working capital requirements.

4. Changes in government policies

Since independence, the Government of India has formulated several policies to support

the fertiliser industry in general and to control and maintain the prices of essential

fertilisers at low levels in particular so that they are affordable by farmers.

Government policies of Urea enforce both Price and distribution controls. Focussing on

subsidy reduction, there has been a targeted reduction in energy consumption norms of

urea, however this has impacted the 12% Post Tax Return as ensured under the extant

policies.


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For production beyond Reassessed Capacity (RAC), Urea units are compensated at lower

of Import Parity Price (IPP) plus weighted average of other incidental charges which the

Government incurs on import of Urea or the compensation based on the respective

variable cost of the unit plus the Uniform Per MT incentive equal to the lowest of the Per

MT fixed cost of all indigenous Urea units. In situations of falling IPP of Urea and

increasing gas prices, the profitability of production beyond stands adversely impacted.

5. Dependence on monsoons

Like any agri-commodity, fertilisers also depend heavily on monsoons for growth in demand. Typically, demand is robust in seasons of good rainfall, driving financial performance of companies through volume growth. On the other hand, drought conditions lead to high inventory and a consequent decline in profits.

6. Global Market Competition

The chemicals business is also exposed to global market competition from cheaper imports.

7. Inability to pass through the increase in cost

Resistance by farmers to price hike in fertilizers can impact future margins

8. Provision of subsidy budget

Low provision of subsidy budget/Delays in settlement of subsidy by Government of India has impacted working capital and finance costs. Risk Relating to the Issue:

1. The Issuer is required to create a debenture redemption reserve (“DRR”) equivalent to

25% of the value of the Debenture offered through this Issue out of profits available

for distribution of dividends. In the absence of sufficient profits, we may not be able to

transfer adequate amounts to the DRR.

Sub rule 7 of Rule 18 of the Companies (Share Capital and Debenture) Rules, 2014 and

Section 71 of the Companies Act states that any company that intends to issue debentures

must create a DRR to which adequate amounts shall be credited out of the profits of the

company available for payment of dividend until the debentures are redeemed. The

quantum of DRR to be created before the redemption liability actually arises in normal

circumstances should be ‘adequate’ which has been prescribed to be 25% of the value of

debentures issued through public issue. As further clarified by the DRR Circular, the

amount to be credited as DRR will be carved out of the profits of the Issuer only and there

is no obligation on the part of the Issuer to create DRR if there is no profit or no adequate

profit for the year to pay dividends for the particular year. Accordingly, if we are unable


Page 28 of 119

to generate adequate profits, the DRR created by us may not be adequate to meet the 25%

of the value of the NCDs issued.

2. There has been only a limited trading in the bonds of such nature and the price of the

Bonds may be volatile subject to fluctuations.

The Bonds have no established market and there is no assurance that an active market for

these Bonds will develop or be sustained. Further, the liquidity and price of the Bonds

may vary with changes in market and economic conditions, the Issuer’s financial

condition and other factors that may be beyond the Issuer’s control.

3. There is no guarantee that the Bonds will be listed on the Stock Exchange(s) in a timely

manner or at all, or that monies refundable to Eligible Investors will be refunded in a

timely manner.

In accordance with Indian law and practice, approval for listing and trading of the Bonds

will not be granted until after the Bonds have been allotted. While issuer will use best

efforts to ensure that all steps for completion of the necessary formalities for allotment,

listing and commencement of trading on the Stock Exchange(s) are taken wit/hin the time

prescribed by SEBI or applicable law, there may be a failure or delay in listing the Bonds

on the Stock Exchange(s). Issuer cannot assure you that any monies refundable on

account of (a) withdrawal of the Issue, or (b) failure to obtain final approval from the

Stock Exchange(s) for listing of the Debentures, will be refunded in a timely manner. The

Issuer shall, however, refund any such monies, with interest due and payable thereon, as

prescribed under applicable law.

4. Eligible Investors may not be able to recover, on a timely basis or at all, the full value

of outstanding amounts on the Bonds.

The Issuer’s ability to pay interest accrued and the principal amount outstanding from

time to time in connection with the Bonds is subject to various factors, including the

Issuer’s financial condition, profitability and the general economic conditions in India and

in the global financial markets.

5. Changes in interest rates may affect the price of the Bonds.

Securities where a fixed rate of interest is offered, such as the Bonds, are subject to price

risk. The price of such securities will vary inversely with changes in prevailing interest

rates, i.e., when interest rates rise, prices of fixed income securities fall and when interest

rates drop, the prices increase. The extent of fall or rise in the prices is a function of the

coupon rate, days to maturity and increase or decrease in prevailing interest rates.

Increased rates of interest, which may accompany inflation and/or a growing economy,

may have a negative effect on the price of the Bonds.

6. A downgrade in credit rating of the Bonds may affect the price of the Bonds.

The Bonds have been assigned “[ICRA]AA- (Stable)” by ICRA and “AA” with “Negative” outlook by India Ratings & Research . We cannot guarantee that this rating will not be downgraded, suspended or withdrawn at any time during the tenor of the Bonds. Any


Page 29 of 119

downgrade, suspension or withdrawal in the credit rating on the Bonds may lower the price of the Bonds.

7. Credit ratings may not reflect all risks.

ICRA Limited and India Rating and Research Private Limited have assigned credit ratings to Bonds. The ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Bonds. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time.

8. Payments on the Bonds will be subordinated to certain tax and other liabilities

preferred by law.

The payment on the Bonds will be subordinated to certain liabilities preferred by law, such as claims of the GoI on account of taxes, and certain liabilities incurred in the ordinary course of the Issuer’s business. In an event of default in excess of the DRR, in particular, in an event of bankruptcy, liquidation or winding-up, the Issuer’s assets will be available to meet payment obligations on the Bonds only after all liabilities that rank senior to the Bonds have been paid and, in such event, there may not be sufficient assets remaining, after paying amounts relating to these claims, to pay amounts due on the Bonds.


Page 30 of 119

3. Corporate Structure:

4. Project cost and means of financing, in case of funding of new projects

Not Applicable

5. Dividend Policy:

The Company has adopted the Dividend Distribution Policy of the Company as required in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in its meeting held on 18th November, 2016. In the interest of providing transparency to the shareholders, the Policy sets out the circumstances and different factors i.e. internal and external including financial parameters for consideration by the Board while declaring dividend or of retention of profits and the circumstances under which the shareholder of the company may not expect any dividend. The Company has been paying dividend from its inception except in the years 1993-94 and 2002-03. The Company endeavours to pay dividend ensuring, generally, that the payout is about 30% of its net profit after tax.


Page 31 of 119

4. Key Operational and Financial Parameters for the last 3 Audited years:

Key Operational and Financial Parameters of standalone results as extracted from the

audited statement of the past three years are as follows:

(Rs.in Crores)

2019-20 2018-19 2017-18

Particulars (Audited)

(Audited)

(Audited)

Net worth 3,186.27 3,034.70 2,929.69

Total debt 4,823.02 3,461.70 1,331.01

Non-Current Maturities of Long term Borrowing 600.91 425.11 320.06

Short term Borrowing-Working Capital Loan 4,076.87 2,885.47 934.59

Current Maturities of long term borrowing 145.24 151.12 76.36

Net Fixed Assets 2,121.30 1,942.71 1,903.49

Non-Current Assets 3,050.74 2,609.55 2,454.36

Cash and Cash equivalents 2.07 3.59 5.24

Current Investments - - -

Current Assets (excluding Cash and Cash Equivalent) 7,247.69 6,307.35 3,863.76

Current Liabilities# 1,610.93 1,668.51 1,165.30

Regulatory Deferral Account Debit Balance 116.45 145.83 157.82

Regulatory Deferral Account Credit Balance 313.39 426.16 377.59

Net Revenue from Operations 9,697.95 8,885.47 7,281.96

EBITDA 711.96 523.35 327.97

EBIT 540.92 367.50 190.93

Finance Cost 237.82 155.85 62.59

Profit After Tax 208.15 139.17 78.80

Dividend Amount 156.68 51.21 39.91

Current Ratio^ 1.24 1.34 1.64

Interest Coverage Ratio 2.99 3.36 5.24

Gross Debt/ Equity Ratio* 0.23 0.19 0.14

Debt Service Coverage Ratio 1.86 1.70 2.36

*Gross Debt excluding Working Capital Loan.

# Excluding Short Term Borrowings and Current Maturities of long term borrowing

^ Current Ratio includes the impact of regulatory deferral balances.


Page 32 of 119

Key Operational and Financial Parameters of consolidated results as extracted from the

audited statement of the past three years are as follows:

(Rs. in Crores)

2019-20 2018-19 2017-18

Particulars (Audited)

(Audited)

(Audited)

Net worth 3,179.04 3,029.65 2,929.73

Total debt 4,823.02 3,461.70 1,331.01

Non-Current Maturities of Long term Borrowing 600.91 425.11 320.06

Short term Borrowing-Working Capital Loan 4,076.87 2,885.47 934.59

Current Maturities of long term borrowing 145.24 151.12 76.36

Net Fixed Assets 2,121.30 1,942.71 1,903.49

Non-Current Assets 3,043.51 2,604.50 2,454.40

Cash and Cash equivalents 2.07 3.59 5.24

Current Investments - - -

Current Assets(excluding Cash and Cash Equivalent) 7,247.69 6,307.35 3,863.76

Current Liabilities# 1,610.93 1,668.51 1,165.30

Regulatory Deferral Account Debit Balance 116.45 145.83 157.82

Regulatory Deferral Account Credit Balance 313.39 426.16 377.59

Net Revenue from Operations 9,697.95 8,885.47 7,281.96

EBITDA 711.92 523.35 327.97

EBIT 540.88 367.50 190.93

Finance Cost 237.82 155.85 62.59

Profit After Tax 207.13 134.08 78.82

Dividend Amount 156.68 51.21 39.91

Current Ratio^ 1.24 1.34 1.64

Interest Coverage Ratio 2.99 3.36 5.24

Gross Debt/ Equity Ratio* 0.23 0.19 0.14

Debt Service Coverage Ratio 1.86 1.70 2.36

*Gross Debt excluding Working Capital Loan.

# Excluding Short Term Borrowings and Current Maturities of long term borrowing ^ Current Ratio includes the impact of regulatory deferral balances.


Page 33 of 119

Gross Debt-Equity Ratio (Standalone basis): (Based on Financials of 31.03.2020)

Particulars Before the issue of bonds After the issue of bonds#

Total Borrowing (Rs.

crores)*

746.15 946.15

Net-worth (Rs. crores) 3186.27 3186.27

Borrowings / Equity Ratio

0.23 0.30

*Excluding Working Capital Loan

# considering the base issue size of Rs. 200 crore.

The Issuer has provided the abridged audited consolidated and standalone financial information in this Information Memorandum. Investors can also visit the following link on our website for detailed information on financials: https://www.rcfltd.com/investerrelations/financial-results-1

C. Details regarding the Directors of the Issuer (as on 30.06.2020)

1. Details of the current Directors:

The profile of the current Directors in detail has been given in Annexure B

S. no.

Name, Designation and DIN

Age (years)

Address Director since Details of other Directorships

1.

Shri S. C.

Mudgerikar,

Chairman &

Managing Director

(03498837)

54

years

604,

Om-Aditya

Housing

Society,

Ganeshwadi,

Panchpakhadi,

Thane 400601

01.10.2019

The Fertiliser

Association of India

Indian Potash Limited

2.

Shri Sudhir D.

Panadare, Director

(Technical)

(07933191)

59

years

Bunglow No.3,

RCF Colony,

Type VI,

Chembur,

Mumbai 400

074

18.12.2017 Nil

3

Shri Umesh Dongre,

Director(Finance)

(08039073)

58

years

Bunglow No.8,

RCF Colony,

Type VI,

Chembur,

Mumbai 400

09.02.2018

1. FACT-RCF

Building Products

Limited

https://www.rcfltd.com/investerrelations/financial-results-1


Page 34 of 119

S. no.

Name, Designation and DIN

Age (years)

Address Director since Details of other Directorships

074

4.

Shri K. U.

Thankachen,

Director

(Marketing)

(06946476)

57

years

Bunglow No.5,

RCF Colony,

Type VI,

Chembur,

Mumbai 400

074

11.12.2018

1.Fertilisers and

Chemicals Travancore

Limited

5.

Ms Alka Tiwari,

Govt. Nominee

Director

(03502306)

55

years

C-II 50, Satya

Marg,

Chanakya Puri,

New Delhi-

110021

06.03.2017

Fertilisers and


Limited

Hindustan Organic

Chemicals Limited

6.

Ms Gurveen Sidhu,

Govt. Nominee

Director

(08121526)

52

years

370, K P

Thakkar Block,

Asiad Village

Complex,

Andrewsganj,

South Delhi,

Delhi 110049

18.05.2018

Fertilisers and


Limited

7.

Prof. Anil Kumar

Singh, Independent

Director

(08382601)

68

years

A-1603, Lake

Primrose, Lake

Homes, Powai,

Mumbai – 400

076

07.03.2019 -

8

Dr. Shambhu

Kumar,

Independent

Director (07368172)

48

years

WZ 308 (TF),

Gali No.17,

Shiv Sagar

Extension,

Delhi 110018

07.03.2019

1. Village Boy

Productions Private

Limited

2. Subansiri

Development Private

Limited

9

Smt. Shashi Bala

Bharti,

Independent

Director

(08770477)

69

years

H-II-36, Sec.D,

LDA Colony,

Kanpur Road,

Lucknow UP

226012

25.06.2020 -

http://www.mca.gov.in/mcafoportal/companyLLPMasterData.do


Page 35 of 119

All our Directors are Indian Nationals. None of our Directors are willful defaulters as

identified by the RBI and/or included in the Export Credit Guarantee Corporation default

list.

2. Details of change in Directors since last three years:

I. For the year 2016-17:

S. No.

Name of Director, Designation & DIN

Date of Joining / Appointment

Date of Cessation Reason

1. Shri R. G. Rajan, Chairman & Managing Director,

(01253189)

- 15.06.2016 Cessation

2. Shri Ashok B. Ghasghase,

Director (Marketing) (06378677)


3. Shri Manoj Mishra, Chairman

& Managing Director

(06408953)

15.06.2016 - Appointment

4. Shri Harin Pathak, Independent

Director, (DIN 07552994),


5. Shri Bharatkumar Barot,

Independent Director,

(07552993)


6. Shri G. M. Inamdar,


(07552999)


7. Shri Dharam Pal, Govt. Nominee

Director, (02354549)

23.09.2016 - Change in designation

at AGM


Page 36 of 119

S. No.





Director, (DIN 07552994),


at AGM



(07552993)


at AGM



(07552999)


at AGM

11. Prof. Damodar Acharya,


(06817842),


12. Ms Alka Tiwari , Govt. Nominee Director (DIN

03502306)


13. Shri Dharam Pal, Govt. Nominee



14. Shri Suryanarayana

Simhadri, Independent



15. Shri Manoj Mishra, Chairman

& Managing Director

(06408953)


16. Shri C. M. T. Britto, Chairman

& Managing Director

(02449069)



Page 37 of 119

II. For the year 2017-18:

S. No. Name of Director, Designation & DIN



1. Shri C. M. T. Britto, Chairman

& Managing Director

(02449069)


2. Shri Suresh Warior, Chairman

& Managing Director

(06920261)


3. Shri C. M. T. Britto, Director

(Technical), (02449069)


4. Shri Suresh Warior, Chairman

& Managing Director

(06920261)


5. Shri Umesh V. Dhatrak,

Chairman & Managing Director

(07718394)


6. Ms Alka Tiwari , Govt. Nominee Director (DIN

03502306)

21.09.2017 - Change in designation at AGM

7. Shri Suryanarayana

Simhadri, Independent


21.09.2017 - Change in designation at AGM


Independent Director

(07552993),



Page 38 of 119

S. No. Name of Director, Designation & DIN



9. Shri Sursh Warior, Director (Finance)

(06920261)


10. Shri Sudhir D. Panadare, Director

(Technical) (07933191)


11. Shri Umesh Dongre, Director

(Finance), (08039073)


III. For the year 2018-19:

S. No.



Date of Cessation

Reason



(07718394)

26.09.2018 - Change in designation at

AGM

2. Shri Sudhir D. Panadare, Director

(Technical) (07933191)


AGM

3. Shri Umesh Dongre, Director

(Finance), (08039073)


AGM

4. Shri K. U. Thankachen,

Director (Marketing), (06946476)


5. Prof. Anil Kumar Singh,


(08382601)


6. Dr. Shambhu Kumar,




Page 39 of 119

S. No.



Date of Cessation

Reason

(07368172)

IV. For the year 2019-20:

S. No.



Date of Cessation

Reason






(07552999)


3. Shri K. U. Thankachen,

Director (Marketing), (06946476)

24.09.2019 - Change in

designation at

AGM

4. Prof. Anil Kumar Singh,


(08382601)

24.09.2019 - Change in

designation at

AGM

5. Dr. Shambhu Kumar,


(07368172)

24.09.2019 - Change in

designation at

AGM



(07718394)


7. Shri S. C. Mudgerikar, Chairman & Managing Director

(03498837)



Page 40 of 119

D. Details of shareholding of the Issuer as on 31.03.2020

1. Details of Share Capital as on 31.03.2020:

Share Capital Amount (Rs. crore)

Authorized Share Capital 800.00

Issued Share Capital 551.69

Subscribed Share Capital 551.69

Paid-up Share Capital 551.69

2. Shareholding pattern of the Issuer as on 31.03.2020:

Category of Shareholder Total No. of Shares

Total No. of Shares held in Dematerialized

Form

Total Shareholding as a % of Total No. of

Shares

(A) Shareholding of Promoter and Promoter Group

(1) Indian

Central Government / State Government(s)

413769483 413769483 75.00

Sub Total 413769483 413769483 75.00

(2) Foreign

Total shareholding of Promoter and Promoter Group (A)

413769483 413769483 75.00

(B) Public Shareholding

(1) Institutions

Mutual Funds / UTI 17995 13095 0.00

Financial Institutions /Banks 13433353 13433353 2.43

Insurance Companies 6054475 6054475 1.10

Foreign Institutional Investors 6766362 6766362 1.23

Sub Total 26272185 26267285 4.76

(2) Non-Institutions

Bodies Corporate

Individuals


Page 41 of 119

Category of Shareholder Total No. of Shares

Total No. of Shares held in Dematerialized

Form

Total Shareholding as a % of Total No. of

Shares

Individual shareholders holding nominal share capital up to Rs. 2 lakh

77277660 77196170 14.01

Individual shareholders holding nominal share capital in excess of Rs. 2 lakh

14646689 14535889 2.65

NBFC Registered with RBI 1387 1387 0.00

Employee Trust 13500 13500 0.00

Non Resident Indians (Non Repat)

594227 594227 0.11

Non Resident Indians (Repat) 2819733 1992633 0.51

Trusts 36100 36100 0.01

Bodies Corporate 9843039 9834639 1.78

Clearing Members 1044991 1044991 0.19

Foreign Nationals 500 500 0.00

IEPF 121077 121077 0.02

Hindu Undivided Family 5247529 5247529 0.95

Sub Total 111646432 110618642 20.24

Total Public shareholding (B)

Total (A)+(B) 551688100 550655410 100.00

Note: There are no shares pledged or encumbered by the promoters of the issuer.

3. List of top 10 holders of equity shares of the Issuer as on 31.03.2020:

Sr. no. Name of the shareholders Total no. of

equity shares

No. of equity

shares in demat

form

Total

Shareholding

as % of total

no. of equity

shares

1 President of India, Promoter

category 413769483 413769483 75.0006

2 Life Insurance Corporation Of

India, Financial Institutions 11409167 11409167 2.0680

3 The New India Assurance

Company Limited, Insurance 3303975 3303975 0.5989


Page 42 of 119

4. Changes in the capital structure of the Issuer (RCF) on 31.03.2020, for the last five years:

Date of Change ( AGM/EGM) Rs. Particulars

41st AGM dated 24th September 2019 NIL No Change

40th AGM dated 26th September 2018 NIL No Change

39th AGM dated 21st September 2017 NIL No Change

38th AGM dated 23rd September 2016 NIL No Change

37th AGM dated 27th August 2015 NIL No Change

Company

4 Jagdish Amritlal Shah, Public 2219000 2219000 0.4022

5 General Insurance Corporation

Of India, Insurance Company

1500000

1500000

0.2719

6

Dimensional Emerging Markets

Value Fund, Foreign Portfolio

Investors (Corporate)

1460777

1460777

0.2648

7

Emerging Markets Core Equity

Portfolio (The Portfolio) Of Dfa

Investment Dimensions Group

Inc. (Dfaidg), Foreign Portfolio

Investors (Corporate)

1332766 1332766 0.2416

8 ICICI Bank Limited, Banks 1225751 1225751 0.2222

9

The Emerging Markets Small

Cap Series Of The Dfa

Investment Trust Company,

Foreign Portfolio Investors

(Corporate)

977335 977335 0.1772

10 Bharat Taparia, Public 961597 961597 0.1743


Page 43 of 119

Rs. Crore

Particulars As on

31.03.2020 2018-19 2017-18 2016-17 2015-16 2014-15

Authorized

Share Capital 800.00 800.00 800.00 800.00 800.00 800.00

Issued,

Subscribed

& Paid Up

551.69 551.69 551.69 551.69 551.69 551.69

Equity Share Capital History of the Company as on last quarter end, for the last five years:-

Date of Allotment

No of Equity Shares

Face Value

(Rs)

Issue Price

(Rs)

Consideration (Cash other

than cash etc)

Nature of Allotment

Cumulative Remarks

No of

Equity Shares

Equity Share Capita

l

(Rs)

Equity Share

premium (Rs)

NIL

5. Details of any Acquisition or Amalgamation in the last 1 year:

There has not been any acquisition or amalgamation in the last 1 year.

6. Details of any Reorganization or Reconstruction in the last 1year:

Type of Event Date of

Announcement Date of Completion Details

There has not been any reorganization or reconstruction in the last 1 year


Page 44 of 119

E. Details regarding Auditors of the Issuer:*

1. Details of the current auditors of the Issuer:

S.No. Name Address Auditor since Remarks

1 M/s. Chhajed & Doshi

M/s Chhajed & Doshi Chartered Accountants 101, Hubtown Solaris, Near East West Flyover, N.S. Phadke Marg, Andheri (E) Mumbai- 400 069

24.09.2019 onwards As appointed by

CAG

2 M/s Ford Rhodes Parks

& Co. LLP

M/s Ford Rhodes Parks & Co LLP Chartered Accountants Sai Commercial Building, 3rd Floor, 312/313 B.K. Devshi Marg, Govandi Mumbai- 400 088.

24.09.2019 onwards As appointed by

CAG

2. Details of the change in auditors since last three years:

Name Address

Date of

Appointment/

Date of

Resignation/Cessa

tion

Date of

cessation (in

case of

resignation)

Remarks

M/s Kalyaniwalla &

Mistry LLP

Chartered Accountants

Esplanade House, Second

Floor

29, Hazarimal Somani

Marg,

Mumbai-400001

10.08.2015 31.03.2019 Statutory Auditors

of the Compan

y are appointe

d by CAG M/s Chhajed

& Doshi Chartered Accountants 101, Hubtown Solaris, Near East West Flyover, N.S. Phadke Marg, Andheri (E) Mumbai- 400 069

29.08.2016 -


Page 45 of 119

F. Details of Borrowings of the Issuer (RCF) as on 31.03.2020

1. Details of Bonds:

i. Foreign Currency Issuances as on 31.03.2020:

Debenture series (ISIN)

Tenor / period

of maturity coupon

Amount Outstanding In US$ Mio

Date of allotment

Redemption on date/ schedule

Credit Rating

Secured / unsecured

Currency

Nil

ii. Domestic Bond Issuances as on 31.03.2020

Debenture series.

Tenor/ period

of Maturi

ty

Coupon

Amount in Rs

Allotment Date

Redemption Date

Call Optio

n Date

& Step Up

Credit

Rating

Secured/ Unsecur

ed

Security

Nil

2. Details of Secured Loan as on 31.03.2020

SL

No.

Lender's

Name

Type of

Facility

Amount

Sanctioned

as per

Agreement

Principal

Amount

Outstanding

Rs. crore

Repayment

Date / Schedule Seurity

1

Kotak Mahin

dra Bank

RTL Rs. 250 crore

176.47

Payable in quarterly installments till

31-03-2023

Secured against moveable fixed assets (machinery and equipment) of Ammonia Plant at Thal

2 EXIM Bank

RTL Rs. 117 crore

89.47

Payable in quarterly installments 01-05-

Secured against moveable fixed assets


Page 46 of 119

SL

No.

Lender's

Name

Type of

Facility

Amount

Sanctioned

as per

Agreement

Principal

Amount

Outstanding

Rs. crore

Repayment

Date / Schedule Seurity

2023 (machinery and equipment) of Urea Plant at Thal

3

State Bank

of India

RTL Rs. 309 crore

309.00

Payable in quarterly installments 31-08-2027

Secured against various plants situated in Trombay Plant like New STP Plant, Ammonia I &V etc.

4 Yes

Bank

FCNR (B) Loan

USD 8.21 mio

30.94

Payable in quarterly installments 20-09-2022

Secured against moveable fixed assets (machinery and equipment) of Medium pressure and High Pressure Nitric Acid Plant at Trombay

5

State Bank

of India

ECB EUR 25.50 mio

140.27

Payable in half yearly installments 31-03-2024

Secured against moveable fixed assets (machinery and equipment) GTG & HRSG Plant at Thal


Page 47 of 119

3. Details of Unsecured Loan as on 31.03.2020 a) Domestic Loan

SL

No. Lender's Name Type of Facility Amount Sanctioned

as per Agreement

Principal

Amount

Outstanding

Repayment

Date /

Schedule

1 State Bank of

India

Cash credit &

Short Term

Loan

Rs. 600 crore 402.00 NA

2 Axis Bank Short Term

Loan

Rs. 750 crore

(interchangeable) 235.00 18-04-2020

3 Rabo Bank Short Term

Loan Rs. 150 crore 150.00 10-01-2020

4 Kotak Mahindra

Bank

Short Term

Loan

Rs. 500 crore


5 Kotak Mahindra

Bank Buyers Credit

Rs. 500 crore


6 HDFC Bank Short Term

Loan Rs. 870 crore 564.00 15-04-2020

7 Axis Bank Buyers Credit Rs. 750 crore

(interchangeable)

56.23 03-04-2020

69.13 11.08.2020

69.89 31.08.2020

4. List of top 10 Bondholders on 31.03.2020:

Nil

5. The amount of corporate guarantee issued by the Issuer along with name of the

counterparty (including Subsidiaries, Joint Ventures, Group Companies, etc.) on behalf

of whom it has been issued

Nil


Page 48 of 119

6. Details of Commercial Paper outstanding as on 31.03.2020:

Maturity Date Amount Outstanding (Rs. Crores)

30-Apr-20 150

6-May-20 110

12-May-20 350

15-May-20 220

22-May-20 120

29-May-20 130

1-Jun-20 120

7. Details of rest of the borrowings (including hybrid debt like FCCB, Optionally

Convertible Bonds /Preference Shares) as on 31.03.2020

The Issuer has not issued any hybrid debt like Foreign Currency Convertible Bonds (FCCBs),

optionally Convertible Bonds /Debentures (OCBs) / Preference Shares etc.

8. Details of all default (s) and /or delay (s) in payments of interest and principal of any

kind of term loans, debt securities and other financial indebtedness including

corporate guarantee issued by the issuer, in the past five years:

There has been no default (s) and / or delay (s) in payments of interest and principal of any

kind of term loans, debt securities and other financial indebtedness including corporate

guarantee issued by the Issuer, in the past five years.

9. Details of any outstanding borrowings taken/ debt securities issued where taken /

issued (i) for consideration other than cash, whether in whole or part, (ii) at a premium

or discount, or (iii) in pursuance of an option:

The Issuer confirms that other than andto the extent mentioned elsewhere in this Disclosure

Document, it has not issued any debt securities or agreed to issue any debt securities or

availed any borrowings for a consideration other than cash , whether in whole or in part, at a

premium or discount or in pursuance of an option.


Page 49 of 119

G. Details of promoters of the Issuer

Details of the Promoter Holding as on 31.03.2020:

Sr.no. Name of the

shareholders

Total no. of

equity

shares

No. of

shares in

demat form

Total

shareholding

as % of total

no. of equity

shares as on

31.12.2019

No. of

shares

pledged

% of shares

pledged with

respect to

shares owned

1. The

President of India

41,37,69,483 41,37,69,483 75.00 Nil Nil

H. Disclosures with regard to interest of directors, litigation etc.

Financial or other material interest of the directors, promoters or key managerial personnel

in the offer and the effect of such interest in so far as it is different from the interests of

other persons.

NIL

Details of any litigation or legal action pending or taken by any Ministry or Department

of the Government or a statutory authority against any promoter of the offeree company

during the last three years immediately preceding the year of the circulation of the offer

letter and any direction issued by such Ministry or Department or statutory authority

upon conclusion of such litigation or legal action

Since President of India through Government of India is the Promoter of the Company, the

litigations, legal actions or directions pending or taken by any Ministry or Department of the

Government or a statutory authority against the Promoter of the Company during the last

three years cannot be ascertained.


Page 50 of 119

Remuneration of Directors

Financial Year 2019-20

Remuneration:

Rs Lakhs

The above amount includes salaries and allowances, contribution to Provident fund,

pension etc. and actual payments towards leave encashment, if any.

The remuneration to key management personnel does not include the provisions made for

gratuity; leave encashment and post-retirement medical benefits as they are determined on

an actuarial basis for the Company as a whole.

There have been no outstanding loans and advances from the above referred parties as at

year end.

Sitting Fees in case of Independent Directors

Name of the Director Sitting Fees Rs.

In Lakhs

Shri. Harin Pathak 1.35

Name of the Director Salary and

Allowances

Other

Benefits and

perquisites

Total

Remuneration

Shri Shriniwas Mudgerikar

Chairman & Managing

Director

(wef from 01.10.2019)

21.45 3.75 25.20

Shri Umesh V. Dhatrak

Chairman & Managing

Director

(Upto 30.09.2019)

77.32 13.04 90.36

Shri Sudhir D. Panadare

Director (Technical) 39.59 11.78 51.37

Shri Umesh Dongre

Director (Finance) 37.47 10.49 47.96

Shri K.U.Thankachen

Director (Marketing)

36.47 10.19 46.66

212.30 49.24 261.54


Page 51 of 119

Shri. G. M Inamdar 1.55

Shri. Suryanarayana Simhadri 6.10

Prof. Anil Kumar Singh 5.20

Dr Shambhu Kumar 4.75

Total 18.95


Details of remuneration of Functional Directors for the financial year 2018-19 are given

below:-

(Rs in

Lakhs)

Name of the Director Salary and Allowances

Other Benefits and perquisites

Total Remuneration

Shri Umesh V.

Dhatrak, Chairman &

Managing Director

44.67 10.30 54.97

Shri Sudhir D.

Panadare

Director (Technical)

42.82 11.96 54.78

Shri Umesh Dongre

Director (Finance)

32.89 9.39 42.28

Shri K. U. Thankachen

Director (Marketing)

(From 11.12.2018)

11.03 1.87 12.90

Total 131.44 33.52 164.93


Page 52 of 119

Details of payments towards sitting fee to Independent Directors during the period

01.04.2018-31.03.2019

Name of the Director Sitting Fees (Rs in Lakh)

Shri Harin Pathak 3.80

Shri G. M. Inamdar 6.40

Shri Suryanarayana Simhadri 5.55

Prof. Anil Kumar Singh 0.25

Dr. Shambhu Kumar 0.50


Details of remuneration of Functional Directors for the financial year 2017-18 are given

below:-

(Rs in

Lakhs)

Name of the Director Salary and

Allowances

Other

Benefits and

perquisites

Total

Remuneration

Shri Umesh V.

Dhatrak, Chairman &

Managing Director

(from 14.09.2017)

15.50 5.00 20.50

Shri C.M.T. Britto,


(upto 30.06.2017)

47.46 7.86 55.32

Shri Suresh Warior,

Director(Finance)

(Upto 30.11.2017)

59.11 11.72 70.83

Shri Sudhir D. 9.69 3.10 12.79


Page 53 of 119

Panadare


(From 18.12.2017)

Shri Umesh Dongre

Director (Finance)

(From 09.02.2018)

4.18 0.82 5.00

Total 135.94 28.50 164.44

Details of payments towards sitting fee to Independent Directors during the financial year 2017-

18

Name of the Director Sitting Fees (Rs in Lakh)

Shri Harin Pathak 2.70

Shri Bharatkumar Barot

(Upto 23.11.2017)

1.80

Shri G. M. Inamdar 4.50

Shri Suryanarayana Simhadri 3.70

Related party transactions during last three financial years including with regard to loans

made, guarantees given or securities provided.

Disclosure of transactions with the related party as defined in the Ind AS 24 are given

below for Financial Year 2019-20:

1. Transactions with Joint Controlled Entities

Name of the Company No of Shares Country of

Incorporation

% of Ownership interest as at

31-03-2020 31-03-2019

1) FACT-RCF BUILDING

PRODUCTS LTD. (FRBL) *

32870000 of

Rs 10 each

India 50.00 50.00

2) URVARAK VIDESH 180002 of Rs India 33.33 33.33


Page 54 of 119

LTD.(UVL) * 10 each

3) TALCHER FERTILIZERS

LIMITED (TFL) #

159504807 of

Rs 10 each

India 33.33 33.33

* Consequent to full provision recognized towards the investments made in FRBL and UVL

as per Indian GAAP, the carrying value as on the date of transition has been recognized as

deemed cost of investment which is NIL as on IND AS transition date .i.e. 1st April 2015.

Further URVARAK VIDESH LTD. (UVL) has been declared as Dormant Company on

04.11.2015 by Registrar of Companies, New Delhi.

# the shareholding is subject to change depending on the final value of the assets

transferred by FCIL to Talcher Fertilizer Ltd.

b) Transactions during the year with the above referred related parties:

Rs Crore

Sr.

No. Particulars

Year ended

31.03.2020

Year ended

31.03.2019

1 Contribution towards share capital-TFL 143.16 11.32

2 Advances given- FRBL - 19.50

3 Share of Expenses receivable from TFL

2.74 4.45

The advances given to FRBL has fully provided for as doubtful

c) Balance Outstanding:

Rs Crore

Sr.

No Particulars

As at 31.03.2020 As at

31.03.2019

Joint

Ventures

Joint

Ventures

1 Advances including advance against

pending equity allotment –FRBL *

40.23

40.23

2 Share of Expenses receivable from

TFL 7.19 4.45


Page 55 of 119

*The same has been fully provided.

Company has given guarantee of Rs 2.20 crore, PY (Rs 2.20 crore) for working capital

facilities from banks on behalf of FRBL. Since such facility has not been availed, no

provision towards financial guarantee and corresponding asset has been recognized.

2 Transactions with other entities- where Directors are interested:

a) Name of the entity & transactions

Fertilizers and Chemicals Travancore Ltd (FACT) -

i) Shri Umesh Dongre Director (Finance) being given the additional charge of

Director (Finance) of the said entity w.e.f 01st February, 2019 till 28th August,

2019.

ii) Shri Sudhir Panadare Director (Technical) being given the additional charge of

Director (Technical) of the said entity w.e.f 04th June 2019 till 30th November,

2019.

iii) Shri K U Thankachen Director (Marketing) being given the additional charge of

Director (Marketing) of the said entity w.e.f 01st June, 2019.

Rs Crore

Sl

no Nature of Transaction 2019-20 2018-19

1 Inter corporate Deposit - 25.50

2 Interest earned during the year 2.17 2.01

3 Earnest Money Deposit(EMD) - (0.03)

The amount of Rs 25.50 crore being the share of contribution of Fertilizers and Chemicals

Travancore Ltd (FACT) - a 50% JV partner in FACT-RCF Building Products Ltd (FRBL)

paid by RCF towards one time settlement entered into between FRBL and their bankers

resulting in discharge of Corporate Guarantee given by Company to FRBL bankers has

been reported under Inter Corporate Deposit (ICD). This ICD along with interest

outstanding for the half year ending 31st March 2020 amounting to Rs 1.09 crore has not

been provided for, considering improvement in FACT's financial position and the

Company is confident of settlement of the ICD given. FACT is a Government owned Entity

and outstanding interest has been settled by them in May 2020. Further the Company has

entered into an agreement with FACT for the ICD given, wherein FACT shall repay the

same in five annual equal instalments commencing from December 2020.


Page 56 of 119

b) Disclosure as required by Regulation 34(3) and 53(f) of SEBI (Listing Obligation and

Disclosure Requirements) Regulations, 2015

Rs Crore

Sr

no Particulars Current Year Previous Year

Entity in which

Directors are

interested

Amount as

on

31.03.2020

Maximum

amount

outstanding

during the

year ended

31.03.2020

Amount as

on

31.03.2019

Maximum

amount

outstanding

during the

year ended

31.03.2019

1

Loans and Advances

including interest to

FACT

26.59

26.59

25.50

25.50

c) Disclosure as per Section 186 of the Companies Act 2013

Rs Crore

Sr n o Name of Party Amount as on

31.03.2020

Amount as on

31.03.2019

1 FACT (Joint Venture

Partner in FRBL)

26.59 25.50

The share of FACT towards onetime settlement entered in to with Dena Bank amounting to

`25.50 Crore has been paid by the Company and is reported as Inter Corporate loan given.

The said loan carries an interest in accordance with section 186(7) of Companies Act 2013.

3 Key Management Personnel

1. Whole Time Directors & Company Secretary

a. Shri S C Mudgerikar , Chairman & Managing Director from 01.10.2019

b. Shri Umesh .V. Dhatrak, Chairman & Managing Director upto 30.09.2019

c. Shri. Sudhir Pandare, Director (Technical) from 18.12.2017

d. Shri. Umesh Dongre, Director (Finance) and CFO from 09.02.2018

e. Shri K U Thankachen, Director(Marketing) from 11.12.2018

f. Shri. Jaibhagwan Sharma, Company Secretary from 01.10.2017

1. Independent Directors

a. Shri. Harin Pathak upto 09.06.2019

b. Shri. G. M Inamdar upto 09.06.2019


Page 57 of 119

c. Shri. Suryanarayana Simhadri upto 07.03.2020

d. Prof. Anil Kumar Singh from 07.03.2019

e. Dr Shambhu Kumar from 07.03.2019

1. Government Nominee Directors

a. Ms Alka Tiwari from 06.03.2017

b. Ms Gurveen Sidhu from 18.05.2018

Details relating to parties referred above:

Rs Crore

Particulars Year ended

31.3.2020

Year ended

31.3.2019

Shri. S C Mudgerikar 0.25 -

Shri. Umesh V. Dhatrak 0.90 0.55

Shri. Sudhir Pandare 0.51 0.55

Shri. Umesh Dongre 0.48 0.42

Shri K U Thankachen 0.47 0.13

Shri. Jaibhagwan Sharma 0.26 0.24

Total 2.87 1.89

The above amount includes salaries and allowances, contribution to Provident fund, pension

etc. and actual payments towards leave encashment, if any.



an actuarial basis for the Company as a whole.

There have been no outstanding loans and advances from the above referred parties as at

year end.

4 Transaction with other Government related Entities

Since Government of India owns 75% of the Company’s equity share capital (under the

administrative control of Ministry of Chemicals and Fertilizers), the disclosures relating to

transactions with Government controlled entities have been reported in accordance with

para 26 of IND AS 24.


Page 58 of 119

Certain transactions which are individually and collectively significant carried out with

Government related entities for purchase of Gases, for procurement of Raw Materials /

Finished Goods, Assets / Spare parts from Original equipment manufacturers etc. the

details of which are as under:

Rs.Crore

Name of Entity Nature of Transaction 2019-20 2018-19

Sale of Product/Services during the year

Bharat Petroleum Corporation

Limited

Deposit received for STP

Project 11.74 25.32


Limited

Renting of Immovable

Property 21.63 -


Limited

Sale of Industrial chemicals 10.62 -

Indian Oil Corporation Ltd Sale of Industrial chemicals 43.81 25.16

Oil and Natural Gas Corporation

Ltd

Renting of Immovable

Property - 20.83

The Singareni Collieries Co. Ltd. Sale of Industrial chemicals 17.05 10.56

Hindustan Insecticides Limited Sale of fertilizers 20.31 35.46

Purchase of Product/Services during the year

GAIL (India) Ltd

Procurement of Gas /

Transportation Charges/Pool

difference payment

5069.52

5104.04

Mangalore Refinery &

Petrochemicals Procurement of Sulphur - 21.88

Indian Oil Corporation Ltd Procurement of Gas 81.78 198.22

Bharat Heavy Electricals Limited Procurement of Capital

Goods 18.13 105.19

Accounts Receivable

Indian Oil Corporation Ltd Trade & other receivable 11.78 10.19


Page 59 of 119

Hindustan Insecticides Limited Trade & other receivable 1.71 9.76

Accounts Payable

GAIL (India) Ltd Trade & other payables 557.05 314.43

Bharat Heavy Electricals Limited Trade & other payables 6.58 9.93


Limited Trade & other payables 82.12 70.37

The above referred transactions have been carried out on arm’s length basis with the

said entities.

Disclosure of transactions with the related party as defined in the Ind AS 24 are given

below for Financial Year 2018-19:

Transaction with other Government related Entities Since Government of India owns 75% of the Company’s equity share capital (under the


transactions with Government and other Government controlled entities have been

reported in accordance with para 26 of IND AS 24.

Certain transactions which are individually and collectively significant carried out with

other Government related entities for purchase of Gases, for procurement of Raw Materials

/ Finished Goods, Assets / Spare parts from Original equipment manufacturers etc. the

details of which are as under:

Rs Crore

Name of Entity Nature of Transaction 2018-19 2017-18

GAIL (India) Ltd Procurement of Gas / Transportation Charges/Pool difference payment

5104 3860.3

Mangalore Refinery & Petrochemicals Procurement of Sulphur 21.88 13.35

Bharat Petroleum Corporation Ltd Procurement of Gas - 101.81

Bharat Petroleum Corporation Limited Deposit received for STP Project 25.32 14.69

Indian Oil Corporation Ltd Procurement of Gas 198.22 107.35

Bharat Heavy Electricals Limited Procurement of Capital Goods 105.19 -

Oil and Natural Gas Corporation Ltd Renting of Immovable Property 20.83 19.92

GSPC ENERGY LIMITED Procurement of Gas - 30.63

The Singareni Collieries Co. Ltd. Sale of Industrial chemicals 10.56 9.56

Hindustan Insecticides Limited Sale of fertilizers 35.46 38.45

The above-referred transactions have been carried out on arm’s length basis with the

said entities.


Page 60 of 119

Transactions with Joint Controlled Entities

Relationship

JOINT CONTROLLED ENTITIES

Name of the Company

No of Shares Country of

Incorporation

% of Ownership interest as at

31-03-2019

31-03-2018

1) FACT-RCF BUILDING PRODUCTS LTD. (FRBL) *

32870000 of Rs10 each India 50.00 50.00

2) URVARAK VIDESH LTD.(UVL) *

180002 of Rs10 each India 33.33 33.33

3) TALCHER FERTILIZERS LIMITED (TFL) #

16344568 of Rs10 each India 33.33 33.32

* Consequent to full provision recognized towards the investments made in FRBL and

UVL as per Indian GAAP the carrying value as on the date of transition has been

recognized as deemed cost of investment which is NIL as on the transition date .i.e. 1st

April 2015.



# The shareholding is subject to change depending on the final value of the assets



Page 61 of 119

Transactions during the year with the above referred related parties:

Rs Crore

Sr. No.

PARTICULARS YEAR ENDED

31.03.2019

YEAR ENDED

31.03.2018 Amount Party-wise

amount Amount Party-wise amount

1 Contribution towards share capital

11.32 11.32 TFL

5.00 5.00 TFL

2 Advances given 19.50 19.50 FRBL

16.25 16.25 FRBL

3 Share of Expenses receivable from TFL

4.45 4.45 TFL

0.02 0.02 TFL

(Company expects to receive additional equity towards advances given during the year to

FRBL. As the investments in equity and advances given in earlier years have been fully

provided for, the amount of Rs19.50 Crore being the advance given to FRBL during the

year has been fully provided for as doubtful).

Balance Outstanding:

Rs Crore

Sr.

No.

PARTICULARS

AS AT

31.03.2019

AS AT

31.03.2018 Joint

Ventures Joint

Ventures 1 Guarantees given

(as security for credit facilities availed by FRBL from Banks)

FRBL – 0.00* FRBL – 19.50*

2 Advances Given/Advance against equity

(for meeting business requirements) FRBL – 40.23 FRBL – 20.73

3 Share of Expenses receivable from TFL 4.45 0.03

*Out of Guarantees given by the Company on behalf of FRBL to its bankers, guarantees

amounting to Rs 35.47 crore has been recognized as a financial asset at fair value. Expecting the

liability of repayment of debt obligations to FRBL bankers may devolve on the Company, loss

on impairment of its corporate guarantee amounting to Rs 35.47 crore towards term loan has

been done with adjustment to its opening reserves as at 1st April 2015,consequent to transition

to Ind AS .

A Onetime Settlement (OTS) was entered with the bankers and FRBL, wherein Company

contributed towards the same. The status of Corporate Guarantee obligation and payment

towards the OTS and the reversal of existing liability is given as under:

Rs Crore


Page 62 of 119

Sl. No.

PARTICULARS AS AT

31.03.2019 AS AT

31.03.2018

1 Outstanding Corporate Guarantee Obligation (security given against the credit facility availed by FRBL)

- 19.50

2 Reversal of liability of Corporate guarantee obligation during the year

19.50 15.97

3 Contribution under onetime settlement (RCF’s share) 19.50 15.97

Out of the total value of guarantees given, Rs 2.20 crore pertains to guarantee given for working

capital facilities from banks on behalf of FRBL. Since such facility has not been availed, no

provision towards financial guarantee and corresponding asset has been recognized.

Transactions with other entities- where Directors are interested:

a) Name of the entity

Fertilizers and Chemicals Travancore Ltd (FACT) - Owing to Shri Umesh Dongre

Director(Finance) being given the additional charge of Director (Finance) of the said

entity w.e.f 01st February, 2019

Rs Crore

Sl. No. Nature of Transaction 2018-19 2017-18

1 Inter corporate Loan 25.50 6.00

2 Earnest Money Deposit(EMD) (0.03) 0.00

Inter Corporate Deposit (ICD) advanced to Fertilizers and Chemicals Travancore Ltd

(FACT) - a 50% JV partner in FACT-RCF Building Products Ltd (FRBL) of Rs 25.50

Crores (being their share of contribution paid by RCF towards one time settlement

entered into between FRBL and their bankers resulting in Corporate Guarantee given by

Company to FRBL bankers being discharged) outstanding as at 31st March, 2019 has

not been provided for, despite FACT’s adverse financial position as the Company is

confident of settlement.

b) Disclosure as required required by Regulation 34(3) and 53(f) of SEBI

(Listing Obligation and Disclosure Requirements) Regulations, 2015


Page 63 of 119

Rs Crore

Sl. No.

Particulars Current Year Previous Year

Entity in which Directors are

interested

Amount as on

31.03.2019

Maximum

amount

outstanding

during the year

ended 31.03.2019

Amount as on

31.03.2018

Maximum

amount

outstanding

during the

year ended

31.03.2018

1

Loans and Advances in the

nature of Loans

To FACT Ltd.

25.50

25.50

6.00

6.00

c) Disclosure as per Section 186 of the Companies Act 2013

Rs Crore Sl. No. Name of

Party Amount as on 31.03.2019

Amount as on 31.03.2018

1 FACT Ltd. ( Joint Venture Partner in FRBL) 25.50 6.00

The FACT Ltd share towards onetime settlement entered in to with Dena Bank

amounting to Rs25.50 Crore has been paid by the Company and is reported as

intercorporate loan given. The said loan carries an interest in accordance with section

186(7) of Companies Act 2013.

Key Management Personnel

(i) Shri Umesh V. Dhatrak, Chairman & Managing Director from 14.09.2017

(ii) Shri Sudhir Panadare, Director (Technical) from 18.12.2017

(iii) Shri Umesh Dongre, Director (Finance) and CFO from 09.02.2018

(iv) Shri K. U. Thankachen, Director(Marketing) from 11.12.2018

(v) Shri Jai Bhagwan Sharma, Company Secretary from 01.10.2017

Details relating to parties referred above:

Remuneration:

Rs Crore

Particulars Year ended 31.3.2019

Year ended 31.3.2018

Shri Umesh V. Dhatrak 0.55 0.20 Shri Sudhir Panadare 0.55 0.13 Shri Umesh Dongre 0.42 0.05 Shri K. U. Thankachen 0.13 - Shri Jai Bhagwan Sharma 0.24 0.11

Total 1.89 0.49


Page 64 of 119



The remuneration to key management personnel does not include the provisions made

for gratuity; leave encashment and post-retirement medical benefits as they are

determined on an actuarial basis for the Company as a whole.

There have been no outstanding loans and advances from the above referred parties as at year end.

Disclosure of transactions with the related party as defined in the Ind AS 24 are given below

for Financial Year 2017-18:

Since Government of India owns 75% of the Company’s equity share capital (under the


transactions with Government and other Government controlled entities have been

reported in accordance with para 26 of IND AS 24.

Certain transactions are carried out with other government related entities for purchase of

Gases, for procurement of Raw Materials / Finished Goods, Assets / Spare Parts from

Original equipment manufacturers, which are significant in terms of value, the details of

which are as under:

Name of Entity Nature of Transaction

2017-18 2016-17

Rs Crore Rs

Crore

GAIL (India) Ltd. Procurement of Gas / Transportation Charges

3860.27 3,491.49

Mangalore Refinery & Petrochemicals

Procurement of Sulphur

13.35 20.09

MMTC Limited Procurement of MOP - 90.43

Bharat Petroleum Corporation Limited

Procurement of Gas 101.81 87.17

Bharat Petroleum Corporation Limited

Deposit received for STP Project

14.69 10.68

Indian Oil Corporation Ltd. Procurement of Gas 107.35 83.98

Oil and Natural Gas Corporation Ltd.

Renting of Immovable Property

19.92 22.47

GAIL (India) Ltd. Compensation and Administration Charges towards Gas Swapping

- 4.36

GSPC ENERGY LIMITED Procurement of Gas 30.63 -

GAIL (India) Limited Gas Swapping arrangement

- 107.43

MAIDC Sale of fertilizers 12.16 16.92

The Singareni Collieries Co. Ltd.

Sale of Industrial chemicals

9.56 14.44


Page 65 of 119

Hindustan Insecticides Limited

Sale of fertilizers 38.45 24.13

Fertilizers and Chemicals Travancore Ltd.

Inter Corporate Loan given

6.00 -

The above referred transactions have been carried out on arm’s length basis with the said entities. The other disclosures with related parties are as under: Relationship

JOINT CONTROLLED ENTITIES

Name of the Company No. of Shares

Country of Incorporation

% of Ownership interest

as at

31-03-2018 31-03-2017

1)FACT-RCF BUILDING PRODUCTS LTD. (FRBL) *

32870000 of Rs 10 each

India 50 50

2) URVARAK VIDESH LTD. (UVL) * 180002 of Rs 10 each

India 33.33 33.33

3) TALCHER FERTILIZERS LIMITED (FORMERLY KNOWN AS RASHTRIYA COAL GAS FERTILIZERS LIMITED) (TFL) #

5015000 of Rs 10 each

India 33.32 30

* Consequent to full provision recognized towards the investments made in FRBL and

UVL as per Indian GAAP, the carrying value as on the date of transition has been

recognized as deemed cost of investment which is NIL as on the transition date .i.e. 1st

April 2015.



# The shareholding is subject to change depending on the final value of the assets



Page 66 of 119

Transactions during the year with the above referred related parties:

Rs Crore

Sr.

No. Particulars



Amount Party-wise

amount Amount

Party-wise

amount

1 Contribution towards share capital

5 5TFL - -

2

Advances given 16.27

16.25 FRBL

0.02 TFL 0.28

FRBL 0.27

TFL 0.01

Company has received 5000000 shares of Rs 10 each from JV Talcher Fertilizers Ltd.

against its share of contribution during the year.

The provision towards the amount given as advances and additional equity contribution

pending allotment in FRBL made in the earlier financial years continues and during the

year an amount of Rs 16.25 crores towards certain advances given to FRBL has also been

fully provided for.

Balance Outstanding:

Rs Crore

Sr.

No. Particulars

As at 31.03.2018

As at 31.03.2017

Joint Ventures

Joint Ventures

1 Guarantees given

(as security for credit facilities availed by FRBL from

Banks)

FRBL – 19.50* FRBL - 37.67

2 Advances Given

(for meeting business requirements)

FRBL –

18.38

TFL 0.03

FRBL- 2.13

TFL -0.01

Out of Guarantees given by the Company on behalf of FRBL to its bankers, guarantees

amounting to Rs 35.47 crore has been recognized as a financial asset at fair value.

Expecting the liability of repayment of debt obligations to FRBL bankers may devolve on

the Company, loss on impairment of its corporate guarantee amounting to Rs 35.47 crore

towards term loan has been done with adjustment to its opening reserves as at 1st April

2015,consequent to transition to Ind AS.


Page 67 of 119

One time settlement has been entered with the bankers and FRBL with the Company

contributing towards the same. Accordingly the liability towards corporate guarantee

obligation / one time settlement stands restricted to Rs 19.50 crores on account of payment

of Rs 15.97 crore towards the same and the existing liability towards the same stands

reversed.

Upon payment of the balance amount under OTS the corporate guarantee would be discharged.

Out of the total value of guarantees given, Rs 2.20 crore pertains to guarantee given for

working capital facilities from banks on behalf of FRBL. Since such facility has not been

availed, no provision towards financial guarantee and corresponding asset has been

recognized.

Key Management Personnel

(i) Shri Umesh V. Dhatrak, Chairman & Managing Director from 14.09.2017

(ii) Shri Sudhir Panadare, Director (Technical) from 18.12.2017

(iii) Shri CMT Britto, Director ( Technical) upto 30.06.2017

(iv) Shri Suresh Warior, Director (Finance) and CFO upto 30.11.2017.

(v) Shri Umesh Dongre, Director (Finance) and CFO from 09.02.2018

(vi) Shri D M Sati, Company Secretary upto 30.09.2017

(vii) Shri Jai Bhagwan Sharma, Company Secretary from 01.10.2017

Details relating to parties referred in above:

Remuneration:

Rs Crore

Particulars Year ended 31.3.2018


Shri. Umesh V. Dhatrak 0.20 -

Shri. Sudhir Panadare 0.13 -

Shri. CMT Britto 0.55 0.41

Shri. Umesh Dongre 0.05 -

Shri. Suresh Warior 0.71 0.46

Shri. Jaibhagwan Sharma 0.11 -

Shri. D. M.Sati 0.09 0.41

Total 1.84 1.28





an actuarial basis for the Company as a whole. Further the above figures do not include the


Page 68 of 119

arrears of wage revision due from 01.01.2017 as approved by Board.

There have been no outstanding loans and advances from the above referred parties as at year end.

Summary of reservations or qualifications or adverse remarks of auditors during last five

financial years

No reservations or qualifications or adverse remarks of statutory auditors during last five

financial years.

Details of any inquiry, inspections or investigations initiated or conducted under the

Companies Act or any previous company law in the last three years till date in the case of

company and all of its subsidiaries. Also if there were any prosecutions filed (whether

pending or not) fines imposed, compounding of offences in the last three years immediately

preceding the year of the offer letter and if so, section-wise details thereof for the company

and all of its subsidiaries

There was no inquiry, inspections or investigations initiated or conducted under the Companies

Act or any previous company law in the last three years till date in the case of company and all of

its subsidiaries. Also, there was no prosecutions filed (whether pending or not) fines imposed,

compounding of offences in the last three years immediately preceding the year of the offer

letter.

Details of acts of material frauds committed against the company in the last three years

There is no material fraud committed against the company in last three years.


Page 69 of 119

I. Abridged version of Audited Consolidated and Standalone Financial Information

(Profit & Loss statement, Balance Sheet and Cash Flow statement) for last three years

and auditor qualifications:

Standalone Balance Sheet

(Rs. in crore)

Particulars As on 31st March 2020

As on 31st March 2019


ASSETS

1.NON CURRENT ASSETS

(a) Property, Plant and Equipment 2,121.30 1,942.71 1,903.49

(b) Capital Work in Progress 433.49 275.69 152.36

(c) Investment Property 6.10 6.29 5.10

(d) Intangible Assets 2.62 0.99 1.41

(e) Financial Assets - - -

(i) Investments - - 5.02

-Investment in Joint Ventures 159.51 16.35 5.02

-Other Investments 103.49 69.99 57.38

(ii) Trade Receivables - - -

(iii) Loans 20.53 0.27 0.41

(iv) Others - - 0.34

(f) Other Non-Current Assets 203.70 297.26 328.85

3,050.74 2,609.55 2,459.38

2. CURRENT ASSETS

(a) Inventories 949.94 1,478.78 741.65

(b) Financial Assets - - -

(i) Trade Receivables 4,551.23 4,550.19 2,860.41

(ii) Cash and Cash Equivalents 2.07 3.59 5.24

(iii) Bank balances other than (ii) above 1.29 1.27 0.72

(iv) Loans 6.50 26.01 6.86

(v) Others 1,655.20 46.23 81.21

(c) Other Current Assets 83.53 204.87 173.10

7,249.76 6,310.94 3,869.19

TOTAL ASSETS 10,300.50 8,920.49 6,323.55

EQUITY AND LIABILITIES

A. EQUITY

(a) Equity Share Capital 551.69 551.69 551.69


Page 70 of 119

(b) Other Equity 2,634.58 2,483.01 2,378.00

3,186.27 3,034.70 2,929.69

B. LIABILITIES

1.NON-CURRENT LIABILITIES

(a) Financial Liabilities - - -

(i) Borrowings 600.91 425.11 320.06

(ii) Trade Payables - - -

(A) Total outstanding dues of micro enterprises and small enterprises. - - -

(B) Total outstanding dues of creditors other than micro enterprises and small enterprises

211.79 211.79 211.79

(iii) Other Financial Liabilities 43.89 43.72 34.71

(b) Provisions 188.55 181.46 253.78

(c) Deferred Tax Liabilities(Net) 196.94 280.33 219.77

(d) Other non-current liabilities 39.11 38.28 26.38

1,281.19 1,180.69 1,066.90

2. CURRENT LIABILITIES

(a) Financial Liabilities

(i) Borrowings 4,076.87 2,885.47 934.59

(ii) Trade Payables

(A) Total outstanding dues of micro enterprises and small enterprises.

36.81 24.67 15.14

(B) Total outstanding dues of creditors other than micro enterprises and small enterprises.

959.92 1,130.42 687.97


(b) Other Current Liabilities 81.51 72.82 80.15

(c) Provisions 142.14 141.83 135.80

(d) Current Tax Liabilities (Net) 53.25 - 36.02

5,833.04 4,705.10 2,327.37

TOTAL EQUITY AND LIABILITIES 10,300.50 8,920.49 6,323.55

Standalone Profit and Loss Statement

(Rs. in crore)




I Revenue from Operations 9,697.95 8,885.47 7,281.96

II Other Income 128.65 79.67 61.24

III Total Income(I+II) IV 9,826.60 8,965.14 7,343.20

IV Expenses:

Cost of Materials Consumed 3,776.22 3,880.01 2,995.89


Page 71 of 119

Purchases of Stock in Trade 294.43 798.15 213.66

Changes in Inventories of Finished Goods and Stock in Trade 603.25 -605.27 14.64

Employee benefits expense 617.26 591.41 573.75

Finance costs 237.82 155.85 62.59

Depreciation and amortization expense / Impairment 171.04 155.69 137.04

Other Expenses 3,823.48 3,777.49 3,217.29

Total Expenses 9,523.50 8,753.33 7,214.86

V Profit before exceptional items (III-IV) 303.10 211.81 128.34

VI Exceptional Items 100.17 -23.44 0.12

VII Profit before tax (V-VI) 202.93 235.25 128.22

VIII Tax Expense

(1) Current tax 71.72 57.12 72.75

(2) Deferred tax -77.16 56.16 -4.06

(3) Taxation adjustment of earlier years Excess (-) /Short(+) 0.22 -17.20 -19.27

IX Profit/ (loss) for the period (VII-VIII) 208.15 139.17 78.80

X Other Comprehensive Income

(i) Items that will not be reclassified to profit or loss -16.27 8.82 -0.61

(ii) Income tax relating to items that will not be reclassified to profit or loss

10.90 -3.07 -0.48

Other Comprehensive Income for the year (X) -5.37 5.75 -1.09

XI Total Comprehensive Income for the year (IX+X) 202.78 144.92 77.71

XII Earnings per equity share

Basic and Diluted Earnings per share (Rs) 3.77 2.52 1.43

Standalone Cash Flow Statement

(Rs. in crore)




A Cash Flow From Operating Activities

Net Profit before tax 202.93 235.25 128.22

Adjustments for :

Depreciation/Loss on impairment of Assets 171.38 156.03 137.24

Profit(-) / Loss on sale of Assets 3.21 -1.89 -2.06

Interest Income -41.41 -17.77 -8.78

Dividend Income -0.20 -0.32 -0.27

Interest and Finance Charges 237.82 155.85 62.59

Provision for Bad/Doubtful debts 4.73 24.58 17.01

Unrealised Foreign Exchange (Gain) /Loss 13.39 -6.28 14.01


Page 72 of 119

Operating Profit before Working Capital Changes Adjustments for :

591.85 545.45 347.96

Trade and Other Receivables -1,494.44 -1,636.23 412.88

Inventories 528.84 -737.13 51.65

Trade Payables and Other Liabilities -145.32 289.98 293.63

Cash Generated from Operations -519.07 -1,537.93 1,106.12

Direct Taxes Paid -10.60 -98.50 -28.00

Net Cash from Operating Activities --------------------------A -529.67 -1,636.43 1,078.12

B.Cash Flow from Investing Activities

Additions to Fixed Assets (Net of trade credit) -425.47 -302.77 -500.90

Sale of Fixed Assets 0.31 4.75 7.21

Purchase of Investments -Joint Ventures and Subsidiary -143.16 -11.33 -5.00

Inter Corporate Advances / Deposits - - -6.00

Interest Received 41.37 17.76 8.75

Dividend Received 0.20 0.32 0.27

Government Grants Received - 0.49 -

Net Cash from Investing Activities ----------------------------B -526.75 -310.28 -495.67

C. Cash Flow from Financing Activities

Net Proceeds /Repayment of Working capital facilities and short term loans

1,181.00 1,956.88 -626.45

Proceeds from Term loans 309.00 267.00 296.22

Repayments of Term loans -139.08 -87.19 -123.14

Interest paid -241.52 -151.89 -61.16

Dividend paid (including Dividend Distribution tax) -51.22 -39.74 -72.99

Lease Liability Paid -3.28 - -

Net Cash from Financing Activities -------------------------- C 1,054.90 1,945.06 -587.52

Net Increase/Decrease(-) in Cash and Cash Equivalent (A+B+C)

-1.52 -1.65 -5.07

Cash and Cash Equivalents as at 1st April (Opening Balance)

3.59 5.24 10.31

Cash and Cash Equivalents as at 31st March (Closing Balance)

2.07 3.59 5.24

Components of Cash and Cash Equivalents

Cash on hand 0.01 0.01 0.01

Balance With Scheduled Banks in Current and Cash Credit Accounts

2.06 3.58 5.23

2.07 3.59 5.24


Page 73 of 119

Consolidated Balance Sheet

(Rs. in crore)




ASSETS

1. NON CURRENT ASSETS

(a) Property, Plant and Equipment 2,121.30 1,942.71 1,903.49

(b) Capital Work in Progress 433.49 275.69 152.36

(c) Investment Property 6.10 6.29 5.10

(d) Intangible Assets 2.62 0.99 1.41

(e) Financial Assets

(i) Investments

Investment in Joint Ventures 152.28 11.30 5.06

Other Investments 103.49 69.99 57.38

(ii) Trade Receivables - - -

(iii) Loans 20.53 0.27 0.41

(iv) Others - - 0.34

(f) Other non-current assets 203.70 297.26 328.85

3,043.51 2,604.50 2,454.40

2.CURRENT ASSETS

(a) Inventories 949.94 1,478.78 741.65

(b) Financial Assets

(i) Trade Receivables 4,551.23 4,550.19 2,860.41

(ii) Cash and Cash Equivalents 2.07 3.59 5.24

(iii) Bank balances other than (ii) above 1.29 1.27 0.72

(iv) Loans 6.50 26.01 6.86

(v) Others 1,655.20 46.23 81.21

(c) Other Current Assets 83.53 204.87 173.10

7,249.76 6,310.94 3,869.19

TOTAL ASSETS 10,293.27 8,915.44 6,323.59

EQUITY AND LIABILITIES

A.EQUITY

(a) Equity Share Capital 551.69 551.69 551.69

(b) Other Equity 2,627.35 2,477.96 2,378.04

3,179.04 3,029.65 2,929.73

B.LIABILITIES

1. NON-CURRENT LIABILITIES


Page 74 of 119


(i) Borrowings 600.91 425.11 320.06

(ii) Trade Payables

(A) Total outstanding dues of micro enterprises and small enterprises

- - -

(B) Total outstanding dues of creditors other than micro enterprises and small enterprises

211.79 211.79 211.79


(b) Provisions 188.55 181.46 253.78

(c) Deferred Tax Liabilities(Net) 196.94 280.33 219.77

(d) Other non-current liabilities 39.11 38.28 26.38

1,281.19 1,180.69 1,066.49

2. CURRENT LIABILITIES


(i) Borrowings 4,076.87 2,885.47 934.59

(ii) Trade Payables

(A) Total outstanding dues of micro enterprises and small enterprises.

36.81 24.67 15.14

(B) Total outstanding dues of creditors other than micro enterprises and small enterprises.

959.92 1,130.42 687.97


(b) Other Current Liabilities 81.51 72.82 80.15

(c) Provisions 142.14 141.83 135.80

(d) Current Tax Liabilities (Net) 53.25 - 36.02

5,833.04 4,705.10 2,327.37

TOTAL EQUITY AND LIABILITIES 10,293.27 8,915.44 6,323.59


Page 75 of 119

Consolidated Profit and Loss

(Rs. in crore)




I Revenue from Operations 9,697.95 8,885.47 7,281.96

II Other Income 128.65 79.67 61.24

III Total Income(I+II) IV 9,826.60 8,965.14 7,343.20

IV Expenses:

Cost of Materials Consumed 3,776.22 3,880.01 2,995.89

Purchases of Stock in Trade 294.43 798.15 213.66

Changes in Inventories of Finished Goods and Stock in Trade 603.25 -605.27 14.64

Employee benefits expense 617.26 591.41 573.75

Finance costs 237.82 155.85 62.59

Depreciation and amortization expense / Impairment 171.04 155.69 137.04

Other Expenses 3,823.48 3,777.49 3,217.29

Total Expenses 9,523.50 8,753.33 7,214.86

V Profit before exceptional items (III-IV) 303.10 211.81 128.34

VI Share of Profit / (Loss) of Associates / JV's -1.02 -5.09 0.02

VII Profit before exceptional items 302.08 206.72 128.36

VIII Exceptional Items 100.17 -23.44 0.12

IX Profit before tax (V-VI) 201.91 230.16 128.24

X Tax Expense

(1) Current tax 71.72 57.12 72.75

(2) Deferred tax -77.16 56.16 -4.06

(3) Taxation adjustment of earlier years Excess(-)/Short(+) 0.22 -17.20 -19.27

XI Profit/ (loss) for the period (VII-VIII) 207.13 134.08 78.82

XII Other Comprehensive Income

(i) Items that will not be reclassified to profit or loss -16.27 8.82 -0.61

(ii) Income tax relating to items that will not be reclassified to profit or loss

10.90 -3.07 -0.48

Other Comprehensive Income for the year (X) -5.37 5.75 -1.09

XIII Total Comprehensive Income for the year (IX+X) 201.76 139.83 77.73

XIV Earnings per equity share

Basic and Diluted Earnings per share (Rs) 3.75 2.43 1.43


Page 76 of 119

Consolidated Cash Flow Statement

(Rs. in crore)




A Cash Flow From Operating Activities

Net Profit before tax 201.91 230.16 128.24

Adjustments for :

Depreciation/Loss on impairment of Assets 171.38 156.03 137.24

Profit (-) / Loss on sale of Assets 3.21 -1.89 -2.06

Changes in value of investments 1.02 5.09 -0.02

Interest Income -41.41 -17.77 -8.78

Dividend Income -0.20 -0.32 -0.27

Interest and Finance Charges 237.82 155.85 62.59

Provision for Bad/Doubtful debts 4.73 24.58 17.01

Unrealised Foreign Exchange (Gain) /Loss 13.39 -6.28 14.01

Operating Profit before Working Capital Changes Adjustments for :

591.85 545.45 347.96

Trade and Other Receivables -1,494.44 -1,636.23 412.88

Inventories 528.84 -737.13 51.65

Trade Payables and Other Liabilities -145.32 289.98 293.63

Cash Generated from Operations -519.07 -1,537.93 1,106.12

Direct Taxes Paid -10.60 -98.50 -28.00

Net Cash from Operating Activities ---------------------------A -529.67 -1,636.43 1,078.12

B Cash Flow from Investing Activities

Additions to Fixed Assets (Net of trade credit) -425.47 -302.77 -500.90

Sale of Fixed Assets 0.31 4.75 7.21

Purchase of Investments -Joint Ventures and Subsidiary -143.16 -11.33 -5.00

Inter Corporate Advances / Deposits - -19.50 -6.00

Interest Received 41.37 17.76 8.75

Dividend Received 0.20 0.32 0.27

Government Grants Received - 0.49 -

Net Cash from Investing Activities -----------------------------B -526.75 -310.28 -495.67

C Cash Flow from Financing Activities

Net Proceeds /Repayment of Working capital facilities and short term loans

1,181.00 1,956.88 -626.45

Proceeds from Term loans 309.00 267.00 296.22

Repayments of Term loans -139.08 -87.19 -123.14

Interest paid -241.52 -151.89 -61.16


Page 77 of 119

Dividend paid (including Dividend Distribution tax) -51.22 -39.74 -72.99

Lease liability paid -3.28 - -

Net Cash from Financing Activities ----------------------------C 1,054.90 1,945.06 -587.52

Net Increase/Decrease(-) in Cash and Cash Equivalent (A+B+C)

-1.52 -1.65 -5.07

Cash and Cash Equivalents as at 1st April (Opening Balance)

3.59 5.24 10.31

Cash and Cash Equivalents as at 31st March (Closing Balance)

2.07 3.59 5.24

Components of Cash and Cash Equivalents

Cash on hand 0.01 0.01 0.01

Balance With Scheduled Banks in Current and Cash Credit Accounts

2.06 3.58 5.23

2.07 3.59 5.24

Auditor Qualifications: There are no auditor qualifications for the fiscal years mentioned above.

1. Auditor’s Opinion Extracts:

Standalone

For the year ended 31st March 2020

We have audited the accompanying standalone Ind AS financial statements of RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED (“the Company”), which comprises the Balance Sheet as at March 31, 2020, the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of cash flows for the year ended March 31, 2020, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us,

the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs of the Company

as at March 31, 2020, and its profit and total comprehensive income, changes in equity and its

cash flows for the year ended on that date


Page 78 of 119

Emphasis of Matters

a) Note No. 47 – Subsidy Income:

DoF vide its Notification dated 30th March, 2020 has removed the ambiguity with respect to

eligible compensation on revision in fixed costs effective from 2nd April, 2014 under Modified

NPS III. Accordingly, Company has recognised subsidy income based on the assessment of its

eligibility and providedfor certain anticipated recoveries by DoF towards final adjustments on

NPK fertilizers and receivables, recognised earlier on estimated basis, being doubtful of

settlement. The net impact of the same works out to Rs. 342.92 Crore receivable from FICC/DoF.

b) Note No 48 - Use of domestic gas for manufacture of nutrient “N”:

The matter relating to the issue of unintended benefits accruing to units using domestic gas for

manufacture of nutrient “N” has been referred and is pending before an Inter-Ministerial

Committee (IMC) of Government of India (GoI). It is expected that a decision on the matter

would be taken soon by the IMC. Initially subsidy amounting to Rs.198.94 Crore was withheld by

DOF, which has been released in full upon submission of its claims along with bank guarantee

for equivalent amount by the Company.

c) Note No 49 - Gas pooling applicable to Fertilizer (Urea) sector:

Consequent to Gas pooling being made applicable to Fertilizer (Urea) sector w.e.f. June 1, 2015, it

is expected that a differential pricing of gas may be made applicable for non-urea usage.

Company has represented to DoF for maintaining supply of domestic gas for P&K fertilizers and

chemicals. Ministry of Petroleum & Natural Gas (MoPNG) vide its order No. L-13013/3/2012-

GP-I, dated: December 16, 2015 has directed GAIL (India) Limited to levy a higher gas price (i.e.

the highest rate of RLNG used for production of urea) for gas consumed in non-urea operations.

As the matter relating to the same is pending before the IMC for decision, the Company has

represented that any decision on the same be taken only upon the issue being settled by the IMC

of GoI. However, pending finalization of price payable as per the said letter, Company is

recognizing liability based on the difference between domestic gas price and pool / market price

of gas for its non-urea operations. The difference is provided considering domestic gas first for

urea operations on cumulative basis for the year and the balance if any, for non-urea operations

and accordingly there is no impact for the year ended March 31, 2020. The Company has

recognised a liability of Rs.211.79 Crore for the period commencing from June 1, 2015 to March

31, 2020 (Rs.211.79 Crore upto March 31, 2019) on this account. The Company has entered into a

contract for procurement of market priced gas for non-urea operations at Trombay unit, effective

from May 16, 2016. Pursuant to the said order, GAIL has sought a differential levy amounting to

Rs.1442.84 crore for the period commencing from July 1, 2006 till March 31, 2017 andhas initiated

arbitration proceeding towards non-payment of the same. The Company has represented this


Page 79 of 119

matter to Department of Fertilizers for dispute resolution as the matter relating to the same is

pending before the IMC of GoI. The said matter has been currently referred to Administrative

Mechanism for Resolution of CPSEs Disputes (AMRCD) on May 22, 2018.

d) Note No 50 - Gas Turbine Generator (GTG) plants at Thal unit:

On 20th and 22nd March, 2019 respectively, both the Gas Turbine Generator (GTG) plants at

Thal unit stopped operating. Upon failure, the matter was taken up with the LSTK contractor

who had supplied the turbines for repair, as the same were covered under warranties. The

matter was referred by the LSTK contractor for repairs to the Original Equipment Manufacturer

(OEM) who had indicated a total estimated expenditure of about 98 Million SEK (Rs.74.51 crore

excluding taxes and duties). In the best interests of the Company, based on the acceptance of

Notice to Proceed as proposed by the LSTK contractor, the equipment have been sent for repair

to the foreign Original Equipment Manufacturer (OEM) which are to be received back as at the

Balance Sheet date. As per the Notice to proceed, the final settlement of the repair costs can

either be decided mutually or in the event not agreed upon, the settlement of disputes clause as

per contract can be invoked. As the equipment are covered under warranties, the Company is of

the view that no additional costs would devolve on the Company. Further the Company has

initiated arbitration proceedings towards the LSTK contractor citing loss of profits owing to

higher energy costs, higher maintenance costs etc. In the meanwhile, the Company has

procured a Gas generator and commissioned a Gas Turbine Generator plant in August 2019 to

mitigate future losses.

e) Note No 56.2) a): Inter Corporate Deposit (ICD) advanced to Fertilizers and Chemicals

Travancore Ltd. The amount of Rs.25.50 crore being the share of contribution of Fertilizers and

Chemicals Travancore Ltd (FACT) - a 50% JV partner in FACT-RCF Building Products Ltd

(FRBL) paid by RCF towards one-time settlement entered into between FRBL and their bankers

resulting in discharge of Corporate Guarantee given by Company to FRBL bankers has been

reported under Inter Corporate Deposit (ICD). This ICD along with interest outstanding for the

half year ending 31st March 2020 amounting to Rs.1.09 crore has not been provided for,

considering improvement in FACT’s financial position and the Company is confident of

settlement of the ICD given. FACT is a Government owned Entity and outstanding interest has

been settled by them in May 2020. Further the Company has entered into an agreement with

FACT for the ICD given, wherein FACT shall repay the same in five annual equal instalments

commencing from December 2020.

f) Note No 62) 1) b) - Contribution to Employee Provident Fund Trust:

Pending finalisation of accounts of the Company’s Employees Provident Fund Trust, the

investments held by the Trust amounting to Rs.92.64 crores have become doubtful as at 31st

March 2020 owing to defaults with respect to payment of principal and interest warranting

provision towards the same. The same will have to be made good by the Company, as principal

employer, in the event there are no adequate assets of the Trust to meet its liabilities as per EPFO

Act. However as per Ind AS 19, for Defined Benefit plans, Company is required to ascertain the

present value of the defined benefit obligation and compare with the fair values of the Plan assets

to determine the surplus or deficit, if any, as at Balance Sheet date. Deficit, if any, needs to be


Page 80 of 119

accounted in the books of the Company. Accordingly, Company has recognized an amount of

Rs.19.07 crores as contribution to Trust owing to such deficit.

g) Note No. 65 - Loss on fair valuation of Transferable Development Rights (TDR): T

he loss on account of fair valuation of Transferable Development Rights (TDRs) received

/accrued has been reported as exceptional item amounting to Rs.100.17 crore. Hitherto, as at

31.03.2019 the Company expecting TDRs to be sold in the coming financial year had classified the

same as Non-Current Assets Held for sale. Considering the current depression in the real estate

segment which has been further aggravated owing to COVID-19 pandemic, the sale of the same

is not highly probable. Accordingly, as per IND AS 105, the TDRs cannot be classified as Non-

Current Asset Held for sale and has been reclassified as investment at fair value of Rs.31.23 crore

for the year ended 31.03.2020.

h) Note No. 76- Effects of COVID-19:

We draw attention to Note 76, which describes the impact of the outbreak of coronavirus

(COVID-19) on the business operations of the company. In view of highly uncertain economic

environment, a definitive assessment of the impact on the subsequent periods is highly

dependent upon circumstances as the evolve. Further our attendance at the physical inventory

verification done by the management was impracticable under the current lockdown restrictions

imposed by the government and we have therefore relied on related alternative procedures to

obtain comfort over the existence and condition of the inventory at year end.

Our opinion is not modified in respect of these matters.


Opinion:

We have audited the accompanying standalone Ind AS financial statements of RASTRIYA

CHEMICALS AND FERTILISERS LIMITED (“the Company”), which comprises the Balance

Sheet as at March 31, 2019, the Statement of Profit and Loss (including other comprehensive

income), Statement of Changes in Equity and Statement of cash flows for the year ended March

31, 2019, and notes to the financial statements, including a summary of significant accounting

policies and other explanatory information. In our opinion and to the best of our information and

according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs

of the Company as at March 31, 2019, and its profit and total comprehensive income, changes in

equity and its cash flows for the year ended on that date.


Page 81 of 119

Emphasis of Matter

a) Note No 47 (b): The matter relating to the issue of unintended benefits accruing to units

using domestic gas for manufacture of nutrient “N” has been referred and is pending

before an Inter-Ministerial Committee (IMC) of Government of India (GoI). It is

expected that a decision on the matter would be taken soon by the IMC. Pending such

decision, initially subsidy amounting to Rs 198.94 Crore was withheld. As per DoF

approval for release of this subsidy, upon submission of its claims along with bank

guarantee for equivalent amount by the Company, an amount of Rs 125.11 Crore has

been received upto March 31, 2019. Accordingly, no provision has been made in these

accounts towards the balance amount of Rs 73.83 Crore withheld, as Company is of the

view that no unintended benefits have accrued to owing to use of domestic gas.

b) Note No 48: Consequent to Gas pooling being made applicable to Fertilizer (Urea) sector

w.e.f. June 1, 2015, it is expected that a differential pricing of gas may be made

applicable for non-urea usage. Company has represented to DoF for maintaining

supply of domestic gas for P&K fertilizers and chemicals. Ministry of Petroleum &

Natural Gas (MoPNG) vide its order No. L-13013/3/2012- GP-I, dated: December 16,

2015 has directed GAIL (India) Limited to levy a higher gas price (i.e. the highest rate of

RLNG used for production of urea) for gas consumed in non-urea operations. As the

matter relating to the same is pending before the IMC for decision, the Company has

represented that any decision on the same be taken only upon the issue being settled by

the IMC of GoI. However, pending finalization of price payable as per the said letter,

Company is recognizing liability based on the difference between domestic gas price

and pool/ market price of gas for its non-urea operations. The difference is provided

considering domestic gas first for urea operations on cumulative basis for the year and

the balance if any, for non-urea operations and Accordingly, there is no impact for the

year ended March 31, 2019. The Company has recognised a liability of Rs 211.79 Crore

for the period commencing from June 1, 2015 to March 31, 2019 (Rs 211.79 Crore upto

March 31, 2018) on this account.

The Company has entered into a contract for procurement of market priced gas for non-

urea operations at Trombay unit, effective from May 16, 2016.

Pursuant to the said order, GAIL has sought a differential levy amounting to Rs 1442.84

Crore for the period commencing from July 1, 2006 till March 31, 2017 and has initiated

arbitration proceeding towards non-payment of the same. The Company has represented

this matter to Department of Fertilizers for dispute resolution as the matter relating to

the same is pending before the IMC of GoI. The said matter has been currently referred

to Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD) on May 22,

2018

c) Note No 53.3) a): Inter Corporate Deposit (ICD) advanced to Fertilizers and Chemicals

Travancore Ltd (FACT) –50% JV partner in FACT-RCF Building Products Ltd (FRBL) of

Rs 25.50 Crore (being their share of contribution paid by RCF towards onetime

settlement entered into between FRBL and their bankers resulting in Corporate Guarantee

given by Company to FRBL bankers being discharged) outstanding as at March 31, 2019

has not been provided for, despite FACT’s adverse financial position, as the Company is

confident of settlement of the ICD given. Further the FACT is a Government owned Entity

and interest has been settled by them upto March 31, 2019.


Page 82 of 119

d) Note No. 63: Net fair value gain of Rs 23.44 Crore on account of valuation of

Development Right Certificate received from Municipal Corporation of Greater Mumbai/

Mumbai Metropolitan Regional Development Authority towards surrender of land in

accordance with IND-AS 38 and Guidance Note on Accounting for Real Estate

Transactions issued by the Institute of Chartered Accountants of India. Tax expense

includes the Capital Gains Tax impact on the same.


Opinion




principles generally accepted in India including the Ind AS, of the state of affairs (financial

position) of the Company as at March 31, 2018, and its profit/loss (financial performance

including other comprehensive income), its cash flows and the changes in equity for the year

ended on that date.

Emphasis of Matter



before an Inter- Ministerial Committee (IMC) of Government of India (GoI). An amount

of Rs 198.94 crore has been withheld by Department of Fertilizers (DOF) for the period

January, 2014 to September, 2015 towards the same. DoF has recently agreed to release the

amount withheld against submission of bank guarantee, which has since been submitted.

Pending final decision on the said matter and since the Company is of the view that no

unintended benefits have accrued to it and is expecting full recoverability of the same,

Company has continued to recognize subsidy income on P&K fertilizers at the rates notified

by DoF.

b) Note No 48: Consequent to Gas pooling being made applicable to Fertilizer (Urea)

sector w.e.f. 1st June, 2015, it is expected that a differential pricing of gas may be made

applicable for non-urea usage. Company has represented to DoF for maintaining supply of

domestic gas for P&K fertilizers and chemicals. Further effective from 16th May, 2016 the

Company has entered into a contract for procurement of market priced gas for non-urea

operations at Trombay unit.

In the interim, Ministry of Petroleum & Natural Gas (MoPNG) vide its order No. L-

13013/3/2012-GP-I, dated: 16th December, 2015 has directed GAIL (India) Limited to levy a

higher gas price (i.e. the highest rate of RLNG used for production of urea) for gas consumed

in non-urea operations. As the matter relating to the same is pending before the IMC for

decision, Company has represented that any decision on the same be taken only upon the

issue being settled by the IMC of GoI.

Pursuant to the said order, GAIL has sought a differential levy amounting to Rs 1442.84 crore


Page 83 of 119

for the period commencing from 1st July 2006 till 31st March 2017 and has initiated

arbitration proceeding towards non-payment of the same, which has been currently referred

to Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD).

Company has also represented this matter to Department of Fertilizers for dispute resolution

as the matter relating to the same is pending before the IMC of GoI.

However, pending finalization of price payable as per the MoPNG order, a liability of Rs

211.79 crore as on 31st March, 2018 (Rs 210.63 crore upto 31st March, 2017) has been

recognized for the period commencing from 1st June, 2015 based on the difference

between the domestic gas price and pooled / market price of gas for its non-urea operations

as applicable.

c) Note No 65 (a): Net fair value gain of Rs 107.94 crore on account of valuation of

Development Right Certificate received from Municipal Corporation of Greater Mumbai

towards surrender of land in accordance with IND-AS 38 and Guidance Note on Accounting

for Real Estate Transactions issued by Institute of Chartered Accountants of India. Tax

expense includes the Capital Gains Tax impact on the same.

d) Note No 65 (b): Past service gratuity cost of Rs 108.06 crore on account of increase in

gratuity limits from Rs 10 lakh to Rs 20 lakh in line with Notification dated 29th March, 2018

issued by the Ministry of Labour and Employment.

Consolidated


We have audited the accompanying consolidated Ind AS financial statements of RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED (“the Company”), and its jointly controlled entities comprising of the Consolidated Balance sheet as at March 31, 2020, the consolidated Statement of Profit and Loss (including other comprehensive income), the consolidated Statement of Changes in Equity and Consolidated Statement of cash flows for the year ended March 31, 2020, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information. (hereinafter referred to as “the Consolidated Ind AS Financial Statements”).




principles generally accepted in India including the Ind AS, of the state of affairs of the Company

as at March 31, 2020, and its profit and total comprehensive income, changes in equity and its

cash flows for the year ended on that date

Emphasis of Matters

a) Note No. 47 – Subsidy Income:

DoF vide its Notification dated 30th March, 2020 has removed the ambiguity with respect to

eligible compensation on revision in fixed costs effective from 2nd April, 2014 under Modified

NPS III. Accordingly, Company has recognised subsidy income based on the assessment of its


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eligibility and providedfor certain anticipated recoveries by DoF towards final adjustments on

NPK fertilizers and receivables, recognised earlier on estimated basis, being doubtful of

settlement. The net impact of the same works out to Rs. 342.92 Crore receivable from FICC/DoF.

b) Note No 48 - Use of domestic gas for manufacture of nutrient “N”:

The matter relating to the issue of unintended benefits accruing to units using domestic gas for

manufacture of nutrient “N” has been referred and is pending before an Inter-Ministerial

Committee (IMC) of Government of India (GoI). It is expected that a decision on the matter

would be taken soon by the IMC. Initially subsidy amounting to Rs.198.94 Crore was withheld by

DOF, which has been released in full upon submission of its claims along with bank guarantee

for equivalent amount by the Company.

c) Note No 49 - Gas pooling applicable to Fertilizer (Urea) sector:

Consequent to Gas pooling being made applicable to Fertilizer (Urea) sector w.e.f. June 1, 2015, it

is expected that a differential pricing of gas may be made applicable for non-urea usage.

Company has represented to DoF for maintaining supply of domestic gas for P&K fertilizers and

chemicals. Ministry of Petroleum & Natural Gas (MoPNG) vide its order No. L-13013/3/2012-

GP-I, dated: December 16, 2015 has directed GAIL (India) Limited to levy a higher gas price (i.e.

the highest rate of RLNG used for production of urea) for gas consumed in non-urea operations.

As the matter relating to the same is pending before the IMC for decision, the Company has

represented that any decision on the same be taken only upon the issue being settled by the IMC

of GoI. However, pending finalization of price payable as per the said letter, Company is

recognizing liability based on the difference between domestic gas price and pool / market price

of gas for its non-urea operations. The difference is provided considering domestic gas first for

urea operations on cumulative basis for the year and the balance if any, for non-urea operations

and accordingly there is no impact for the year ended March 31, 2020. The Company has

recognised a liability of Rs.211.79 Crore for the period commencing from June 1, 2015 to March

31, 2020 (Rs.211.79 Crore upto March 31, 2019) on this account. The Company has entered into a

contract for procurement of market priced gas for non-urea operations at Trombay unit, effective

from May 16, 2016. Pursuant to the said order, GAIL has sought a differential levy amounting to

Rs.1442.84 crore for the period commencing from July 1, 2006 till March 31, 2017 andhas initiated

arbitration proceeding towards non-payment of the same. The Company has represented this

matter to Department of Fertilizers for dispute resolution as the matter relating to the same is

pending before the IMC of GoI. The said matter has been currently referred to Administrative

Mechanism for Resolution of CPSEs Disputes (AMRCD) on May 22, 2018.

d) Note No 50 - Gas Turbine Generator (GTG) plants at Thal unit:

On 20th and 22nd March, 2019 respectively, both the Gas Turbine Generator (GTG) plants at Thal

unit stopped operating. Upon failure, the matter was taken up with the LSTK contractor who had

supplied the turbines for repair, as the same were covered under warranties. The matter was

referred by the LSTK contractor for repairs to the Original Equipment Manufacturer (OEM) who

had indicated a total estimated expenditure of about 98 Million SEK (Rs.74.51 crore excluding


Page 85 of 119

taxes and duties). In the best interests of the Company, based on the acceptance of Notice to

Proceed as proposed by the LSTK contractor, the equipment have been sent for repair to the

foreign Original Equipment Manufacturer (OEM) which are to be received back as at the Balance

Sheet date. As per the Notice to proceed, the final settlement of the repair costs can either be

decided mutually or in the event not agreed upon, the settlement of disputes clause as per

contract can be invoked. As the equipment are covered under warranties, the Company is of the

view that no additional costs would devolve on the Company. Further the Company has initiated

arbitration proceedings towards the LSTK contractor citing loss of profits owing to higher energy

costs, higher maintenance costs etc. In the meanwhile, the Company has procured a Gas

generator and commissioned a Gas Turbine Generator plant in August 2019 to mitigate future

losses.

f) Note No 51 - Contribution to Employee Provident Fund Trust:

Pending finalisation of accounts of the Company’s Employees Provident Fund Trust, the

investments held by the Trust amounting to Rs.92.64 crores have become doubtful as at 31st

March 2020 owing to defaults with respect to payment of principal and interest warranting

provision towards the same. The same will have to be made good by the Company, as principal

employer, in the event there are no adequate assets of the Trust to meet its liabilities as per EPFO

Act. However as per Ind AS 19, for Defined Benefit plans, Company is required to ascertain the

present value of the defined benefit obligation and compare with the fair values of the Plan assets

to determine the surplus or deficit, if any, as at Balance Sheet date. Deficit, if any, needs to be

accounted in the books of the Company. Accordingly, Company has recognized an amount of

Rs.19.07 crores as contribution to Trust owing to such deficit.

e) Note No 54.2: Inter Corporate Deposit (ICD) advanced to Fertilizers and Chemicals

Travancore Ltd. The amount of Rs.25.50 crore being the share of contribution of Fertilizers and

Chemicals Travancore Ltd (FACT) - a 50% JV partner in FACT-RCF Building Products Ltd

(FRBL) paid by RCF towards one-time settlement entered into between FRBL and their bankers

resulting in discharge of Corporate Guarantee given by Company to FRBL bankers has been

reported under Inter Corporate Deposit (ICD). This ICD along with interest outstanding for the

half year ending 31st March 2020 amounting to Rs.1.09 crore has not been provided for,

considering improvement in FACT’s financial position and the Company is confident of

settlement of the ICD given. FACT is a Government owned Entity and outstanding interest has

been settled by them in May 2020. Further the Company has entered into an agreement with

FACT for the ICD given, wherein FACT shall repay the same in five annual equal instalments

commencing from December 2020.

g) Note No. 59 - Loss on fair valuation of Transferable Development Rights (TDR):

The loss on account of fair valuation of Transferable Development Rights (TDRs) received

/accrued has been reported as exceptional item amounting to Rs.100.17 crore. Hitherto, as at

31.03.2019 the Company expecting TDRs to be sold in the coming financial year had classified the

same as Non-Current Assets Held for sale. Considering the current depression in the real estate

segment which has been further aggravated owing to COVID-19 pandemic, the sale of the same

is not highly probable. Accordingly, as per IND AS 105, the TDRs cannot be classified as Non-


Page 86 of 119

Current Asset Held for sale and has been reclassified as investment at fair value of Rs.31.23 crore

for the year ended 31.03.2020.

h) Note No. 65- Effects of COVID-19:

We draw attention to Note 76, which describes the impact of the outbreak of coronavirus

(COVID-19) on the business operations of the company. In view of highly uncertain economic

environment, a definitive assessment of the impact on the subsequent periods is highly

dependent upon circumstances as the evolve. Further our attendance at the physical inventory

verification done by the management was impracticable under the current lockdown restrictions

imposed by the government and we have therefore relied on related alternative procedures to

obtain comfort over the existence and condition of the inventory at year end.

Our opinion is not modified in respect of these matters.


Opinion We have audited the accompanying consolidated Ind AS financial statements of RASTRIYA

CHEMICALS AND FERTILISERS LIMITED (hereinafter referred to as “the Company”) and its

jointly controlled entities comprising of the Consolidated Balance Sheet as at March 31, 2019, the

Consolidated Statement of Profit and Loss (including other comprehensive income), the

Consolidated Statement of Changes in Equity and Consolidated Statement of cash flows for the

year ended March 31, 2019, and notes to the financial statements, including a summary of

significant accounting policies and other explanatory information. (hereinafter referred to as “the

Consolidated Ind AS Financial Statement”).


the aforesaid consolidated Ind AS 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 including the Ind AS, of the consolidated state of affairs of

the Company as at March 31, 2019, and its consolidated profit, Consolidated total comprehensive

income, consolidated changes in equity and its consolidated cash flows for the year ended on that

date.

Emphasis of Matter



before an Inter-Ministerial Committee (IMC) of Government of India (GoI). It is

expected that a decision on the matter would be taken soon by the IMC. Pending such

decision, initially subsidy amounting to Rs 198.94 Crore was withheld. As per DoF

approval for release of this subsidy, upon submission of its claims along with bank


Page 87 of 119

guarantee for equivalent amount by the Company, an amount of Rs 125.11 Crore has

been received upto March 31, 2019. Accordingly, no provision has been made in these

accounts towards the balance amount of Rs 73.83 Crore withheld, as Company is of the

view that no unintended benefits have accrued to owing to use of domestic gas.


w.e.f. June 1, 2015, it is expected that a differential pricing of gas may be made

applicable for non-urea usage. Company has represented to DoF for maintaining

supply of domestic gas for P&K fertilizers and chemicals. Ministry of Petroleum &

Natural Gas (MoPNG) vide its order No. L-13013/3/2012- GP-I, dated: December 16,

2015 has directed GAIL (India) Limited to levy a higher gas price (i.e. the highest rate of

RLNG used for production of urea) for gas consumed in non-urea operations. As the

matter relating to the same is pending before the IMC for decision, the Company has

represented that any decision on the same be taken only upon the issue being settled by

the IMC of GoI. However, pending finalization of price payable as per the said letter,

Company is recognizing liability based on the difference between domestic gas price

and pool/ market price of gas for its non-urea operations. The difference is provided

considering domestic gas first for urea operations on cumulative basis for the year and

the balance if any, for non-urea operations and Accordingly, there is no impact for the

year ended March 31, 2019. The Company has recognised a liability of Rs 211.79 Crore

for the period commencing from June 1, 2015 to March 31, 2019 (Rs 211.79 Crore upto

March 31, 2018) on this account.

The Company has entered into a contract for procurement of market priced gas for non-

urea operations at Trombay unit, effective from May 16, 2016.

Pursuant to the said order, GAIL has sought a differential levy amounting to Rs 1442.84

Crore for the period commencing from July 1, 2006 till March 31, 2017 and has initiated

arbitration proceeding towards non-payment of the same. The Company has represented

this matter to Department of Fertilizers for dispute resolution as the matter relating to

the same is pending before the IMC of GoI. The said matter has been currently referred

to Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD) on May 22,

2018

c) Note No 53.3) a): Inter Corporate Deposit (ICD) advanced to Fertilizers and Chemicals

Travancore Ltd (FACT) –50% JV partner in FACT-RCF Building Products Ltd (FRBL) of

Rs 25.50 Crore (being their share of contribution paid by RCF towards onetime

settlement entered into between FRBL and their bankers resulting in Corporate Guarantee

given by Company to FRBL bankers being discharged) outstanding as at March 31, 2019

has not been provided for, despite FACT’s adverse financial position, as the Company is

confident of settlement of the ICD given. Further the FACT is a Government owned Entity

and interest has been settled by them upto March 31, 2019.

d) Note No. 63: Net fair value gain of Rs 23.44 Crore on account of valuation of

Development Right Certificate received from Municipal Corporation of Greater Mumbai/

Mumbai Metropolitan Regional Development Authority towards surrender of land in

accordance with IND-AS 38 and Guidance Note on Accounting for Real Estate

Transactions issued by the Institute of Chartered Accountants of India. Tax expense

includes the Capital Gains Tax impact on the same.


Page 88 of 119

For the year ended 31st March 2018 Opinion In our opinion and to the best of our information and according to the explanations given to us,

the aforesaid consolidated Ind AS 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 including Ind AS, of the consolidated state of affairs

(financial position) of the Company and its jointly controlled entities as at March 31, 2018, and

the consolidated profit (financial performance including other comprehensive income), their

consolidated cash flows and changes in equity for the year ended on that date.

Emphasis of Matter



before an Inter- Ministerial Committee (IMC) of Government of India (GoI). An amount

of Rs 198.94 crore has been withheld by Department of Fertilizers (DOF) for the period

January, 2014 to September, 2015 towards the same. DoF has recently agreed to release the

amount withheld against submission of bank guarantee, which has since been submitted.

Pending final decision on the said matter and since the Company is of the view that no

unintended benefits have accrued to it and is expecting full recoverability of the same,

Company has continued to recognize subsidy income on P&K fertilizers at the rates notified

by DoF.


w.e.f. 1st June, 2015, it is expected that a differential pricing of gas may be made applicable

for non-urea usage. Company has represented to DoF for maintaining supply of domestic

gas for P&K fertilizers and chemicals. Further effective from 16th May, 2016 the Company

has entered into a contract for procurement of market priced gas for non-urea operations at

Trombay unit.

In the interim, Ministry of Petroleum & Natural Gas (MoPNG) vide its order No. L-

13013/3/2012-GP-I, dated: 16th December, 2015 has directed GAIL (India) Limited to levy a

higher gas price (i.e. the highest rate of RLNG used for production of urea) for gas consumed

in non-urea operations. As the matter relating to the same is pending before the IMC for

decision, Company has represented that any decision on the same be taken only upon the

issue being settled by the IMC of GoI.

Pursuant to the said order, GAIL has sought a differential levy amounting to Rs 1442.84 crore

for the period commencing from 1st July 2006 till 31st March 2017 and has initiated

arbitration proceeding towards non-payment of the same, which has been currently referred

to Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD).

Company has also represented this matter to Department of Fertilizers for dispute resolution

as the matter relating to the same is pending before the IMC of GoI.

However, pending finalization of price payable as per the MoPNG order, a liability of Rs

211.79 crore as on 31st March, 2018 (Rs 210.63 crore upto 31st March, 2017) has been


Page 89 of 119

recognized for the period commencing from 1st June, 2015 based on the difference

between the domestic gas price and pooled / market price of gas for its non-urea operations

as applicable.

c) Note No 65 (a): Net fair value gain of Rs 107.94 crore on account of valuation of

Development Right Certificate received from Municipal Corporation of Greater Mumbai

towards surrender of land in accordance with IND-AS 38 and Guidance Note on Accounting

for Real Estate Transactions issued by Institute of Chartered Accountants of India. Tax

expense includes the Capital Gains Tax impact on the same.

d) Note No 65 (b): Past service gratuity cost of Rs 108.06 crore on account of increase in gratuity

limits from Rs 10 lakh to Rs 20 lakh in line with Notification dated 29th March, 2018 issued

by the Ministry of Labour and Employment.

J. Any material event/ development or change having implications on the

financials/credit quality (e.g. any material regulatory proceedings against the

Issuer/Promoters, Tax litigations resulting in material liabilities, corporate

restructuring event etc) at the time of issue which may affect the issue or the investor’s

decision to invest / continue to invest in the debt securities.

The Issuer hereby confirms that other than the information disclosed in the Public Domain, our

website and this disclosure document there has been no material event, development or change

having implications on the financials/ credit quality of the Issuer (e.g. any material regulatory

proceedings against the Issuer/ promoters of the Issuer, tax litigations resulting in material

liabilities, corporate restructuring event etc) at the time of Issue which may affect the Issue or

the investor’s decision to invest/ continue to invest in the debt securities of the Issuer.

K. The names of the debenture trustee(s) shall be mentioned with statement to the effect

that debenture trustee(s) has given his consent to the Issuer for his appointment under

regulation 4 (4) and in all the subsequent periodical communications sent to the

holders of debt securities.

In accordance with the provisions of Securities and Exchange Board of India (Issue and

Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-

NRO/GN/2008/13/127878 dated June 06, 2008, as amended, the Issuer has appointed

SBICAP Trustee Company Limited to act as Trustees to the Bondholder(s).

The address and contact details of the Trustees are as under:

Name: SBICAP Trustee Company Limited

Address: Apeejay House, 6th Floor,3, Dinshaw Wachha Road, Churchgate, Mumbai – 400 020

Tel: (022) 43025514


Page 90 of 119

Fax: (022) 22040465


Website: www.sbicaptrustee.com

Copy of letter from SBICAP Trustee Company Limited dated 7th July 2020 conveying their

consent to act as Trustees for the current issue of Bonds is enclosed within the Annexure in this

Disclosure Document.

The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given

their consent to the Trustees or any of their agents or authorized officials to do all such acts,

deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their

absolute discretion deem necessary or require to be done in the interest of the holder(s) of the

Bonds. Any payment made by the Issuer to the Trustees on behalf of the Bondholder(s) shall

discharge the Issuer pro tanto to the Bondholder(s). No Bondholder shall be entitled to

proceed directly against the Issuer unless the Trustees, having become so bound to proceed,

fail to do so.

The Trustees shall perform its duties and obligations and exercise its rights and discretions, in

keeping with the trust reposed in the Trustees by the holder(s) of the Bonds and shall further

conduct itself, and comply with the provisions of all applicable laws, provided that, the

provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees.

The Trustees shall carry out its duties and perform its functions as required to discharge its

obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of

India (Debenture Trustees) Regulations, 1993, the Debenture Trusteeship Agreement,

Disclosure Document and all other related transaction documents, with due care, diligence

and loyalty.

In case of delay in execution of Trust Deed and Charge documents, the Company will refund

the subscription with agreed rate of interest or will pay penal interest of atleast 2% p.a. over

the coupon rate till these conditions are complied with at the option of the investor.

L. The detailed rating rationale (s) adopted (not older than one year on the date of

opening of the issue)/ credit rating letter issued (not older than one month on the date

of opening of the issue) by the rating agencies shall be disclosed

The Bonds proposed to be issued have been assigned a rating of “[ICRA]AA (Negative)” by

ICRA vide its letter dated 10th July 2020 and “IND AA” with Negative outlook by India

Ratings & Research vide its letter dated July 16 , 2020. Instruments with this rating are

considered to have the high degree of safety regarding timely servicing of financial obligations.

Such instruments carry very low credit risk.

Copy of the letter from ICRA Limited and India Ratings & Research Private Limited are

enclosed with this Offer Letter including respective Rating Rationales as Annexure I and

Annexure II respectively.




Page 91 of 119

M. If the security is backed by a guarantee or letter of comfort or any other document /

letter with similar intent, a copy of the same shall be disclosed. In case such document

does not contain detailed payment structure (procedure of invocation of guarantee and

receipt of payment by the investor along with timelines), the same shall be disclosed in

the offer document.

The Bonds will be secured by a pari passu first charge on the movable assets , namely

book debts (i.e subsidy receivables from Government of India) and movable plant and

machinery and other equipment of the company as may be mentioned in the Debenture

Trust Deed. The security will be created within the time stipulated as per the relevant

statutory provisions.

The Company shall at all times maintain a minimum-security cover of 1.0 times of the

Bonds proposed to be issued and interest accrued thereon.

The Company reserves the right to create further charge on such asset cover for its

present and future financial requirements or otherwise, without any prior consent of the

Bondholders, or as provided for under the Debenture Trust Deed, provided that

minimum asset cover of one time is maintained.

N. Stock Exchange where Bonds are proposed to be listed

The Bonds are proposed to be listed on the Debt segment of NSE and BSE Limited. The

designated stock exchange is NSE.

O. Other Details

1. DRR Creation –

The Company will create a Debenture Redemption Reserve (‘DRR’) and will credit to the

DRR such amounts as applicable under provisions of Section 71 of the Companies Act

2013 and rules made there under (as amended from time to time) or any other relevant

statute(s) as applicable

2. Issue/instrument specific regulations

The Issue is being made under SEBI Debt Regulations and applicable laws. The Issuer can

undertake the activities proposed by it in view of the present approvals and no further

approval from any GOI authorities is required by it to undertake the proposed activities

save and except those approvals which may be required to be taken in the normal course

of business from time to time. The present Issue is being made pursuant to the following:

i. Resolution of the Board of Directors of the Issuer dated 08th August 2019 approving issuance of debentures as set out in Annexure III.

ii. Shareholder’s approval obtained pursuant to section 180(1)(c) of the Companies Act by special resolution through postal ballot on 16th August 2014 to borrow funds, not exceeding Rs. 10,000 Crores or the aggregate of paid up capital of the Issuer and its


Page 92 of 119

free reserve in accordance with its latest audited financial statement, whichever is higher apart from temporary loans, as set out in Annexure IV.

The aggregate amount of borrowings including the Debentures offered through this

document are within the limits of borrowings mentioned above. The Issuer can issue the

Debentures proposed by it in view of the present approvals and no further approvals in

general from any GOI authority are required by it to undertake the Issue.

3. Application Process

i. Who Can Apply

All QIBs, and any non-QIB Investors specifically mapped by the Issuer on the BSE BOND – EBP

Platform, are eligible to bid / invest / apply for this Issue.

All applicants are required to comply with the relevant regulations/ guidelines applicable to

them for investing in the issue of Bonds as per the norms approved by Government of India,

RBI or any other statutory and regulatory body from time to time.

This Disclosure Document is intended solely for the use of the person to whom it has been sent

by the Issuer for the purpose of evaluating a possible investment opportunity by the recipient(s)

in respect of the securities offered herein, and it is not to be reproduced or distributed to any

other persons (other than professional advisors of the prospective investor receiving this

Disclosure Document from the Issuer).

ii. Documents to be provided by Investors

Investors need to submit the certified true copies of the following documents, along-with the

Application Form, as applicable:

• Memorandum and Articles of Association/constitution/ bye-laws/ trust deed;

• Board resolution authorizing the investment and containing operating instructions;

• Power of attorney/ relevant resolution/authority to make application;

• Specimen signatures of the authorized signatories (ink signed), duly certified by an

appropriate authority;

• Government notification (in case of primary co-operative Issuer and regional rural

Issuers);

• SEBI registration certificate (for Mutual Funds);

• Copy of Permanent Account Number Card (“PAN Card”) issued by the Income Tax

department;

• Necessary forms for claiming exemption from deduction of tax at source on interest on

application money, wherever applicable;

• Application Form (including RTGS/NEFT details).


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iii. Applications to be accompanied with Issuer Account Details

Every application shall be required to be accompanied by the Issuer account details of the

Applicant for the purpose of facilitating direct credit of all amounts through RTGS.

iv. How to Apply

All eligible Investors should refer the operating guidelines for issuance of debt securities on

private placement basis through an electronic book mechanism as available on the website of

BSE. Investors will also have to complete the mandatory know your customer (KYC)

verification process. Investors should refer to the BSE EBP Guidelines in this respect. The

Application Form will be filled in by each Investor and uploaded in accordance with the SEBI

regulatory and operational guidelines. Applications for the Bonds must be in the prescribed

form (enclosed) and completed in BLOCK LETTERS in English as per the instructions

contained therein.

(a) The details of the Issue shall be entered on the BSE – EBP Platform by the Issuer at least 2

(two) Business Days prior to the Issue opening date, in accordance with the Operational

Guidelines.

(b) The Issue will be open for bidding for the duration of the bidding window that would be

communicated through the Issuer’s bidding announcement on the BSE– EBP Platform, at least 1

(one) Business Day before the start of the Issue opening date.

Some of the key guidelines in terms of the current Operational Guidelines on issuance of

securities on private placement basis through an EBP mechanism are as follows:

(a) Modification of Bid

Investors may note that modification of bid is allowed during the bidding period / window.

However, in the last 10 (ten) minutes of the bidding period / window, revision of bid is only

allowed for improvement of coupon / yield and upward revision of the bid amount placed by

the Investor.

(b) Cancellation of Bid

Investors may note that cancellation of bid is allowed during the bidding period / window.

However, in the last 10(ten) minutes of the bidding period / window, no cancellation of bids is

permitted.

(c) Multiple Bids

Investors are permitted to place multiple bids on the EBP platform in line with EBP Guidelines

vide SEBI circular SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018.

However, Investors should refer to the Operational Guidelines prevailing as on the date of the


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bid.

Payment Mechanism

Applicants shall make remittance of application money by way of electronic transfer of funds

through RTGS/electronic fund mechanism for credit by the pay-in time in the Issuer account of

the BSE Clearing Corporation appearing on the BSEEBP platform in accordance with the

timelines set out in the EBP Guidelines and the relevant rules and regulations specified by SEBI

in this regard. All payments must be made through RTGS as per the Issuer details mentioned in

the application form /BSE-EBP platform.

Payment of subscription money for the Debentures should be made by the successful

Eligible Investor as notified by the Issuer.

Successful Eligible Investors should do the funds pay-in to the account of ICCL

(“Designated Bank Account”). The Designated Bank Account information shall be

displayed in the front end of BSE EBP Platform and the same shall also be available in the

obligation file downloaded to Eligible Investors.

The Designated Bank Accounts of ICCL are as under:

ICICI Bank :

Beneficiary Name: INDIAN CLEARING CORPORATION LTD

Account Number: ICCLEB

IFSC Code : ICIC0000106

Mode: NEFT/RTGS

HDFC Bank:

Beneficiary Name: INDIAN CLEARING CORPORATION LTD

Account Number: ICCLEB

IFSC Code : HDFC0000060

Mode: NEFT/RTGS

Successful Eligible Investors must do the subscription amount payment to the Designated

Bank Account on or before 10:30 a.m. on the Pay-in Date (“Pay-in Time”). Successful

Eligible Investors should ensure to make payment of the subscription amount for the

Debentures from their same bank account which is updated by them in the BSE EBP

Platform while placing the bids. In case of mismatch in the bank account details between

BSE EBP Platform and the bank account from which payment is done by the successful

bidder, the payment would be returned.

Note: In case of failure of any successful bidders to complete the subscription amount payments by the Pay-in Time or the funds are not received in the ICCL’s Designated Bank Account by the Pay-in Time for any reason whatsoever, the bid will liable to be rejected and the Issuer shall not be liable to issue the Debentures to such successful bidders.


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The Issuer assumes no responsibility for any Applications lost in mail. The entire amount of

Rs.10 lacs per Bond is payable on application.

How to fill the Application Form

• Applications should be for the number of Bonds applied by the Applicant. Applications

not completed in the said manner are liable to be rejected.

• The name of the applicant’s Issuer, type of account and account number must be filled

in the Application Form.

• The Applicant or in the case of an application in joint names, each of the Applicant,

should mention his/her PAN allotted under the Income -Tax Act, 1961 or where the

same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. As

per the provision of Section 139A (5A) of the Income Tax Act, PAN/GIR No. needs to

be mentioned on the certificates. Hence, the investor should mention their PAN/GIR

No. Application Forms without this information will be considered incomplete and are

liable to be rejected.

• All applicants are requested to tick the relevant column “Category of Investor” in the

Application Form. Public/ private/ religious/ charitable trusts, provident funds and

other superannuation trusts and other investors requiring “approved security” status

for making investments. These are not approved securities as defined under the

Insurance Act, 1938.

v. Terms of Payment

The full face value of the Bonds applied for is to be paid along with the Application Form.

Investor(s) need to send in the Application Form and payment through RTGS for the full value

of Bonds applied for.

vi. Force Majeure

The Issuer reserves the right to withdraw the issue prior to the Issue Closing Date in the event

of any unforeseen development adversely affecting the economic and regulatory environment

or otherwise.

vii. Applications under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along

with the names and specimen signature(s) of all the authorized signatories and the

tax exemption certificate/document, if any, must be lodged along with the submission of the

completed Application Form. Further modifications/ additions in the power of attorney or

authority should be notified to the Issuer or to the Registrars or to such other person(s) at such

other address(es) as may be specified by the Issuer from time to time through a suitable

communication.


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In case of an Application made by companies under a power of attorney or resolution or

authority, a certified true copy thereof along with memorandum and articles of association

and/or bye-laws along with other constitutional documents must be attached to the

Application Form at the time of making the application, failing which, the Issuer reserves the

full, unqualified and absolute right to accept or reject any application in whole or in part and in

either case without assigning any reason thereto. Names and specimen signatures of all the

authorized signatories must also be lodged along with the submission of the completed

Application Form.

viii. Application by Mutual Funds

In case of applications by mutual funds and venture capital funds, a separate application must

be made in respect of each scheme of an Indian mutual fund/venture capital fund registered

with SEBI and such applications will not be treated as multiple applications, provided that the

application made by the asset management company/ trustees/ custodian clearly indicate their

intention as to the scheme for which the application has been made.

The application forms duly filled shall clearly indicate the name of the concerned scheme for

which application is being made and must be accompanied by certified true copies of:

a. SEBI registration certificate

b. Resolution authorizing investment and containing operating instructions

c. Specimen signature of authorized signatories

ix. Application by Provident Funds, Superannuation Funds and Gratuity Funds

The applications must be accompanied by certified true copies of

a. Trust deed / bye laws /resolutions

b. Resolution authorizing investment

c. Specimen signatures of the authorized signatories

Those desirous of claiming tax exemptions on interest on application money are required to

submit a certificate issued by the Income Tax officer along with the Application Form. For

subsequent interest payments, such certificates have to be submitted periodically.

x. Acknowledgements

No separate receipts will be issued for the application money. However, the Issuer receiving the

duly completed Application Form will acknowledge receipt of the application by stamping and

returning to the applicant the acknowledgement slip at the bottom of each Application Form.

xi. Basis of Allocation

Allotment against valid applications for the Bonds will be made to applicants in accordance

with applicable SEBI regulations, operational guidelines of the exchanges and all applicable


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laws. At its sole discretion, the Issuer shall decide the amount of over subscription to be

retained over and above the Base Issue size.

The allotment of valid applications received on the EBP shall be done on yield-time priority

basis in the following manner:

(a) allotment would be done first on “yield priority” basis;

(b) where two or more bids are at the same yield, then the allotment shall be done on “time-

priority” basis;

(c) where two or more bids have the same yield and time, then allotment shall be done on “pro

rata” basis.

If the proportionate allotment of Bonds to such applicants is not a minimum of one Bond or in

multiples of one Bond (which is the market lot), the decimal would be rounded off to the next

higher whole number if that decimal is 0.5 or higher and to the next lower whole number if the

decimal is lower than 0.5. All successful applicants on the Issue closing date would be allotted

the number of Bonds arrived at after such rounding off. It is clarified that the rounding off as

specified here will not amount to the Issuer exceeding the total Issue size.

xii. Right to Accept or Reject Applications

The Issuer reserves its full, unqualified and absolute right to accept or reject any application, in

part or in full, without assigning any reason thereof. The application forms that are not

complete in all respects are liable to be rejected and would not be paid any interest on the

application money. Application would be liable to be rejected on one or more technical

grounds, including but not restricted to:

(a) Number of Bonds applied for is less than the minimum application size;

(b) Application money received not being from the Issuer account of the person/entity

subscribing to the Bonds or from the Issuer account of the person/ entity whose name

appears first in the Application Form, in case of joint holders;

(c) Issuer account details of the Applicants not given;

(d) Details for issue of Bonds in dematerialized form not given;

(e) PAN/GIR and IT circle/Ward/District not given;

(f) In case of applications under power of attorney by limited companies, corporate bodies,

trusts, etc. relevant documents not submitted;

In the event, if any Bonds applied for is/ are not allotted in full, the excess application monies of

such Bonds will be refunded, as may be permitted.

xiii. PAN /GIR Number

All applicants should mention their Permanent Account Number or the GIR Number allotted

under Income Tax Act, 1961 and the Income Tax Circle/ Ward/ District. In case where neither

the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be


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mentioned in the Application Form in the space provided.

xiv. Signatures

Signatures should be made in English or in any of the Indian languages. Thumb impressions

must be attested by an authorized official of Issuer or by a Magistrate/ Notary Public under

his/her official seal.

xv. Nomination Facility

Only individuals applying as sole applicant/joint applicant can nominate, in the prescribed

manner, a person to whom his Bonds shall vest in the event of his death. Non-individuals

including holders of power of attorney cannot nominate.

xvi. Fictitious Applications

In terms of the Section 38 of the Companies Act, 2013, any person who makes, in fictitious

name, any application to a body corporate for acquiring, or subscribing to, the bonds, or

otherwise induced a body corporate to allot, register any transfer of bonds therein to them or

any other person in a fictitious name, shall be punishable under the extant laws.

xvii. Depository Arrangements

The Issuer has appointed Link Intime India Pvt Ltd as the Registrar for the present Bond Issue.

The Issuer has entered into necessary depository arrangements with NSDL and CDSL for

dematerialization of the Bonds offered under the present Issue, in accordance with the

Depositories Act, 1996 and regulations made there under. In this context, the Issuer has signed

two tripartite agreements as under:

• Tripartite Agreement between the Issuer, NSDL and the Registrar for dematerialization

of the Bonds offered under the present Issue.

• Tripartite Agreement between the Issuer, CDSL and the Registrar for dematerialization

of the Bonds offered under the present Issue.

Bondholders can hold the bonds only in dematerialized form and deal with the same as per the

provisions of Depositories Act, 1996 as amended from time to time.

xviii. Procedure for applying for Demat Facility

A. Applicant(s) must have a beneficiary account with any DP of NSDL or CDSL prior to

making the application.

B. Applicant(s) must specify their beneficiary account number and DP ID in the relevant

columns of the Application Form.

C. For subscribing to the Bonds, names in the application form should be identical to those

appearing in the account details of the Depository. In case of joint holders, the names


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should necessarily be in the same sequence as they appear in the account details in the

Depository.

D. If incomplete/ incorrect beneficiary account details are given in the Application Form

which does not match with the details in the depository system, it will be deemed to be an

incomplete application and the same be held liable for rejection at the sole discretion of the

Issuer.

E. The Bonds shall be directly credited to the beneficiary account as given in the Application

Form and after due verification, the confirmation of the credit of the Bonds to the

applicant’s depository account will be provided to the Applicant by the DP of the

Applicant.

F. Interest or other benefits with respect to the Bonds would be paid to those bondholders

whose names appear on the list of beneficial owners given by the depositories to the Issuer

as on the Record Date.

G. For the allotment of debentures and all future communications including notices, the

address, nomination details and other details of the applicant as registered with his/her DP

shall be used for all correspondence with the applicant. The Applicant is therefore

responsible for the correctness of his/her demographic details given in the Application

Form vis-a-vis those with his/her DP. In case the information is incorrect or insufficient, the

Issuer would not be liable for the losses, if any.

H. Applicants may please note that the Bonds shall be allotted and traded on the stock

exchange(s) only in dematerialized form.

4. Others

i. Right of Bondholder(s)

Bondholder is not a shareholder. The Bondholders will not be entitled to any rights and

privilege of shareholders other than those available to them under statutory requirements. The

Bond(s) shall not confer upon the holders the right to receive notice, or to attend and vote at the

general meetings of the Issuer. The principal amount and interest on the Bonds will be paid to

the registered Bondholders only, and in case of Joint holders, to the one whose name stands

first.

Besides the above, the Bonds shall be subject to the provisions of the terms of this Issue and the

other terms and conditions as may be incorporated in the Debenture Trusteeship Agreement

and other documents that may be executed in respect of these Bonds.

ii. Modification of Rights

The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or

abrogated with the consent, in writing, of those holders of the Bonds who hold at least three

fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a

resolution passed at a meeting of the Bondholders, provided that nothing in such consent or

resolution shall be operative against the Issuer where such consent or resolution modifies or

varies the terms and conditions of the Bonds, if the same are not acceptable to the Issuer.


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Further, the Issuer shall be entitled (without obtaining a prior approval from the Bondholders)

to make any modifications in this Disclosure Document which in its opinion is of a formal,

minor or technical nature or is to correct a manifest error.

iii. Future Borrowings

The Issuer shall be entitled to borrow/ raise loans or avail of financial assistance in whatever

form as also issue bonds/ debentures or other securities in any manner with ranking as senior

or on pari passu basis or otherwise and to change its capital structure, including issue of shares

of any class or redemption or reduction of any class of paid up capital, on such terms and

conditions as the Issuer may think appropriate, without the consent of, or intimation to, the

Bondholder(s) or the Trustees in this connection.

In relation to the aforesaid, it is hereby clarified that such borrowing or raising of loans or

availing of financial assistance by the Issuer may be on such terms and conditions as the Issuer

may deem fit, in accordance with applicable laws, and may be secured and/or unsecured, at

the discretion of the Issuer. It is further clarified that such borrowing may or may not be to

enhance and/or to replace regulatory capital.

iv. Notices

All notices required to be given by the Issuer or by the Trustee to the Bondholders shall be

deemed to have been given if sent by ordinary post/ courier /e-mail and/or any other mode of

communication as may be permitted under applicable law as per the discretion of the Issuer to

the original sole/ first allottees of the Bonds and/ or if an advertisement is given in a leading

newspaper.

All notices to be given by the Bondholder(s) shall be sent by registered post or by hand delivery

to the Issuer at Registered Office or to such address as may be notified by the Issuer from time

to time and shall be deemed to have been received on actual receipts.

v. Minimum subscription

As the current issue of Bonds is being made on private placement basis, the requirement of

minimum subscription shall not be applicable and therefore the Issuer shall not be liable to

refund the issue subscription(s)/proceed (s) in the event of the total issue collection falling short

of the issue size or certain percentage of the issue size.

vi. Underwriting

The present issue of Bonds is not underwritten.

vii. Deemed Date of Allotment

All benefits under the Bonds and relating to the Bonds (including payment of interest) will


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accrue and be available to the Bondholders from and including the Deemed Date of Allotment.

The actual allotment of Bonds may take place on a date other than the Deemed Date of

Allotment.

The Issuer reserves the right to keep multiple date(s) of allotment / allotment date(s) at its sole

and absolute discretion without any notice. In case if the issue closing date/ pay in dates

is/are changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed

(pre -pond/ postponed) by the Issuer at its sole and absolute discretion.

viii. Credit of the Bonds

The beneficiary account of the investor(s) with National Securities Depository

Limited (NSDL)/ Central Depository Services (India) Limited (CDSL)/ DP will be given

initial credit within 2 working days from the Deemed Date of Allotment. The initial credit

in the account will be akin to the letter of allotment. On completion of the all statutory

formalities, such credit in the account will be akin to a bond certificate.

ix. Issue of Bond Certificate(s)

Subject to the completion of all statutory formalities within time frame prescribed in the

relevant regulations/Act/ rules etc., the initial credit akin to a letter of allotment in the

Beneficiary Account of the investor would be replaced with the number of Bonds allotted.

The Bonds since issued in electronic (dematerialized) form, will be governed as per the

provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories

and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ DP from time to time and

other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in

dematerialized form only.

x. Market Lot

The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in

dematerialized form, the odd lots will not arise either at the time of issuance or at the time of

transfer of Bonds.

xi. Trading of Bonds

The marketable lot for the purpose of trading of Bonds shall be 1 (one) Bond of face value of

Rs.10 lacs each. Trading of Bonds would be permitted in demat mode only in standard

denomination of Rs.10 lacs and such trades shall be cleared and settled in recognized stock

exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been

made over the counter, the trades shall be reported on a recognized stock exchange having a

nationwide trading terminal or such other platform as may be specified by SEBI.


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xii. Mode of Transfer of Bonds

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as

prescribed by the NSDL/ CDSL/DP of the transferor/transferee and any other applicable laws

and rules notified in respect thereof. The normal procedure followed for transfer of securities

held in dematerialized form shall be followed for transfer of these Bonds held in electronic

form. The seller should give delivery instructions containing details of the buyer’s DP account

to his DP. The transferee(s) should ensure that the transfer formalities are completed prior to

the Record Date. In the absence of the same, interest will be paid/ redemption will be made to

the person, whose name appears in the records of the Depository. In such cases, claims, if any,

by the transferee(s) would need to be settled with the transferor(s) and not with the Issuer.

xiii. Common Form of Transfer

The Issuer undertakes that it shall use a common form/procedure for transfer of Bonds issued

under terms of this Disclosure Document.

xiv. Interest on Application Money

Interest at the Coupon Rate (subject to deduction of income tax under the provisions of the

Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as

applicable) will be paid to the applicants on the application money for the Bonds for the period

starting from and including the date of realization of application money in the Issuer’s account

up to one day prior to the Deemed Date of Allotment. The interest on application money shall

be payable by the Issuer through electronic mode within 15 (Fifteen) days from the Deemed

Date of Allotment. In absence of complete Issuer details i.e. correct/updated Issuer account

number, IFSC/RTGS code/NEFT code etc., the Issuer shall be required to make payment

through cheques/ DDs or any other mode of payment as per the discretion of the Issuer.

Since the Pay-In Date and the Deemed Date of Allotment fall on the same date, interest on

application money shall not be applicable. Further, no interest on application money will

be payable in case the Issue is withdrawn by the Issuer in accordance with the

Operational Guidelines.

The Issuer shall not be liable to pay any interest in case of invalid applications or applications

liable to be rejected including applications made by person who is not an Eligible Investor.

xv. Interest on the Bonds

The face value of the Bonds outstanding shall carry interest at the coupon rate from deemed

date of allotment and the coupon rate & frequency of payment (subject to deduction of income

tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-

enactment thereof, as applicable) are mentioned at summary term sheet.

The interest payment shall be made through electronic mode to the bondholders whose names


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appear on the list of beneficial owners given by the depository participant to R&TA as on the

record date fixed by Issuer in the bank account which is linked to the demat of the bondholder.

However, in absence of complete bank details i.e. correct/updated bank account number,

IFSC/RTGS code /NEFT code etc., issuer shall be required to make payment through cheques

/ DDs on the due date at the sole risk of the bondholders. Interest or other benefits with respect

to the Bonds would be paid to those Bondholders whose names appear on the list of beneficial

owners given by the depository participant to R&TA as on the Record Date.

xvi. Payment on Redemption

The Bond will be redeemed on the expiry of the number of years/months as specified in the

Summary Term Sheet from the Deemed Date of Allotment.

The redemption proceeds shall be made through electronic mode to the bondholders whose

names appear on the list of beneficial owners given by the DP to R&TA as on the record date

fixed by the Issuer in the Issuer account which is linked to the demat of the bondholder.

However, in absence of complete Issuer details i.e. correct/updated Issuer account number,

IFSC/RTGS code/NEFT code etc., The Issuer shall be required to make payment through

cheques / DDs or any other mode of payment as per the discretion of the Issuer on the due date

at the sole risk of the bondholders.

The redemption proceeds shall be paid to those Bondholders whose names appear on the list of

beneficial owners given by the DP to R&TA as on the record date fixed by the Issuer for the

purpose of redemption.

xvii. Right to further issue under the ISINs

The Issuer reserves right to effect multiple issuances under the same ISIN with reference to

SEBI Circular CIR/IMD/DF-1/ 67 /2017 dated June 30, 2017 as amended (“First ISIN

Circular”) and SEBI Circular CIR/DDHS/P/59/2018 dated March 28, 2018, as amended or any

other applicable laws or regulations from time to time (“Second ISIN Circular”, together with

the First ISIN Circular, the “ISIN Circulars”).

The Issue can be made either by way of creation of a fresh ISIN or by way of issuance under the

existing ISIN at premium, par or discount as the case may be in line with the ISIN Circulars.

xviii. Right to Re-purchase, Re-issue or Consolidate the Bonds

The Issuer will have power, exercisable at its sole and absolute discretion from time to time, to

re-purchase a part or all of its Bonds from the secondary markets or otherwise, at any time prior

to the Redemption Date, subject to applicable law and in accordance with the applicable

guidelines or regulations, if any.

In the event of a part or all of the Issuer’s Bonds being repurchased as aforesaid or redeemed

under any circumstances whatsoever, the Issuer shall have, and shall be deemed always to

have had, the power to re-issue the Bonds either by re-issuing the same Bonds or by issuing


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other debentures in their place. The Issuer shall have right to consolidate the Bonds under

present series in accordance with applicable law.

Further the Issuer, in respect of such re-purchased or re-deemed Bonds shall have the power,

exercisable either for a part or all of those Bonds, to cancel, keep alive, appoint nominee(s) to

hold or re-issue at such price and on such terms and conditions as it may deem fit and as

permitted under the ISIN Circulars or by laws or regulations.

xix. Deduction of Tax at Source

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-

enactment thereof will be deducted at source from Interest on Application Money and/or

Interest on Bonds, as applicable. For seeking TDS exemption/ lower rate of TDS, relevant tax

exemption certificate/ declaration of non-deduction of tax at source on interest on application

money, should be submitted along with the application form. Where any deduction of Income

Tax is made at source, the Company shall send to the Bondholder(s) a Certificate of Tax

Deduction at Source.

Regarding deduction of tax at source and the requisite declaration forms to be submitted,

prospective investors are advised to consult their own tax consultant(s).

xx. List of Beneficial Owners

The Issuer shall request the Depository to provide a list of Beneficial Owners as at the end

of the Record Date. This shall be the list, which shall be considered for payment of interest

or repayment of principal amount, as the case may be.

xxi. Succession

In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of

joint holders for the time being, the Issuer shall recognize the executor or administrator of the

deceased Bondholder or the holder of succession certificate or other legal representative as

having title to the Bond(s).The Issuer shall not be bound to recognize such executor or

administrator, unless such executor or administrator obtains probate, wherever it is necessary,

or letter of administration or such holder is the holder of succession certificate or other legal

representation, as the case may be, from a court in India having jurisdiction over the matter. The

Issuer may, in its absolute discretion, where it thinks fit, dispense with production of probate or

letter of administration or succession certificate or other legal representation, in order to

recognize such holder as being entitled to the Bond(s) standing in the name of the deceased

Bondholder on production of sufficient documentary proof or indemnity.

Non –resident Indians who become entitled to the Bonds by way of succession shall ensure that

they comply with all such procedures and compliances as may be required under the Foreign

Exchange Management Act, 1999 and the rules made thereunder, the relevant RBI guidelines

and other applicable laws for them to become the beneficial holders of the Bonds.


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xxii. Joint - Holders

Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same

as joint tenants with benefits of survivorship subject to provisions contained in the Companies

Act and the amendments there to.

xxiii. Disputes and Governing Law

The Bonds are governed by and shall be construed in accordance with the existing laws of

India. Any dispute arising thereof shall be subject to the jurisdiction of courts of Mumbai,

Maharashtra .

xxiv. Investor Relations and Grievance Redressal

Arrangements have been made to redress investor grievances expeditiously as far as possible.

The Issuer shall endeavor to resolve the investor’s grievances within 30 (Thirty) days of its

receipt. All grievances related to the issue quoting the application number (including prefix),

number of Bonds applied for, amount paid on application and details of collection centre where

the Application was submitted, may be addressed to the Compliance Officer at registered office

of the Issuer. All investors are hereby informed that the Issuer has designated a Compliance

Officer who may be contacted in case of any pre-issue/ post-issue related problems such as

non-credit of letter(s) of allotment/ bond certificate(s) in the demat account etc. Contact details

of the Compliance Officer are given elsewhere in this Disclosure Document.

xxv. Material Contracts and Agreements involving Financial Obligations of the Issuer

By very nature of its business, the Issuer is involved in a large number of transactions involving

financial obligations and therefore it may not be possible to furnish details of all material

contracts and agreements involving financial obligations of the Issuer. However, the contracts

referred to in Para A below (not being contracts entered into in the ordinary course of the

business carried on by the Issuer) which are or may be deemed to be material that have been

entered into by the Issuer. Copies of these contracts may be inspected at the Central Office of

the Issuer between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.


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A. Material Contracts and Documents

a. Letter appointing Trustees to the Issue dated 07th July 2020.

b. Authorizing issue of Bonds offered under terms of this Disclosure Document.

c. Letter of consent from the Trustees to act as Trustees to the Issue.

d. Letter of consent from the registrars for acting as registrars to the issue.

e. In-principle Approval for listing of Bonds by BSE and NSE.

f. Letter from ICRA Limited and India Ratings and Research Private Limited conveying the

credit rating for the Bonds.

g. Tripartite Agreement between the Issuer, NSDL and Registrars for issue of Bonds in

dematerialized form.

h. Tripartite Agreement between the Issuer, CDSL and Registrars for issue of Bonds in

dematerialized form.

i. Annual Report along with Audited financials and Audit Reports for the last three financial

years.


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P. Issue Details

Summary Term Sheet:

Security Name ___% RCF ___ Series I-2020

Series Series I-2020

Issuer/Issuer Rashtriya Chemicals and Fertilizers Limited (RCF)

Issue Size Rs. 200 crore (Rupees Three Hundred Crore)

Option to retain oversubscription

Rs. 300 crore (Rupees Two Hundred Crore)

Type of Instrument Listed, Secured, Redeemable, Non-Cumulative, Taxable, Non-Convertible Bonds in the nature of Debentures (“NCDs”)

Nature of Instrument

Secured

Seniority Senior

Type of Issue Private Placement

Listing/Designated Stock Exchange

On Debt Segment of NSE and BSE. BSE is proposed to be the Designated Stock Exchange.

Rating

“ICRA AA – /Stable” by ICRA Limited and

“IND AA/ Negative” India Ratings & Research Private Limited

Objects of the Issue

Augmentation of long term working capital of the company, capital expenditure including recoupment of capital expenditure already incurred and for the purpose of corporate requirements of regular business activities.

Details of Utilization of funds

Augmentation of long term working capital of the company, capial expenditure including recoupment of capital expenditure already incurred and for the purpose of corporate requirements of regular business activities.

Coupon Rate [●]

Step Up/Step Down Coupon Rate

Not Applicable

Coupon Payment Frequency

Annual

Coupon Payment Dates

First coupon date shall be 3rd August 2021 and every year thereafter.

(Please refer illustrative cash flow)

Coupon Type Fixed

Coupon Reset Process (including rates, spread,

Not Applicable


Page 108 of 119

effective date, interest rate cap and

floor etc.)

Day Count Basis Actual/Actual

Business Day Convention/ Effect of Holidays

‘Business Day’ shall be a day on which commercial Banks are open for business in the city of Mumbai, Maharashtra and when the money market is functioning in Mumbai. If the date of payment of interest/redemption of principal does not fall on a Business Day, the payment of interest/principal shall be made in accordance with SEBI Circular CIR/IMD/DF-1/122/2016 dated November 11, 2016.

If any of the Coupon Payment Date(s), other than the ones falling

on the redemption date, falls on a day that is not a Business Day,

the payment shall be made by the Issuer on the immediately

succeeding Business Day, which becomes the coupon payment

date for that coupon. However, the future coupon payment

date(s) would be as per the schedule originally stipulated at the

time of issuing the debentures. In other words, the subsequent

coupon payment date(s) would not be changed merely because

the payment date in respect of one particular coupon payment

has been postponed earlier because of it having fallen on a non-

Business Day.

If the redemption date of the Bonds falls on a day that is not a

Business Day, the redemption amount shall be paid by the Issuer

on the immediately preceding Business Day which becomes the

new redemption date, along with interest accrued on the

debentures until but excluding the date of such payment.

Default Interest Rate

In case of default in payment of Interest and/or principal

redemption on the due dates, additional interest at 2% p.a. over

the Coupon Rate will be payable by the Issuer for the defaulting

period.

Delay in Listing

In case of delay in listing of the debt securities beyond 20 days

from the deemed date of allotment, the Company will pay penal

interest of atleast 1 % p.a. over the coupon rate from the expiry of

30 days from the deemed date of allotment till the listing of such

debt securities to the investor.

Tenor 5 years from the deemed date of allotment

Redemption Date 05.08.2025

Redemption Amount

At par (Rs.10 lacs per Bond)

Premium/Discount on redemption

Nil


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Issue Price

At par (Rs.10 lacs per Bond)

Discount on Issue

Nil

Put Option Date Not Applicable

Put Option Price Not Applicable

Issuer Call Option/Call Option

Not Applicable

Call Option Date Not Applicable

Call Option Price Not Applicable

Put Notification Time

Not Applicable

Call Notification Time

Not Applicable

Face Value Rs. 10 Lacs per Bond.

Minimum Application

1 Bond and in multiples of 1 Bond thereafter.

Issue Timing:

1. Bid Opening/ Closing

Date

2. Issue Opening/

Closing Date

3. Pay-in Date

4. Deemed Date of

Allotment

03-08-2020

03-08-2020

05-08-2020

05-08-2020

Issuance mode In Demat mode only.

Trading Mode In Demat mode only.

Settlement

Payment of interest and repayment of principal shall be made by way of credit through direct credit/ National Electronic Clearing Service/RTGS/ NEFT mechanism or any other permitted method

at the discretion of the issuer.

Settlement Cycle for EBP

[T+2]

Depository

National Securities Depository Limited and Central Depository Services (India) Limited.

Record Date

15 (Fifteen) calendar days prior to each Coupon Payment Date or the Redemption Date (as the case may be). In the event the Record Date falls on a day, which is not a Business Day, immediately succeeding Business Day shall be considered as Record Date.

Security The debentures will be secured by a pari-passu first charge on


Page 110 of 119

movable assets of the company, namely book debts (i.e subsidy receivables from the Government of India) and movable plant and machinery and other equipment of the Company as may be mentioned in the Debenture Trust Deed. The security will be created within the time stipulated as per the relevant statutory provisions.

The Company shall at all times maintain a minimum security

cover of 1.0 times of the principle amount of debenture

outstanding and interest thereon.

The Company reserves the right to create further charge on such

asset cover for its present and future financial requirements or

otherwise, without any prior consent of the Bondholders, or as

provided for under the Debenture Trust Deed, provided that

minimum asset cover of one time is maintained.

Transaction documents

The Issuer has executed/ shall execute the documents including

but not limited to the following in connection with the Issue:

1. Consent Letter from SBICAP Trustee to act as Trustee to the Bondholders;

2. Debenture Trusteeship Agreement; 3. Debenture Trust Deed; 4. Rating Letter from ICRA Limited and India ratings &

Research Private Limited; 5. In principle approval letter from BSE and NSE Limited;

Conditions precedent to subscription of Bonds

The subscription from applicants shall be accepted for allocation and allotment by the Issuer, subject to the following:

a) Rating Letters from ICRA Limited and India Ratings &

Research Private Limited not more than one month old from

the Issue Opening Date; and

b) Consent Letter from the Trustees to act as Trustee to the Bondholder(s).

c) In-principle approval from BSE and NSE for listing of bonds

Conditions subsequent to subscription of Bonds

The Issuer shall ensure that the following documents are executed / activities are completed as per terms of the Disclosure Document:

a) Credit of Demat Account(s) of the Allottee(s) by number of

Bonds allotted within 2 (Two) Business Days from the


b) Making application to NSE and BSE within 15(Fifteen) days

from the Deemed Date of Allotment to list the Bonds and

obtain listing permission within 20 (Twenty) days from the


Page 111 of 119


Events of Default

If the Company commits a default in making payment of any instalment of interest or repayment of principal amount of the Bonds on the respective due date(s), the same shall constitute an “Event of Default” by the Company. Excluding in cases of technical errors due to reasons beyond the control of company

Cross Default Not Applicable

Role and Responsibilities of Trustees to the Issue

The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the Bondholders and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture Trusteeship Agreement, Disclosure Document and all other related Transaction Documents, with due care, diligence and loyalty.

Additional Covenants

1. Default in Payment: In the event of delay in the payment of interest amount and/ or principal amount on the due date(s), the Company shall pay additional interest of 2.00% per annum in addition to the respective Coupon Rate payable on the Bonds, on such amounts due, for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and up to but excluding the date on which such amount is actually paid.

2. Delay in Listing: The Company shall complete all the formalities

and obtain listing permission from stock exchange(s) within 20

(Twenty) days from the Deemed Date of Allotment. In the event

of delay in listing of Bonds beyond 20 (Twenty) days from the

Deemed Date of Allotment, the Company shall pay penal

interest of 1.00% per annum over the respective Coupon Rate

from the expiry of 30 (Thirty) days from the Deemed Date of

Allotment till the listing of Bonds to the Bondholder(s).

3. Security Creation: If the Company fails to execute the trust

deed within three months from the closure of the issue, the

Company shall also pay interest of 2% p.a. to the debenture

holder, over and above the agreed coupon rate, till the

execution of the trust.

The interest rates mentioned in above three covenants shall be

independent of each other.

Type of Bidding Closed bidding


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Note: The Issuer reserves its sole and absolute right to modify (pre -pone/ postpone) the above

issue schedule without giving any reasons or prior notice. The Issuer also reserves its sole and

absolute right to change the Deemed Date of Allotment of the above issue without giving any

reasons or prior notice. Consequent to change in Deemed Date of Allotment, the Coupon

Payment Dates, if any may also be changed at the sole and absolute discretion of the Issuer. The

Issuer reserves the right to close the issue earlier than the stipulated issue closing date and it is

further clarified that the Issuer need not wait for any minimum subscription amount to the Bonds

before closing the issue.

Illustrative Cash Flow:


Wednesday, 05 August, 2020

Pay-in Date Wednesday, 05 August, 2020

Redemption Date Tuesday, 05 August, 2025

Tenor 5 years

Interest Payment Frequency

Annual

Coupon [•]

Face Value 1,000,000.00

First Interest on Thursday, 05 August, 2021

Day Count Convention

Actual/Actual

Cash Flow Due Date Payment Date No of Days

Amount (In Rupees)

1st Coupon Thursday, 05 August 2021 Thursday, 05 August 2021 365 -

2nd Coupon Friday, 05 August 2022 Friday, 05 August 2022 365 -

3rd Coupon Saturday, 05 August 2023 Monday, 07 August 2023 365 -

4th Coupon Monday, 05 August 2024 Monday, 05 August 2024 366 -

5th Coupon Tuesday, 05 August 2025 Tuesday, 05 August 2025 365 -

Prinicipal Payment Tuesday, 05 August 2025 Tuesday, 05 August 2025 -

1,000,000.000

Manner of Allotment

Uniform – yield

Governing Law

and Jurisdiction

The Bonds are governed by and shall be construed in accordance

with the existing laws of India. Any dispute arising thereof shall

be subject to the jurisdiction of courts of Mumbai, Maharashtra.


Page 113 of 119

Q. Disclosures pertaining to willful default

a) Name of the Issuer declaring the entity as a willful defaulter

Not Applicable

b) The year in which the entity is declared as a willful defaulter

Not Applicable

c) Outstanding amount when the entity is declared as a willful defaulter

Not Applicable

d) Name of the entity declared as a willful defaulter

Not Applicable

e) Steps taken, if any, for the removal from the list of willful defaulters

Not Applicable

R. Additional Disclosures:

S. DECLARATION

The Issuer undertakes that

(a) the company has complied with the provisions of the Companies Act, 2013 and the rules made

thereunder, Securities and Exchange Board of India (Issue and Listing of Debt Securities)

Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as

amended from time to time and such other applicable circulars issued by SEBI from time to time;

(b) the compliance with the said Act and the rules made thereunder do not imply that payment of

interest or repayment of debentures is guaranteed by the Central Government; (c) the monies

received under the offer shall be used only for the purposes and objects indicated in the private

placement offer cum application letter

Board of Directors of the company has severally authorized Chairman & Managing Director and

Director (Finance) vide resolution number Item No. 413.2.6 dated 08th August 2019 to sign this

form and declare that all the requirements of the Companies Act, 2013 and the rules made

thereunder in respect of the subject matter of this form and matters incidental thereto have been

complied with. Whatever is stated in this form and in the attachments thereto is true, correct and

complete and no information material to the subject matter of this form has been suppressed or

concealed and is as per the original records maintained by the promoters subscribing to the

Memorandum of Association and Articles of Association.

In relation to the Issuer, it is hereby declared that:

(1) The Company has complied with the provisions of the Companies Act, 2013 and the rules


Page 114 of 119

made there under.

(2) It is to be distinctly understood that compliance with the Companies Act, 2013 and the

rules does not imply that payment of dividend or repayment of redemption amount, is

guaranteed by the Government of India.

(3) The Company undertakes that the monies received under the issue shall be utilized only

for the purposes and ‘Object of the Issue’ indicated in the Disclosure document.

The Issuer accepts no responsibility for the statement made otherwise than in the Disclosure

Document or in any other material issued by or at the instance of the Issuer and that anyone placing

reliance on any other source of information would be doing so at his own risk.

It is further declared and verified that all the required attachments have been completely, correctly

and legibly attached to this Disclosure document.

Signed pursuant to internal authority granted;

For Rashtriya Chemicals and Fertilizers Limited

Mr. Umesh Dongre

Director (Finance)

Place: Mumbai

Date:


Page 115 of 119

ANNEXURE I - Copy of Rating letter from ICRA Limited and India Ratings and Research

Private Limited

ANNEXURE II – Debenture Trustee Consent Letter

ANNEXURE III – RTA Consent letter

ANNEXURE IV - Board Resolution Authorizing the Issue

ANNEXURE V - Shareholders’ approval obtained pursuant to section 180(1)(c)


Page 116 of 119

ANNEXURE A

Any change in accounting policies during the last three years and their effect on the profits

and the reserves of the company.

The Company adopted Ind AS framework effective from 1st April 2016 wherein the effective date

of trnasition was 1st April 2015. Consequent to the same, the accoutnign policies have been

consistently followed with no changes in the same.

ANNEXURE B

Profile of Directors

1. Shri S. C. Mudgerikar , Chairman & Managing Director

Shri S.C. Mudgerikar has taken over charge of Chairman & Managing Director of Rashtriya

Chemicals & Fertilizers Ltd. (RCF) w.e.f. 01.10.2019.

Shri Mudgerikar has remained an Indian Railway Traffic Service (IRTS) Officer. He is a Post

Graduate Engineer with a Post Graduate Management qualification from IIM Bangalore. He has

wide experience in Logistics & Supply Chain Management and has worked in the Indian

Railways in various capacities as an IRTS Officer. Before joining RCF, he has worked as Director

(Marketing & Corporate Planning) of Central Warehousing Corporation. He has also served the

Director on the Boards of CONCOR Air Ltd., National Multi Commodity Exchange, IFFCO-

CRWC JV, Maharashtra SWC and West Bengal SWC. He has also worked as Chief Commercial

Manager (FS), CPRO, Sr. Divisional Commercial Manager in the Indian Railways & Chief

General Manager of CONCOR.

He has received extensive training in the field of Management at some of the world’s best

Institutes like IIM Bangalore, IIM Kolkata, INSEAD/ Singapore, ICLIF/Malaysia, Syracuse

University USA Antwerp Port Training Centre, China-Europe Management School. He has in-

depth knowledge about the supply-chain logistics & is also involved in policy making for further

development of the field.

2. Shri Sudhir D. Panadare, Director (Technical)

Shri Sudhir D. Panadare has taken over the Director (Technical) of Rashtriya Chemicals and

Fertilizers Limited on 18th December, 2017.

Shri Panadare is Chemical Engineer from University Department of Chemical Technology,

Mumbai (now known as Institute of Chemical Technology). He is also a certified Energy Auditor

by Bureau of Energy Efficiency (BEE). He joined the Company in year 1981 as Management

Trainee and rose to the post of Director (Technical). In his long career spanning more than 39

years, he has worked in various capacities in Technical Services, Ammonia plants, Urea Plant &

Chemical Plants etc. and in development of the projects of the Company.


Page 117 of 119

Shri Panadare headed the Corporate Department for pre project work of Thal expansion project

and other projects and has visited various countries like Denmark, Egypt, USA, Ghana, Vietnam

and Turkmenistan for business opportunities. Shri Panadare was leader of RCF team for re-

commissioning of revamped Namrup III Unit of Brahmaputra Valley Fertilizer Corporation

Limited.

Prior to elevation to the present post, he was Executive Director (Planning and Project

Development) In-charge.

He is an avid reader and has published technical papers in various journals.

3. Shri Umesh Dongre, Director (Finance)

Shri Umesh Dongre has taken over as Director (Finance) & Chief Financial Officer of Rashtriya

Chemicals and Fertilizers Limited on 9th February, 2018.

Shri Dongre is a Fellow CMA from the Institute of Cost Accountants of India and belongs to

Indian Cost Accounts Service (ICoAS). He has also Masters in Commerce from Osmania

University. An officer of ICoAS 1991 batch, he has vast experience of Costing and Pricing of wide

variety of products and dealt with project evaluation proposals of Government of India. He has

also experience of working on Urea Subsidy in Fertilizer Industry Coordination Committee

(FICC). He occupied several important positions as ICoAS officer in Department of Fertilizers,

Department of Public Enterprise, Directorate of Sugar and Department of Expenditure, apart

from initial working tenure in a CPSE and NABARD.

Prior to joining Director (Finance), Shri Dongre was Advisor (Cost), Department of Expenditure,

Ministry of Finance.

He believes that cost efficiency in all operations lead to higher profitability and sustainability of

the organisation.

4. Shri K. U. Thankachen, Director (Marketing)

Shri K. U. Thankachen has taken over as Director (Marketing) of Rashtriya Chemicals and

Fertilizers Limited on 11th December, 2018.

He is MBA with specialisation in Marketing from Department of Commerce & Management

Studies, University of Calicut in the year 1986. Shri Thankachen is a seasoned professional in the

field of logistics and warehousing with over 30 years of experience. He started his career with

Airports Authority of India in the year 1987 and joined Container Corporation of India Ltd. in the

year 1995. He has held various important positions in Marketing, Commercial and Operations

functions within CONCOR. He was posted as Chief General Manager, Central Region of

CONCOR at Nagpur having jurisdiction of 5 terminals at Nagpur, Bhusawal, Aurangabad,

Raipur and Mandideep from September, 2010 to April, 2012. Thereafter, he was posted as head of

the largest Inland Container Depot in Asia at Tughlakabad, New Delhi from April, 2012 to

September, 2013.


Page 118 of 119

Prior to joining Director (Marketing), Shri Thankachen was Managing Director of Central

Railside Warehouse Company Limited. He attended a one year international management

programme organised by International Centre for Promotion of Enterprises, Ljubljana, Slovenia.

5. Ms Alka Tiwari, Government Nominee Director

Ms Alka Tiwari, IAS is Government Nominee Director on the Board of the Company w.e.f. 6th

March, 2017. Ms Tiwari is a 1988 batch of IAS officer and is presently Additional Secretary,

Department of Fertilizers, Ministry of Chemicals and Fertilizers, New Delhi. She has held

various positions in Government of Jharkhand and Government of India. She also served as

Advisor to the NITI Aayog. She has varied and rich experience in Government, in different

positions, and has great managerial capabilities.

6. Ms Gurveen Sidhu, Government Nominee Director

Ms Gurveen Sidhu is Government Nominee Director on the Board of the Company w.e.f. 18th

May, 2018. Ms. Sidhu is 1995 batch IA&AS officer presently posted as Joint Secretary,

Department of Fertilizers. She has done Chartered Accountant and Certified Internal Auditor.

Prior to this, Ms Sidhu was Account General (Economic and Revenue Sector Audit), Gujarat. She

has a rich experience of working in the fields of revenues of union and states, public sector

undertaking, environmental and its conservation related activities, budgetary control and

financial management etc. She has represented Comptroller and Auditor General of India (C &

AG) on various Committees on Institute of Chartered Accountants of India (ICAI), Delhi. She

also headed the Strategic Management Unit of C & AG. She was Technical Team Member in the

C & AG team that presented the successful bid for audit of WIPO, Audit of Indian Embassies in

Europe and Central Asia. She has knowledge of International and domestic Accounting and

auditing standards, principles and practices for both Public and Private Sector.

7. Prof. Anil Kumar Singh, Independent Director

Professor Anil Kumar Singh is appointed as an Independent Director on the Board of the

Company w.e.f. 7th March, 2019.

Professor Anil Kumar Singh (Ph.D. IIT Kanpur, 1978) has been associated with IIT Bombay since

January 1983 in various capacities. He has also served in administrative capacity in other higher

education and research institutions in India like Director of Regional Research Laboratory (CSIR)

Jorhat and Vice-Chancellor of Bundelkhand University and University of Allahabad.

With teaching/research/administrative career spanning over more than four decades, Prof.

Singh embodies wealth of expertise and experience of research in chemical and allied sciences,

and academic administration. His research interests broadly span the areas of organic chemistry,

bio-organic chemistry, photochemistry and photobiology.

Prof. Singh has participated in drawing-up and developing academic policies and programmes

of education and research and expansion of collaborations of IIT Bombay both in India and

abroad. He has also been associated in multiple capacities with several other national and


Page 119 of 119

international educational institutions and R&D organizations, science academies and societies,

administrative and policy making bodies to drive organizational excellence, development and

advancement of higher education and research in science and technology.

Prof. Singh’s academic and research endeavours are duly recognized by educational and research

organizations, government and corporate bodies, science academics and professional scientific

societies by awards and honours.

8. Dr. Shambhu Kumar, Independent Director

Dr. Shambhu Kumar is appointed as an Independent Director on the Board of the Company

w.e.f. 7th March, 2019.

Dr. Shambhu Kumar is Bachelor of Arts from HP University Shimla and completed Ph. D from

Jamia Millia Islamia, New Delhi.

He has vast experience in Indian Government development programme such as Bihar Rural

Livelihood Programme (BRLP), National Food for Work Programme (NFFWP), Jharkhand Tribal

Development Programme (JTDP), Chhattisgarh Tribal Development Programme (CTDP),

Pradhan Mantri Gramin Sarak Yojna (PMGSY) & different Rural Development programme. He

worked for the evaluation study of the impact of micro-credit scheme of National Handicapped

Finance and Development Corporation (NHFDC) & National Minority Development Finance

Corporation (NMDFC), Sankat Haran Bima Yojna of KRIBHCO. He has completed research in

Watershed project and SWA-SHAKTI (Rural women Development and Empowerment project,

RWDEP).

He was the coordinator of bilateral trade between Thailand & Uttar Pradesh, coordinator of

Thailand government for 2018 Uttar Pradesh investor Summit (Lucknow) & ASEAN- India

Business summit in New Delhi, visited Bangkok as a guest for ASEAN - India Expo & Forum.

He is CEO of M/S Subansiri Development Private Limited and Director of Village Boy

Production Private Limited.

9. Smt Shashi Bala Bharti, Independent Director

Smt. Shashi Bala Bharti is appointed as an Independent Director on the Board of the Company

w.e.f. 24th June, 2020. Smt Shashi Bala Bharti holds a degree of Master of Arts from Agra

University and Bachelor of Education from Kanpur University.

She is an eminent parliamentarian and was former member of Uttar Pradesh Legislative

Assembly. She has been associated with social activities and also associated with women welfare

for the last 27 years. Currently, she is a Member of Uttar Pradesh State Commission for Women

from September 2018.

ANNEXURE I

Copy of Rating letter from ICRA

Limited and India Ratings and

Research Private Limited

ICRA Limited

Confidential

Ref: MUM/20-21/1066

Date: July 10, 2020

Ms. N.J. Shaikh

Executive Director Finance

Rashtriya Chemicals & Fertilizers Limited (RCF)

Priyadarshini

Eastern Express Highway,

Sion, Mumbai – 400022

Dear Madam,

Re: ICRA rating for Rs. 500 crore Non Convertible Debenture (NCD) Programme of Rashtriya Chemicals and

Fertilizers Limited

Please refer to your request dated June 09, 2020 for revalidating the rating letter issued for the captioned programme.

We confirm that the [ICRA]AA- (pronounced ICRA double A minus) rating with a Stable outlook assigned to your captioned

programme and last communicated to you vide our letter dated March 12, 2020 stands. Instruments with this rating are

considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low

credit risk.

The other terms and conditions for the rating of the instrument shall remain the same as communicated vide our letter Ref

MUM/19-20/2596 dated March 12, 2020.

The rating, as aforesaid, however, should not be treated as a recommendation to buy, sell or hold long term debt/non-

convertible debenture to be issued by you.

We look forward to further strengthening our existing relationship and assure you of our best services.

With kind regards,

For ICRA Limited

K Ravichandran

Senior Vice President

[email protected]

RAVICHANDRANDigitally signed by RAVICHANDRAN DN: c=IN, st=Tamil Nadu, 2.5.4.20=6eb215410c5c8feb135f39b6656e59de11bf0e833c7ed764eea4b1f2ee5ae0f1, postalCode=600108, street=B27/10,POLICE STATION STREET,ARUMAKKAM,CHENNAI,TAMILNADU 600108, serialNumber=9d2c0eb3fd0c32486c8a5ed1deae745509bb3998c689073440d17e122ced2fa4, o=Personal, cn=RAVICHANDRAN, pseudonym=2ffa69aee226573c9f97156bfc536359 Date: 2020.07.10 16:55:16 +05'30'

1

March 12, 2020

Rashtriya Chemicals and Fertilizers Limited: Long Term Rating downgraded; Outlook

revised to ‘Stable’

Summary of rating action

Instrument* Previous Rated Amount (Rs. crore)

Current Rated Amount (Rs. crore)

Rating Action

Bank facilities 5,100.00 5,100.00 Long term rating: [ICRA]AA- downgraded from [ICRA]AA; outlook revised to Stable from Negative

Non-Convertible Debentures

500.00 500.00 Long term rating: [ICRA]AA- downgraded from [ICRA]AA; outlook revised to Stable from Negative

Commercial Paper Programme

2,000.00 3,000.00 [ICRA]A1+; Assigned/outstanding

Total 7,600.00 8,600.00

*Instrument details are provided in Annexure-1

Rationale

The downgrade in the long-term rating takes into account the weakening cost competitiveness of RCF in urea operations

due to i) tightening of energy norms by Government of India in FY2019 even as breakdown of Gas Generator at Thal

Plant led to higher energy consumption in YTD FY2020 and ii) production beyond RAC being less remunerative in a

scenario of subdued international prices of urea. The downgrade in rating also factors in losses in Chemicals division due

to fall in the realisation of key products even as cost of production remains high owing to high cost of gas, the weakening

credit metrics of the company due to higher subsidy receivables and increase in scale of trading operations leading to

higher working capital borrowings, and the large debt funded capital expenditure/investment plans.

The ratings, however, continue to factor in the high financial flexibility of the company by virtue of the large sovereign

ownership. The company has access to debt markets at competitive rates to support its liquidity profile. The ratings also

factor in the established position of RCF as one of the largest urea manufacturers in India having vertically integrated

operations in fertilisers and chemicals coupled with healthy operating efficiency of the company’s urea operations

reflected in high plant utilisation levels.

The ratings, nonetheless, are constrained by the vulnerability of profitability in the fertiliser business to regulatory risks

and agro-climatic risks; vulnerability of the profitability of the chemical division to commodity price cycles, exchange

fluctuations and potential reduction of import duty, and high working capital intensive nature of fertiliser operations. In

FY2020, the tightening of energy consumption norms for Thal unit along with breakdown of Gas Generator leading to

higher energy consumption affected the profitability from Urea business to some extent. In the medium term, the

tightening of energy consumption norms for Trombay unit as per New Urea Policy 2015, would also affect the

profitability from urea business though the same is expected to be offset to an extent with increase in energy efficiency

supported by the ongoing capex at both the units.

ICRA has taken note of the on-going dispute of RCF with GAIL (India) Limited regarding the use of subsidised gas for non-

urea operations. Any material liability that may emerge on RCF from these matters is a key rating sensitivity.

2

The stable outlook takes into account the established position of company as one of the largest urea manufacturers in

India and the financial flexibility enjoyed by the company.

Key rating drivers

Credit strengths

Large sovereign ownership and established position as one of the largest urea manufacturers- The GoI remains the

largest stakeholder with 75% share in RCF. The large sovereign ownership results in high degree of financial flexibility for

the company. The company has access to debt markets at competitive rates to support its liquidity profile. Further, RCF

remains one of the largest urea manufacturers in India with a market share of ~8% in FY2018. RCF has an established

position in about ten states in the western, central and southern parts of India on the back of its strong brand strength

(“Ujjwala”) and also has a significant presence in urea trading, which, along with products like DAP, MOP, etc. helps to

provide a wider basket of products to farmers.

Product diversity and vertically integrated operations- The operations of RCF are characterised by a high level of vertical

integration across its fertilisers and chemicals, thereby allowing high value addition and diversification. The strength of

the company lies in its product diversity and ability to switch between product streams in line with the market

conditions.

Healthy operating efficiency for urea operations- The company has maintained high operating efficiency at Thal and

Trombay with capacity utilization of over 100%. Nonetheless, in FY 2020 there was increase in energy consumption at

Thal plant due to break down of Gas Generator. Going forward, tightening of the energy norms from FY2021 onwards (to

6.538 Gcal/MT) will negatively impact the profitability at Trombay due to reduction in energy savings; however, the

company is undertaking revamp projects to reduce its energy consumption levels which would partly negate the

aforementioned impact over the medium term. As per modified version of NPS-III, RCF plants are eligible to get an

increase in the fixed cost of urea by Rs. 350/MT. However, as the policy notification remains delayed, the company has

not taken into account the retention prices as per higher fixed cost reimbursement, while finalizing its accounts for the

period FY2015-FY2019. The company plans to account for the same only after the notification which will result in a one-

time recognition of about Rs. 500 crore, while recurring reimbursement would be in the range of Rs.101 crore thereafter.

Credit challenges

Sensitivity of cash flows to delays in subsidy receipts and other regulatory risks - The subsidy receipts from the GoI

witnessed an increase, with outstanding subsidy receivables standing at Rs. 5816 crores as of January 2020. The company

undertook urea imports of about Rs 3000 crore at the behest of the GoI, of which about Rs 2000 crore is yet to be paid

by the latter. The company’s interest costs too increased in FY2019 and YTD FY2020 partly due to higher working capital

borrowings. Moreover, the sector, being highly regulated, remains vulnerable to changes in the regulations by the GoI.

Because of weak profits and elevated debt levels, the company’s return metrics (RoCE of 7.3% in FY 2018-19) and

leverage metrics (Total Debt/OPBDITA of 7.8 times as on March 31, 2019) are likely to be under pressure in the medium

term.

Continued regulatory overhang on gas related issues:- Due to significant shortage in domestic gas supply, there has

been deliberation by the GoI to not allow captive ammonia-based complex fertiliser manufacturers to benefit from

cheap domestic gas. In this regard, the DoF has been asked to work out a suitable mechanism to mop up benefits caused

due to ammonia manufactured by these companies. The above issue relating to gas usage has been referred and is

pending before an Inter-Ministerial Committee (IMC) for deliberation. On the same issue, the DoF had withheld Rs. 198.9

3

from the subsidy claims, pending final decision on the recovery. However, as per DoF approval for release of this subsidy,

upon submission of its claims along with bank guarantee for equivalent amount by the Company, it received Rs. 198.9

crore of subsidy. GAIL, has made additional claims of Rs. 1,442.8 crore, which is currently under arbitration and has been

recently referred to the committee of secretaries.

Large debt-funded capex plans over the medium term -The company is undertaking capex of about Rs. 900 crore for

reducing the energy consumption at both its plants over the next two years which would adversely affect the capital

structure in the medium term besides exposing the company to project execution risks. In addition, RCF is one of the JV

partners for a greenfield coal gasification based urea plant at Talcher (Odisha) and in BVFCL of Assam which would entail

sizeable equity infusion as well as expose the company to project execution risks. As the internal accruals of the company

are not adequate, most of these investments are likely to be debt funded, which will put pressure on its key credit

metrics over the medium term.

Liquidity Position: Adequate The liquidity profile of RCF was affected in FY2019 due to increase in the overall subsidy burden in Q4 that led to higher

short-term borrowings including loans availed from the special banking arrangement provided by the GoI. Further

receivables from GoI remain high and stood at Rs. 5,816 crore as on January FY 2020. Nevertheless, the company’s

liquidity position is expected to remain adequate as it enjoys high financial flexibility due to its sovereign ownership

resulting in easy access to debt markets and banks, which lends comfort from a credit perspective.

Analytical approach:

Analytical Approach Comments

Applicable Rating Methodologies Rating Methodology on Chemicals Rating Methodology for Entities in the PharmaceuticalIndustry

Parent/Group Support NA

Consolidation / Standalone For arriving at the ratings, ICRA has considered the consolidated financials of Rashtriya Chemicals and Fertilizers Limited. As on March 31, 2019, the company had 3 JVs, that are enlisted in Annexure-2

About the company:

Established in 1978, Rashtriya Chemicals & Fertilizers Limited (RCF) has a diversified product portfolio comprising urea

(~70% of overall sales), complex fertilisers (~15%), traded fertilisers and industrial chemicals. The company’s industrial

chemicals portfolio comprises 15 products such as ammonium nitrate, nitric acid and methylamines. RCF has two plants

in Maharashtra - at Trombay and Thal. The Thal unit is primarily engaged in the production of urea (capacity of 2 mmtpa)

besides a few industrial chemicals. The Trombay unit is engaged in manufacturing a wide range of industrial products,

complex fertilisers (capacity of 0.66 mmtpa) and urea (capacity 0.33 mmtpa). The Government of India (GoI) holds 75%

stake in the company.

For 9M FY2020 company recorded operating revenues Rs. 7092 crore with EBITDA margin of 3.06% and Profitability

margin of 0.93%.

https://www.icra.in/Rating/ShowMethodologyReport/?id=588

https://www.icra.in/Rating/ShowMethodologyReport/?id=671

4

Key financial indicators

FY2018 FY2019

Operating Income (Rs. crore) 7,319 8,885

PAT (Rs. crore) 79 139

OPBDIT/OI (%) 3.7% 5.0%

RoCE (%) 4.2% 7.3%

Total Debt/TNW (times) 0.5 1.1

Total Debt/OPBDIT (times) 4.9 7.8

Interest coverage (times) 4.3 2.8

DSCR 1.6 2.2

Status of non-cooperation with previous CRA: Not applicable

Any other information: None

5

Rating history for last three years:

Instrument

Current Rating (FY2020)

Chronology of Rating History for the past 3 years

Type

Amount Rated (Rs. crore)

Amount Outstanding (Rs Crore)

Date & Rating

In FY 2020

Date & Rating in FY2019



12 March 2020

23 July 2019 12 July

2018 08 June 2018

04 Jan 2018

31 March 2017

19 January 2017

04 May 2016

1 Cash Credit

Long Term

600 - [ICRA] AA- (Stable)

[ICRA] AA (Negative)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

2 Term Loans

Long Term

4,500 499 [ICRA] AA- (Stable)


[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

3

Non-Convertible Debentures

Long Term

500 - [ICRA] AA- (Stable)


[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

[ICRA] AA (Stable)

- -

4 Commercial Paper

Short Term

3,000 - [ICRA]A1+

[ICRA]A1+ [ICRA]A

1+ [ICRA]A1+

[ICRA]A1+

[ICRA] A1+

[ICRA]A1+

-

Complexity level of the rated instrument:

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The

classification of instruments according to their complexity levels is available on the website click here

https://www.icra.in/Rating/ShowRatingPolicyReport/?id=1&type=new

6

Annexure-1: Instrument Details

ISIN No Instrument Name Date of Issuance / Sanction

Coupon Rate

Maturity Date

Amount Rated (Rs. crore)

Current Rating and Outlook

NA NCD Yet to be placed NA - 500.00 [ICRA]AA- (Stable)

NA Fund Based Limits (Cash Credit)

NA NA - 600.00 [ICRA]AA-(Stable)

NA Term Loan 1 FY2016 NA FY2023 304.00 [ICRA]AA-(Stable )

NA Term Loan 2 FY2019 NA FY2024 117.00 [ICRA]AA-(Stable)



NA Proposed Term Loan

NA NA - 3829.00 [ICRA]AA-(Stable)

NA Commercial Paper NA NA 1-365 days 3000.00 [ICRA]A1+ Source: Rashtriya Chemicals and Fertilizers Limited

Annexure-2: List of entities considered for consolidated analysis

Company Name Ownership Consolidation Approach

FACT-RCF Building Products Ltd. (FRBL), Kochi 50% Equity Method

Urvarak Videsh Limited (UVL) 33.33% Equity Method

Talcher Fertilizers Limited (TFL) 29.67% Equity Method

7

ANALYST CONTACTS

K.Ravichandran +91 44 45964301 [email protected]

Prashant Vasisht +91 124 4545322 [email protected]

Kiran Hande +91 22 6169 3327 [email protected]

RELATIONSHIP CONTACT

L Shivakumar +91 22 6114 3406 [email protected]

MEDIA AND PUBLIC RELATIONS CONTACT

Ms. Naznin Prodhani Tel: +91 124 4545 860 [email protected]

Helpline for business queries:

+91-9354738909 (open Monday to Friday, from 9:30 am to 6 pm)

[email protected]

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Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange. The international Credit

Rating Agency Moody’s Investors Service is ICRA’s largest shareholder.

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ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of

surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA’s current opinion on the relative capability of the issuer

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or its contents


Mr. S. ShivakumarDeputy General Manager-FinanceRashtriya Chemicals and Fertilizers Limited9th Floor, Priyadarshini,Eastern Express Highway, SionMumbai-400022

July 16, 2020

Dear Sir/Madam,

Re: Rating Letter for non-convertible debenture (NCD) programme of Rashtriya Chemicals And Fertilizers Limited

India Ratings and Research (Ind-Ra) is pleased to communicate the ratings of Provisional IND AA/Negative for INR5 billion Proposed Non-Convertible Debentures (NCD) of Rashtriya Chemicals And Fertilizers Limited

In issuing and maintaining its ratings, India Ratings relies on factual information it receives from issuers and underwriters and from other sourcesIndia Ratings believes to be credible. India Ratings conducts a reasonable investigation of the factual information relied upon by it in accordancewith its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources areavailable for a given security.

The manner of India Ratings’ factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of therated security and its issuer, the requirements and practices in India where the rated security is offered and sold, the availability and nature ofrelevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such asaudit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by thirdparties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particularjurisdiction of the issuer, and a variety of other factors

Users of India Ratings’ ratings should understand that neither an enhanced factual investigation nor any third-party verification can ensure that allof the information India Ratings relies on in connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers areresponsible for the accuracy of the information they provide to India Ratings and to the market in offering documents and other reports. In issuingits ratings India Ratings must rely on the work of experts, including independent auditors with respect to financial statements and attorneys withrespect to legal and tax matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events thatby their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings can be affected by future events orconditions that were not anticipated at the time a rating was issued or affirmed.

India Ratings seeks to continuously improve its ratings criteria and methodologies, and periodically updates the descriptions on its website of itscriteria and methodologies for securities of a given type. The criteria and methodology used to determine a rating action are those in effect at thetime the rating action is taken, which for public ratings is the date of the related rating action commentary. Each rating action commentary providesinformation about the criteria and methodology used to arrive at the stated rating, which may differ from the general criteria and methodology forthe applicable security type posted on the website at a given time. For this reason, you should always consult the applicable rating actioncommentary for the most accurate information on the basis of any given public rating.

Ratings are based on established criteria and methodologies that India Ratings is continuously evaluating and updating. Therefore, ratings are thecollective work product of India Ratings and no individual, or group of individuals, is solely responsible for a rating. All India Ratings reports haveshared authorship. Individuals identified in an India Ratings report were involved in, but are not solely responsible for, the opinions stated therein.The individuals are named for contact purposes only.

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan orsecurity or to undertake any investment strategy with respect to any investment, loan or security or any issuer. Ratings do not comment on the

Devendra PantSenior Director

adequacy of market price, the suitability of any investment, loan or security for a particular investor (including without limitation, any accountingand/or regulatory treatment), or the tax-exempt nature or taxability of payments made in respect of any investment, loan or security. India Ratingsis not your advisor, nor is India Ratings providing to you or any other party any financial advice, or any legal, auditing, accounting, appraisal,valuation or actuarial services. A rating should not be viewed as a replacement for such advice or services. Investors may find India Ratingsratings to be important information, and India Ratings notes that you are responsible for communicating the contents of this letter, and any changeswith respect to the rating, to investors.

It will be important that you promptly provide us with all information that may be material to the ratings so that our ratings continue to beappropriate. Ratings may be raised, lowered, withdrawn, or placed on Rating Watch due to changes in, additions to, accuracy of or the inadequacyof information or for any other reason India Ratings deems sufficient.

Nothing in this letter is intended to or should be construed as creating a fiduciary relationship between India Ratings and you or between IndiaRatings and any user of the ratings.

In this letter, “India Ratings” means India Ratings & Research Pvt. Ltd. and any successor in interest.

We are pleased to have had the opportunity to be of service to you. If we can be of further assistance, please contact the undersigned at +91 224000 1700.

Sincerely,

India Ratings

Rashtriya Chemicals And Fertilizers Limited 16-July-2020

/

20NOV 2019

By Ashish Agrawal

India Ratings and Research (Ind-Ra) has revised Rashtriya Chemicals and Fertilizers Limited’s (RCF) Outlook to

Negative from Stable while affirming its Long-Term Issuer Rating at ‘IND AA’. The instrument-wise rating action

is as follows:

InstrumentType

Date ofIssuance

CouponRate (%)

MaturityDate

Size ofIssue

(million)

Rating/Outlook RatingAction

Proposed

non-

convertible

debentures

(NCDs)

- - - INR5,000 Provisional IND

AA/Negative

Affirmed;

Outlook

revised to

Negative

from Stable

* The rating is provisional and shall be confirmed upon the sanction and execution of loan documents for the above

facilities by RCF to the satisfaction of Ind-Ra.

Analytical Approach: Ind-Ra has considered the standalone profile of RCF along with the share of profit from the

joint ventures FACT-RCF Building Products Limited (50% stake), Urvarak Videsh Limited (33.3% stake) and Talcher

Fertilizers Limited (33.3% stake). Additionally, Ind-Ra has factored in equity commitment required for these joint

ventures while arriving at the ratings.

RCF’s Negative Outlook reflects its weaker-than-expected operating performance given the higher-than-expected

duration of the plant shut-downs, a decline in the international urea prices that would result in lower profitability

beyond the reassessed capacity, a significantly high debt-funded capex with reduced energy efficiency savings given

the lowering of energy norms. The Negative Outlook also factors in the increase in the net debt position adjusted for

subsidy receivables of the company in 1HFY20 from FY19.

India Ratings Revised Rashtriya Chemicals and Fertilizers’Outlook to Negative; A�rms ‘IND AA’

https://www.indiaratings.co.in/Analyst?analystID=178&analystName=Ashish%20Agrawal

/

KEY RATING DRIVERS

Weaker-than-expected Operating Performance: Ind-Ra had expected RCF’s plant operations to stabilise during

1QFY20, given that the maintenance activities were undertaken for 15-20 days in May 2019. However, the shut-down

extended for a month at the Thal Plant and over two months at the Trombay unit, owing to the longer time taken for

plant stabilisation. The Trombay unit faced further issues in August and September 2019. This resulted in RCF’s

operating performance remaining weak with EBITDA of INR0.5 billion in 2QFY20 (2QFY19: INR0.9 billion). The

operating performance of both - the fertiliser as well as the industrial - segments was impacted with fertiliser volumes

and the energy efficiency declining as the operating days were lower. Additionally, the industrial segment registered

losses of INR77 million at the EBIT level (1HFY19: INR117 million) given the decline in end-product prices and a fall in

the ammonia prices internationally while the cost of manufacturing ammonia for RCF remained high given the high

imported gas prices. Ind-Ra expects the fertiliser segment to see muted performance in 2HFY20, given the decline in

the international prices of urea, thus impacting production beyond the reassessed capacity. The industrial segment will

also continue to report muted profitability given the muted end-product prices and high input prices. Unlike other

players in the industry, RCF has not been booking the fixed cost of INR350/t allowed by the government of India

(GoI). This lowers its EBITDA margins but is a more conservative accounting policy.

Credit Metrics Decline: RCF’s interest coverage declined to 1.15x in 1HFY20 (1HFY19: 2.7x), driven by a significant

fall in EBITDA to INR1.3 billion (INR1.9 billion) and an increase in interest expense to INR1.1 billion (INR0.7 billion).

The interest expense increased as the receivables (including subsidy) and inventory were high at INR45 billion and

INR14.7 billion, respectively at FYE19, most of which got liquidated primarily during 2QFY20 to INR28.1 billion and

INR12.5 billion, respectively. Due to the decline in the working capital, RCF was able to lower its gross borrowings to

INR20.9 billion in H1FY20 (FY19: INR34.6 billion). However, subsidy build-up is likely to take place during 2HFY20 as

the subsidy flows from the government are stronger during the first half than those in the second half of the year. This

is likely to keep the interest coverage ratio low at 1.0x-1.25x. Given the weak interest coverage, the debt service

coverage ratio is also likely to remain weak as the repayments in FY20 and FY21 are INR1.5 billion and INR1.6 billion,

respectively.

Capex to Keep Leverage Elevated: RCF is incurring capex of INR15.8 billion (reduced from INR18.8 billion) at both

Thal and Trombay units for setting up gas turbines generators and heat recovery steam generator, CO2 compressors,

air compressors, vapor absorption machine to lower its energy consumption and a sewage treatment plant, below the

normative levels of 6.2GCal/t effective FY19 and 6.5Gcal/t effective FY21. At FYE19, RCF incurred capex of INR8 billion

on these plants. The Trombay unit’s current normative efficiency level is 8.538Gcal/t. Given the reduction in normative

levels, the savings are likely to be lower and additionally, with the decline in the pooled gas prices, the savings could

fall further. Given that the capex is likely to be funded in a debt:equity ratio of 70:30, the same would entail a term

debt of INR13.2 billion while the savings from the capex are likely to be lower. At FYE19, the term debt stood at

INR4.25 billion. Also, the company is incurring capex on the industrial products segment, and extending equity support

to joint ventures at Talcher (15% equity participation) and the Namrup unit of Brahmaputra Valley Fertilizer

Corporation’s project in Gabon, Central Africa. Due to RCF’s weak operating performance, the equity contribution

required for these projects could also be funded through debt till the time the operating performance improves. RCF’s

net debt (adjusted for subsidy receivables and cash) increased to negative INR4 billion at 1HFY20 (FY19: negative

INR7.4 billion).

Contingent Liability Remains a Risk: The Department of Fertiliser (DoF) in planning to mop up unintended gains

made by fertiliser units in producing the nutrient ‘N’ by the use of domestic gas with retrospective effect from FY10.

The matter is pending with an Inter-Ministerial Committee (IMC) of GoI. Pending decision, subsidy worth INR1.99

billion was withheld. However, the DoF released the withheld subsidy against a bank guarantee of an equivalent

amount. Of this, RCF received INR1.25 billion till FY19 while the balance is yet to be received. Additionally, post the

gas pooling applicable from 1 June 2015, the DoF had directed GAIL to charge the highest rate of re-liquefied natural

gas for gas consumed in non-urea operations. As the matter related to the same is pending before IMC for finalisation,

RCF is recognising the liability on its books and has made a provision of INR2.1 billion over 2QFY16-FYE19. GAIL,

however, has sought a differential levy of INR14.5 billion over 1 July 2006-31 March 2017. RCF has represented the

matter to the DoF as the matter is pending before IMC. This order, if implemented, will have a material adverse impact

on RCF’s profitability and financials.

Government Support: The GoI holds 75% in RCF. RCF is a strategically important entity in the fertiliser sector

owing to its size, market share and distribution network. However, Ind-Ra expects RCF’s credit profile to stay

/

dependent on the timing of subsidy payments. Furthermore, the GoI extended the applicability of present energy

efficiency norm of RCF’s Trombay plant and 13 other urea units till FY21.

Strong Market Position, Well-diversified Product Profile: RCF is the third-largest producer of urea in India with

a market share of 8%-9%. RCF is vertically integrated to produce non-urea fertilisers and other industrial chemicals.

The steady long-term demand for fertilisers, both urea and non-urea, and India’s dependence on import due to the

demand-supply gap augur well for RCF’s business. During FY19, the company generated gross operating revenue of

INR88.9 billion (FY18: INR7.8 billion, FY17: INR72.2 billion) with fertiliser business (urea and NPK)/industrial

chemicals/trading contributing 85.1%/10.7%/4.2% during FY19 (FY18: 85.5%/10.7%/3.7%, FY17:

83.5%/11.7%/4.8%).

Liquidity Indicator - Adequate: RCF’s cash and bank balances stood at INR915 million in 1HFY20 (FYE19: INR36

million). It had consortium fund-based working capital limits of INR17 billion and additional access to INR18 billion of

limits outside the consortium. RCF’s fund-based working capital limits utilisation was 22% of the total sanctioned limits

of INR17 billion for the 12 months ended September 2019. Furthermore, RCF has access to low-cost banking finance,

CP borrowing of INR20 billion and inter-corporate deposits, and has strong financial flexibility due to its sovereign

ownership. However, its liquidity position is affected by a long working capital cycle (FY19: 209 days; FY18: 151 days),

the characteristic of the urea manufacturing industry owing to large pending urea subsidy receivables. Cash flow from

operations was also impacted during FY19 due to the elongated working capital cycle. Ind-Ra expects the liquidity

profile to remain dependent on the timeliness of the subsidy receivables from the GoI.

RATING SENSITIVITIES

Revision of Outlook to Stable: Favourable structural changes in the urea subsidy policy leading to the timely

receipt of subsidy receivables, an improvement in profitability, along with adequate cash generation to fund the equity

contribution for the capex without relying on borrowings resulting in an improvement in net adjusted leverage and

interest coverage could result in the Outlook being revised back to Stable.

Negative: Continued muted operating performance, large debt-funded capex without consequent benefits at the

EBITDA level and/or any weakening of the support from the GoI leading to deterioration in the net adjusted leverage

and low interest coverage ratio on a sustained basis after adjusting fertiliser subsidy will be negative for the ratings.

COMPANY PROFILE

RCF operates two urea plants one each at Thal (Raigad) and Trombay (Mumbai) with a capacity of 2.0mmtpa and

0.33mmtpa, respectively. The plants are vertically integrated to produce non-urea fertilisers and industrial chemicals.

FINANCIAL SUMMARY

Particulars FY19 FY18

Revenue (INR million) 888,55 72,916

EBITDA(INR million) 4,437 2,667

EBITDA margin (%) 5.0 3.7

Gross interest expense (INR million) 1,559 626

Debt (INR million) 34,628 13,310

Source: Ind-Ra, RCF

/

RATING HISTORY

Instrument Type Current Rating/Outlook Historical Rating/Outlook

Rating Type Rated

Limits

(million)

Rating 12 June

2019

5 April 2018

Issuer rating Long-term - IND AA/Negative IND

AA/Stable

IND AA/Stable

Proposed NCDs Long-term INR5,000 Provisional IND AA/Negative Provisional

IND

AA/Stable

Provisional IND AA/Stable

COMPLEXITY LEVEL OF INSTRUMENTS

For details on the complexity level of the instruments, please visit https://www.indiaratings.co.in/complexity-

indicators.

SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the

issuer, and therefore, India Ratings has been compensated for the provision of the ratings.

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make

or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan

or security or any issuer.

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HTTPS://WWW.INDIARATINGS.CO.IN/RATING-DEFINITIONS. IN ADDITION, RATING DEFINITIONS AND THE TERMS

https://www.indiaratings.co.in/complexity-indicators


https://www.indiaratings.co.in/rating-definitions

/

OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.INDIARATINGS.CO.IN.

PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. INDIA

RATINGS’ CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE,

AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION

OF THIS SITE.

Applicable Criteria

Analyst Names

Corporate Rating Methodology

Primary Analyst

Ashish Agrawal

Senior Analyst

India Ratings and Research Pvt Ltd DLF Epitome, Level 16, Building No. 5, Tower B DLF

Cyber City, Gurgaon Haryana 122002

0124 6687241

Secondary Analyst

Bhanu Patni

Analyst

0124 6687276

Committee Chairperson

Rohit Sadaka

Director

+91 33 40302503

Media Relation

Namita Sharma

Manager – Corporate Communication

+91 22 40356121


https://www.indiaratings.co.in/Uploads/CriteriaReport/CorporateRatingMethodology.pdf

ANNEXURE II

Debenture Trustee Consent

Letter

Corporate Office : Apeejay House, 6th Floor, 3, Dinshaw Wachha Road, Churchgate, Mumbai - 400 020 Phone : 022-4302 5555 Fax : 022-2204 0465

Email : [email protected]

Registered Office : 202, Maker Tower E, Cuffe Parade, Mumbai 400 005

Website : www.sbicaptrustee.com Corporate Identity Number : U65991MH2005PLC158386

A wholly owned Subsidiary of SBI Capital Markets Ltd.

Ref.no. /SBICTCL/DT/2020-21 Date: 07th July 2020

Rashtriya Chemicals and Fertilizers Limited

Priyadarshini, Eastern Express Highway,

Sion, Mumbai 400 022

Issue of Secured, Redeemable Non-Convertible Taxable Debentures issue of upto maximum Rs. 500

crore on Private placement basis by Rashtriya Chemicals And Fertilizers Limited (“Company”)

We, the undersigned, do hereby consent to act as a Debenture Trustee to the Issue and to our name being

inserted as the Debenture Trustee to the Issue in the ‘Offer document /Private placement offer letter’ to be filed

by the Company with the Indian stock exchanges where the Bonds are proposed to be listed (the “Stock

Exchanges”) and any other document intended to be filed with Stock Exchanges, SEBI and other regulatory or

statutory authority in respect of the Issue. The following details with respect to us may be disclosed:

Name : SBICAP Trustee Company Limited

Address : Apeejay House, 3, Dinshaw Wachha Road,

Churchgate, Mumbai 400 020

Tel : 022 43025555

Fax : 022 22040465

E-mail : [email protected]

Investor Grievance e-mail: [email protected]

Website : www.sbicaptrustee.com

Contact Person : Ms. Aayushi Sanghavi, Compliance Officer

Tel No. 022 43025546

SEBI Registration Number: IND000000536

We confirm that we are registered with SEBI and that such registration is valid as on the date of this letter. We

enclose a copy of our registration certificate. We also confirm that we have not been prohibited by SEBI to act

as an intermediary in capital market issues. We further confirm that no enquiry/investigation is being

conducted by SEBI on us.

We further confirm that we have not received any communication from SEBI prohibiting us from acting as the

intermediary:

We confirm that we will immediately inform the Company of any change, additions or deletions in respect of

the matters covered in this certificate till the date when the Bonds offered, issued and allotted pursuant to the

Issue, are admitted for trading on the Stock Exchanges. In the absence of any such communication from us, the

above information should be taken as updated information until the listing and trading of Bonds on the Stock

Exchanges.

We hereby authorise you to deliver this letter of consent to the Stock Exchanges and any other regulatory or

statutory authority as required.

Sincerely,

For SBICAP Trustee Company Limited

Name: Harish Shetty

Designation: Senior Manager

Harish Aithappa Shetty

Digitally signed by Harish Aithappa Shetty DN: c=IN, o=Personal, 2.5.4.20=bc275fde2ca46855fe454a6a95f42f983d16fae5ab134ba1808bd27a02458ce8, postalCode=400053, st=Maharashtra, serialNumber=93e8d20a6d6b8bb1042a954c08d813d71f6511ac8de638cb9b1aac41d1354204, cn=Harish Aithappa Shetty Date: 2020.07.07 14:47:19 +05'30'



ANNEXURE III

RTA Consent letter

Date: July 22, 2020 To RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED, Priyadarshini, Eastern Express Highway, Sion, Mumbai 400 022 Dear Sir/Madam, Sub.: Consent to act as Registrar to the Proposed issue of “Listed, Secured, Redeemable, Non-Cumulative, Taxable, Non-Convertible Bonds in the nature of Debentures

(“NCDs”)” Face Value. 10,00,000 /- Each for Cash at Par Aggregating to Rs.500 Crores

to be issued on private placement basis. We refer to the subject issue and hereby accept our appointment as ‘Registrar’ for Electronic Connectivity Provider to issue of “Listed, Secured, Redeemable, Non-Cumulative,

Taxable, Non-Convertible Bonds in the nature of Debentures (“NCDs”)” Of Face Value Of Rs.

10,00,000 /- Each For Cash At Par Aggregating To Rs. 500 Crores and give our consent to incorporate our name as “Registrar to the Issue” in the offer documents.

Our Permanent SEBI Registration No.: INR000004058.

ANNEXURE IV

Board Resolution Authorizing

the Issue

ANNEXURE V

Shareholders’ approval

obtained pursuant to section

180(1)(c)

BSE Limited Registered Office: Floor 25, P J Towers, Dalal Street, Mumbai – 400 001, India T : +91 22 2272 8045 / 8055 F : +91 22 2272 3457 www.bseindia.com Corporate Identity Number: L67120MH2005PLC155188

BSE - CONFIDENTIAL

DCS/COMP/AA/IP-PPDI/283/20-21 July 29, 2020 The Company Secretary Rashtriya Chemicals and Fertilizers Limited Priyadarshini, Eastern Express Highway, Sion, Mumbai 400 022 Dear Sir/Madam,

Re: Private Placement Listed, Secured, Redeemable, Taxable, Non-Cumulative, Non-Convertible Debentures

(“Bonds”) of Rs. 10,00,000/- each (Series I-2020) aggregating to total issue size of Rs.500 Crore with a base

issue size of Rs. 200 Crore with an option to retain oversubscription of Rs.300 crore (“The Issue”)

We acknowledge receipt of your application on the online portal on July 28,2020 seeking In-principle approval

for issue of captioned security. In this regard, the Exchange is pleased to grant in-principle approval for listing

subject to fulfilling the following conditions:

1. Filing of listing application. 2. Payment of fees as may be prescribed from time to time. 3. Compliance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 as amended 2012, and submission of Disclosures and Documents as per Regulations 21, in the format specified in Schedule I of the said Regulations and also Compliance with provisions of Companies Act 2013. 4. Receipt of Statutory & other approvals & compliance of guidelines issued by the statutory authorities including SEBI, RBI, DCA etc. as may be applicable. 5. Compliance with change in the guidelines, regulations directions of the Exchange or any statutory authorities, documentary requirements from time to time 6. Compliance with below mentioned circular dated June 10, 2020 issued by BSE before opening of the investors

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20200610-31

This In-Principle Approval is valid for a period of 1 year from the date of issue of this letter. The Exchange reserves its right to withdraw its in-principle approval at any later stage if the information submitted to the Exchange is found to be incomplete/ incorrect/misleading/false or for any contravention of Rules, Bye-laws and Regulations of the Exchange, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Guidelines/Regulations issued by the statutory authorities etc. Further, it is subject to payment of all applicable charges levied by the Exchange for usage of any system, software or similar such facilities provided by BSE which the Company shall avail to process the application of securities for which approval is given vide this letter. Yours faithfully, For BSE Limited Sd/- Sd/- Rupal Khandelwal Raghavendra Bhat Senior Manager Dy. Manager

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20200610-31