National fertilizer marketing limited



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NATIONAL FERTILIZER MARKETING LIMITED
MINUTES OF 75TH BOARD MEETING OF THE COMPANY

HELD ON 31ST MARCH 2011 AT 2100 HOURS IN LAHORE

PRESENT
1. Brig Balal Ahmed Khan (Retd) Managing Director

Sitara-e-Imtiaz (Mil)

2. Mr. Nasrullah Khan Director

3. Mr. Agha Jan Akhtar Director

4. Mr. Arif Nadeem Director

IN ATTENDANCE
1. Miss Zahida Alvi G.M. (Finance) NFC

2. Mr. Muhammad Sharif Chaudhry Company Secretary



RECITATION
The meeting started with Recitation from the Holy Quran.

APPOINTMENT OF DIRECTORS
On behalf of NFML, the Company Secretary welcomed Brig Balal Ahmed Khan (Retd), Sitara-e-Imtiaz (Mil), Managing Director and Mr. Nasrullah Khan, Joint Secretary (CF-1), Ministry of Finance, Government of Pakistan, Islamabad, the new incumbents as Directors on the Board of Directors of the Company.
The Board was requested to approve the appointments of incumbents as Directors. It was, therefore, unanimously resolved as under:
“Resolved that in accordance with Articles 61-A & 63 of the Articles of Association of the Company, Brig Balal Ahmed Khan (Retd), Sitara-e-Imtiaz (Mil) and Mr. Nasrullah Khan, be and are hereby appointed as Directors of the Company in place of M/s. Muhammad Ijaz and Mr. Muhammad Iqbal Awan respectively.”
“Further resolved that Secretary of the Company be and is hereby authorized to take or cause to be taken any or all actions necessary to implement the above resolution.”
LEAVE OF ABSENCE
Leave of absence was granted to the Chairman NFC, Mr. Muhammad Khalid Malik and Director, Sahibzada Faiz Mahmood Faizi.

PROCEEDINGS

Brig Balal Ahmed Khan (Retd), Sitara-e-Imtiaz (Mil), took the chair and welcomed the Directors to 75th Meeting of the Board of Directors of the Company.



Item-1 CONFIRMATION OF THE MINUTES OF PREVIOUS BOARD MEETING
The Board was informed that Minutes of 74th meeting of the Board held on 14th December 2010 were circulated to the Directors for their comments.
The Company Secretary informed that the observations raised by the Director Mr. Khizar Hayat Khan had been incorporated in the Minutes. It was confirmed that no observation had been received from other Directors.
Minutes of 74th meeting, as circulated and duly amended were approved by the Board and signed by the Chairman.

Item-2 MATTERS ARISING FROM PREVIOUS BOARD MEETING
After detailed review, the Board conveyed its satisfaction over the progress made in respect of follow-up actions on decisions of 74th Board Meeting.

Item-3 CHANGE OF CORPORATE STRATEGY BY THE INCUMBENT MANAGING DIRECTOR
The Board was updated that despite several challenges faced by the new Managing Director during the last two months, the Company was successfully going ahead to cater for the Urea needs of the Country's farming community. New initiatives and major achievements in different areas were also presented to the Board.

The Managing Director further added that exercise of proper controls had resulted in achievement of considerable savings specially on account of freight expenses from Karachi and Gwadar Ports to up-country. He also mentioned about the expected increase in other income from the Banking Sector. In this context, he quoted an estimated figure of overall savings to the tune of Rs.47,885,731/- for the Company.


After detailed discussion, the Board appreciated the efforts of management.

Item-4 BUDGET PROPOSALS FOR THE YEAR 2010-11
The Budget of the Company for the year 2010-11 was placed before the Directors. While explaining salient features of the Budget, the Board was informed that:
- During the Budget year, the Company was expected to receive allocation of 1,125,000 M.Tons of Imported Urea for distribution through the dealers’ network. Against the projected quantity of imported Urea 633,937 M.Tons had already been allocated to NFML upto February 2011.
- The Company had estimated to sell 1,219,815 M.Tons of Imported Urea inclusive of the opening stock.
- Based on previous year’s experience and considering the prevalent market conditions, the dealers were being proposed to be allowed Rs.100/- per ton as Marketing Allowance on Imported Urea.
- Based on prior year’s actuals, freight costs had been projected more realistically at Rs.4200/- per ton.
- It had been estimated that during the year under presentation, manpower of the Company would comprise of 63 regular and 127 contractual employees;
The budget was discussed in detail by Directors. While reviewing the budget, the Managing Director assured the Board that maximum economy would be affected by the new management of the Company in respect of controllable marketing incidentals, especially freight cost.
After detailed deliberations and keeping in view the favourable cost movement trends to restrict the variable incidentals at the lowest possible level, the budget of the Company for the year 2010-11 was approved by the Board.

Item-5 REVIEW OF OPERATIONS
While discussing the review of Company's operations, Director, Mr. Arif Nadeem observed that NFML being a state enterprise has a vital role to play in price stabilization of Urea in the open market and it had to ensure that the farmers get the Imported Urea at the subsidized rates.
The Board was informed that in line with the Government directives, the Company has already rendered valuable services for the Flood Affectees despite the fact that payments to the Company were much delayed.
Miss Zahida Alvi, General Manager (Finance) NFC desired that the management should complete the pending reconciliation of dispatches/sale and stock position of Imported Urea with Trading Corporation of Pakistan both in value and quantity terms.
The Board was informed that reconciliation of accounts with TCP according to their statement of accounts as on 31.11.2010 was prepared. The amount claimed by TCP lacked certain adjustments in their books of accounts and NFML had already conveyed the factual position to them since February 2011.
The Board appreciated the role played by NFML for the benefit of Flood Afectees as a service to the National Cause.

Item-6 OPENING OF BANK ACCOUNTS
The Board was informed about the expected comparative advantage of higher earnings on the Company's working balances to be kept with different scheduled Banks under the revised Financial Management Policy.

Director, Mr. Nasrullah Khan, remarked that un-healthy competition was going on amongst the Banks and their Branches for procurement of deposits.



After detailed deliberations and due consideration, the Board approved opening of Bank Accounts with the following Banks:


1.


National Bank of Pakistan

Islamic Banking Branch,

5-Z Block, DHA, Lahore


2.


Muslim Commercial Bank Ltd.

MCB Privilege Banking, MCB House,

15-Main Gulberg, Jail Road, Lahore


3.


Bank Alfalah Limited

Corporate Branch Gulberg, Lahore

(Collection Account)


4.


The Bank of Punjab

Mozang Chungi Branch, Lahore


5.


The Bank of Punjab

Civil Secretariat Branch, Lahore.


6.


Summit Bank Limited

Bank Road Rawalpindi Branch


In this perspective, following Resolutions were passed:

Resolution No.88
Resolved that funds of the Company may be placed with National Bank of Pakistan, Islamic Banking Branch, 5-Z Block, DHA, Lahore and in this respect one officer from each category as mentioned below is hereby authorized to jointly execute/sign necessary documents/operate the Account with the Bank.
Category – 'A' Category – 'B'
- Managing Director - Acting General Manager (Finance)

- Regional Manager, Lahore - Deputy Manager (Finance)

- Senior Manager (Commercial) - Deputy Manager (Accounts)

Resolution No.89
Resolved that funds of the Company may be placed with Muslim Commercial Bank Ltd. MCB Privilege Banking, MCB House, 15-Main Gulberg, Jail Road, Lahore and in this respect one officer from each category as mentioned below is hereby authorized to jointly execute/sign necessary documents/operate the Account with the Bank.
Category – 'A' Category – 'B'
- Managing Director - Acting General Manager (Finance)

- Regional Manager, Lahore - Deputy Manager (Finance)

- Senior Manager (Commercial) - Deputy Manager (Accounts)

Resolution No.90
Resolved that funds of the Company may be placed with Bank Alfalah Limited Corporate Branch Gulberg, Lahore (Collection Account) and in this respect one officer from each category as mentioned below is hereby authorized to jointly execute/sign necessary documents/operate the Account with the Bank.
Category – 'A' Category – 'B'
- Managing Director - Acting General Manager (Finance)

- Regional Manager, Lahore - Deputy Manager (Finance)

- Senior Manager (Commercial) - Deputy Manager (Accounts)

Resolution No.91
Resolved that funds of the Company may be placed with The Bank of Punjab, Mozang Chungi Branch, Lahore and in this respect one officer from each category as mentioned below is hereby authorized to jointly execute/sign necessary documents/operate the Account with the Bank.
Category – 'A' Category – 'B'
- Managing Director - Acting General Manager (Finance)

- Regional Manager, Lahore - Deputy Manager (Finance)

- Senior Manager (Commercial) - Deputy Manager (Accounts)

Resolution No.92
Resolved that funds of the Company may be placed with The Bank of Punjab, Civil Secretariat Branch, Lahore and in this respect one officer from each category as mentioned below is hereby authorized to jointly execute/sign necessary documents/operate the Account with the Bank.
Category – 'A' Category – 'B'
- Managing Director - Acting General Manager (Finance)

- Regional Manager, Lahore - Deputy Manager (Finance)

- Senior Manager (Commercial) - Deputy Manager (Accounts)

Resolution No.93
Resolved that funds of the Company may be placed with Summit Bank Limited Bank Road Rawalpindi Branch and in this respect one officer from each category as mentioned below is hereby authorized to jointly execute/sign necessary documents/operate the Account with the Bank.
Category – 'A' Category – 'B'
- Managing Director - Acting General Manager (Finance)

- Regional Manager, Lahore - Deputy Manager (Finance)



- Senior Manager (Commercial) - Deputy Manager (Accounts)
It was further resolved as under:
Resolution No.94
Resolved that the Managing Director NFML shall stand authorized to change the Branch within a Bank.
Item-7 RATIFICATION OF RESOLUTION BY CIRCULATION
After due consideration, Resolution No.87, as approved by Directors through Circulation dated June 14, 2010, was ratified by the Board.
Item-8 OTHER BUSINESS
8.1 Civil Court Stay Order against Agri. Tech.
The Board was informed that Pak American Fertilizer Daudkhel District, Mianwali (Punjab) & Hazara Phosphate located at Haripur (KPK) were privatized and sold to a company now called Agri Tech. In terms of the contract, Agri Tech was bound to pay outstanding balance/supply the production in kind to settle the final account with NFML. However, it was learnt through reliable sources that Agri Tech was negotiating with different parties to sell both the factories in violation of the contract and had not honoured the payment clauses of the agreement with NFML. Approximately an amount of Rs.30.00 crore of NFML was outstanding against Agri Tech.
After deliberations, it was decided that case be taken up with the court to get immediate stay order for both the factories against the Agri Tech sale efforts followed by further necessary legal proceedings against them.

8.2 NFML New Single Super Phosphate (SSP) Project
The Board was informed that to meet the requirement of country's soil which was mostly alkaline in nature, use of adequate quantity of acidic fertilizer preferably Single Super Phosphate (SSP) to keep its PH value favourable for maximum farm output was considered very essential. Presently, a plant producing SSP was located at Jaranwala, District Faisalabad, while another small plant "Hazara Phosphate Fertilizer" at Haripur, was operated by Agri Tech (Ex-Pak American Fertilizers). Quite a few other small setups were also producing SSP using both local and imported phosphate rocks but their production was unable to meet country's increasing requirement and moreover they were also producing substandard product. Pakistan, therefore, was in dire need of SSP for optimum crop yield.
The matter was discussed in detail and a presentation was given by Cactus Fertilizers to the Board, introducing the basic requirement and suggesting fabrication and operation of a new affordable plant, specifying 90% local machinery except Teflon coated electric motors, centrifugal pumps and Chinese Steel Ball Grinding Mill. Return on investment (ROI) on establishment of SSP Plant was expected 2 & half years after 2 years fabrication period. Expansion scope by addition of Sulphuric Acid plant as well as production of electricity from its sulpher burning, was also considered possible.
After detailed deliberations and due consideration, it was decided that preliminary economic feasibility study based on 50% imported phosphate rock and balance from domestic sources or whatever feasible, be prepared for circulation to the Directors.

There being no other business, the meeting ended with a vote of thanks to the Chair.


______________________


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