The company has achieved its highest-ever production of 3.19 million tonnes of urea, record capacity utilisation of 114 per cent and an all-time high net profit of Rs 251 crore during the year.

The NFL has achieved a net reserve of Rs 800 crore and in its books of account, the scam amount of Rs 133 crore has been treated as a contingency drawn out of the company's reverse but has been treated separately apart from the reserve of Rs 800 crore.

NFL CMD Dinesh Singh disclosed that arbitration proceedings were already on with the Turkish firm that took a Rs 133-crore advance and failed to deliver urea contracted by NFL three years ago. Under these circumstances, the company expected to get back the amount of Rs 133 crore.

Singh further stated that the impressive recovery has encouraged the company to prepare a newcorporate plan that envisaged diversification from fertiliser production into power and petrochemicals. This is mainly to utilise the Rs 800-crore cash reserves the company has built up, he added. He, however, pointed out that the future strategy would largely depend on the government's new fertiliser policy on the basis of the Hanumantha Rao committee report. The government's future policy on fertiliser retention prices will decide the investment potential of the industry as well as its profitability.

Singh feared that the Hanumantha Rao committee recommendations on remunerative prices/incentives to indigenous fertiliser units did not augur well for units like NFL that have old but efficiently working fuel oil-based plants.

He said that if the committee report was implemented in toto, it would render a number of industrial units unviable. He said that the profitability of the fertiliser industry would be reduced by about Rs 376 crore annually if the high-powered committee recommendations were accepted bythe government.

On the proposed pricing regime, he said the normative referral prices (NRP) were lower than the existing cost of prices, and would compel several gas-based fertiliser units to register losses.

Questioning the criteria for arriving at ex-factory NRPs, he said the committee has taken into consideration only the provisional and ad hoc capital costs and not the actual capital costs of the units and determination of NRP on lower capital costs is not correct.

NFL, which obtained its highest sales turnover of Rs 2,221 crore in 1997-98, will not be able to have the required liquidity to support its operations and any return on the investments made, if the proposed NRP is implemented, he said.

He said the NFL's two-decade-old fuel oil-based plants at Nangal, Bhatinda (both in Punjab) and Panipat (Haryana) achieved impressive capacity utilisation ranging from 110 to 123 per cent. The natural gas-based twin units at Vijaipur (Madhya Pradesh) too had recorded a 114 per cent capacityutilisation.

He added that expansion of urea production by 1,48,000 tonnes a year from the Nangal plant was being planned by taking up plant revamping. Similarly an extra 7,26,000 tonnes of urea would come from installation of a naphtha-based urea-ammonia complex at the Panipat plant.

NFL also achieved the highest-ever sales turnover of Rs 2,221 crore, which included Rs 95.5-crore sales of industrial products like nitric acid, methanol, sodium nitrate, sulphur and ammonium nitrate. All these are by-products of fertiliser production.

Singh said NFL has recentlly installed an argon recovery unit at Panipat to tap the growing market for argon gas in the northern states.

The company has recently adopted ten villages in Bastar district of Madhya Pradesh for effecting integrated rural development and promotion of fertiliser use.