Chambal Fertilisers & Chemicals Ltd
Directors Reports
Dear Members,
Your Board of Directors have pleasure in presenting the 38th Annual
Report on the business and operations of the Company together with audited financial
statements for the Financial Year ended March 31, 2023.
1. Standalone Financial Results
The financial performance of your Company on standalone basis is
summarized below:
(Rs. in Crore)
Particulars |
Financial Year |
|
2022-23 |
2021-22 |
| Revenue from Operations |
27,772.81 |
16,068.83 |
| Other Income |
259.04 |
95.56 |
| Total Income |
28,031.85 |
16,164.39 |
| Total Expenses |
26,580.06 |
14,212.48 |
| Profit before Tax |
1,451.79 |
1,951.91 |
| Total Tax Expenses |
382.48 |
664.79 |
Profit for the Year |
1,069.31 |
1,287.12 |
| Other Comprehensive Income for the Year (Net
of Tax) |
(64.88) |
(23.45) |
Total Comprehensive Income for the Year |
1,004.43 |
1,263.67 |
Retained Earnings - Opening Balance |
5,289.32 |
4,426.15 |
| Add: |
|
|
| Profit for the Year |
1,069.31 |
1,287.12 |
| Any Other Change |
(1.24) |
0.29 |
| Re-measurement (Loss) / Gain on Defined
Benefit Plans |
(0.29) |
0.34 |
| Less: |
|
|
| Cash Dividend |
312.16 |
374.58 |
| Transfer to General Reserve |
50.00 |
50.00 |
Retained Earnings - Closing Balance |
5,994.94 |
5,289.32 |
2. Operations
The Company has three plants i.e Gadepan-I, Gadepan-II and Gadepan-III
located at Gadepan, District Kota, Rajasthan to manufacture Urea. Apart from manufacture
of Urea, the Company is also engaged in marketing of other fertilisers such as Di-Ammonium
Phosphate ("DAP"), Muriate of Potash ("MOP"), NPK fertilisers,
Speciality Plant Nutrients and Crop Protection Chemicals.
The Financial Year 2022-23 was a challenging year for the Company. The
year started with elevated prices of fertilizers, adverse movement in USD Rupee exchange
rate and fixation of subsidy rates by Government of India for DAP, MOP and NPK fertilisers
which negatively impacted the profitability of the Company in spite of higher sales
volumes of DAP, MOP and NPK fertilizers in the Financial Year 2022-23 as compared to the
previous financial year. Higher prices of DAP, MOP and NPK fertilisers and higher cost of
production of Urea on account of substantial increase in natural gas prices resulted in
increase of working capital deployment by the Company and consequently interest cost of
the Company.
The prices of fertilisers and natural gas started coming down by the
end of Financial Year 2022-23. Further, release of additional allocation of subsidy by the
Government of India towards the end of the year 2022 had supported the Company in keeping
its working capital deployment under control as at March 31, 2023. The additional
contribution by new geographies along with strong growth in crop protection chemicals and
speciality plant nutrients have contributed positively to the top line and bottom line of
the Company. During the Financial Year 2022-23, the Company continued its focus on
speciality plant nutrients and crop protection chemicals and introduced various new
products.
The Company imparts the highest emphasis on Environment Social
Governance parameters and achieved best ever safety performance in the Financial Year
2022-23. The Company continued to implement appropriate measures to maintain the
reliability of the plants in the long run and increase the energy efficiency of its
plants. Energy saving initiatives as well as good operational performance yielded
significant benefits to the Company. During the Financial Year 2022-23, the Company
achieved lowest ever energy consumption in plants of the Company and lowest ever water
consumption at Gadepan site which apart from positive impact on financial results of the
Company also resulted in lesser environmental footprints.
The production of ammonia in the Company is in excess of its
requirement for manufacture of Urea due to technical reasons and such excess ammonia is
sold by the Company in the market. There was strong demand due to global supply
disruptions and high international prices. The Company achieved highest ever sales of
ammonia during the year under review with strong contribution.
The Company had been continuously monitoring the situation arising on
account of COVID-19 pandemic considering both internal and external factors and its
production, dispatches, sales and market collections remained unaffected. The detailed
information on the business operations of the Company, the Industry in which the Company
operates and other relevant information is given in the Management Discussion and Analysis
Report attached as Annexure "A" to this Report.
3. Technical Ammonium Nitrate Plant
Your Company had decided to set up a plant for manufacture of Technical
Ammonium Nitrate, with a capacity of approximately 2,40,000 MT per annum including a plant
to manufacture approximately 2,10,000 MT per annum of Weak Nitric Acid
("Project") at its existing site at Gadepan, District Kota, Rajasthan. The
Company awarded a contract on April 5, 2023 to Larsen and Toubro Limited for
implementation of the Project. The contract includes designing, engineering, procurement,
supply of equipment and materials, construction, project management, pre-commissioning and
commissioning of the Project and its associated facilities and grant/ transfer of
requisite license to the Company. The Project is scheduled to be completed within 30
months from April 5, 2023 and is subject to necessary statutory and other approvals.
4. Dividend
The Board of Directors of the Company declared an interim dividend of
Rs. 4.50 per equity share of Rs. 10 each @ 45% (Previous Year - Rs. 4.50 per equity share
@ 45%) during the Financial Year ended March 31, 2023. Further, the Board of Directors
recommended final dividend of Rs. 3 per equity share of Rs. 10 each @ 30% (Previous Year -
Rs. 3 per equity share @ 30%) for the Financial Year 2022-23 which shall be paid after
approval of shareholders at the ensuing Annual General Meeting of the Company. The total
dividend for the Financial Year 2022-23 amounts to Rs. 7.50 per equity share of Rs. 10
each (Previous Year - Rs. 7.50 per equity share) with total outgo of Rs. 312.16 Crore
(Previous Year - Rs. 312.16 Crore) on account of interim and final dividend.
The Dividend Distribution Policy of the Company is available on the
website of the Company and can be accessed at the weblink:
https://www.chambalfertilisers.com/pdf/Final-Dividend-Distribution-Policy.pdf. There has
been no change in this policy during the year under review. The interim and final dividend
declared/recommended by the Board of Directors are in accordance with the Dividend
Distribution Policy of the Company.
5. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act, 2013, the rules
framed thereunder, Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the
applicable accounting standards, the Company has prepared Consolidated Financial
Statements. The audited Consolidated Financial Statements alongwith Auditor's Report and
the Statement containing salient features of the financial statements of
subsidiaries/joint venture (Form AOC - 1) forms part of the Annual Report.
6. Corporate Governance Report and Code of Conduct
Your Directors are committed to maintain high standards of Corporate
Governance. The Corporate Governance Report for the Financial Year 2022-23 is attached as Annexure
"B" to this Report. All the Directors of the Company and senior management
personnel have confirmed the compliance of Code of Conduct and Ethics of the Company. The
declaration of the Managing Director confirming compliance with the 'Code of Conduct and
Ethics' of the Company is enclosed as Annexure "C" to this Report and
Auditor's Certificate regarding compliance with the conditions of Corporate Governance is
enclosed as Annexure "D" to this Report.
7. Subsidiaries and Joint Venture
The details of the subsidiaries and joint venture as on March 31, 2023
are given below:
(a) Subsidiaries
CFCL Ventures Limited ("CVL") is a subsidiary of your Company
in Cayman Islands. CVL has step down subsidiaries namely ISGN Corporation in United States
of America and ISG Novasoft Technologies Limited ("ISGN, India") in India. There
was no business activity in these subsidiaries during the year under review.
ISGN, India had received the order dated January 24, 2023 of National
Company Law Tribunal, Bengaluru Bench confirming the reduction of its equity share
capital. The paid-up equity share capital of ISGN, India has been reduced from Rs.
36,23,07,000 (3,62,30,700 equity shares of Rs. 10 each fully paid up) to Rs. 6,68,07,000
(66,80,700 equity shares of Rs. 10 each fully paid up). ISGN, India is in the process of
completing the process of reduction of its equity share capital as provided in relevant
rules and the order of National Company Law Tribunal.
Chambal Infrastructure Ventures Limited is a wholly owned subsidiary of
the Company in India. There was no business activity in this subsidiary during the year
under review.
(b) Joint Venture: Indo Maroc Phosphore S. A. - IMACID
Indo Maroc Phosphore S. A. - IMACID ("IMACID") is a joint
venture of your Company in Morocco with Tata Chemicals Limited and OCP S.A., Morocco. Each
partner is having equal stake (33.33% each) in the joint venture. IMACID is engaged in the
manufacture of phosphoric acid in Morocco.
The performance of IMACID is summarized below:
Particulars |
April 01,2022 to March 31,2023 |
April 01,2021 to March 31,2022 |
| Production of Phosphoric Acid (MT) |
3,89,867 |
5,00,367 |
| Sales of Phosphoric Acid (MT) |
3,87,090 |
4,57,266 |
| Revenue |
Moroccan Dirham 5323.13 Million (Rs. 4088.16
Crore) |
Moroccan Dirham 5342.27 Million (Rs. 4337.92
Crore) |
| Profit after Tax |
Moroccan Dirham 224.72 Million (Rs. 172.58
Crore) |
Moroccan Dirham 1131.94 Million (Rs. 919.13
Crore) |
The lower demand for phosphoric acid and increase in the prices of its
raw material resulted in lower margins which led to sharp decline in profit after tax for
the Financial Year 2022-23.
The Company does not have any material subsidiary as per the provisions
of the Listing Regulations.
The performance of the subsidiaries of the Company is summarized in
Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section
129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the
overall performance of the Company is also provided in Note no. 46 to the Consolidated
Financial Statements.
The Company shall place the financial statements of subsidiaries on its
website in pursuance of Section 136 of the Companies Act, 2013.
No subsidiary, associate or joint venture has been acquired or ceased/
sold / liquidated during the Financial Year 2022-23.
8. Health, Safety, Environment Protection and
Quality
The Company continuously strives to improve the standards of Health,
Safety, Security, Environment Protection and Quality of products. The Company has
implemented a Health, Safety, Security, Environment & Quality Policy as part of a
formal process to achieve this objective. The brief outline of the Company's initiatives
in this regard is as under:
(a) Health & Hygiene
The health assessment and occupational disease monitoring of employees
and contractor work force is carried out through periodic medical examinations and hygiene
monitoring at workplace.
A well-equipped Occupational Health Center at Gadepan operates round
the clock to provide health services to employees and their families, contractor workforce
and villagers in the vicinity of the plants. Three well equipped ambulances are available
at Gadepan which also cater to the requirements of villagers in medical emergencies. The
Company also facilitates employees to consult a Company affiliated doctor to ensure the
well-being of the employees. The Company also organizes training and awareness programs on
health and hygiene related matters from time to time through external experts. In addition
to this, various health camps and campaigns like pulse polio & swine flu vaccination,
blood donation, immunization program for children, etc. are also organized periodically.
The self-sustainable complex at Gadepan provides a neat, clean and healthy environment for
the employees and their families which goes a long way in their well-being.
(b) Safety Management
The Company strives to maintain the highest levels of health and safety
of all its employees and contractor workforce through a well- defined health and safety
management system. A strong process safety management system is also in place to take care
of safety in the operation of plants and maintenance of equipment and machinery.
In order to take care of safety aspects in maintenance jobs at the
plants, a cross functional team of senior management members reviews the jobs on a daily
basis from safety perspective and ensures that all recommended safety measures are taken
to prevent hazards while carrying out the jobs. Extensive training and drills are
conducted by internal and external experts which helps the Company in maintaining and
improving safety systems.
Your Company had reviewed the safety plan and executed various
improvement schemes to strengthen workplace safety in the plants based on the learnings
from incidents of the other companies. During the year under review, the Company has
implemented improved Scaffolding Management System to reduce the risk of working at
height.
The Chief Inspector of Factories & Boilers, Jaipur, Government of
Rajasthan has recognized your Company for its safety, health and welfare practices and
compliances of Factories Act, 1948 in the category of large-scale industry.
The schemes of "Near-Miss" and "Make-to-Good"
reporting are also in place and various programs and campaigns are organized to encourage
safety awareness and involvement among employees and contractor workforce. Keeping in view
the nature of its operations, the Company has a well-defined "Onsite Disaster
Management Plan" and "Mutual Aid and Response Group" arrangement with
neighboring industry which works for the mutual benefit of all participants. In case of
any fire emergency, the Company also provides services to neighboring villages of Gadepan
plants.
(c) Environment Protection
Your Company follows the principles of prevention of pollution,
minimization of waste, recycling and conservation of natural and other resources. During
the Financial Year 2022-23, approximately 75% of the sludge generated from Reverse Osmosis
(RO)
plant was sent to cement companies for co-processing instead of dumping
in land fill at the site approved by the Pollution Control Board.
Your Company has a robust mechanism in place to ensure that all the
environmental parameters are maintained within the permissible limits. A dedicated
Environment Management Cell monitors the compliances related to environment.
During the Financial Year 2022-23, the Company has implemented various
schemes to reduce plant energy consumption. These schemes have resulted in reduction of
greenhouse gases emissions and in turn will also result in further reduction of specific
water consumption.
The Company is fully conscious of its responsibility towards
environmental sustainability. The Company has installed roof top solar panels in Gadepan
campus having capacity of 1000 Kilo Watt peak power as a step towards use of renewable
energy. This will enable the Company to replace around 13.7% of grid power utilized by the
Company in its Gadepan complex.
The Company has been conferred with Environment Protection Award 2022
for a Nitrogenous Fertilizer Plant (Runner Up) by The Fertiliser Association of India.
The Company has developed and maintained a dense green belt at Gadepan
campus which also comprises a variety of fruit trees. It provides a healthy environment
for the employees and their families and also helps in maintaining the ecological balance
in the area. Your Company augmented 55 hectares area of green belt with irrigation network
in the last two years. The green belt is maintained with utmost care and augmented through
regular plantation. Only treated wastewater is used for maintaining the green belt through
irrigation network spread all over the Gadepan complex.
The Gadepan-III plant of the Company is a zero liquid discharge plant.
Effluents from Gadepan-III plant along with part of effluents from Gadepan-I and
Gadepan-II plants are treated in reverse osmosis-zero liquid discharge plant and permeate
therefrom is used as make up water for cooling towers, which results in lesser intake of
fresh water from the river. The Gadepan-III plant is most energy efficient and therefore
consumes less natural resources.
'Single Use Plastic' is strictly banned in the Gadepan campus as per
Government guidelines.
The Company also operates Bio-Methanation plant at Gadepan to handle
the kitchen waste of the canteen and township facilities and bio-gas is utilized in the
kitchen of guest house at Gadepan complex.
(d) Quality Management
The Company is always focused on providing quality products to its
customers and continuously works towards improvement in product quality through process
improvements and technological interventions.
The quality is ensured at all stages of manufacturing processes,
maintenance and support services. The Urea manufactured by the Company is preferred in its
marketing territory because of its quality. The Company sources the products marketed by
it from the reputed manufacturers in India and abroad and appropriate measures are taken
to ensure quality of the products. The Company gives utmost importance to customer
feedback which is one of the most important tool for improvement.
9. Corporate Social Responsibility
The Company has always given the utmost importance of its
responsibility towards the community through its Corporate Social Responsibility projects
and programmes.
With the concept of "Investing Today for a Sustainable
Tomorrow", your Company is actively supporting the communities in the fields of
Education including Technical and Vocational Education, Rural Development, Health care and
Sanitation, Employability and Empowerment, Environmental Sustainability, Animal Welfare
and Soil Health, Disaster Management and Promotion of Sports.
The highlights of the Corporate Social Responsibility ("CSR")
projects and programmes of the Company are as under:
a) Project Akshar - Pre-Primary & School Education
Your Company has been consistently working on ensuring quality
education and conducive learning environment. With the view to improve the level of
education, the Company is reaching out to more than 12,000 students enrolled in 47
Aanganwadi centers and 53 Government schools adopted by the Company in Kota and Baran
districts of Rajasthan. The Company is also extending its support to 52 schools of Punjab,
Haryana and Madhya Pradesh.
The Company had developed 3 new Aanganwadi centers in nearby villages
of plant location during the Financial Year 2022-23. These adopted Aanganwadi centers are
now being developed as model preschool centres on PENCIL concept i.e. Protective,
Effective 'N' Context-based Initiation of Learning.
The Company has been focusing on science and digital education to make
it as integral part of curriculum for rural students. The Company had been regularly
conducting cultural programs, extracurricular activities, sports and career counseling
sessions in adopted schools to ensure holistic development of students.
CFDAV School is being run in collaboration with Dayanand Anglo Vedic
College Trust & Management Society wherein majority of students are from nearby
villages of the plant location.
The Company was conferred with Bhamashah Award for its commendable
contribution in the development of various Government schools in Kota district by the
Government of Rajasthan and the Corporate Social Responsibility Award 2020-21 by the
Federation of Indian Chambers of Commerce and Industries for its exemplary efforts in the
field of education.
b) Project Saksham - Technical and Vocational
Education
Project Saksham is aimed in helping rural youth to enhance their
technical skills to avail better employment opportunities.
Your Company is supporting 5 Industrial Training Institutes offering
1316 seats annually and one Government Polytechnic College offering 240 seats per year,
near its plants at Gadepan. Apart from regular trade-based theoretical and practical
classes, certificate training courses on Occupational Health and First Aid, Fire and
Safety and Personality Development were offered to the students.
Short term vocational training courses were offered to rural youth,
especially girls through vocational training centers. During the Financial year 2022-23,
short term vocational courses such as tailoring, motor driving, soft toys making, beauty
services, electrical wiring, food processing, embroidery, jewellery making, tie and dye
techniques, hand block printing, plumbing and auto mechanic courses were offered to rural
youth.
c) Project Saakar - Rural Development
The Company is committed to improve the quality of life for rural
communities by developing basic infrastructure facilities in nearby villages of Gadepan
and selected villages of Bundi district. During the Financial Year 2022-23, several
infrastructure development projects were undertaken including developing common spaces for
the community i.e. community hall, recreational areas, play area and walkways, cement
concrete roads, entrance gates and installation of high mast lights. Storm water drain
network was also strengthened in Gadepan and adjoining villages. Open gym facilities were
established in 5 villages and efforts were also made to reduce plastic waste in villages
through solid waste management initiatives.
d) Project Arogya - Health care and Sanitation
Project Arogya aims to strengthen healthcare services in rural areas of
Kota and Baran districts of Rajasthan. During the Financial Year 2022-23, the second phase
of infrastructure development jobs at adopted Government Primary Health Centers at
Gadepan, Simliya and Kundanpur were completed. These adopted centers are offering early
diagnosis of health issues and preventive healthcare facilities to over 1,15,000 community
members.
The Company had organized specialized sessions and awareness camps in
32 villages near Gadepan plant location and 12 villages of Haryana, Madhya Pradesh and
Punjab during the Financial Year 2022-23. The Company has also installed Reverse Osmosis
("RO") units in schools in Haryana, Madhya Pradesh and Punjab to ensure safe
drinking water facilities. The Company is installing tuberculosis detection unit at the
Government Primary Health Center at Gadepan to cater the needs of rural community of Kota
and Baran districts.
e) Project Pragati - Employability and Empowerment
Project Pragati supports the community especially youth, women and
farmers to become economically self-reliant.
Your Company organizes skill-based training programs for women. The
Company is also supporting small and marginalized farmers to adopt modern and sustainable
agriculture practices. The community members of nearby villages are facilitated to avail
the benefits of various government social security schemes such as pension scheme,
affordable housing, employment cards, Pradhan Mantri Ujjwala Yojana, Jan Aadhaar Yojana,
Atal Pension Yojana etc.
f) Project Bhoomi - Environmental Sustainability, Animal Welfare and
Soil Health
Project Bhoomi aims to introduce modern and sustainable agriculture
methods amongst small and marginalized farmers in three northwestern states i.e. Punjab,
Haryana and Rajasthan. Crop residue management initiative was successfully completed in
141 villages of 4 districts of Punjab and 70 villages of 4 districts of Haryana and
residue burning was successfully prevented in over 75,000 acre land in these states. The
project successfully reached out to over 1.10 lakhs farmers to promote alternative methods
of crop residue management.
The agriculture development laboratory at Gadepan continues to
facilitate farming communities to get soil testing services for their farmland, which
helps them to understand the nutrient needs of their farms and optimize the farm inputs.
Your Company is also working to protect flora and fauna of the villages
and nearby areas of its plants location. The second phase of development activities at
Sorsan Eco Forest Reserve was completed during the Financial Year 2022-23. Plantation
drives were also organized to increase the green cover in nearby villages.
g) Disaster Management
Your Company extended support to flood-affected rural communities in
Sangod, Itawa and Sultanpur blocks of Kota district. The Company had made available food
kits, ration and temporary shelters to provide immediate relief to flood-affected
families.
h) Promotion of Sports
The Company focuses on building and upgrading rural sports
infrastructure and developing sports culture in schools, technical institutes and nearby
villages of plant location. With the aim of promoting sports at grassroot level, pragmatic
interventions were launched in 20 senior secondary schools and 6 technical institutes at
nearby villages. Apart from regular training sessions on various sports, your Company has
been organizing various competitive events at village, school and cluster level.
The second phase of infrastructure development at sports stadium in the
Sangod Block was completed and the stadium is now equipped with sports facilities such as
cinder track, football ground, basketball, volleyball and badminton court and indoor and
outdoor gymnasium. 2 mini sports development centers were also developed near the plant
location. These centers have been offering regular training and support to the students
and rural youth and aim to increase participation in state and national level sports
events.
The composition and terms of reference of Corporate Social
Responsibility Committee are given in the Corporate Governance Report. The Corporate
Social Responsibility Policy of the Company is available on the website of the Company at
http://www.chambalfertilisers.com/csroverview. The Annual Report on Corporate Social
Responsibility (CSR) Activities for the Financial Year 2022-23 (including the details of
the development and implementation of the Corporate Social Responsibility Policy) as
prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate
Social Responsibility Policy) Rules, 2014 is attached as Annexure "F" to
this Report.
For the purpose of Section 135 of the Companies Act, 2013, the amount
equivalent to 2% of the average net profits of the Company made during the immediately
preceding three financial years works out to Rs. 34.28 Crore. As against this, the Company
had spent Rs. 34.30 Crore on CSR projects / programmes during the Financial Year 2022-23.
10. Directors and Key Managerial Personnel
The Board of Directors of the Company was having eight directors as on
March 31,2023 with seven Non-Executive Directors including four Independent Directors and
a Managing Director.
The shareholders of the Company at the Annual General Meeting held on
September 13, 2022 appointed Mr. Berjis Minoo Desai (Director Identification Number:
00153675) as an Independent Director of the Company to hold office for a term of 5 (five)
consecutive years from September 13, 2022 to September 12, 2027. The Board of Directors is
of the opinion that Mr. Berjis Minoo Desai is a person of integrity with high level of
ethical standards and having worked in the areas of mergers and acquisitions, corporate
and financial laws, international business laws and international commercial arbitration,
he possesses requisite expertise and experience for appointment as Independent Director of
the Company. Mr. Berjis Minoo Desai is exempt from the requirement to undertake online
proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.
Mr. Marco Philippus Ardeshir Wadia (Director Identification Number:
00244357) and Ms. Radha Singh (Director Identification Number: 02227854) completed their
tenure as Independent Directors of the Company on September 14, 2022 and ceased to be the
Directors of the Company with effect from September 15, 2022.
The tenure of appointment of Mr. Vivek Mehra (Director Identification
Number: 00101328), Independent Director, shall expire on September 17, 2023. Mr. Vivek
Mehra, being eligible, has offered himself for re-appointment as Independent Director. On
the recommendation of the Nomination and Remuneration Committee and considering the other
relevant factors, the Board of Directors recommends to the shareholders of the Company,
the re-appointment of Mr. Vivek Mehra as Independent Director of the Company to hold
office for a second term of 5 (five) consecutive years from September 18, 2023 to
September 17, 2028.
Mr. Abhay Baijal, Chief Financial Officer of the Company, retired from
the services of the Company on January 31, 2023 and ceased to be the Chief Financial
Officer and Key Managerial Personnel of the Company with effect from February 01,2023. The
Board of Directors appreciated the contribution of Mr. Abhay Baijal during his service
tenure as Chief Financial Officer of the Company.
On the recommendations of the Nomination and Remuneration Committee and
Audit Committee, the Board of Directors has appointed Mr. Anand Agarwal as Chief Financial
Officer and Key Managerial Personnel of the Company with effect from February 01, 2023.
Mr. Rajveer Singh ceased to be the Company Secretary and Key Managerial
Personnel of the Company from close of business hours on May 5, 2023. On the
recommendation of the Nomination and Remuneration Committee, the Board of Directors has
appointed Mr. Anuj Jain as Company Secretary and Key Managerial Personnel of the Company
with effect from May 6, 2023.
Mr. Chandra Shekhar Nopany (Director Identification Number: 00014587)
is due for retirement at the forthcoming Annual General Meeting and has offered himself
for re-appointment.
All the Independent Directors have submitted declarations that they
meet the criteria of independence as provided under Section 149(6) of the Companies Act,
2013, the rules framed thereunder and the Listing Regulations. In terms of Section 150 of
the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification
of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the
Company have been included in the data bank maintained by the Indian Institute of
Corporate Affairs.
During the Financial Year 2022-23, Mr. Gaurav Mathur had not received
any commission or remuneration from any subsidiary of the Company.
Four meetings of the Board of Directors were held during the Financial
Year 2022-23.
Other information on the Directors and the Board Meetings is provided
in the Corporate Governance Report attached as Annexure "B" to this
Report.
A certificate obtained by the Company from a Company Secretary in
practice, confirming that none of the Directors on the Board of Directors of the Company
have been debarred or disqualified from being appointed or continuing as director of
companies by the Securities and Exchange Board of India /Ministry of Corporate Affairs or
any such statutory authority, is enclosed as Annexure "E" to this Report.
11. Internal Financial Controls
The Company has internal financial controls commensurate to the size
and nature of its business. The Company has policies and procedures in place for ensuring
orderly and efficient conduct of its business and operations including adherence to the
Company's policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records and the timely
preparation of reliable financial information.
The details of the internal control system are also given in the
Management Discussion and Analysis Report attached as Annexure "A" to
this Report.
12. Remuneration Policy
In pursuance of the provisions of Section 178 of the Companies Act,
2013 and Listing Regulations, the Company has formulated a Remuneration Policy. The
Remuneration Policy, inter-alia, includes the appointment criteria & qualification
requirements, process for appointment & removal, retirement policy, remuneration
structure, etc. of the Directors including Managing Director and Whole Time Director(s),
Key Managerial Personnel ("KMP") and other senior management personnel of the
Company. As per the Remuneration Policy of the Company, a person proposed to be appointed
as Director, KMP or other senior management personnel should be a person of integrity with
a high level of ethical standards. In case of appointment as an Independent Director, the
person should fulfill the criteria of independence prescribed under the Companies Act,
2013, rules framed thereunder and the Listing Regulations. The Remuneration Policy also
contains provisions about the payment of fixed & variable components of remuneration
to the Managing Director and Whole Time Director(s) and payment of sitting fee &
commission to the Non-Executive Directors and describes fundamental principles for
determination of remuneration of senior management personnel and other employees which are
as follows:
a) demand-supply relationship of the concerned job expertise;
b) need of organization to retain and attract talent and its ability to
pay;
c) employees' social aspiration for enhancing standard of living; and
d) compensation trends in the industries in which the Company operates.
There has been no change in the Remuneration Policy during the year
under review. The Remuneration Policy of the Company is available on the website of the
Company at the weblink: http://chambalfertilisers.com/pdf/RemunerationPolicy.pdf.
13. Disclosures under the Companies Act, 2013,
Rules thereunder and Secretarial Standards
a) Your Company has not issued any shares during the Financial Year
2022-23.
b) No significant and material orders have been passed by the
regulators or courts or tribunals or statutory and quasi-judicial bodies impacting the
going concern status and Company's operations in future.
c) All related party transactions entered during the Financial Year
2022-23, were on arm's length basis and in the ordinary course of business. No material
related party transaction (in terms of the Company's Policy on Related Party Transactions)
was entered during the year by the Company and no contracts or arrangements were entered
during the year with related parties which are required to be disclosed under section
134(3)(h) of the Companies Act, 2013 in Form AOC-2.
d) A copy of annual return of the Company is available on the website
of the Company at the weblink: http://chambalfertilisers.com/annualreturns/
e) The following information is given in the Corporate Governance
Report attached as Annexure "B" to this Report:
i) The performance evaluation of the Board of Directors, the Committees
of the Board of Directors, Chairman of the Company and the individual Directors;
ii) The composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism/Whistle Blower
Policy.
f) The particulars of loans and guarantees given, security provided and
investments made, if any, under Section 186 of the Companies Act, 2013 are provided in
Notes to the Financial Statements.
g) During the Financial Year 2022-23, the auditors, secretarial
auditors and cost auditors have not reported any fraud under Section 143(12) of the
Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.
h) The Company has complied with the applicable Secretarial Standards
prescribed under Section 118(10) of the Companies Act, 2013.
i) The Company has complied with the provisions relating to the
constitution of Internal Complaints Committees under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
j) There have been no material changes and commitments affecting the
financial position of the Company, which have occurred between the end of the Financial
Year 2022-23 and the date of this Report.
14. Directors Responsibility Statement Your Directors hereby state
that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and no material departures have been made from the same;
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as at March 31, 2023
and of the profit and loss of the Company for the year ended March 31, 2023;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern
basis;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and
operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are adequate and operating
effectively.
15. Auditors and Cost Auditors
The Notes to the Financial Statements read with the Auditor's Reports
are self-explanatory and therefore do not call for further comments or explanations. There
has been no qualification, reservation, adverse remark or disclaimer in the Auditor's
Reports.
The shareholders of the Company, at the Annual General Meeting held on
September 13, 2022, had re-appointed M/s. Price Waterhouse Chartered Accountants LLP (Firm
Registration Number: 012754N/ N500016) as Auditor of the Company, to hold office for the
second term of 5 (five) consecutive years from the conclusion of Thirty Seventh Annual
General Meeting of the Company till the conclusion of Forty Second Annual General Meeting
of the Company.
The maintenance of cost records as specified by the Central Government
under sub-section (1) of Section 148 of the Companies Act, 2013, is required by the
Company in respect of production of fertilisers and accordingly such accounts and records
are made and maintained by the Company.
The Board of Directors of the Company has appointed M/s. K.G. Goyal
& Associates, Cost Accountants for conducting the audit of cost records of the
Company, as applicable, for the Financial Year ending March 31, 2024. As required under
the Companies Act, 2013 and Rules framed thereunder, your Directors are seeking
ratification from the members of the Company for the remuneration payable to M/s. K.G.
Goyal & Associates, Cost Accountants.
16. Secretarial Audit
The Board of Directors of the Company had appointed M/s. RMG &
Associates, Company Secretaries for conducting the secretarial audit of the Company for
the Financial Year 2022-23. The Secretarial Audit Report issued by the aforesaid
Secretarial Auditor is attached as Annexure "G" to this Report.
There has been no qualification, reservation, observation, disclaimer
or adverse remark in the Secretarial Audit Report.
17. Energy Conservation, Technology Absorption and
Foreign Exchange Earnings and Outgo
The Company undertakes continuous efforts to make its manufacturing
facilities and allied operations energy efficient and explores options in this regard from
time to time. The energy conservation can be achieved by using energy more efficiently or
by reducing the usage of energy. Gadepan-III plant of the Company is more energy efficient
in comparison to Gadepan-I and Gadepan -II plants. The requisite information with regard
to conservation of energy, technology absorption and foreign exchange earnings and outgo
in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure "H" attached
to this Report.
18. Risk Management
Your Company has developed and implemented a detailed Risk Management
Policy. The Risk Management Committee of the Company periodically reviews all risks,
finalise the risk document and monitors various risks of the Company including the risks,
if any, which may threaten the existence of the Company. The composition and terms of
reference of the Risk Management Committee are given in the Corporate Governance Report.
The risk document containing Key and Non-Key risks including way
forward for mitigation thereof, as approved by the Risk Management Committee, is also
reviewed by the Audit Committee and the Board of Directors periodically.
19. Deposits
During the year under review, the Company had not accepted any deposits
from the public under Chapter V of the Companies Act, 2013. There was no public deposit
outstanding as at the beginning and end of the Financial Year 2022-23.
20. Particulars of Employees
Your Company always strives to keep its human resources motivated and
encourages healthy relations, which is the base of a strong and long-running organization.
Your Company maintains a cordial work environment, promotes the culture of
entrepreneurship at all levels in the organization and encourages the employees to
contribute their best. The information required to be disclosed in pursuance of Section
197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is attached as Annexure "I" to this
Report.
21. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option
Scheme 2010, as amended and revised from time to time ("ESOS 2010") for grant of
stock options exercisable into not more than 41,62,000 equity shares of face value of Rs.
10/- each to eligible employees and Whole Time Director(s)/ Managing Director of the
Company. Each stock option when exercised is converted into one fully paid-up equity share
of Rs. 10/- of the Company.
The Company has not granted any stock options during the year under
review.
There has been no change in ESOS 2010 during the Financial Year
2022-23. ESOS 2010 is in compliance with Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 ("ESOP Regulations")
and implemented through CFCL Employees Welfare Trust ("Trust"). For the purpose
of ESOS 2010, the Trustee of the Trust was holding 68,000 equity shares of the Company as
on March 31, 2023 (3,27,000 equity shares as on March 31, 2022), being 0.02 % of the
paid-up share capital of the Company, which were equivalent to the outstanding stock
options. The ownership of these shares cannot be attributed to any particular employee
till he/ she exercises the stock options granted to him / her and the concerned shares are
transferred to him / her. Hence, the concerned employees to whom the stock options were
granted under ESOS 2010 cannot exercise voting rights in respect of the aforesaid shares
held by the Trustee of the Trust as such employees are not holders of such shares. The
Trustee has not exercised the voting rights in respect of the aforesaid shares during the
Financial Year 2022-23.
The disclosures required to be made under ESOP Regulations are given on
the website of the Company at the weblink:
https://www.chambalfertilisers.com/pdf/ESOP-Disclosure-2022-23.pdf. The disclosures in
respect of ESOS 2010 are also given in the Notes to the Financial Statements.
22. Business Responsibility and Sustainability
Report
In pursuance of the provisions of the Listing Regulations, the Business
Responsibility and Sustainability Report for the Financial Year 2022-23, describing the
initiatives taken by the Company from environmental, social and governance perspective,
forms part of the Annual Report.
23. Investor Service Centre
The in-house Investor Service Centre of your Company is located in the
Corporate Office of the Company at New Delhi which provides prompt and efficient service
to the investors. The Company takes various initiatives for investor awareness including
sending reminders to investors about their unclaimed dividends and shares due for transfer
to Investor Education and Protection Fund.
The equity shares of your Company are listed at National Stock Exchange
of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock
Exchanges for the Financial Year 2023-24.
The members are requested to refer to general shareholders' information
given in Corporate Governance Report attached hereto.
24. Acknowledgements
The Board of Directors wishes to place on record its appreciation of
the assistance and co- operation extended by all the stakeholders including the Department
of Fertilisers, Government of India, Government of Rajasthan and other State Governments,
Financial Institutions & Banks, investors and customers. The Board of Directors also
conveys its appreciation of the services rendered by each and every employee with utmost
commitment, hard work and dedication.
|
For and on behalf of the
Board of Directors of Chambal Fertilisers and Chemicals Limited |
|
|
Rita Menon |
Gaurav Mathur |
| Place : New Delhi |
Director |
Managing Director |
| Date : May 26, 2023 |
DIN: 00064714 |
DIN: 07610237 |
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