The Directors hereby present their Eighty-Fourth (84th) Annual Report on the
performance of Tata Chemicals Limited ('the Company') together with the Audited Financial
Statements for the Financial Year ('FY') ended March 31, 2023.
1. Financial Results
2. Dividend
For FY 2022-23, the Board of Directors has recommended a dividend of Rs.17.50 per share
i.e. 175% (previous year Rs.12.50 per share i.e. 125%) on the Ordinary Shares of the
Company. If declared at the ensuing Annual General Meeting ('AGM'), the total dividend
outgo during FY 2023-24 would amount to Rs.446 crore (previous year Rs.318 crore).
3. Performance Review & State of Company's Affairs
3.1 Consolidated:
On a consolidated basis, the revenue from operations increased to Rs.16,789 crore in FY
2022-23 from Rs.12,622 crore in FY 2021-22. The increase was mainly on account of higher
soda ash prices across geographies. The profit before tax from continuing operations
increased to Rs.2,740 crore in FY 2022-23 from Rs.1,667 crore in FY 2021-22, up by 64%.
3.2 Standalone:
On a standalone basis, the revenue from operations increased to Rs.4,930 crore in FY
2022-23 from Rs.3,721 crore in FY 2021-22. The increase was mainly on account of higher
soda ash prices prevailing throughout the year. Profit before tax from continuing
operations stood at Rs.1,265 crore in FY 2022-23 against Rs.988 crore in FY 2021-22, up by
28%.
For more details on the Consolidated and Standalone performance, please refer to
Management Discussion & Analysis.
4. Management Discussion & Analysis
The Management Discussion & Analysis, as required in terms of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ('SEBI Listing Regulations'), forms part of this Integrated Annual Report.
5. Business Overview
The Company has two business segments viz. Basic Chemistry Products and Specialty
Products.
Basic Chemistry segment comprises inorganic chemicals led by Soda Ash, Salt and Sodium
Bicarbonate. Scale, supply chain efficiencies and customer relationships drive this
business. This segment has manufacturing operations spread across four continents viz.
North America (USA), Europe (UK), Africa (Kenya) and Asia (India). These inorganic
chemicals primarily service industries such as Glass (Automotive, Architectural &
Container), Detergent, Food, Pharma, Animal Feed and Industrial Chemicals.
Specialty Products portfolio is driven by Chemistry-led differentiation. The Company
has three key products in this segment comprising Specialty Silica, Prebiotics and Agri
inputs. Specialty Silica range serves Food, Rubber and Tyre industry. Prebiotics and
Formulations are targeted at Food, Animal Feed and Pharmaceutical applications. Rallis
India Limited ('Rallis'), a listed subsidiary of the Company, produces and markets range
of Agri inputs including Seeds for Indian and overseas farmers.
The Company is increasing its focus on Green Chemistry with Sustainability as a key
driver of value. Basic Chemistry will scale further by adding capacities of the core
products and leveraging cost competitiveness. The growth in Soda Ash demand is also driven
by Solar Glass (used in Solar Electricity generation) and Lithium Carbonate. The Specialty
Products will focus on maximising value with a sustainable portfolio, low carbon footprint
Specialty Silica and Prebiotics based on fermentation platform.
5.1 Basic Chemistry Products Standalone (India)
For FY 2022-23, the revenues from the Basic Chemistry Products business stood at
Rs.4,698 crore, higher by 35%.
Soda Ash
Indian soda ash demand remained steady during FY 2022-23, growing at around 4.0-4.5%,
driven mainly by container, flat and solar glass segments. Considering annual solar
installations of 20-25 GW, solar glass is expected to remain a key demand driver.
Increasing supply chain costs and rise in global soda ash prices resulted in import
parcels coming at higher prices.
Domestic availability remained normal with no major outages and high operating rates
due to steady demand. Availability of imported material was tight in the first half of the
year but started to ease in second half of the year with easing of supply chains and lower
ocean freight rates. Coal prices remained volatile and surged after the Russia-Ukraine
conflict. This kept the production costs higher, though some of this was passed on to
customers. Prices began to fall in the second half, but high inflationary pressures kept
demand and margins under control. Soda ash realisations improved during FY 2022-23
resulting in increase in revenues and EBITDA over FY 2021-22. Higher than expected demand
coupled with supply constraints and a pressure of increased input and energy cost led to
increased pricing.
Sales of soda ash for FY 2022-23 stood at 6.5 lakh Metric Tonne ('MT'), a decrease of
5% over the previous year.
Sodium Bicarbonate
Sales of sodium bicarbonate stood at 1.2 lakh MT, same as last year.
The Company markets four value-added grades of Bicarb - Medikarb (pharma grade),
Sodakarb (food grade), Alkakarb (feed grade) and Speckarb (industrial grade).
Salt
The demand for salt was higher from the Company's key customer, Tata Consumer Products
Limited, during the year and the production was increased appropriately to meet the
increased requirement.The Company recorded highest ever production of salt at 13.2 lakh MT
during FY 2022-23. In addition, a project is under implementation to increase the salt
manufacturing capacity to meet the projected demand increase. On the manufacturing side,
solar salt production was affected due to brine dilution owing to extended rains and
flooding.
Other Products
Sale of cement stood at 4.8 lakh MT, an improvement of 13.7% over previous year.
Bromine production was impacted due to bittern dilution.
Subsidiaries
Tata Chemicals North America Inc., USA ('TCNA') (as per USGAAP)
During FY 2022-23, overall revenue for TCNA increased by 32% to US$ 655.7 million ( Rs.
5,271 crore) from US$495.0 million ( Rs. 3,688 crore) due to increased realisation
offsetting a small volume reduction of 2%.
EBITDA registered an increase of 51% to US$ 160.3 million ( Rs. 1,288 crore) against
US$ 106.0 million ( Rs. 790 crore) in FY 2021-22. This increase in business performance
led to TCNA registering a profit after tax and non-controlling interest of US$ 90.7
million (T 729 crore) during FY 2022-23 compared to a profit of US$ 49.9 million ( Rs. 372
crore) in FY 2021-22.
TCE Group Limited, UK ('TCE group') (as per IFRS)
TCE Group Limited's business consists of soda ash, sodium bicarbonate, and energy units
and British Salt Limited which manufactures and sells food and industrial grade white
salt. Together they are referred to as 'UK Operations' of the Company in this Report.
The turnover from the UK Operations for FY 2022-23 was ? 271.5 million ( Rs. 2,629
crore) against ? 191.5 million ( Rs. 1,949 crore) in the previous year, registering a
growth of 42%.
In a year dominated by high and volatile natural gas prices, soda ash sales volumes
were steady throughout the year with slight softening of demand in the chemicals and
construction sectors witnessed later in the year. Sales of high-grade sodium bicarbonate
remained consistent compared to FY 2021-22, with some softness latterly in relation to
lower technical grades in the Central & Western Europe market. Prices for both
products were substantially higher to reflect higher raw material and energy cost inputs.
The UK Operations maintained core UK market share with slightly reduced exports into
Europe in line with the above. The combined heat and power (CHP) facility at Winnington
performed well through the year generating good electricity margins despite volatile and
high natural gas prices throughout the period.
In the Salt business, sales volumes were steady amid rising energy costs and price was
increased in the market to reflect the same.
EBITDA for FY 2022-23 for the UK Operations was ? 63.6 million ( Rs. 615 crore)
against ? 11.6 million ( Rs. 118 crore) and the profit after tax was ? 45.0 million (
Rs. 435 crore) against the loss off 8.4 million ( Rs. 85 crore) in the previous year.
Tata Chemicals Magadi Limited, Kenya ('TCML')
(as per IFRS)
During FY 2022-23, sales volumes were lower by 10% over FY 2021-22. TCML achieved a
revenue of US$ 117.6 million ( Rs. 945 crore) for FY 2022-23 as against revenue of US$
77.4 million ( Rs. 577 crore) in the previous year, an increase of 52%. For FY
2022-23,TCML registered an EBITDA of US$ 58.3 million ( Rs. 468 crore) against the EBITDA
of US$ 19.2 million ( Rs. 143 crore) in the previous year, higher by 204%. The increase in
EBITDA was due to better realisations and cost control.TCML recorded a net profit of US$
55.9 million ( Rs. 450 crore) in FY 2022-23 against a net profit of US$ 12.7 million ( Rs.
94 crore) in FY 2021-22.
5.2 Specialty Products
Standalone
Silica
Tyre demand during FY 2022-23 had normalised. Tyre labelling norms will continue to
drive demand of highly dispersible silica (HDS). Silica margins in FY 2022-23 were
impacted by a steep increase in raw material and energy costs. The Company's primary focus
will be on scaling use of HDS in tyre to protect overall realisations.
Prebiotics & Formulations
The Company stabilised its operations at its state-of- the-art greenfield facility in
Mambattu, Andhra Pradesh. Food safety certifications (FSSAI, FSSC 22000, FAMI QS, Halal,
Kosher), strong scientific backing, regulatory support, together with ongoing application
development have enabled the Company to serve customers across the globe.
In addition to continuing growth from the USA and South East Asia markets, there has
been encouraging potential also opening up from the European Union. The facility has been
qualified by some global customers placing the Company on the path of achieving full
capacity utilisation in the coming year.There were specific intervention projects
undertaken to improve efficiencies and cost of operations.
Subsidiary
Rallis India Limited ('Ranis')
(as perTCL consolidated books)
Rallis India Limited, the Company's listed subsidiary, has been serving Indian farmers
and Global markets through its products in Crop Protection, Crop Nutrition and Hybrid
Seeds. Rallis achieved revenue from operations of Rs.2,967 crore in FY 2022-23 compared to
Rs.2,602 crore in FY 2021-22, an increase of 14%. The profit after tax stood at Rs.92
crore, down by 44% against a profit after tax of Rs.164 crore in FY 2021-22.
During FY 2022-23, the Domestic Crop care business of Rallis achieved a revenue of
Rs.1,643 crore as against Rs. 1,468 crore in FY 2021-22, an increase of 11.9%. This is in
the context of the industry facing headwinds from erratic rainfall and lower pest
infestation across the majority of the crops. Large part of the growth in the
Agrochemicals industry in general and Rallis in particular has been driven by price
growth.
The International business of Rallis grew by 24.5% to Rs.979 crore in FY 2022-23 from
Rs.787 crore in FY 2021-22. Growth was competitive and well balanced between price and
volume.
Revenue of the Seeds division of Rallis decreased by 1.3% overthe previous year to
Rs.345 crore. The business continued to witness challenges for the second year in a row.
Reduced demand for Hybrid Paddy and the presence of illegal cotton seeds impacted the
industry. Profitability was impacted due to inventory provision & impairments of
intangibles of Rs.83 crore.Their portfolio has also faced challenges with some of the
product launches not scaling up as per the expectations. High fixed costs have also
limited operating leverage impacting the overall profitability of the business.
6. Finance and Credit Ratings
Amid the geopolitical conflict and a global macro-economic scenario of pressing energy
inputs costs, rising interest rates, high inflation and supply-chain disruptions, the
Company kept the focus on accelerated pre-payment of loans at its overseas subsidiaries
while at the same time proactively responded to the global situation by negotiating
competitive margins during refinances, arranging appropriate trade finance facilities to
realign with the working capital requirements and broadening the investment avenues to
enhance blended yield on deployment of surplus cash balances.
The Company's overseas subsidiary,Tata Chemicals Magadi Limited, Kenya, pre-paid its
entire term loan outstanding of US$ 36 million during the year. Term loans at Tata
Chemicals International Pte Limited ('TCIPL'), Singapore and Homefield Pvt UK Limited
amounting to US$ 200 million and US$ 28.5 million respectively, were refinanced and
consolidated at TCIPL, Singapore. ? 80 million term loan at UK was refinanced with a new
loan of Rs. 70 million and balance was repaid. Tata Chemicals North America has repaid US$
85 million, ahead of the schedule, during the year under review.
During FY 2022-23, Rallis, a subsidiary and IMACID, a joint venture, paid dividends of
Rs. 29 crore (FY 2021-22: Rs. 29 crore) and Rs.92 crore (FY 2021-22: Rs.28 crore)
respectively to the Company. Tata Chemicals South Africa (Pty) Limited paid a dividend of
South African Rand 5.0 million (Rs.2 crore) [FY 2021-22: South African Rand 30.0 million
(Rs.15 crore)]. TC Africa Holdings Limited paid a dividend of Rs. 0.3 million (Rs.3 crore)
[FY 2021-22: Rs.1.5 million (Rs.15 crore)].
For the year under review, the Company's credit ratings were reaffirmed. Fitch Ratings
upgraded the outlook to 'Positive'.
The Company as on March 31, 2023 had the following credit ratings:
Long-Term Corporate Family Rating - Foreign Currency of Ba1/Stable from Moody's
Investors Service Long Term Foreign Currency Issuer Default Rating (IDR) of BB+ with
Positive outlook from Fitch Ratings Long Term bank facilities (fund-based limits) of
Rs.1,300 crore and short-term bank facilities (non-fund based limits) of Rs. 2,000 crore
are rated at CARE AA+ (Outlook: Stable) and CARE A1 + respectively, by CARE Ratings and
Commercial Paper of Rs.100 crore is rated at CRISILA1 + by CRISIL Ratings
7. Dividend Distribution Policy
In accordance with Regulation 43A of the SEBI Listing Regulations, the Board of
Directors of the Company has adopted a Dividend Distribution Policy which endeavours for
fairness, consistency and sustainability while distributing profits to the shareholders.
The same is available on the Company's website at https://www.tatachemicals.com/
DividendDistPolicy.htm.
8. Transfer to Reserves
The Board of Directors has decided to retain the entire amount of profits for FY
2022-23 in the retained earnings.
9. Deposits from Public
The Company has not accepted any deposits from public and as such no amount on account
of principal or interest on deposits from public was outstanding as on March 31,2023.
10. Business Responsibility & Sustainability Report
The Company endeavours to cater to the needs of the communities it operates in thereby
creating maximum value for the society along with conducting its business in a way that
creates a positive impact and enhances stakeholder value. As per Regulation 34(2)(f) of
the SEBI Listing Regulations, the Business Responsibility & Sustainability Report
depicting initiatives taken by the Company from an environmental, social and governance
perspective which has been assured by Ernst & Young LLP, forms part of this Integrated
Annual Report.
11. Related Party Transactions
In line with the requirements of the Companies Act, 2013 ('the Act') and SEBI Listing
Regulations, as amended from time to time, the Company has formulated a Policy on Related
Party Transactions ('RPT Policy') for identifying, reviewing, approving and monitoring of
Related Party Transactions and the same is available on the Company's website at
https://www.tatachemicals.com/RPTPolicy.htm.
All related party transactions entered into during FY 2022-23 were on arm's length
basis and in the ordinary course of business and were reviewed and approved by the Audit
Committee. With a view to ensure continuity of day-to-day operations, an omnibus approval
is obtained for related party transactions which are of repetitive nature and entered in
the ordinary course of business and on an arm's length basis. A statement giving details
of all related party transactions entered pursuant to the omnibus approval so granted is
placed before the Audit Committee on a quarterly basis for its review. The related party
transactions entered into pursuant to the omnibus approval so granted are also reviewed as
part of the internal audit by an independent external firm on a half-yearly basis.
During the year under review, the Company did not enter into any contracts or
arrangements with related parties and no material related party transactions were entered
into pursuant to Section 188(1) of the Act read with the relevant rule. Accordingly, the
disclosure of related party transactions as required under Section 134(3)(h) of the Act
read with Rule 8(2) of the Companies (Accounts) Rules,2014in Form AOC-2 is not applicable
to the Company for FY 2022-23 and hence does not form part of this Integrated Annual
Report.
In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details
of related party transactions on a consolidated basis as per the specified format to the
stock exchanges on a half-yearly basis.
The details of the transactions with related parties are provided in the accompanying
Financial Statements.
12. Risk Management
Risk Management at Tata Chemicals forms an integral part of Management focus.
The Risk Management Policy of the Company, which is approved by the Risk Management
Committee of the Board ('RMC) and the Board of Directors, provides the framework of
Enterprise Risk Management ('ERM') by describing mechanisms for the proactive
identification and prioritisation of risks based on the scanning of the external
environment and continuous monitoring of internal risk factors. The ERM framework
identifies, evaluates, manages and reports risks arising from the Company's operations and
exogenous factors.
The Company has deployed bottom-up and top-down approaches to drive enterprise-wide
risk management. The bottom-up process includes identification and regular assessment of
risks by the respective business units and implementation of mitigation strategies. This
is complemented by a top-down approach where the Risk Management Group (Senior Leadership
Team) as well as the RMC identifies and assesses long-term, strategic and macro risks for
the Company.
The RMC oversees the risk management process in the Company. The RMC is chaired by an
Independent Director and the Chairperson of the Audit Committee is also a Member of the
RMC. Further, the Chairman of the RMC briefs the Board at its Meetings about the
significant discussions at each of the RMC Meetings. This robust governance structure has
also helped in the integration of the ERM with the Company's Strategic Planning Process
where emerging risks are used as inputs in such process. Identified risks are used as one
of the key inputs in the strategy and business plans.
A systematic review of risks identified is subject to a series of focussed meetings of
the empowered Risk Management Group (Senior Leadership Team), respective Business-level /
Subsidiary-level Committees and the RMC. The RMC meets periodically to review all the key
risks and assess the status of mitigation measures.
Considering the volatility, uncertainties and unprecedented challenges involved in the
businesses, the risk management function has gained more importance over the last few
years and it is imperative to manage and address such challenges effectively. With a view
to have a focussed approach in doing so, the Company has appointed a Chief Risk Officer to
oversee the Risk Management function of the Company.
Based on benchmarking and inputs from global standards on ERM, the Risk Management
process has been deployed across geographies and businesses.
Some of the risks identified are set out in the Management Discussion & Analysis
which forms part of this Integrated Annual Report.
13. Corporate Social Responsibility
The Corporate Social Responsibility ('CSR') activities of the Company are governed
through the Corporate Social Responsibility Policy ('CSR Policy') approved by the Board.
The CSR Policy guides in designing CSR activities for improving quality of life of society
and conserving the environment and biodiversity in a sustainable manner. The CSR Committee
of the Board oversees the implementation of CSR Projects in line with the Company's CSR
Policy.
The Company has adopted a participatory approach in designing need-based CSR programmes
which are implemented through Tata Chemicals Society for Rural Development ('TCSRD') in
partnership with the Tata Trusts and with various government and non-government
institutions.
The Company's CSR programme framework focusses on building economic capital, ensuring
environmental integrity, enablers for social, economic and environmental development and
building social capital.
Building economic capital: The Company focusses on poverty alleviation and creating
livelihoods, linked to farm and non-farm based activities.
Ensuring environmental integrity: The Company's main focus is on management of
natural resources and conservation of environment. The key programmes include land and
water management activities, waste management, preservation of biodiversity and mitigation
of climate change impacts.
Enablers for social, economic and environmental development:
The Company's programmes focus on health and nutrition, education and drinking water.
The Company conducts regular health and nutrition camps and also provides health care
services. The education programme focusses on students starting from primary to the
post-graduation level. Educational support is provided for enrolment of children and
improving quality of education. The Company helps to provide clean water through roof
rainwater harvesting structures, repair of hand pumps, installation and maintenance of
drinking water pipelines, supporting households with water purifier systems through
SwachTarang Project.
Building social capital: Building the social capital for long- term sustainability
is a key cross-cutting theme in all these programmes.
Women empowerment, reducing inequality of marginalised communities (through Affirmative
Action), partnerships for achieving goals and setting up sustainable social enterprise
models (Okhai and Ncourage Social Enterprise Foundation) are key initiatives for achieving
the same.
The Company also endeavours to respond to disasters that affect any part of India and
in the neighbourhood of all its manufacturing plants.
The CSR Policy is available on the website of the Company at
https://www.tatachemicals.com/CSRPolicy2021 .htm.
The Annual Report on CSR activities for FY 2022-23 is enclosed as Annexure 1 to
this Report.
14. Whistleblower Policy and Vigil Mechanism
The Company has devised an effective whistleblower mechanism enabling stakeholders,
including individual employees and their representative bodies, to communicate their
concerns about illegal or unethical practices freely. The Company has also established a
vigil mechanism for stakeholders to report concerns about any unethical behaviour, actual
or suspected fraud or violation of the Company's code of conduct. Protected disclosures
can be made by a whistleblower through several channels. The Whistleblower Policy of the
Company provides for adequate safeguards against victimisation of employees whoavail of
the mechanism. No personnel of theCompany has been denied access to the Chairperson of the
Audit Committee. The Policy also facilitates all employees of the Company to report any
instance of leak of unpublished price sensitive information.
A dedicated third-party Ethics Helpline has been setup which is managed by an
independent professional organisation for confidentially raising any ethical concerns or
practices that violate the Tata Code of Conduct. The Ethics helpline services include
toll-free number, web access, postal services and e-mail facilities.
The Policy is available on the website of the Company at:
https://www.tatachemicals.com/WhistleblowerPolicy.htm.
15. Prevention of Sexual Harassment
Pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition &
Redressal) Act, 2013 ('POSH Act') and Rules made thereunder, the Company has formed an
Internal Committee ('1C') for its workplaces to address complaints pertaining to sexual
harassment in accordance with the POSH Act. The Company has a detailed policy for
prevention of sexual harassment at workplace which ensures a free and fair enquiry process
with clear timelines for resolution.
The Policy is uploaded on the website of the Company at
http://www.tatachemicals.com/POSHPolicy.htm.
No complaints were pending at the beginning of the financial year. During the year
under review, one concern was reported which was investigated and appropriate action was
taken. No complaint was pending as at the end of the financial year.
To build awareness in this area, the Company has been conducting awareness sessions
during induction of new employees and also periodically for permanent employees,
third-party employees and contract workmen through online modules and webinars.
16. Particulars of Loans, Guarantees and Investments
During the year under review, the Company has given a loan of Rs. 150crore to Tata
International Limited, carrying a coupon of 9.2% p.a. The proceeds on maturity of existing
Non-Convertible Debentures of Rs. 150 crore held in Tata International Limited were timely
received.
Pursuant to the merger of Bio Energy Ventures-1 (Mauritius) Pvt. Ltd., erstwhile
subsidiary ('Bio Energy') into the Company, a loan to Homefield Pvt UK Ltd of US$ 92.52
million ( Rs. 701 crore) and an investment in Preference shares of Homefield Pvt UK Ltd of
US$ 17.85 million ( Rs. 116 crore), got transferred to the Company as directly held
assets. Both these assets were earlier impaired in the books of Bio Energy and hence
reflected without any value in the Company's books upon merger. Subsequently, in line with
the procedural requirements under the Cross Border Merger guidelines, the loan and the
Preference shares were transferred during theyeartoTata Chemicals International Pte. Ltd.,
Singapore.
There were no investments in equity shares during the year under review.
The Company has not extended any Corporate Guarantee during the year under review.
Details ofloans,guaranteesand investments covered under the provisions of Section 186
of the Act are given in the notes to the Financial Statements.
17. Consolidated Financial Statements
The Consolidated Financial Statements of the Company and its subsidiaries for FY
2022-23 are prepared in compliance with the applicable provisions of the Act and as
stipulated under Regulation 33 of the SEBI Listing Regulations as well as in accordance
with the Indian Accounting Standards notified under the Companies (Indian Accounting
Standards) Rules, 2015.The Audited Consolidated Financial Statements together with the
Auditor's Report thereon form part of this Integrated Annual Report.
Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the
Company, Consolidated Financial Statements along with relevant documents and separate
annual accounts in respect of subsidiaries are available on the website of the Company.
The annual accounts of the subsidiaries and related detailed information will be made
available to investors seeking information till the date of the AGM. They are also
available on the website of the Company at https://www.
tatachemicals.com/investors/agm-documents.
18. Subsidiary Companies, Joint Ventures and Associate
As on March 31, 2023, the Company had 27 (direct and indirect) subsidiaries (2 in India
and 25 overseas), 3 Joint Ventures ('JV') and 1 Associate.There has been no material
change in the nature of the business of the subsidiaries.
During the year under review, Cheshire Compressor Limited, wholly-owned step-down
subsidiary was dissolved and accordingly ceased to be a subsidiary of the Company with
effect from March 14,2023.
Subsequent to the year end, Tata Chemicals (Soda Ash) Partners [a general partnership
formed under the laws of the State of Delaware (USA)] was converted into a Limited
Liability Corporation (LLC) and renamed Tata Chemicals Soda Ash Partners LLC with effect
from April 3, 2023. Further, TCSAP LLC, another subsidiary, was merged with the above
subsidiary with effect from April 3,2023.
Pursuant to SEBI Listing Regulations, the Company's Policy on determining material
subsidiaries is uploaded on the Company's website at https://www.tatachemicals.com/
policy-on-determining-material-subsidiaries.pdf.
A report on the financial position of each of the subsidiaries, joint ventures and
associate as per Section 129(3) of the Act is provided in Form AOC-1 enclosed to the
Financial Statements.
19. Internal Financial Controls
Internal financial control systems of the Company are commensurate with its size and
the nature of its operations. These have been designed to provide reasonable assurance
with regard to recording and providing reliable financial and operational information,
complying with applicable accounting standards and relevant statutes, safeguarding assets
from unauthorised use, executing transactions with properauthorisation and ensuring
compliance of corporate policies. The Company has a well-defined delegation of authority
with specified limits for approval of expenditure, both capital and revenue. The Company
uses an established Enterprise Resource Planning (ERP) system to record day-to-day
transactions for accounting and financial reporting.
The Audit Committee deliberated with the members of the Management, considered the
systems as laid down and met the internal audit team and statutory auditors to ascertain
their views on the internal financial control systems. The Audit Committee satisfied
itself as to the adequacy and effectiveness of the internal financial control systems as
laid down and kept the Board of Directors informed. However, the Company recognises that
no matter howthe internal control frameworkis.it has inherent limitations and accordingly,
periodic audits and reviews ensure that such systems are updated on regular intervals.
Details of internal control system are given in the Management Discussion &
Analysis which forms part of this Integrated Annual Report.
20. Directors' Responsibility Statement
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, work performed by the internal, statutory, cost
and secretarial auditors and external consultant(s), including audit of internal financial
controls over financial reporting by the statutory auditors and the reviews performed by
the Management and the relevant Board Committees, including the Audit Committee, the Board
is of the opinion that the Company's internal financial controls were adequate and
effective during FY 2022-23.
Accordingly, pursuant to Sections 134(3)(c) and 134(5) of the Act, the Directors, to
the best of their knowledge and ability, confirm that for the year ended March 31,2023:
a) in the preparation of the annual accounts, the applicable accounting standards have
been followed and that there are no material departures;
b) they have selected such accounting policies and applied them consistently and made
judgements and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and of the
profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
21. Corporate Governance and Compliance
The Company follows the best governance practices to boost long-term shareholder value
and respect minority rights.
The Company considers the same as its inherent responsibility to disclose timely and
accurate information to its stakeholders regarding its operations and performance, as well
as the leadership and governance of the Company. The Company is committed to the Tata Code
of Conduct which articulates values and ideals that guide and govern the conduct of the
Tata companies as well as its employees in all matters relating to business. The Company's
overall governance framework, systems and processes reflect and support its Mission,
Vision and Values.
At Tata Chemicals, human rights is also an integral aspect of doing business and the
Company is committed to respect and protect human rights to remediate adverse human rights
impacts that may be resulting from or caused by the Company's businesses. In furtherance
to this, the Company has adopted the 'Tata Business and Human Rights Policy' which aligns
with the principles contained in the Universal Declaration of Human Rights, International
Labour Organsations (ILO), Declaration on Fundamental Principles and Rights at Work and
the United Nations Guiding Principles on Business and Human Rights and is consistent with
the Tata Code of Conduct.
The Company's governance guidelines cover aspects mainly relating to composition and
role of the Board, Chairman and Directors, Board diversity, retirement age for the
Directors and Committees of the Board.
The Company has in place an online compliance management system for monitoring the
compliances across its various plants and offices. A compliance certificate is also placed
before the Board of Directors every quarter. In compliance with the SEBI Listing
Regulations, the Corporate Governance Report and the Secretarial Auditor's Certificate
form part of this Integrated Annual Report.
22. Directors and Key Managerial Personnel Directors
Re-appointment
In accordance with the provisions of Section 152 of the Act and the Articles of
Association of the Company, Mr. N Chandrasekaran, Non-Executive, Non-Independent Director
(Chairman) of the Company, retires by rotation at the ensuing AGM and being eligible, has
offered himself for re-appointment.
Ms. Padmini Khare Kaicker (DIN: 00296388) completed her first term of five years as
Independent Director of the Company on March 31,2023. On the recommendation of the
Nomination & Remuneration Committee ('NRC') and the Board of Directors, the
Shareholders of the Company on March 23, 2023 by way of a special resolution passed
through postal ballot, approved the re-appointment of Ms. Kaicker as Independent Director
of the Company for a second term of five years commencing from April 1,2023 upto March 31,
2028.
Mr. Zarir Langrana (DIN: 06362438) was appointed as the Executive Director of the
Company for a period of five years effective April 1,2018 upto March 31,2023. Based on the
recommendation of the NRC, the Board of Directors, at its meeting held on February 1,
2023, re-appointed Mr. Langrana as the Executive Director for a further period effective
April 1, 2023 upto February 29, 2024 (i.e. till he attains the retirement age in line with
the Retirement Policy adopted by the Company), subject to approval of the shareholders. On
March 23, 2023, the Shareholders of the Company, by way of a postal ballot, approved the
reappointment of Mr. Langrana as Executive Director for the above-mentioned tenure.
Independent Directors
In terms of Section 149 of the Act, Ms. Vibha Paul Rishi, Ms. Padmini Khare Kaicker,
Dr. C. V. Natraj, Mr. K. B. S. Anand and Mr. Rajiv Dube are the Independent Directors of
the Company. The Company has received declarations from all the Independent Directors
confirming that they meet the criteria of independence as prescribed under Section 149(6)
of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and are independent of
the Management. In terms of Regulation 25(8) of the SEBI Listing Regulations, they have
confirmed that they are not aware of any circumstance or situation which exist or may be
reasonably anticipated, that could impair or impact their ability to discharge their
duties with an objective independent judgement and without any external influence. The
Board of Directors of the Company has taken on record the declaration and confirmation
submitted by the Independent Directors after undertaking due assessment of the veracity of
the same.
The Board is of the opinion that all Directors including the Independent Directors of
the Company possess requisite qualifications, integrity, expertise and experience in the
fields of science and technology, digitalisation, strategy, finance, governance, human
resources, safety, sustainability, etc.
The Independent Directors of the Company have confirmed that they have enrolled
themselves in the Independent Directors' Databank maintained with the Indian Institute of
Corporate Affairs ('IICA') in terms of Section 150 of the Act read with Rule 6 of the
Companies (Appointment & Qualification of Directors) Rules, 2014.
Details of Familiarisation Programme for the Independent Directors are provided
separately in the Corporate Governance Report which forms part of this Integrated Annual
Report.
During the year under review, the Non-Executive Directors of the Company had no
pecuniary relationship or transactions with the Company, other than sitting fees,
commission and reimbursement of expenses incurred by them for the purpose of attending
meetings of the Board/Committees of the Company.
Key Managerial Personnel ('KMP')
In terms of the provisions of Section 2(51) and Section 203 of the Act, the following
are the KMP of the Company:
Mr. R. Mukundan, Managing Director & CEO
Mr. Zarir Langrana, Executive Director
Mr. Nandakumar S. Tirumalai, Chief Financial Officer
Mr. Rajiv Chandan, Chief General Counsel & Company Secretary
Procedure for Nomination and Appointment of Directors
The NRC is responsible for developing competency requirements for the Board based on
the industry and strategy of the Company. The Board composition analysis reflects in-depth
understanding of the Company, including its strategies, environment, operations, financial
condition and compliance requirements.
The Committee is also responsible for reviewing the profiles of potential candidates
vis-a-vis the required competencies and meeting the potential candidates prior to making
recommendations of their nomination to the Board. At the time of appointment, specific
requirements for the position including expert knowledge expected is communicated to the
appointee.
The list of core skills, expertise and competencies of the Board of Directors as are
required in the context of the businesses and sectors applicable to the Company are
identified by the Board and are available with the Board. The Directors have also reviewed
the list of core skills, expertise and competencies which were mapped against them.
The same is disclosed in the Corporate Governance Report forming part of this
Integrated Annual Report.
Scientific Advisory Board
The Board has constituted a Scientific Advisory Board consisting of scientists with
relevant domain expertise under the Chairmanship of Dr. C.V. Natraj, Independent Director
of the Company with a view to synergise the Research & Development initiatives at the
Company's Innovation Centre and Research & Development Centres of Rallis India Limited
(Crop Care and Seeds). Further details in this regard are provided in the Corporate
Governance Report.
Criteria for determining Qualifications, Positive Attributes and Independence of a
Director
The NRC has formulated the criteria for determining qualifications, positive attributes
and independence of Directors in terms of provisions of Section 178(3) of the Act and the
SEBI Listing Regulations. The same is available at
https://www.tatachemicals.com/criteriadetermining.pdf.
Board Evaluation
The Board has carried out the annual evaluation of its own performance and that of its
Committees and individual Directors for the year pursuant to the provisions of the Act and
the SEBI Listing Regulations. The exercise of performance evaluation was carried out
electronically through a secure application. This resulted in saving paper, reducing the
cycle time to make documents available to the Board/Committee Members and in increasing
confidentiality and accuracy.
The performance of the Board and individual Directors was evaluated by the Board after
seeking inputs from all the Directors. The criteria for performance evaluation of the
Board included aspects such as Board composition and structure, effectiveness of Board
processes, contribution in the long-term strategic planning, etc. The performance of the
Committees was evaluated by the Board after seeking inputs from the Committee Members. The
criteria for performance evaluation are broadly based on the Guidance Note issued by SEBI
on Board Evaluation.
The Chairman of the Board had one-on-one meetings with each Independent Director and
the Chairman of the NRC had one-on-one meetings with each Executive and Non-Executive,
Non-Independent Directors.
In a separate meeting, the Independent Directors evaluated the performance of
Non-Independent Directors and performance of the Board as a whole including the Chairman
of the Board taking into account the views of Executive Directors and Non-Executive
Directors. The NRC reviewed the performance of the Board, its Committees and of the
Individual Directors. The same was discussed in the Board Meeting that followed the
meeting of the Independent Directors and the NRC, at which the feedback received from the
Directors on the performance of the Board and its Committees was also discussed.
The Company follows a practice of addressing each of the observations and suggestions
by drawing up an action plan and monitoring its implementation through the Action Taken
Report which is reviewed by the Board of Directors from time to time.
23. Remuneration Policy
The Company has in place a Remuneration Policy for the Directors, KMP and other
employees pursuant to the provisions of the Actand theSEBI Listing Regulations which is
available at https://www.tatachemicals.com/rempolicy.
24. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign
exchange earnings and outgo as required to be disclosed pursuant to the provisions of
Section 134 of the Act read with the Companies (Accounts) Rules, 2014 are provided in Annexure
2forming part of this Report.
25. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 ('Rules') are enclosed as Annexure 3 forming part
of this Report. The statement containing particulars of employees as required under
Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Rules also forms part of
this Report. Further, the Report and the Accounts are being sentto the Members excluding
the aforesaid statement. In terms of Section 136 of the Act, the said statement will be
open for inspection upon request by the Members. Any Member interested in obtaining such
particulars may write to the Company Secretary at investors@tatachemicals.com.
26. Auditors
I. Statutory Auditors
Atthe 83,d AGM held on July, 6,2022, B S R & Co. LLP, Chartered Accountants (Firm
Registration No. 101248W/W-100022) were appointed as Statutory Auditors of the Company for
a second term of five (5) consecutive years upto the 88th AGM by the Members.
The report of the Statutory Auditors along with notes to Schedules is a part of this
Integrated Annual Report. There has been no qualification, reservation, adverse remark or
disclaimer given by the Auditors in their Report.
II. Cost Auditors
As perSection 148 of the Act read with the Companies (Cost Records and Audit) Rules,
2014, the Company is required to prepare, maintain as well as have the audit of its cost
records conducted bya Cost Accountant and accordingly. it has made and maintained such
cost accounts and records. The Board, on the recommendation of the Audit Committee has
appointed D. C. Dave & Co., Cost Accountants (Firm Registration No. 000611) ['D. C.
Dave & Co.'] as the Cost Auditors of the Company for FY 2023-24.
D. C. Dave & Co. have confirmed that they are free from disqualification specified
under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and
that the appointment meets the requirements of the Act. They have further confirmed their
independent status and an arm's length relationship with the Company.
The remuneration payable to the Cost Auditors is required to be placed before the
Members in a General Meeting for their ratification. Accordingly, a resolution seeking
Members' ratification for the remuneration payable to D. C. Dave & Co., forms part of
the Notice of the 84th AGM forming part of this Integrated Annual Report.
III. Secretarial Auditors
In terms of Section 204 of the Act and Rules made thereunder, M/s. Parikh &
Associates, Practicing Company Secretaries (Firm Registration No. P1988MH009800) have been
appointed as Secretarial Auditors of the Company to carry out the secretarial audit for FY
2023-24. The report of the Secretarial Auditors for FY 2022-23 is enclosed as Annexure
4 forming part of this Report.
There has been no qualification, reservation, adverse remark or disclaimer given by the
Secretarial Auditors in their Report.
27. Reporting of Fraud
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial
Auditors have not reported any instances of frauds committed in the Company by its
officers or employees to the Audit Committee under Section 143(12) of the Act, details of
which need to be mentioned in this Report.
28. General Disclosures
I. Details of Board Meetings
During the year under review, six (6) Board Meetings were held, details of which are
provided in the Corporate Governance Report.
II. Composition of Audit Committee
The Audit Committee comprised four (4) Members out of which three (3) are Independent
Directors and one (1) is a Non-Executive Director. During the year under review, nine (9)
Audit Committee Meetings were held, details of which are provided in the Corporate
Governance Report. During the year under review, there were no instances when the
recommendations of the Audit Committee were not accepted by the Board.
III. Composition of CSR Committee
The CSR Committee comprised three (3) Members out of which one (1) is an Independent
Director. During the year under review, three (3) Meetings of the CSR Committee were held,
details of which are provided in the Corporate Governance Report. During the year under
review, there were no instances when the recommendations of the CSR Committee were not
accepted by the Board.
IV. Secretarial Standards
The Directors have devised proper systems and processes for complying with the
requirements of applicable Secretarial Standards issued by the Institute of Company
Secretaries of India and such systems were adequate and operating effectively.
29. Other disclosures
(a) No significant and material orders were passed by the regulators or the courts or
tribunals impacting the going concern status and the Company's operations in future.
(b) In 2020, Allied Silica Limited (ASL) filed an application under Section 9 of the
Insolvency and Bankruptcy Code, 2016 ('IBC') against the Company and the same is pending
before the National Company LawTribunal, Mumbai Bench as at the end of the year. The
Company has contested the proceedings among other things, on the grounds that no
operational debt is due and payable, the alleged debt is not an operational debt, the
party is notan operational creditor under the IBC and that there is pre-existence of
disputes between the parties.
(c) There has been no change in the nature of business of the Company as on the date of
this Report.
(d) There were no material changes and commitments affecting the financial position of
the Company between the end of the financial year and the date of this Report.
30. Annual Return
Pursuant to Section 92(3) read with Section 134(3)
(a) of the Act, the Annual Return in Form MGT-7 as on March 31, 2023 is available on
the Company's website at
https://www.tatachemicals.com/MGT72023.pdf.
31. Acknowledgements
The Directors appreciate the hard work, dedication, and commitment of all its employees
including workmen at the manufacturing plants towards the success of the Company.
The Directors also acknowledge the support extended by the Company's Unions and would
also like to thank the financial institutions, banks, government authorities, customers,
vendors and other stakeholders for their continued support and co-operation.
On behalf of the Board of Directors
N. Chandrasekaran
Chairman
DIN: 00121863
Mumbai, May 3,2023.
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