chambal fertilisers chemicals ltd Directors report

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 Auditors 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 Auditors 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 Companys 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 Companys 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 Companys operations in future.

c) All related party transactions entered during the Financial Year 2022-23, were on arms length basis and in the ordinary course of business. No material related party transaction (in terms of the Companys 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 Auditors 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 Auditors 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