chemplast sanmar ltd share price Directors report

The Directors have pleasure in presenting the Thirty-Ninth Annual Report along with the Audited Financial Statements for the financial year ended March 31, 2023.

Financial Summary – Standalone and Consolidated

Rs Crores

Particulars	Stand-alone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations and Other income	2,222	2,045	5,021	5,949
Profit before interest, depreciation and taxes	332	660	548	1,254
Depreciation	92	91	142	137
Interest	23	136	154	322
Profit before share of Profit / (Loss) from Joint Venture and associate and tax	217	434	252	796
Profit / (Loss) before tax and exceptional items	217	434	252	796
Exceptional Items	(50)	-	(81)	-
Profit / (Loss) before tax	167	434	171	796
Tax Expenses	(21)	(54)	(19)	(147)
Profit / (Loss) after tax	146	379	152	649
Total Other Comprehensive Income for the year	-	126	1	135
Total Comprehensive Income for the year	146	505	153	783
Basic and Diluted Earnings per share (equity shares, par value Rs 5/- each)	9.21	25.54	9.64	43.66

Financial Performance Standalone

On a stand-alone basis, the revenue from operations and other income increased to Rs 2,222 Crores for FY 2022-23 from Rs 2,045 Crores in FY 2021-22. The increase is primarily driven by higher volume of Speciality Paste PVC sales. items for FY 2022-23 Profit was Rs 217 Crores against Rs 434 Crores in FY 2021-22. The Company achieved a revenue growth of 9% when compared of Paste to FY 2021-22. However, significant PVC and Chloromethanes products coupled with a steep increase in fuel prices has adversely affected the flow-through to Profit Before Tax.

Financial Performance Consolidated

On a consolidated basis, the revenue from operations and other income stood at Rs 5,021 Crores for FY 2022-23 against Rs 5,949 Crores in FY 2021-22. The Profit Before Tax and Exceptional items for FY 2022-23 was Rs 252 Crores against Rs 796 Crores in FY 2021-22. The drop in revenue and profits at a consolidated drop in prices of Speciality Paste PVC, Suspension PVC and Chloromethanes products, coupled with increase in fuel prices.

Dividend and Transfer to Reserves

Considering the growth plans and the consequential need to conserve resources, the Directors have decided not to recommend any dividend for the financial year 2022-23. The Directors also do not recommend any transfer to reserves.

Share Capital

The Companys paid-up equity share capital stood at Rs 79.06 Crores as on March 31, 2023, consisting of 15,81,09,574 equity shares of Rs 5/- each. There is no change in the share capital of the Company.

Borrowings

The total borrowings, including interest accrued, on a consolidated basis stood at Rs 1,007.97 Crores as on March 31, 2023 as against Rs 867.38 Crores as on March 31, 2022.

Capacity Expansion

Leveraging the existing land and infrastructure facilities, the Company is increasing capacity of Speciality Paste PVC production by 41,000 tonnes per annum at an estimated outlay of Rs 360 Crores and setting up a multi-purpose facility levelwasmainlydueto for Custom

Manufactured steep Chemicals in a phased manner at an overall estimated outlay of Rs 680 Crores. The Speciality Paste PVC project at SIPCOT Industrial Complex, Phase II, Cuddalore is expected to be commissioned in the second half of FY 2023-24 and phase I of the multi-purpose facility for Custom Manufactured Chemicals at Berigai, Krishnagiri District, is expected to be commissioned by second quarter of 2023-24.

Further, during the year under review, the wholly owned subsidiary of the Company, Chemplast Cuddalore Vinyls Limited, has completed its debottlenecking project, adding 10% to its production capacity.

Statement of Companys Affairs

Chemplast Sanmar Limited (CSL) is a leading Speciality chemicals manufacturer in India with focus on Speciality

Paste PVC resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro-chemical and fine chemicals sectors. CSL is the largest manufacturer of Speciality Paste PVC resin in India. In addition, CSL is also the fourth largest manufacturer of Caustic Soda and the largest manufacturer of Hydrogen Peroxide in South India and the oldest manufacturer of Chloromethanes in India.

I. Spe ciality Chemicals

PVC Paste Resin

(FY = Financial Year and Q=Quarter)

The domestic demand for Speciality Paste PVC Resin in FY 2022-23 registered a strong growth of 17%, reaching 163kt, compared to 139kt in FY 2021-22. The recovery in Auto sector and foot wear segment fuelled the growth in demand for Speciality Paste PVC resin. In the recent past, downstream processing industry in the NCR region used to face curtailed operations in

Q3 the spike in air pollution around this time used to trigger the regulatory authorities into curtailing the use of coal. However, this year, with many of the leather cloth units shifting to gas based fuel, operations could continue mostly unhindered.

In contrast to India, the demand in US and Europe was weak due to high inflationary pressures and rising interest rates while Chinese demand was also lower than usual due to the countrys Zero-Covid policy. Though China lifted Covid lock down restrictions towards the end of 2022, the demand continued to be sluggish resulting in China pushing more and more material to India. In this scenario, from the middle of Q1, international prices started falling at regular intervals, thus pushing processers to buy on "just in time" basis. The price reduction was also facilitated by ocean freight rates reverting to near earlier levels. Prices fell by 29% during the course of the year. This was compounded by the sharp increase in energy costs (both coal and natural gas) resulting in a squeeze on margins.

The company recorded the highest ever production and sale of Speciality Paste PVC resin during FY23.

Custom Manufactured Chemicals

The Custom Manufactured Chemicals business manufactures advanced intermediates for global innovators and originators in Pharmaceutical and

Agrochemical markets. The Company markets and sell unique chemistry and process capabilities to its customers based on which customers approach the Company with projects for products that they wish to outsource. Therefore, unlike other chemical companies, the Company does not have a catalogue of products to sell. The Company is well renowned in the industry for its ability to handle various chemistries and chemicals. Examples include Cyanation, Hydrogenation, Diazotisation, Mercaptans. Significant expertise is available within the Chemplast ecosystem in processing and handling complex chemicals such as Chlorine, Ethylene di chloride, Fluorine, Peroxides, Chlorosilanes and Sodium Cyanide to name a few. Therefore, the Company offers a world-class research and development capability combined with a broad range of chemical technologies at production scale. In addition, the Company is also well known for its Environmental and Safety stewardship. In fact, customers use this as a first criterion for screening before they decide to work with a supplier. The Company is also unique in having access to many basic starting materials important for this business such as Caustic, Chlorine, Hydrogen & Chloromethanes and ability to handle gases like Ethylene.

The Company has long standing partnerships and relationships with global innovator companies in the agro chemical and pharmaceutical space. In fact, many of its customers have been with the Company for over a decade. It takes anywhere between 1 to 2 years to develop a product.

The Company focusses on engaging with its customers at an early stage of the life cycle of a product to ensure this. Global innovator companies, are increasing their outsourcing pie constantly. This together with China+1 strategy of the innovators, is resulting in increased enquires for Indian players including Chemplast Sanmar. Due to its efforts over the years in building relationships and partnerships, the Company has a strong pipeline of products under various stages of development. Many of these will require the Company to make investments in new capacity in the coming months and years. The Company has already committed to invest Rs 680 Crores to set up a world class facility to accommodate the new products in the pipeline.

Over the past 6 months, the Company has signed 2 Letters of Intent with an agrochemical innovator to manufacture advanced intermediates.

II. Oth er Chemicals Chloromethanes

The year 2022-23 began amidst the backdrop of the less virulent ‘Omicron strain of COVID-19 with marginal impact across various consumption segments. Demand for Chloromethanes (CMP) began on a steady note, especially in the key pharma sector. Offtake from the adhesive and foam sector continued to remain good as well. Tight availability, coupled with lower import arrivals and high energy prices in Europe, gave impetus to firm domestic prices in the early part of the financial year. New capacities were set up by other companies during the year, to an extent of around 200ktpa. Start-up and stabilisation issues kept the operating rates of the new plants low, thereby supporting firm prices till the end of Q3.

The real impact of additional capacities were felt during the last quarter of the year as full operating levels, coupled with limited export order book with local producers, led to a sharp fall in prices of both Methylene DiChloride (MDC) and Chloroform. The demand slump was more pronounced in Carbon Tetra Chloride (CTC) with synthetic pyrethroids segment witnessing a much sharper drop in demand from the end of Q3, as their exports to major markets in Latin America and Europe were severely impacted by the drought conditions. Though addition of certain new customers did result in some positive offtake of CTC, this could only marginally mitigate the impact of the severe contraction in consumption from the DV acid segment.

Overall domestic demand for MDC grew by 7% from 345kt to 370kt during the year, driven by the Pharma sector which remains as the single largest consumption sector.

Chloroform demand grew by 17% from 155kt to 181kt during the year, driven by PTFE demand. CTC demand contracted by 19% from 27kt to 22kt during the year.

The Companys production of Chloromethanes stood at 34,971 mt, while sales, excluding captive consumption, were 32,826 mt during the year.

Caustic Soda

Being a very basic alkali with a strong correlation between consumption and economic activity, Caustic

Soda witnessed a steady demand at the start of the new financial year. However, by the end of Q1, higher yarn prices, and lower export orders from the European Union, forced several small and mid-sized textile processors in South India to cut down operating levels or shut plants due to unviable cost economics. Hence demand from this sector started witnessing a downward trend whilst other segments like Paper and Pulp, Alumina and ETPs exhibited a steady demand for the product.

The year also saw stabilisation of new capacity set up in FY 2021-22, and the commissioning of additional capacity in the western part of the country. Drought/ energy crisis in Europe gave an opportunity for domestic producers (especially in the West) to book huge export orders during the period between Aug-Oct22 which supported firm domestic prices availability became tighter. Prices started softening again from the beginning of the last quarter on account of reduced export order book.

The Companys production of Caustic Soda was 1,03,032 MT while sales, excluding captive consumption, stood at 98,677 mt during the year.

Hydrogen Peroxide

During the year under review, the Company gradually enhanced sales of Hydrogen Peroxide to Textile and Paper and Pulp sectors. Domestic availability was limited in the second and third quarter due to curtailed production from other domestic producers on account of restricted supply of gas, in addition to lower imports from Bangladesh (due to a safety incident at their container terminal). These factors had a positive impact which enabled us to achieve higher volumes on a monthly basis and finally culminated in highest monthly sale of 2,528 MT in December 2022. However, production was moderated in the fourth quarter based on the overall economics of the caustic chain. The Companys production of Hydrogen Peroxide was 25,284 MT while the sale was 25,316 MT during the year.

Performance of Subsidiary:

Chemplast Cuddalore Vinyls Limited (CCVL)

The Companys wholly owned subsidiary CCVL earned a profitbefore tax of Rs 35.48 Crores (before exceptional items) for the year ended March 31, 2023 as compared to Rs 361.93 Crores for 2021-22. The profit after tax for 2022-23 was Rs 6.74 Crores, as against a profit Rs 269.18 Crores in 2021-22.

Management Discussion and Analysis Report

Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("Listing Regulations"), the Management Discussion and Analysis Report for the year under review, is presented in a separate section as Annexure A, forming part of the Annual Report.

Corporate Governance Report

The report on corporate governance along with a certificate from the Practising Company Secretary as required under the Listing Regulations is annexed to this Report as Annexure B.

The Managing Director and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Regulation 17(8) read with Schedule II of Part B of the Listing Regulations which is annexed to the report on corporate governance.

The Board and senior management personnel have affirmed that they have complied with the Code of Conduct of the Company. A declaration from Mr Ramkumar Shankar, Managing Director, as required under Regulation 34(3) and Schedule V (D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to this effect is annexed to the report on corporate governance.

Business Responsibility and Sustainability Report

In terms of Regulation 34 (2) (f) of the Listing Regulations, a Business Responsibility and Sustainability Report is presented in a separate section, forming part of this

Directors Report as Annexure C.

Safety and Environment

The Company continues to place great importance on protecting the environment and managing natural resources responsibly. These principles have been incorporated in all its operational systems, with stringent solid and hazardous waste management processes followed at all plants.

1. Pr ocess Safety Management

All the Mettur plants have started implementing a Process Safety Management programme. Each plant in Mettur is working on critical safety risk reduction through Barrier Health Management study.

2. Beh aviour Based Safety

All the plants in the Company have commenced a Behaviour Based Safety programme to further enhance and reinforce the safety-oriented work culture.

3. British Safety Council Occupational Health &

Safety Specification

Our manufacturing facilities have been audited by British Safety Council on implementation of the latest Occupational Health and Safety specifications.

FIVE STAR rating has been awarded to all our plants at Mettur and Karaikkal.

4. Pr ocess Hazard Analysis & safety studies

The Company completed the following safety studies in the plants, as listed below.

Mettur, Plant 2 Fire risk assessment and HAZOP revalidation

Mettur, Plant 4 Quantitative Risk Assessment Mettur, Coal Based Power Plant Hazardous Area Classification and Lighting Protection study

5. IS 14489 Statutory Audit

IS 14489 statutory audit was conducted at Mettur, Plant 4 and the recommendations are under implementation.

IS 14489 statutory audit was conducted at Karaikkal plant and the recommendations are under implementation.

6. Inte grated Management System Audit

Mettur Plant 4 obtained Integrated Management System Certificationfor ISO14001 and ISO 45001, certified by Bureau Veritas.

7. A wards and Rewards

A. The following awards have been received from

The Indian Chemical Council

(a) ICC EVONIK Award for Excellence in Management of Environment Che mplast Sanmar Limited, Mettur (b) A ward for the Best Nicer Globe User company

Che mplast Sanmar Limited (c) A ward for the Best Logistics Service Provider Murugan Oil Corporation Logistic (MOC) Che mplast Sanmar Limited (d) A ward for the Best Three drivers i) M.Swaminathan Murugan Oil also Corporation (Operating for Chemplast Sanmar) ii) M.K umar Velliangiri

Thunai (VAT) Transport (Operating for Chemplast Sanmar) B. The following awards have been from The National Safety Council Tamil

Nadu Chapter.

CSL Plant 1 & 2 received Star Award

Berigai plant received Appreciation award for Occupational Health and Safety Award, 2020 from National Safety Council, Tamil Nadu Chapter.

C. The Company received award for Carbon Reduction from one of its key customers of Custom Manufactured Chemicals.

Finance

The Company has established a good track record with the Bankers and Financial institutions, thereby enjoying their full confidence In the first week of April 23, CRISIL Ratings has reaffirmed Chemplast Sanmar Limiteds and its wholly owned subsidiary Chemplast Cuddalore Vinyl Limiteds credit ratings to AA- (long term), signifying a high degree of safety. CRISIL has also reaffirmed short term rating of A1+, whichisthehighestrating possible. areas of operations. All

Dividend Distribution Policy

The Company forms part of the List of top 500 listed entities based on market capitalisation as on March 31, 2023. In view thereof, pursuant to the provisions of Regulation 43A of the Listing Regulations, 2015, as amended, the Board of Directors has approved the Dividend Distribution Policy and the said Policy is available in the following link https:// www.chemplastsanmar.com/downloads/investor-relations/ csl-policies/dividend-distribution-policy.pdf

Change in the Nature of Business

There was no change in the nature of business of the Company during the financial

Risk Assessment and Management

The Company has a well-defined Risk Management System. The Board of Directors had constituted a Risk Management Committee to monitor and oversee the Risk Management System. The Composition of the Risk Management Committee, terms of reference and number of committee meetings held during the year under review are givenintheCorporateGovernance deficiencies in the design or operation Report.

The Risk Management Policy of the Company as recommended by the Risk Management Committee and approved by the Board of Directors of the Company can be accessed in the Companys website using the link https://www.chemplastsanmar.com/downloads/ investor-relations/csl-policies/risk-management- and policy.pdf. The Risk Management System of the Company ensures that all risks that the organisation faces including strategic, financial, credit, operational, market, liquidity, security, property, legal, regulatory, IT, reputational and other risks are identified and the impact assessed. Mitigation plans are then drawn up and these plans are effectively reviewed and implemented.

Internal Control Systems

Adequate internal controls, systems, and checks are in place, commensurate with the nature of the Companys business and size. The management exercises financial control on the operations through a well-defined budget monitoring process and other standard operating procedures.

Internal audit for the year 2022-23 was carried out by R.G.N. Price & Co, Chartered Accountants covering all significant observations of the Internal Auditors are placed before the Audit Committee together with corrective actions. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control in the Company, and compliance with operating systems, accounting procedures and policies at all locations of the

Company. Based on the reports of Internal Auditors, the management undertakes appropriate corrective action in their respective areas.

Internal Financial Control over Financial Reporting

The Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been assessed during the year . taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessment carried out by management with the help of the internal auditors, no reportable material weakness or of significant internal financial controls were observed.

Deposits

During the year under review, the Company has not accepted any public deposit within the meaning of the provisions of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 and as on March 31, 2023, the Company did not have any outstanding public deposit.

Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

Particulars of investments and guarantees under

Section 186 of the Companies Act, 2013 are given in the Notes forming part of the Financial Statements for the year ended March 31, 2023.

The Company has not given any loans under the provisions of Section 186 of the Companies Act, 2013.

Consolidated Financial Statements

Consolidated Financial Statements are prepared by the Company in accordance with the applicable and Material Orders passed by

Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs and the same together with Auditors Report thereon form part of the Annual

Report. The financial statementshavebeenprepared and material orders passed as per Division II of Schedule III issued by the Ministry of Corporate Affairs vide its Notification dated April 06, 2016 as amended from time to time.

Subsidiary

Chemplast Cuddalore Vinyls Limited continues to be the wholly-owned subsidiary of the Company. The details on operations / performance of the said subsidiary during the year under review are given hereinabove.

Pursuant to the requirements of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the details of investments made in the subsidiary and the details of guarantees issued by the Company to the lenders of the wholly-owned subsidiary Company have been furnished in the Notes forming part of the Accounts.

A statement containing the salient features of the financial statements of the Companys wholly-owned subsidiary company under the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 has been annexed in prescribed Form AOC 1 as Annexure 6. The Audited financial statements of the wholly-owned subsidiary Company are placed on the Companys website www.chemplastsanmar.com

The Company does not have any joint venture or

Associate Company during the year or at any time after the closure of the year and till the date of the report.

Related Party Transactions

There are no contracts / arrangements / transactions with related parties which are not at arms length basis and there are no material contracts / arrangements / transactions which are at arms length basis. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188 (1) along with the justification for entering into such contract or arrangement in Form AOC 2 does not form part of the report.

The Policy on Related Party Transactions as approved by the Board is uploaded on the Companys websitehttps://www.chemplastsanmar.com/ downloads/investor-relations/csl-policies/related-party-transaction-policy.pdf

Significant

Regulators or Courts or Tribunals impacting the going concern status of the Company

There were no significant by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and Companys operations in future.

Material Changes and Commitment affecting the financial position of the Company that occurred afterMarch 31, 2023

There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year to which the Financial Statements relate and on the date of this report.

Directors and Key Managerial Personnel

Dr Amarnath Ananthanarayanan, Non-Executive Non-Independent Director resigned from the Board with effect from May 09, 2023. The Board of Directors place on record the valuable services rendered by him during his tenure as Director of the Company.

The Board of Directors on the recommendation of Nomination and Remuneration Committee, approved the appointment of Mr Vikram Taranath Hosangady (DIN: 09757469) as Non-Executive Non-Independent

Director of the Company in the casual vacancy caused by the resignation of Dr Amarnath Ananthanarayanan Non-Executive Non-Independent Director, at its meeting held on May 16, 2023 subject to the approval of shareholders of the Company.

The Company has received notice from of the Company a member for under Section 160 of the Companies Act, 2013 proposing the appointment of Mr Vikram Taranath Hosangady as Non-Executive Non-Independent Director of the Company liable to retire by rotation. Pursuant to the provisions of Section 152, 160, 161 and other applicable provisions of the Companies Act, 2013 approval of shareholders of the Company is required for the appointment Mr Vikram Taranath Hosangady as Non-Executive Non-Independent Director, liable to retire by rotation.

Mr Chandran Ratnaswami, Director, is liable to retire by rotation pursuant to Section 152 (6) of the Companies Act, 2013. Being eligible, he offers himself for reappointment. His re-appointment was recommended by the Nomination and Remuneration Committee of Directors at its meeting held on May 16, 2023 and will be placed before the members for approval at the ensuing 39th Annual General Meeting.

The Independent Directors have submitted declarations stating that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013. Based on the declarations received from all the Independent Directors and in the opinion of the Board, all the Independent Directors possess integrity, expertise, experience and proficiency and are independent of the management. Pursuant to the provisions of Section 203 of the Companies Act, 2013 read with the rules thereunder, the Key Managerial Personnel (KMP) of the Company are Mr Ramkumar Shankar, Managing Director, Mr N Muralidharan, Chief Financial Officer and Mr M Raman, Company Secretary. They are also the KMPs of the Companys wholly-owned subsidiary company, Chemplast Cuddalore Vinyls Limited.

Directors Responsibility Statement

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013. (a) In the preparation of the annual accounts the year ended March 31, 2023, the applicable accounting standards have been followed by the Company.

(b) The Directors have selected such 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 the 31, 2023 and of the profit Overview

year ended on that date. (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 Financial Statements fraud and other irregularities.

(d) The Directors have prepared the annual accounts of the Company on a going concern basis.

(e) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(f) The Directors have laid down internal financial controls to be followed and confirms that such internal financial controls were adequate and operating effectively.

Number of Board Meetings

During the year, the Board of Directors met five times as per details furnished in the Corporate Governance Report.

Audit Committee

Composition of Audit Committee

The composition of the Audit Committee is as under and is in compliance with the provisions of Section 177 of the Companies Act, 2013 read with the rules there under and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The scope of the activities of the Audit Committee is set out in the Corporate Governance Report.

Name of the Members	Category
Mr Sanjay Vijay Bhandarkar- Chairman	Independent Director
Mr Prasad Raghava Menon	Independent Director
Mr Vijay Sankar	Non-Executive Director

During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

The Members of the Audit Committee met five times during the financial year under review, as per the details stated in the Corporate Governance Report.

Nomination and Remuneration Committee

The Members of the Nomination and Remuneration Committee met three times during the financial year under review. The details of the constitution of the Nomination and Remuneration Committee, terms of reference and the meetings held during the financial year have been stated in the Corporate Governance Report.

The Policy on formal Annual Evaluation by the Board can be accessed through the following link https://www.chemplastsanmar.com/downloads/ investorrelations/csl-policies/nomination-remuneration-policy-and-board-evaluationpolicy.pdf

Stakeholders Relationship Committee

The Members of the Stakeholders Relationship Committee met once during the financial year under review. The details of the constitution of the Stakeholders Relationship Committee, terms of reference and the meetings of the Committee held during the financial year have been stated in the Corporate Governance Report.

Risk Management Committee

The Members of the Risk Management Committee met twice during the financial year under review. The details of the constitution of the Risk Management Committee, terms of reference and the meetings of the Committee during the financial year have been stated in the Corporate Governance Report.

Corporate Social Responsibility Committee

The Members of the Corporate Social Responsibility Committee met once during the financial year under review. The details of the constitution of the CSR

Committee and the Committee meetings held during the financial year have been stated in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out evaluation of its own performance, the directors individually and evaluation of working of the committees of the Board during the financial year 2022-23 as per the criteria laid down by Nomination and Remuneration Committee. The evaluation process contained various aspects of the functioning of the Board and its committees, number of committees and their roles, frequency of meetings, level of participation, and independence of judgement, performance of duties and obligations.

The Board expressed its satisfaction on the performance of all the directors, Board and its committees which reflected the overall engagement of the directors, the Board and its committees of the Company.

Familiarisation Programme for the Independent Directors:

The details with respect to familiarisation programme for the Independent Directors are furnished in the Corporate Governance Report.

Personnel

Industrial relations with employees remained cordial during the year. Human Resource Development activities continued to receive considerable attention.

The emphasis was on imparting training and developing the skill set of employees to enable them to face the challenges in an increasingly complex work environment.

Particulars of employees

Disclosure 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 is annexed to this Report as Annexure 3.

Statement containing particulars of employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is provided in the Annexure forming part of this report. In terms of proviso to Section 136 (1) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. The said Statement is also open for inspection. Any member interested in obtaining a copy of the same may write to the Company Secretary.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has complied with the provisions of

Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, in regard to constitution of an internal Committee as prescribed. During the year, there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism Policy to deal with an instance of fraud or mismanagement, if any. The Directors are pleased to report that during the year under review, no untoward or fraud case of material nature was reported.

The Company has adopted an ethical code of conduct for the highest degree of transparency, integrity, accountability and corporate social responsibility. Any actual or potential violation of the Code would be a matter of serious concern for the Company. This policy has been formulated with a view:

T o provide a mechanism for employees of the Company and other persons dealing with the Company to report to the Chairman of the Audit Committee, any instance of unethical behaviour, actual or suspected fraud or violation of the Companys Ethics Policy. T o safeguard the confidentialityand interest of such employees / other persons dealing with the Company against victimisation, and T o appropriately communicate the existence such mechanism, within the organisation and to outsiders.

T o ensure that no personnel is denied access the Chairman of the Audit Committee in respect of reporting any of above instances.

Corporate Social Responsibility

The Company has all along attached utmost importance to sustainable development. As mandated by the Companies Act, 2013 and the rules framed thereunder, the Company has formulated a Policy on CSR and has constituted a CSR Committee to recommend and monitor expenditure on CSR. Details of CSR Expenditure are given in the prescribed format and forms part of this Report and is enclosed as Annexure 2.

Statutory Auditors

BSR & Co. LLP, Chartered Accountants (Firm Registration No 101248W/W-100022) was appointed as the Statutory Auditors of the Company for a period of 5 years, from the conclusion of 38^th Annual General Meeting to 43rd Annual General Meeting of the Company, that is, for the Financial Years 2022-23 to 2026-27.

Internal Auditors

RGN Price & Co. LLP, Chartered Accountants are the Internal Auditors of the Company.

Cost Records, Audit and Auditor

Pursuant to Section 148(1) of the Companies Act, 2013 and rules thereunder, the Company is required to maintain cost records/ accounts as specified therein in respect of its products and the Company maintains cost records/ accounts in the prescribed format. As per provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014, the cost audit records maintained by the Company in respect of the products of the Company are required to be audited. The Company has appointed N. Sivashankaran & Co, Cost & Management Accountants, Chennai (Firm Registration No. 100662) as cost auditors to audit the cost accounts of the Company for the financial year 2022-23.

The Cost Auditors have given a Certificate to the effect that the appointment, if made, will be within the prescribed limits specified under Section 141 of the Companies Act, 2013.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is placed before the Members for their ratification

Secretarial Audit

The Board of Directors had appointed B Ravi & Associates, Company Secretaries in Practice, Chennai to carry out the Secretarial Audit of the Company for the financial year 2022-23. The Report of the Secretarial Auditor is annexed herewith as Annexure 4 and forms part of this Report.

Pursuant to Regulation 24A of the Listing Regulations, the Secretarial Audit Report issued by B Ravi & Associates, Company Secretaries in Practice, Chennai to the Companys material unlisted subsidiary Chemplast Cuddalore Vinyls Limited is also annexed herewith as Annexure 5.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board of Directors have appointed B Ravi & Associates, Company Secretaries in Practice, Chennai to carry out the Secretarial Audit of the Company for the financial year 2023-24.

Explanations or comments on the qualification, reservation, adverse remark or disclaimer made by the Statutory Auditors or by the Company Secretary in Practice in their report.

For the year under review, there is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditor or Secretarial Auditor of the

Company. The report of the Statutory Auditors forms part of the financial statement.

During the year under review, there were no material or serious instances of fraud falling within the purview of

Section 143(12) of the Companies Act 2013 and rules made there under by officers or employees reported by the Statutory Auditors of the Company during the course of the audit conducted.

The Managing Director and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Regulation 17(8) read with Schedule II of Part B of the Listing Regulations.

Secretarial Standards

The Board confirms compliance with the Secretarial Standards notified by the Institute of Company Secretaries of India, New Delhi and applicable to the Company.

Annual Return

Draft Annual return in Form MGT 7 as on March 31, 2023 is available in the Companys website https:// www.chemplastsanmar.com/annual-report.php.

Green initiative

Your Directors would like to draw your attention to Section 20 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules 2014, as may be amended from time to time, which permits paperless compliances and also service of notice/documents (including annual report) through electronic mode to its members. To support this green initiative of the Central Government in full measure, the Company appeals to all those members who have not registered their e-mail addresses so far, to register their e-mail address in respect of electronic holdings with their concerned Depository Participants and / or with the Company.

Further, the Company will also send the Annual Report for the Financial Year 2022-23 to all the shareholders only through electronic means as per the relaxations provided by MCA Circular dated May 05, 2020, January 13, 2021, December 14, 2021 May 05, 2022 and December 28, 2022 and SEBI Circular dated May 12, 2020, January 15, 2021, May 13, 2022 and January 05, 2023 which enhances the Green initiative measures taken by the Company.

Other disclosures

During the year under review, there were no: a) Issues of Equity Shares with differential voting rights, dividend or otherwise as per Section 43(a) (ii) of the Companies Act 2013. b) Issues of shares including Sweat Equity Shares to the employees of the Company under any scheme as per provisions of Section 54 (1) (d) of the Companies Act, 2013. c) Inst ances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section

67 (3) of the Companies Act, 2013 and d) Re visions to the financial statements during the year under review.

Other Particulars

Additional information on conservation on energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of section 134(3)(m) of the Companies Act, 2013, read with Rule 9 of the Companies (Accounts) Rules 2014 is set out in Annexure 1 and forms part of this Report.

Acknowledgements

The Board of Directors thank the customers, vendors, bankers, regulatory and Government authorities, stock exchanges, business associates and all other stakeholders for their assistance, support and cooperation extended. The Directors also thank theShareholders for reposing faith on the Companys performance. The Board of Directors places on record its appreciation for the committed service of all the employees of the Company.

Cautionary Statement

Statements made in the report, including those stated under the caption "Management Discussion and Analysis" describing the Companys plans, and expectations may constitute, "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied.

For and on behalf of the Board

	Vijay Sankar
Chennai	Chairman
May 16, 2023	DIN: 00007875