F A C T Director Discussions


Dear Members,

Your Directors have pleasure in presenting the79th Annual Report on the business and operations and the Audited Standalone and Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2023 and Auditors Report thereon.

Your Directors are extremely happy to inform you that during the financial year 2022-23, the Company has achieved very good performance in the production, marketing and financial front. The Company has achieved highest ever turnover of 6198 Cr and earned a net profit of 612.99 Crore. The Financial Year 2022-23 witnessed unprecedented volatility on the prices of fertiliser inputs like Ammonia, Phosphoric Acid, Sulphuric Acid, Natural Gas etc due to various geopolitical reasons. Your Company was able to successfully navigate the situation by taking appropriate business decisions, entering into long term contract for supply of fertiliser inputs and improvement in logistics. During the Financial Year 2022-23, FACT celebrated its 75 years of fertiliser production and service to the nation.

Based on Market Capitalization, as on March 31, 2023, your Company is one among the top 500 listed Companies.

Performance Highlights;

• Net profit of 612.99 Cr.

• All time high turnover 6198.15 Cr.

• Total fertiliser production 10.73 Lakh MT.

• Production of 44,754 MT Caprolactam

• Sale of 995815 MT Fertilisers.

• Sale of 43,712 MT Caprolactam

• Long term contract with IOCL for supply of RLNG

• Established 172 PMKSK shops across marketing territories.

• Commissioning of CAPEX projects

1. Financial Results (Standalone)

Financial Results of the Company for the year ended March 31, 2023 is summarized below:

in crore

Particulars 2022-23 2021-22
Net Sales 6198.15 4424.80
Other Income 135.57 111.23
Total Revenue 6333.72 4536.03
Total Expenses 5720.73 4100.59
Profit before Exceptional Items and Tax 612.99 435.43
Exceptional Items 0 -89.06
Earnings before interest, depreciation and Taxes (EBIDTA) 890.44 617.64
Interest 247.34 244.07
Depreciation 30.11 27.19
Profit for the year 612.99 346.38
Other comprehensive Income -1.11 16.09
Total Comprehensive Income 611.88 362.47

Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board of Directors of the Company (the Board) has formulated and adopted the Dividend Distribution Policy. The policy is hosted on the website of the Company and can be accessed through the link https://fact.co.in/home/Dynamicpages?MenuId=914

Dividend

For the financial year 2022-23, the Board has recommended a Dividend of 1 per equity share of face value of 10/- each. The Board has recommended dividend based on the parameters laid down in the Dividend Distribution Policy. The dividend will be paid out of the profits for the year 2022-23.

The Dividend on equity shares is subject to the approval of shareholders at the Annual General Meeting scheduled to be held on 29 September 2023.

Based on the number of equity shares, as on date of this report, the dividend, if approved would result in cash out flow of 64.70 Crore.

Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profit in the profit and loss account. No amount has been transferred to reserves for the Financial Year 2022-23.

Operations and Performance

Production

During the Financial Year 2022-23, the production of Factamfos increased marginally by 1643 tonnes as compared to previous year. The production of Ammonium Sulphate and Caprolactam increased by 108067 tonnes and 23919 tonnes respectively.

Production (in MT) (in MT)
2022-23 2021-22
Factamfos 828195 826552
Ammonium Sulphate 244732 136665
Caprolactam 44754 20835

Marketing

During the Financial Year 2022-23, the sale of Factamfos decreased by 10% as compared to previous year whereas the sale of Ammonium Sulphate increased by 52%.The sale of Caprolactam increased by 110%as compared to previous year.

Sale 2022-23 (In Lakh MT) 2021-22 (In Lakh MT)
Factamfos 7.43 8.32
Ammonium Sulphate 2.20 1.45
Caprolactam 0.44 0.21

The Company expanded fertiliser marketing area to the states of Maharashtra, Gujarat, West Bengal, Odisha and Bihar during the Financial Year 2022-23.

Memorandum of Understanding with Government of India

Your Company has been entering into a Memorandum of Understanding (MoU) with the Department of Fertilizers, Ministry of Chemicals and Fertilizers, Government of India, setting the performance parameters and targets every year. The evaluation of MoU performance for the Financial Year 2022-23 is yet to be completed. The MoU for 2023-24 is under finalisation by the Govt. of India.

Management Discussion and Analysis Report

Management Discussion and Analysis Report covering the operational aspects for the year under review, as stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015(as amended) is presented in a separate section forming part of Directors Report.

Roadmap for sustainability / Capital Projects

During the Financial Year 2019-20, Union Cabinet has accorded approval for CAPEX worth 608 crores for implementing essential capital jobs with a view to enhance the reliability of production plants and compliance with changing statutory requirements and setting up of additional raw material storage tanks. Critical renovation and modernizing schemes for debottlenecking raw material and product handling facilities also form part of CAPEX. FACT is in the process of commissioning / implementing various CAPEX projects to enhance the production capacity and the sustainable growth of the Company in the long run.

During the financial year 2022-23, the Company has commissioned the following projects. l New Ammonia Barge for transporting Ammonia between production Divisions and Cochin Port through inland waterways. l Two additional Sulphuric Acid storage tanks of 5000 MT capacity each, at Cochin Division, Ambalamedu.

Reconstruction of Berth at Cochin Port utilising the financial assistance under ‘ Sagar Mala Scheme is completed.

Other CAPEX projects including 1650 TPD NP project are progressing as per schedule. The NP project is expected to be commissioned during the year 2024-25.

Commissioning of the CAPEX project would result in an increase in fertiliser production of the Company from 10 lakh MT to 14 lakh MT and considerable increase in turnover and Profit.

Sustainable Development

Your Company is giving priority on implementing several sustainable development activities. Fuel in driers of phosphate plants was changed from furnace oil to Re-gassified Liquefied Natural Gas (RLNG) in the year 2022-23. Changing the fuel to natural gas is a step towards conservation of energy as RLNG is a clean fuel, providing better efficiency in combustion.

Industrial Relations

During the Financial Year 2022-2023, cordial industrial relations were maintained across all Divisions of the Company. Pay revision for the period 1.1.2017 31.12.2026 effective from 1.4.2022, was implemented.

Corporate Governance

The Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Board lays emphasis on transparency and accountability for the benefit of all stakeholders of the Company. The Report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, annexed to this report, forms an integral part of this report.

Business Responsibility and Sustainability Report

In accordance with Regulations 34(2)(f) of the SEBI Listing Regulations, the Securities and Exchange Board of India (SEBI), in May 2021 introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and Sustainability Report (BRSR). BRSR is a significant step towards giving platform to the Companies to report the initiative taken by them in the areas of environment, social and governance. SEBI has mandated top 1000 Listed Companies, based on market capitalisation to publish BRSR from Financial Year 2022-23 onwards. Accordingly, your directors are glad to present the BRSR report of FACT for the financial year 2022-23 and it is part of the Annual Report of the Company.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company for the financial year ended March 31, 2023, prepared in accordance with Section 129(3) of the Companies Act 2013 and relevant accounting standards form part of the Annual Report.

The Consolidated Financial Statements have been prepared under equity method along with Companys Standalone Financial Statements.

Material changes and commitment

There were no material changes and commitments affecting the financial position of the Company between the end of Financial Year (31st March, 2023) and the date of the report. Similarly, there was no change in the nature of business of the Company during the Financial Year 2022-23.

Associate Company or Joint Venture

FACT-RCF Building Products Limited (FRBL) is a Joint Venture (JV) Company of FACT. During the Financial Year 2022-23, Kerala Enviro Infrastructure Limited (KEIL) has ceased to be an Associate Company of FACT. In accordance with the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the associate company / joint ventures in Form AOC-1 is provided as part of the Annual Report.

Report on financial position and Performance of Joint Venture

During the Financial Year 2022-23, the financial results of FRBL shows a net loss of .7.9 Crores. Due to the accumulated loss, the entire networth of FRBL has been eroded. The Company has created provisions for the entire investment made in FRBL.

ISO Certification

All fertilizer plants in Udyogamandal Complex and Cochin Division are certified for ISO 14001:2015 and ISO 9001:2015. FACT Cochin Division is certified for ISO 45001:2018. FACT Udyogamandal Division is certified for ISO 50001:2018.

Pollution Control Activities

FACT gives top priority to ensure clean air and better living environment to the inhabitants in and around the factory. The effluent treatment plant and emission control facilities are kept in operation along with the plant throughout the year. Treated effluents and gas emissions discharged from plants conform to the standards prescribed by the Kerala State Pollution Control Board. As per directions from Central Pollution Control Board (CPCB)&Kerala State Pollution Control Board (KSPCB), continuous online monitoring and web uploading are in progress. All analysers as per guidelines have been installed and the parameters are uploaded in KSPCB & CPCB websites. Caprolactam plant was continuously online during the Financial Year 2022-23.

The Company could maintain all effluent parameters within limits as specified by the statutory authorities. As per an agreement between FACT and Kerala Enviro Infrastructure Limited (KEIL), the accumulated stock of hazardous wastes viz., spent V2O5 catalysts, ETP sludge, Sulphur Muck and E-waste were sent to KEIL for nal disposal.

Scheme for solid waste management is being implemented by providing separate Bin for metal scraps bio degradable and non-bio degradable wastes. The waste is collected and further segregated at designated facility. As per directions from Central Pollution Control Board (CPCB) & Kerala State Pollution Control Board (KSPCB) requirement, emission and effluent data in respect of the following are being uploaded to the website of KSPCB & CPCB. l SO2 emission from Sulphuric Acid plant stack l Ammonia, Fluoride and particulate matter emission from complex fertilizer plant stack l Fluoride and particulate matter emission from Phosphoric Acid plant stack. l pH, Fluoride, Ammoniacal Nitrogen and flow of effluent outlet.

Official Language

FACT continued to give top priority for the implementation of the Official Language Act and Rules issued by the Ministry of Home Affairs, Govt. of India from time to time. Meetings of Official Language Implementation Committee is being conducted regularly under the chairmanship of Chairman & Managing Director. In order to create enthusiasm in Official Language Hindi among the employees, FACT is regularly conducting Hindi Programmes and Competitions for the employees and Officers of various Divisions of the Company. Hindi Fortnight Celebration and Official Language Seminar were conducted at corporate level. The Company is organizing Official Language Workshops, Training Programmes, and Spoken Hindi Classes for employees on monthly basis to give awareness of Official Language Act and Rules. In order to do more official work in Hindi, the company is giving attractive Cash Incentives to the employees. FACT won the First place for the excellent performance in Official Language from the Kochi Town Official Language Implementation Committee during the year 2020-21 which was awarded in December, 2022.

Azadi Ka Amrut Mahotsav

While India moves towards the dream of accomplishing good governance, development, global peace and spreading patriotic feelings throughout the Nation as part of the completion of 75 years of Indias Independence, the employees of FACT also celebrated Azadi Ka Amrut Mahotsav by organising series of events like Blood donation campaign, Mini marathon, Dealers Meetings etc.

Public procurement policy of Micro and Small Enterprises (MSEs) Order 2012

Company is giving priority to Micro and Small Enterprises for procurement as per directives issued by the Government of India from time to time.

During the Financial Year 2022-2023, the Company procured material worth 268.60 crorefrom MSEs. Out of which 3.72 Cr (1.4%) is from MSEs owned by SC/ST entrepreneurs and 2.20 Crore (0.82%) is from women entrepreneurs. Most of the feed stocks and Fertiliser inputs procured by FACT are not available with the MSEs. FACT has paid all dues pertaining to MSEs and no amounts are pending to MSMEs as on date. FACT is registered with TReDs platform of Receivable Exchange of India Limited (RXIL) a joint venture by SIDBI and NSE for providing bill discounting facilities to MSMEs.

During the Financial Year 2022-23 FACT has conducted one vendor development programme, in cooperation with Government e-Marketplace (GeM) with special emphasis on procurement through GeM, seller registration in GeM etc.

Directors and Key Managerial Personnel

Appointments

Government of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers, vide Order No. 86/1/2017-HR-I dated 02nd March, 2023 notified the appointment of Dr.Jayachandran K as Director (Technical) on the Board of Directors of FACT.

The Department of Fertilizers, vide Order No. 95/1/2019-HR PSU dated 10th February 2023 notified the appointment of Shri Avtar Singh Sandhu as Part-time Government nominee director, on the Board of Directors of FACT.

The Department of Fertilizers, vide Order No. F.No.78/2/2006-HR-I (pt. III) dated 20.06.2023 also notified the appointment of Shri M Chandran and Shri Keda Tanaji Aher as Non-Official Part-time Directors (Independent Director) on the Board of Directors of FACT.

The Department of Fertilizers, vide Order No. 95/1/2019-HR PSU (pt. 2) dated 04.08.2023 also notified the appointment of Shri Taranjit Singh as Part-time Government Nominee Director on the Board of Directors of FACT.

Retirements and Resignations

On superannuation, Shri A S Kesavan Namboothiri, Director (Technical) ceased to be a Directorof the Company with effect from 30th September 2022. Consequent to the Order of the Govt. of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers, Ms. Deepika Jain ceased to be the Government Nominee Director on the Board of the Company with effect from 17th February 2023.

On completion of three year term Shri Rabinarayan Patra Independent Director retired from the Board of FACT with effect from 7th May 2023.

Consequent to the Order of the Govt. of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers, Sri. Avtar Singh Sandhu ceased to be the Government Nominee Director on the Board of the Company with effect from 04th August 2023.

The Board places on record its appreciation for the valuable services rendered by Shri. A S Kesavan Namboothiri, Ms. Deepika Jain, Shri. Rabinarayan Patra and Sri. Avtar Singh Sandhu during their tenure as Directors of the Company.

Reappointment of Independent Directors

During the Financial Year 2022-23, no Independent Director was reappointed on the Board of the Company as per section 149 (10) of the Companies Act 2013.

Disqualification of Directors

None of the Directors has incurred any disqualification as provided under section 164 of the Companies Act 2013.

Annual Evaluation of Board.

FACT being a Government Company, all appointments on the Board is made by the Government of India, Ministry of Chemicals and Fertilizers, Department of Fertilizers. The performance of Directors is evaluated by the Ministry of Chemicals & Fertilizers, Department of Fertilizers, Government of India. As per Government of India, Ministry of Corporate Affairs notification dated 5th June 2015, clause (e) and (p) of subsection 3 of Section 134 of the Companies Act 2013 relating to appointment, remuneration and Annual evaluation of the performance of the Board is not applicable to FACT.

However, the Independent Directors in a meeting held on 30.03.2023 reviewed the performance of non-Independent Directors, reviewed the Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board and reviewed the performance of the Chairperson of the Company as per Regulation 25(4) of SEBI (LODR) Regulations.

Declaration of Independent Directors

The Independent Directors made declaration of independence under sub-section (6) of Section 149 of Companies Act, 2013 during the Financial Year 2022-23.

Meetings of the Board

During the Financial Year 2022-23, ve (5) meetings of the Board were convened and held. The details of the meetings of the Board of Directors are given in the report on Corporate Governance, which is part of this report. The intervening gap between the meetings was within the limit prescribed under the Companies Act 2013.

Secretarial Standards

Your Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relating to “Meetings of the Board of Directors” and “General Meetings” respectively, have been followed by the Company.

AUDITORS

(1) Statutory Auditors and Statutory Auditors Report

M/s. K Venkatachalam Aiyer& Co., Chartered Accountants, Kochi, wasre-appointed as Statutory Auditors of the Company for the Financial Year 2022-23 by the Comptroller and Auditor General of India. M/s Raja & Kumar, Chartered Accountants, Chennai, was appointed as Branch Auditors for the year 2022-23, for the Area / Regional Of ces at Tamil Nadu and Kerala, by the Comptroller and Auditor General of India. M/s CKS Associates, Chartered Accountants, Hyderabad, was appointed as Branch Auditors for the year 2022-23 for the Area / Regional Of ces at Andhra Pradesh, Telengana and Karnataka States by the Comptroller and Auditor General of India.

Statutory Auditors has not made any qualification or adverse remarks on the Financial Statements for the Financial Year 2022-23.

(2) Cost Audit

As prescribed under section 148 of the Companies Act, 2013, read with the Companies (Cost Report and Audit) Rules 2014, cost accounting records are being maintained by the Company. M/s Rajendran, Mani & Varier, Cost Accountants, Kochi has been appointed as Cost Auditors of the Company for the year 2022-23. Cost Audit report for the Financial Year 2021-22 was led with Ministry of Corporate Affairs on 28th September 2022.

(3) Secretarial Audit

M/s SVJS & Associates, Company Secretaries, Kochi, has been appointed as Secretarial Auditors of the Company for the year 2022-23. The report of the Secretarial Auditor is annexed to this report as Annexure-1. The Secretarial Auditor has made the following observations in their Secretarial Audit Report.

1. As per Regulation 31 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, “the listed entity shall ensure that hundred percent of shareholding of promoter(s) and promoter group is in dematerialized form and the same is maintained on a continuous basis in the manner as specified by the Board.” However, 700 shares held by the promoter and promoter group are not maintained in dematerialized form.

2. The Board of directors of the Company comprises of Executive and Non-Executive Directors. As per Regulation 17 (1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the board of directors shall have an optimum combination of executive and non-executive directors with at least one-woman director and not less than fifty per cent of the board of directors shall comprise of non-executive directors. During the financial year 01.04.2022 to 31.03.2023, fifty per cent of the Board of directors of the Company does not comprise of Independent Directors and non-executive directors. The Company has not appointed a woman independent director upto 18/04/2022. Two Third of the members of the Audit Committee does not comprise of Independent Directors upto 06/05/2022. The members of the Nomination and Remuneration Committee do not comprise of non-executive directors and comprise of only one Independent Director upto 06/05/2022. The Nomination Remuneration Committee comprises of executive directors as well. Explanation on observations made by Secretarial Auditors in their report is given below;

1 The entire promoter(s) and promoter group shares are in dematerialized form except for the 700 shares held by the nominee shareholders, holding on behalf of the President of India.

2. Being a Central PSU, the members on the Board of FACT are nominated by the Department of Fertilizers, Ministry of Chemicals & Fertilizers, Govt. of India. On appointment of woman Independent Director w.e.f 18.04.2022 and subsequent reconstitution of the Committees w.e.f. 06.05.2022, the Company complied with the SEBI (LODR) Regulations, 2015, except Regulation 17(1). The Company will comply the provisions of regulations 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, once the notification on appointment of Independent Directors is issued by the Government of India.

Audit Committee

In line with the provisions of Section 177 of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 an Audit Committee of the Board has been constituted. Details of Members/ Meetings of the Audit Committee are elaborated in the report on Corporate Governance annexed here with. There were no instances in which the Board has not accepted any recommendation of the Audit Committee.

Public Deposit

During the Financial Year 2022-23, the Company has not accepted any deposit from public.

Investorfieducation and Protection Fund (IEPF)

During the year 2022-23 no amount is required to be transferred to Investorfieducation and Protection Fund and therefore FACT has not transferred any amount to Investorfieducation and Protection Fund. No amount is pending for transfer to IEPF.

Contract or arrangement with related parties

The transactions entered into with related parties for the year under review were on arms length basis and in the ordinary course of business. The disclosure in form No AOC-2 for the transactions with related parties during the period under review is enclosed as Annexure -2.

Corporate Social Responsibility

FACT continued to give priority on various Social Responsibility measures during the Financial Year 2022-23. The Company has constituted a Board level Committee as per the provisions of Companies (Corporate Social Responsibility Policy) Rules 2014. Annual Report on CSR as per the provisions of Companies (Corporate Social Responsibility Policy) Rules 2014 is annexed to this report as Annexure-2A.

Risk Management

FACT has formulated a risk management policy for identification of potential area of risk and mitigation of the same. FACT is having adequate risk management infrastructure in place capable of addressing all potential risks.

Vigil Mechanism& Whistle Blower Policy

FACT is having a vigil mechanism for directors and employees to report their concerns. The Directors and employees can approach Chairman, Audit Committee of the Board directly and report their concern in appropriate case. The vigil mechanism and whistle blower policy is published in the web site of the Company www.fact.co.in. and can be download using the link https://fact.co.in/home/ Dynamicpages?MenuId=45

Code of Conduct

FACT is having a code of conduct known as FACT Code of business Conduct and Ethics applicable to the members on the Board and all senior executives of the Company. The code has been posted on the Companys website www.fact.co.inand can be download using the link https://fact.co.in/home/ Dynamicpages?MenuId=2959 The code lays down the standard procedure of business conduct which is expected to be followed by the Directors and senior executives of the Company. The Board members and Senior Executives of the Company have af rmed compliance of the code of Conduct for the Financial Year 2022-23.

Prevention of Insider Trading

No instances of insider trading have been reported on FACT shares till date. A Code of Conduct on Prohibition of Insider Trading is published in the website of the company and can be download using the link https://fact.co.in/home/Dynamicpages?MenuId=849 .

Particulars of Loan given, Investment made, Guarantees given and Securities provided

Particulars of Investment made by the Company, are provided in the financial statement for the year 2022-23. During the Financial Year 2022-23, FACT has not provided any loan/guarantee or made any investment within the purview of Section 186 of the Companies Act 2013.

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

The Company has formulated a Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received relating to sexual harassment. Following are the summary of sexual harassment complaints received and disposed of during the period under review:

Number of complaints at the beginning of the year: 2
Number of complaints received during the year: 0
Number of complaints disposed of during the year: 2
Number of complaints at the end of the year: 0

Particulars of Employees

During the year under review, none of the employees of the Company had drawn remuneration in excess of the limit prescribed under section 134 (3) (c) of the Companies Act, 2013 read with Companies (Appointment of Managerial Personnel) Rules 2014.

Vigilance

Vigilance department in FACT is an integral part of the management function. This department functions with the concept of “Vigilance for Corporate Excellence” and works with a motto” committed to Institute and Internalize ethical practices in FACT”. Adopting an approach of proactive and preventive vigilance, this department strives to improve the quality management systems within FACT by creating a corruption free environment for each individual to strive for high level performance towards achieving the Vision and Mission of FACT.

The work profile of Vigilance department includes investigation of complaints received from various sources, surprise inspections, regular surveillance/intelligence gathering, scrutiny of procurement/contract les, scrutiny of property returns of employees, coordination with CVC and other Government Departments.

During the Financial Year 2022-2023, the Company has observed Vigilance Awareness Week with the theme Corruption free India for a developed Nation, from 31st October 2022 6th November, 2022, in line with the decision of Central Vigilance Commission and conducted several programs to create vigilance awareness.

Integrity Pact

An Integrity Pact in line with Government of India guidelines in this regard has been nalised and implemented in the company.

The Right to Information Act, 2005

FACT is complying the provisions of the Right to Information Act, 2005 and the details relating to Public Information Officer, Assistant Public Information officer, Appellate Authority, Nodal Officer etc. are published in the website of the Company www.fact.co.in and can be download using the link https://fact.co.in/home/Dynamicpages?MenuId=472

Annual Return

The Annual Return of the Company as provided under sub section (3) of Section 92 of Companies Act, 2013, is published on the website of the Company, www.fact.co.in.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information regarding the conservation of energy, technology absorption, and foreign exchange earnings and-outgo as required to be disclosed in terms of the Companies (Accounts) Rules 2014 is set out in a separate statement attached to this report.

Directors Responsibility Statement

Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors hereby state that:

(a) in the preparation of annual accounts for the year ended March 31, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(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 profit and loss statement 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 this Act, 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 were operating effectively; and

(f) 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.

General

The Board of Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review.

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the company under any scheme.

4. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

5. Neither the Managing Director nor the whole time Directors of the Company receive any remuneration or commission from its Associate Company.

6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

7. No fraud has been reported by the auditors to the Audit Committee or to the Board.

Acknowledgement

Your Directors gratefully acknowledge the valuable guidance and support extended by Honble Minister of Chemicals and Fertilizers, Honble Minister of State for Chemicals and Fertilizers, Honble Chief Minister, Government of Kerala, the Secretary, Ministry of Chemicals and Fertilizers and other Officials of the Ministry of Chemicals and Fertilizers as well as other Ministries of the Government of India, Department of Public Enterprises and the State Governments of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Bihar, Odisha, Maharashtra ,West Bengal and Union Territory of Puducherry.

The Directors deeply appreciate the committed efforts put in by the employees and look forward to their dedicated services and endeavor in the years ahead to enable the Company to scale greater heights.

The Directors also acknowledge the continued support extended by the Shareholders, Dealers, Suppliers, Bankers, Valued Customers and Auditors of the Company, the Press and Electronic Media.

For and on behalf of the Board of Directors.

(Kishor Rungta)

Chairman and Managing

Director DIN-00231106

Place : Udyogamandal

Date : 31.08.2023