tuticorin alkali chemicals fertilizers ltd Management discussions

Your Directors are pleased to present the 49th Annual Report and the Audited Financial Statements of the Company for the year ended 31st March, 2022.

FINANCIAL RESULTS (Rs. In Crores)

description	2021-22	2020-21
Sales Turnover (Net of GST)	180.57	67.91
Gross Loss after meeting all expenses but before providing depreciation and interest	28.63	52.82
Add: Interest	2.30	1.95
Cash Loss	30.93	54.77
Add: Depreciation for the year	3.04	3.23
Extraordinary items	-	-
Net Profit / (Loss) for the year	(33.97)	(58.00)
Accumulated Loss	418.39	384.42
EPS & Diluted EPS	(2.79)	(4.76)

The unseasonal rains during April and May 21 created shortage of the major raw material Salt and the plants have to be shutdown whole of the month of June ‘21. A ship load of Salt was arranged from Gujarat and the plants were restarted by the second week of July 21. Similarly very heavy rains in the months of November and December ‘21 and the twin cyclones flooded the coal yard and the production was interrupted in December ‘21.

These major interruptions alongwith ongoing COVID appropriate measures restricted the production to only 41,683 MTs of Soda Ash and 37,414 MTs of Ammonium Chloride in the financial year 2021-22. The shutdown periods were gainfully used to carry out major repairs and also replace the defective pumps and compressors and centrifuges etc. Though the performance of the Company was very good in the last quarter registering a profit of Rs. 14.65 Crores, due to higher level of production and higher remunerative selling prices. The losses incurred in the first three quarters has pulled down the overall performance for the financial year.

The production and sales during the year ended 31st March, 2022 compared to the previous year, are as given below;

(Qty. in MTs)

Product	Production		Sales (Includes internal Consumption)
	2021-22	2020-21	2021-22	2020-21
Soda Ash (Light)	41,683	23,651	*41,860	*24,843
Soda Ash (Dense)	--	--	--	*13
Ammonium Chloride	37,414	17,687	30,547	17,100
Sodium Bicarbonate	--	--	--	--

includes captive consumption DIVIDEND

Your Directors are not able to recommend any dividend in view of the accumulated losses.

MARKET SCENARIO

The financial year began on the routine note and nothing significant was noticed till September 21. The selling prices were flat, whereas there was steep increase in the raw material prices month-aftermonth, especially that of Ammonia, Salt and Coal. The prices of Coal almost doubled and Salt tripled during the second and third quarter of the year. The selling prices has started moving up only in October ‘21 and reached all-time high figures by February and March 22. Due to the global shortage of Soda Ash and also due to increase in oil price, the freight rates have pushed the landed cost of the imported raw materials significantly, based on which, the Indian market price is determined.

Inspite of the turbulences of selling and buying prices, the market for the product remains good and your Company did well in producing 14,840 MTs of Soda Ash in the 4th quarter of the financial year. We expect that with the high price prevailing now, which is likely to continue for the major part of the next financial year also and with the constant vigil on repairs and maintenance and improving the production, your Company will be able to record better performance in the next financial year.

FUTURE OUTLOOK

Since the market is continuing to improve and in view of the continuous encouragement from our long-term customers, it should be possible for the Company to ramp-up the production to the maximum and also take upon the expansion activities.

In view of the abundant availability of CO2 from the flue gas of not only TFL, but from the adjacent fertilizer plant, and with the setting up of a another 20,000 MTs storage tank at the imported ammonia facility at the Tuticorin port by M/s.Greenstar Fertilizers Ltd., the Company can embark upon expanding the capacity of the plants. The Ammonium Chloride fertilizer is also being gainfully used in the manufacture of complex fertilizers.

opportunities and threats

Since the Companys production facilities are at Tuticorin, the Southern tip of India, additional volumes, when produced, need to be moved-up to North. The prohibited cost of road transport has to be overcome by the selective use of coastal shipping and rail rake movement. Your Company is in discussion with other Companies, who move large volumes of their products, to use their facilities. As we progress with our expansion activity, we may also strengthen our network in these areas. This transportation cost is a major threat especially when the oil prices are soaring high.

ENVIRONMENT AND SAFETY

Updation to ISO 9001:2015 the latest standard is under progress. WIND MILL

During the year 2021-22, 4,70,712 units were generated from Wind Turbine Power Generators at Gudimangalam, Tirupur District, as against 4,28,983 units generated in the previous year. The ageing windmills are being refurbished for better results

pOWER pURCHASE

Your Company didnt purchase electricity under the Group Captive Scheme during the financial year starting from 1st April, 2021 to 31st March, 2022

CAPTIVE SALT WORKS

10,440 MTs of salt was produced and all the unused pans were also brought under production and the systems were modified to produce quality salt. With the availability of enriched water from the SWRO plant, more quantity of quality salt would be produced during the year.

BSE / SEBI

As per the order of SEBI, your Company went through the process OFS through BSE and achieved the prescribed Minimum Public Shareholding of 25%.

FIXED DEPOSIT

There was no outstanding deposit as at 31st March, 2022. The Company has neither accepted nor renewed any deposits during the year under review.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND pROTECTION FUND

Since there was no Dividend declared last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

MATERIAL CHANGES AND COMMITMENT IF ANY, AFFECTING THE FINANCIAL pOSITION OF THE COMpANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATES AND THE DATE OF THE REpORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates on the date of this report.

STATEMENT CONCERNING DEVELOpMENT AND IMpLEMENTATION OF RISK MANAGEMENT pOLICY OF THE COMpANY

The Statement showing the details regarding the development and implementation of Risk Management Policy of the Company is furnished in Annexure 1, which is attached to this report.

The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting.

Your Company was earlier primarily dependent on SPIC for the supply of CO2, while the ammonia was imported through their storage and pumping system. Your Company has now implemented an independent CO2 Recovery facility, which is operational from November 2016. This has reduced the risk considerably. Ammonia will continue to be imported through the augmented storage system. The Board does not envisage any other major risk.

DETAILS OF pOLICY DEVELOpED AND IMpLEMENTED BY THE COMpANY ON ITS CORpORATE SOCIAL RESpONIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibility initiates as the said provisions are not yet applicable as on date in view of the accumulated losses of the Company.

particulars of loans, guarantees or investments made

UNDER SECTION 186 OF THE COMpANIES ACT, 2013

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

pARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED pARTIES

The transactions entered into during the financial year with related party as defined under the Act were in the ordinary course of business and at arms length basis. There were no materially significant transactions during the financial year 2021-22, which were in conflict with the interests of the Company. Policy on materiality of related party transactions is placed on the Companys website viz., www. tacfert.in

company?s policy relating to directors appointment,

pAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 2 and is attached to this report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had five Board meetings during the financial year under review. Full details are given in the Corporate Governance Report.

DIRECTORS? RESpONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:-

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had 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 at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had 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 had prepared the annual accounts on a going concern basis; and

e) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to 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.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMpANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No case of sexual harassment was reported during the year. DIRECTORS AND KEY MANAGERIAL pERSONNEL

The Companys Board comprises of the following directors: Mr.B.Narendran, Mr.S.Asokan, Mrs.Rita Chandrasekar, Mr.E.Balu, Mr.K.R.Anandan and Mr.G.Ramachandran.

Mr.S.Nandakumar is the Chief Financial Officer of the Company.

Ms.S.Rohini Priyadarshini took over as Company Secretary in February 2021 and continue to effectively carryout the routines of the Company Secretary.

COMMITTEES OF THE BOARD

There are four committees of the Board namely, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee. The details of composition of committees are furnished in the Corporate Governance report, which is annexed to this report.

DECLARATION OF INDEpENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves for the continuance / appointment as independent directors under the provisions of the Companies Act, 2013 and the relevant rules.

The Independent Directors have also affirmed that they have completed requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act, read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015, the Boards performance and performance of the non-independent Director were considered/evaluated by the independent directors at their meeting without the participation of the non-independent director and key managerial personnel.

They also assessed the quality, quantity and timeliness of flow of information between the Companys Management and the Board that are necessary for the Board to effectively and reasonably perform its duties.

Pursuant to the provisions of the Companies act, 2013 and Regulation

17 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its various committees.

STATUTORY AUDITORS

M/s.MSKA& Associates, Chartered Accountants, Chennai, (Registration No.105047W) have been appointed as Statutory

Auditors of the Company in 44th Annual General meeting for a term of five years from the Financial year 2017-‘18 till the conclusion of the Annual general meeting of the Company to hold office to be held in the year 2022.

SECRETARIAL AUDITOR

M/s. KRA & Associates, Practicing Company Secretaries have been appointed by the Board of Directors to carry out the Secretarial Audit for the year ended 31st March, 2022. Secretarial Auditors Report is annexed, which forms part of this report.

COST AUDITOR

As per the Government of Indias directive, the Companys Cost Reports in respect of Fertilizer -Ammonium Chloride and Chemical - Soda Ash for the year ended 31st March, 2022 are being audited by the Cost Auditor M/s. RavichandranBhagyalakshmi& Associates, (Firm Reg No. 001253), who was appointed by the Board. The Company is required to maintain Cost Records as specified by the Central Government under Section 148 (1) of the Act and that accordingly such accounts and records are made and maintained. The Cost Audit Report for the year ended 31st March, 2021 was filed within the time stipulated under the Act.

EXpLANATIONS OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE pRACTICING COMpANY SECRETARY IN THEIR REpORTS

There was no qualification, reservations or adverse remarks made by the Statutory Auditors, M/s. MSKA & Associates and Secretarial Auditor, KRA & Associates, Practicing Company Secretaries in their reports. However the Secretarial Auditor have some observations and our response is as below:-

Under Companies Act

Regularise sale of office building The old office building has not been sold.

Managerial Remuneration

No director has been employed by the Company excepting the Executive Director and hence they receive only the sitting fees as disclosed in the annual report.

Under SEBI

Late induction of two directors

Two additional directors were inducted as per the LODR Regulations in June 21, well before the first board meeting of the financial year. Hence BSE waived the penalty for the later induction.

Under other laws

The National Green Tribunal (NGT) levied token compensation of Rs.36.24 lakhs and complimented the efforts of the company in implementing the carbon capture project. Hence a minimum penalty was levied in view of the various case laws of the country

Under other reports

The auditors have also recommended generally to update the website, the secretarial standards etc., which will be taken up in due course.

The Statutory Auditors Report for the financial year ended, 31st March 2022 is annexed.

INTERNAL FINANCIAL CONTROL:

The Board has adopted the Policies and Procedures for ensuring the orderly and efficient conduct of its business, including adherence to 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 Disclosures.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Audit Committee consists of Mr. B. Narendran, Mr. K.R. Anandan and Mrs. Rita Chandrasekar.

The Company has established a vigil mechanism and oversees through a committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co-employees and the Company. Policy is given in Annexure 3 and is placed on the Companys website viz., www.tacfert.in.

SHARES

The Company has not bought back any of its shares during the year under review.

The Company has not issued any "Sweat Equity" Shares during the year under review.

No Bonus Shares were issued during the year under review.

The Company has not provided any Stock Option Scheme to the employees.

ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with relevant Rules, is placed in the website of the Company in the link https://www.tacfert.in/

CORPORATE GOVERNANCE

A report on Corporate Governance as stipulated under Schedule V and Regulation 34(3) of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The requisite certificate from a Chartered Accountant confirming compliance with the conditions of corporate governance as stipulated is annexed to this Report.

FAMILIARIZATION PROGRAMME

The Independent Directors attend a Familiarization programme on being inducted to the Board. The details are provided in the Corporate Governance report and on the website of the Company viz., https:// www.tacfert.in. Till COVID set in, the Directors were visiting the factory to keep updated of the progress.

DISCLOSURE ON COMpLIANCEWITH SECRETARIAL STANDARDS

Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with.

particulars of employees

The Company has no Employees, whose salary exceeds the limits as prescribed under Rule (5)(2) of Companies (Appointment and Remuneration of Key Managerial Personnel) Rules , 2014.

Disclosures under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year - 2021-22	Mr. G. Ramachandran, Managing Director	18.82
	Mr. B. Narendran	0.46
	Mr. S. Ashokan	0.46
	Mrs. Rita Chandrasekar	0.46
	Mr. K.R. Anandan	0.46
	Mr. E. Balu	0.27
The percentage increase in remuneration of each Director, Chief	Mr.G.Ramachandran, Managing Director	Nil
Financial Officer and Company Secretary in the financial year - 2021- 22.	Mr. S.Nandakumar, Chief Financial Officer	5%
	Mrs. S.Rohini Priyadarshini, Company Secretary	-9%
The percentage increase in the median remuneration of employees in the financial Year - 2021-22.	3.97
The number of permanent employees on the rolls of Company as on 31.03.2022	221
Average percentage increase already made in the salaries	Average percentage increase already made in the	3.86
of employees other than the managerial personnel in the last	salaries of employees other than the key managerial
financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof	personnel in the FY 2021-22.
	Average percentage increase already made in the salaries of the key managerial personnel in the FY 2021-22	0.23

AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY

Company is adopting remuneration guidelines for fixing the remuneration as per the policies laid down by the Nomination and Remuneration Committee.

PARTICULARS AS REQUIRED UNDER RULE 3 OF THE COMPANIES (ACCOUNTS) RULES, 2014

A. Conservation of Energy

1. Steps taken and impact on conservation of energy

a. Filter press was installed and commissioned to recycle process liquor without having it to pass through to distiller. This would result in saving of approximately 29 tonnes of steam per day. Moreover it will improve the ammonia specific consumption.

b. A new product centrifuge was installed to eliminate recycle of crystals back to the system. This resulted in energy saving by preventing unnecessary recycle of process liquor.

2. Steps taken for utilizing alternative sources of energy We are studying co-firing of biomass alongwith coal.

3. Capital investment in conservation energy

Further investment of Rs.120 lakhs have been made on installation of VFDs and also change of centrifuges.

B. Technology Absorption

(a) The Company has fully utilized the imported Technology of Hitachi Zosen, Japan which was imported in the year 1980.

(b) Expenditure on Research & Development

(i) Capital Nil

(ii) Recurring Nil

(iii) Total Nil

C. Foreign Exchange Earnings and outgo:

(a) Foreign Exchange inflow: Rs.1.34 Crores

(b) Foreign Exchange outflow: Rs.26.05 Crores

GENERAL

No disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year:

a. No significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future

b. There was no issue of Equity shares with differential voting rights

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company?s activities during the year under review. Your Directors also acknowledge gratefully the shareholders for their support and confidence reposed on your Company.

DISCLAIMER

Statements in the Management Discussion and Analysis describing the Company?s objectives, estimates, projections, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company?s operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes and economic development within India

	For and on behalf of the Board of Directors
Chennai	B NARENDRAN	G.RAMACHANDRAN
08.08.2022	Director	Managing Director