• OPEN AN ACCOUNT
Indian Indices
Nifty
15,835.35 83.30
(0.53%)
Sensex
53,234.77 326.84
( 0.62%)
Bank Nifty
33,940.90 401.45
( 1.20%)
Nifty IT
27,890.65 -173.60
( -0.62%)
Global Indices
Nasdaq
11,127.85 99.11
(0.90%)
Dow Jones
31,097.26 321.83
(1.05%)
Hang Seng
21,830.35 -29.44
(-0.13%)
Nikkei 225
26,153.81 218.19
(0.84%)
Forex
USD-INR
78.71 -0.10
(-0.13%)
EUR-INR
82.06 -0.19
(-0.23%)
GBP-INR
95.15 -0.10
(-0.10%)
JPY-INR
0.58 0.00
(-0.09%)

EQUITY - MARKET SCREENER

Chambal Fertilisers & Chemicals Ltd
Industry :  Fertilizers
BSE Code
ISIN Demat
Book Value()
500085
INE085A01013
148.5697068
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
CHAMBLFERT
8.89
11441.55
EPS(TTM)
Face Value()
Div & Yield %
30.92
10
2.73
 

As on: Jul 05, 2022 09:01 AM

Dear Members,

Your Board of Directors have pleasure in presenting the 36th Annual Report on the business and operations of the Company together with audited financial statements for the Financial Year ended March 31,2021.

1. Standalone Financial Results

The financial performance of your Company on standalone basis is summarized below:

(Rs. in Crore)

Particulars

Financial Year

2020-21 2019-20
Revenue from Operations 12719.01 12205.95
Other Income 59.89 179.34
Total Income 12778.90 12385.29
Total Expenses 10819.96 11093.01
Profit before Exceptional Items and Tax 1958.94 1292.28
Exceptional Items - (33.42)
Profit before Tax 1958.94 1325.70
Total Tax Expenses 611.90 101.39
Profit for the Year 1347.04 1224.31
Other Comprehensive Income for the Year (Net of Tax) 151.57 (251.62)
Total Comprehensive Income for the Year 1498.61 972.69
Retained Earnings - Opening Balance 3254.12 2381.60
Add:
Profit for the Year 1347.04 1224.31
Any Other Change 0.19 0.57
Less:
Cash Dividend (including Dividend Distribution Tax) 124.86 301.05
Transfer to General Reserve 50.00 50.00
Re-measurement Loss on Defined Benefit Plans 0.34 1.31
Retained Earnings - Closing Balance 4426.15 3254.12

2. Operations

The Company manufactures Urea in its three plants located at Gadepan, District Kota, Rajasthan. The Company is also engaged in marketing of other fertilisers and agri-inputs such as Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP), Ammonium Phosphate Sulphate (APS), different grades of NPK fertilisers, Sulphur, Micronutrients and Agrochemicals.

The Financial Year 2020-21 started amidst the outbreak of Novel Corona Virus ("COVID-19") pandemic and the country was under lockdown. The economies world over were severely impacted by COVID-19 pandemic and there were lot of apprehensions about the economic activity in the country. However, the Company was able to continue its operations at normal levels. The Company's production, dispatches, sales and market collections remained unaffected. The Company is continuously monitoring the situation arising on account of COVID-19 pandemic considering both internal and external factors and taking appropriate measures in this regard. When many sectors were under stress due to pandemic, the agriculture sector remained unaffected and consecutive good monsoon in the second year helped the Company in maintaining the growth momentum.

The Company had achieved highest ever production and sales of Urea and highest ever sales volumes of DAP and MOP fertilisers. There was also growth in sales of NPK fertilisers, Sulphur, Micro-nutrients and Agrochemicals. The sales volumes of APS fertilizer were also encouraging. During the year under review, the Company has crossed an important milestone of sales of 5 Million MT of fertilisers. The increased sales volumes of Urea and increased volumes and better margins on marketed products have enabled the Company to achieve highest ever revenue and profit after tax during the year.

After establishing itself firmly in its existing marketing territory, the Company is now looking forward to expanding its reach in new geographies in eastern, western and southern part of India. The Company is increasing its presence by opening marketing offices in these territories. Apart from DAP and MOP, the focus of the Company is to expand its volumes of APS/ NPK fertilisers in the new territories. The expansion of its marketing area will also allow the Company to get the advantage of different weather cycles and seasons for sale of products.

The Government of India had made additional allocation for fertiliser subsidy to clear the backlog. The outstanding subsidy of the Company as on March 31, 2021 was Rs. 1103.28 Crore as against Rs. 5349.33 Crore outstanding as on March 31, 2020. This has improved the liquidity position of the Company which has resulted into substantial reduction in the finance cost and its benefit will continue in the coming year also. Further, the credit rating for long term borrowings of the Company has been upgraded from CRISIL AA/Positive to CRISIL AA+/Stable. The detailed information on the business operations of the Company, the Industry in which the Company operates and other relevant information is given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.

3. Dividend

The Board of Directors of the Company declared an interim dividend of Rs. 3.00 per equity share of Rs. 10 each @ 30% during the Financial Year ended March 31, 2021. Further, the Board of Directors recommended final dividend of Rs. 4.50 per equity share of Rs. 10 each @ 45% for the Financial Year 2020-21. The total dividend for the Financial Year 2020-21 amounts to Rs. 7.50 per equity share of Rs. 10 each with total outgo of Rs. 312.15 Crore on account of interim and final dividend. During the Financial Year 2019-20, the Company paid total dividend (i.e. interim dividend) of Rs. 4.00 per equity share of Rs. 10 each @ 40%.

The Dividend Distribution Policy of the Company is attached as Annexure "B" to this Report and also available on the website of the Company and can be accessed at the weblink: http://www.chambalfertilisers.com/pdf/Final-Dividend-Distribution-Policy.pdf. The Dividend Distribution Policy was amended with effect from November 05, 2020 mainly to incorporate the following changes:

(i) Inclusion of total dividend pay-out ratio of about 25% (inclusive of tax on distribution of dividend in the hands of the Company, if any) of the annual standalone profits after tax of the Company, to make the Dividend Distribution Policy more specific in respect of dividend distribution out of profits of the Company.

(ii) Inclusion of additional factors viz. buy-back of shares of the Company and investment in new business(s), for utilization of retained earnings of the Company, in order to enable the Company to have more options in this regard.

The interim and final dividend declared/recommended by the Board of Directors are in accordance with the Dividend Distribution Policy of the Company.

4. Consolidated Financial Statements

In pursuance of the provisions of the Companies Act, 2013, the rules framed thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the applicable Accounting Standards, the Company has prepared Consolidated Financial Statements. The Audited Consolidated Financial Statements alongwith Auditor's Report and the Statement containing salient features of the financial statements of Subsidiaries/Joint Venture (Form AOC - 1) forms part of the Annual Report.

5. Corporate Governance Report and Code of Conduct

Your Directors strive to maintain the high standards of transparency and Corporate Governance. The Corporate Governance Report for the Financial Year 2020-21 is attached as Annexure "C" to this Report. All the Directors of the Company and senior management personnel have confirmed the compliance of Code of Conduct and Ethics of the Company. The declaration of the Managing Director confirming compliance with the 'Code of Conduct and Ethics' of the Company is enclosed as Annexure "D" to this Report and Auditor's Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "E" to this Report.

6. Subsidiaries and Joint Venture

The details of the subsidiaries and joint venture are given below:

(a) Subsidiaries

(i) CFCL Ventures Limited, Cayman Islands and its subsidiaries

CFCL Ventures Limited ("CVL") is a subsidiary of your Company in Cayman Islands and ISGN Corporation ("ISGN, USA") in USA and ISG Novasoft Technologies Limited ("ISGN, India") in India are subsidiaries of CVL.

There was no business activity in these subsidiaries during the year under review.

Inuva Info Management Private Limited ("Inuva") was a subsidiary of ISGN, India. The National Company Law Tribunal, Kolkata Bench vide its order dated May 03, 2021 had approved dissolution of Inuva upon voluntary liquidation. Accordingly, Inuva stands dissolved from May 03, 2021 and ceased to be a subsidiary of ISGN, India and the Company.

(ii) Other Subsidiaries

Chambal Infrastructure Ventures Limited is a wholly owned subsidiary of the Company in India. There was no business activity in this subsidiary during the year under review.

India Steamship Limited ("ISS, India") was a wholly owned subsidiary of the Company in India. The National Company Law Tribunal, Jaipur Bench vide its order dated February 09, 2021 had approved dissolution of ISS, India through voluntary liquidation. Accordingly, ISS, India stands dissolved from February 09, 2021 and ceased to be a subsidiary of the Company. Further, India Steamship Pte. Ltd. ("ISS, Singapore"), a wholly owned subsidiary of the Company in Singapore, had earlier applied for closure and voluntary striking-off its name from the register of Accounting and Corporate Regulatory Authority, Singapore ("ACRA"). The name of ISS, Singapore was struck-off from the register of ACRA on April 06, 2020 and it ceased to be a subsidiary of the Company.

(b) Joint Venture: Indo Maroc Phosphore S. A. - IMACID ("IMACID")

IMACID is a joint venture of your Company in Morocco with Tata Chemicals Limited and OCP, Morocco. Each partner is having equal stake in the joint venture (33.33% each). IMACID is engaged in the manufacture of phosphoric acid in Morocco.

The performance of IMACID is summarized below:

Particulars April 01,2020 to March 31,2021 April 01,2019 to March 31,2020
Production of Phosphoric Acid (MT) 468,987 344,381
Sales of Phosphoric Acid (MT) 397,670 293,093
Revenue Moroccan Dirham 2638.01 Million (Rs. 2097.22 Crore) Moroccan Dirham 1944.07 Million (Rs.1425.01 Crore)
Profit after Tax Moroccan Dirham 337.56 Million (Rs. 268.36 Crore) Moroccan Dirham 12.34 Million (Rs. 9.04 Crore)

The phosphoric acid is raw material for manufacture of phosphatic fertilisers. The demand of phosphoric acid gradually improved and there was also upward movement in sales prices thereof during the Financial Year 2020-21 which has improved the margins of IMACID. The higher production and sales with higher margins have enabled IMACID to substantially improve its financial performance during the Financial Year 2020-21.

The Company does not have any material subsidiary as per the provisions of the Listing Regulations.

The performance of the subsidiaries of the Company is summarized in Form AOC - 1 attached to the Financial Statements of the Company in pursuance of Section 129 of the Companies Act, 2013. The contribution of subsidiaries and joint venture to the overall performance of the Company is also provided in Note no.47 to the Consolidated Financial Statements.

The Company shall place the financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013.

Except as mentioned above, no subsidiary, associate or joint venture has been acquired or ceased/ sold / liquidated during the Financial Year 2020-21.

7. Health, Safety, Quality and Environmental Protection

Your Company is operating three hi-tech Urea plants having world class technology. The health and safety of people is of paramount importance for the Company and it continuously strives to improve the health and safety standards in its operations. The Company has in place a Health, Safety, Security, Environment & Quality Policy as part of a formal process to achieve this objective. An Integrated Management System based on ISO- 45001:2018, ISO-14001:2015, ISO- 9001:2015 has been established and the Company has also adopted Process Safety Management System. The brief outline of the Company's initiatives in this regard is as under:

(a) Health & Hygiene

The health assessment and occupational disease monitoring of employees and contractor work force is carried out through periodic medical examinations and hygiene monitoring at work place.

The Company's health centre at Gadepan is equipped with requisite medical facilities and doctors and it provides healthcare services to employees & their families, contractor workforce and villagers in the vicinity of the plants. Three well equipped ambulances are available at Gadepan which also cater to the requirements of villagers in medical emergencies. The Company also facilitates employees to consult a Company affiliated doctor to ensure the well-being of the employees. Training and awareness programs on health and hygiene related matters are organized from time to time.

The Company has taken all the preventive measures for protection against COVID-19 pandemic. Further, awareness sessions on preventive measures of COVID-19 pandemic like social distancing, wearing mask, hand sanitization, hygiene, etc. are being regularly organised amongst employees, contractor workforce and residents of township at Gadepan.

(b) Safety Management

The Company strives to maintain highest levels of health and safety of all the employees and contractor workforce through a well-defined health and safety management system. The Company has implemented a number of safety measures for accident prevention like hazard identification and risk assessment, job safety analysis, safety work permit system, etc. The Company has a strong Process Safety Management System in place to take care of safety in operation of plants and maintenance of equipment and machinery.

In order to take care of safety aspects in maintenance jobs in the plants, a cross functional team of senior employees review the jobs on a daily basis from safety perspective. Extensive trainings and drills are conducted by internal and external experts which helps in maintaining and improving safety systems. To encourage safety awareness, schemes of "Near-Miss" and "Make- to Good" reporting are in place and various programmes and campaigns are also organized. Keeping in view the nature of its operations, the Company has a well-defined "Onsite Disaster Management Plan" and "Mutual Aid and Response Group" arrangement with neighbouring industry. The Company also provides services to all neighbouring villages surrounding Gadepan plants in case of any fire emergency.

Your Company has achieved zero reportable accident during last three consecutive years.

(c) Environment Protection

Your Company recognizes its responsibility towards protection of environment and always looks for opportunities to improve its environmental performance. The Company gives utmost importance to conservation of natural resources (including raw materials, fuels and water). The philosophy of "Reduce, Re-use & Re-cycle" has been adopted for usage of the resources and reduction of waste generation and emissions.

In order to achieve zero liquid discharge in third Urea plant of the Company ("Gadepan-III Plant"), a reverse osmosis - zero liquid discharge plant has been installed for treatment of effluent, which has resulted in lesser intake of fresh water from the river. Online continuous ambient air monitoring stations have been installed in the premises in prominent directions. To monitor the quality of liquid effluent, online continuous liquid effluent monitoring systems have been installed.

The Company has developed dense green belt in Gadepan campus which provides healthy environment to people residing in and around the campus. The greenery at the campus is maintained through regular care and plantation of trees.

As a recognition to the dedicated efforts of the Company, it has been awarded state level first prize in the large scale industry category under the "Factories Safety Award Scheme-2021" by the Government of Rajasthan for the best safety performance during last three years. Your Company has also won "Fertilizers Association of India Environmental Protection" award for the year 2019-20.

(d) Quality Management

Your Company has adopted state of the art technology in its plants to ensure best in class quality of Urea. The relevant raw material, Urea manufactured by the Company and the fertilisers marketed by the Company are tested at the Company's laboratory at Gadepan. The Company sources the products marketed by it from the reputed manufacturers, some of whom are large multi-national organisations. The Company also undertakes market surveys, customer feedback surveys, etc. and the outcome thereof is considered appropriately for improvement in quality and different areas of operations.

8. Corporate Social Responsibility

The Corporate Social Responsibility ("CSR") is ingrained in the working of your Company since long and its CSR projects and programmes have benefitted the community at large over the years. The CSR initiatives of the Company largely focused on the areas where it makes lasting impact to uplift the social and financial status of the people in the villages and improves their living standard. The Company has developed CSR projects and programmes keeping in view the needs and requirements of the community in the rural areas especially the villages near its plants.

The CSR projects/ programmes of the Company cover mainly the areas of Education including Technical and Vocational Education, Rural Development, Healthcare and Sanitation, Employability and Empowerment, Environment Sustainability, Animal Welfare and Soil Health, Disaster Management, etc. As a socially responsible organization, your Company has made contribution of Rs. 5.00 Crore to the Prime Minister's Citizen Assistance and Relief in Emergency Situation Fund i.e PM CARES Fund during the Financial Year 2020-21.

The brief outline of the CSR projects / programmes of the Company is as under:

a) Project Akshar-Pre-Primary and School Education

Your Company is supporting 44 Government schools and 41 Government Aanganwadi centers of Kota and Baran Districts of Rajasthan. The Company works for enhancing overall education standard in these Government schools through remedial / extra classes, development of infrastructure, promotion of extra-curricular activities, etc. With the continuous efforts of the Company, these schools are now having quality infrastructure facilities to support the education of the students. During the Financial Year 2020-21, the Company had started 30 new SMART classes to introduce digital interface, bringing the total number to 61 SMART classes in the aforesaid Government schools. The science labs were established in two senior secondary schools for developing science acumen amongst students of higher classes. The substantial improvement in the academic performance of the students in these schools over the years is testimony to the efforts made by the Company in this regard.

The schools were closed since March 2020 due to outbreak of COVID-19 pandemic. The students were facilitated through online classes, e-content sharing and problem solving sessions to ensure continuous academic engagement of students.

CFDAV School is being run in collaboration with Dayanand Anglo Vedic College Trust & Management Society and over 63% students in this school are from nearby villages.

b) Project Saksham - Technical and Vocational Education

Your Company is continuously focusing on equipping rural youth with suitable technical skills with an objective to enhance employment opportunities through 5 Industrial Training Institutes and one Government Polytechnic College near its plants at Gadepan. Renovation and infrastructure development work at Government Polytechnic College, Baran was successfully completed during the Financial Year 2020-21. The Company aims to make this institute as one of the top three polytechnic colleges of Rajasthan in next 2 years. During the Financial Year 2020-21,8 additional SMART classes were installed in the adopted institutes, taking the total to 24 SMART classes in 6 institutes.

During the COVID - 19 pandemic, online classes were organized in the institutes to support the students.

During the Financial Year 2020-21, the Company also offered vocational training programs in 3 vocational training centers. These centers are providing courses on solar panel assembling & maintenance, Tie & Dye techniques and jewellery designing to rural youths.

c) Project Saakar - Rural Development

Realizing the need of improvement in rural infrastructure facilities, your Company has undertaken rural development projects to cater to the basic needs of the community members residing in nearby villages. During the Financial Year 2020-21, the Company had focused on development of the basic facilities in nearby villages such as rural roads, electrification of public places, storm water drainage system, community hall and community sheds. The Company had undertaken construction of 3 new integrated Aanganwadi centers in school premises and renovation of 11 Government schools during the Financial Year 2020-21.

d) Project Arogya - Healthcare and Sanitation

The Company aims to create a quality healthcare network in rural areas to cater to the needs of community members. The healthcare activities and awareness sessions were resumed in the month of November 2020. The community members were facilitated in healthcare camps, awareness sessions on low cost protein and iron rich meal, water borne disease and its prevention, etc. in 26 villages. The Company has also carried out awareness sessions in these villages for COVID-19 vaccination. The healthcare facilities were also extended in the remote villages of Dehradun and Tehri districts in Uttarakhand.

e) Project Pragati - Employability and Empowerment

With the objective of creating alternate livelihood opportunities for the community members, especially women in rural areas, the Company is facilitating various self-help groups in nearby villages. These groups are emerging as small livelihood clusters and supporting the members to earn a decent income from various on-farm and off-farm livelihood activities. Your Company is supporting rural women for production of reusable face masks, school uniforms, school bags, reusable carry bags, jute bags and low cost sanitary napkins.

The Company is also facilitating small and marginalized farmers to adopt modern agriculture practices and optimize farm input cost to improve the farm income.

f) Project Bhoomi - Environmental Sustainability, Animal Welfare and Soil Health

The Company is running two agriculture development laboratories in Gadepan (Rajasthan) and Agra (Uttar Pradesh) along with a mobile soil testing van in Budaun District of Uttar Pradesh. These laboratories are facilitating farming community, especially small and marginalized farmers to avail soil health card facility and farm advisory services for balanced usage of fertilisers and optimize farm output. In order to promote sustainable agriculture practices amongst small and marginalized farmers, a farmer education center has been established.

g) Disaster Management

Your Company remained at the forefront to provide immediate relief to the community residing in areas near its plants and to the migrating population which is the most affected section of the community with COVID - 19 pandemic. In order to provide immediate relief to the community members, more than 9500 food kits were distributed in the community. In addition to this, more than 37,000 reusable face masks were distributed amongst community members. The Company had organized sanitization drives at villages in collaboration with the local government on periodic basis.

The Ministry of Corporate Affairs, Government of India had amended the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") vide its notification dated January 22, 2021. The Corporate Social Responsibility Policy of the Company has been amended mainly to align it with the requirements under the amended CSR Rules and the CSR activities to be undertaken by the Company has been updated. The revised policy contains aims and objectives of CSR Projects / Programmes of the Company and includes guiding principles for selection, implementation and monitoring of CSR activities as well as formulation of the annual action plan. The Corporate Social Responsibility Policy of the Company is available at the website of the Company at http://www.chambalfertilisers.com/csroverview.

The composition and terms of reference of Corporate Social Responsibility Committee are given in the Corporate Governance Report. The Annual Report on Corporate Social Responsibility Activities (including the details of the development and implementation of the Corporate Social Responsibility Policy) as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure "G" to this Report.

For the purpose of Section 135 of the Companies Act, 2013, the amount equivalent to 2% of the average net profits of the Company made during the immediately preceding three financial years works out to Rs. 19.58 Crore. As against this, the Company had spent Rs. 19.65 Crore on CSR projects / programmes during the Financial Year 2020-21.

9. Directors and Key Managerial Personnel

The Board of Directors of the Company was having ten directors as on March 31, 2021 with eight Non-Executive Directors including five independent directors, a Managing Director and a Joint Managing Director.

The shareholders of the Company at the Annual General Meeting held on September 10, 2020 appointed Mrs. Rita Menon (DIN: 00064714) as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years from September 10, 2020 to September 09, 2025. The Board of Directors is of the opinion that Mrs. Rita Menon is a person of integrity with high level of ethical standards and having worked in senior positions in various departments / ministries of Government of India, she possesses requisite expertise and experience for appointment as Independent Director of the Company. Mrs. Rita Menon is exempt from the requirement to undertake online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.

The shareholder of the Company at the Annual General Meeting held on September 10, 2020 has also approved the appointment of Mr. Pradeep Jyoti Banerjee (DIN: 02985965) as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years from December 01,2019 to November 30, 2024.

Mr. Nimesh Nagindas Kampani (DIN: 00009071), completed his tenure on September 14, 2020 and ceased to be a Director of the Company with effect from September 15, 2020.

Mr. Anil Kapoor (DIN: 00032299) completed his tenure as Managing Director of the Company on April 15, 2021 and ceased to be the Managing Director and Director of the Company with effect from April 16, 2021. The Board of Directors expresses its sincere thanks and appreciation of the immense contribution made by Mr. Anil Kapoor during his tenure as Managing Director of the Company.

Mr. Gaurav Mathur (DIN: 07610237) had been working as Whole Time Director designated as Joint Managing Director of the Company since January 06, 2020. The Board of Directors at its meeting held on February 04, 2021 had appointed Mr. Gaurav Mathur as Managing Director of the Company for a period from April 16, 2021 to January 05, 2025, subject to approval of the shareholders of the Company.

There was no change in Chief Financial Officer and Company Secretary of the Company during the year under review.

Ms. Radha Singh (DIN: 02227854), Independent Director shall attain the age of 75 years on November 24, 2021. The shareholders of the Company at the Annual General Meeting held on September 15, 2017, had re-appointed Ms. Radha Singh as an Independent Director of the Company for further term of 5 (five) consecutive years, that is, upto September 14, 2022. Pursuant to Regulation 17(1A) of Listing Regulations, the Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has recommended to the shareholders of the Company, to approve continuation of Ms. Radha Singh as an Independent Director of the Company after she attains the age of 75 years.

Mr. Saroj Kumar Poddar (DIN: 00008654) is due for retirement at the forthcoming Annual General Meeting and has offered himself for reappointment. Further, Mr. Saroj Kumar Poddar attained the age of 75 years on September 15, 2020 and pursuant to Regulation 17(1A) of Listing Regulations, the Board of Directors, on the recommendation of the Nomination and Remuneration Committee, recommends to the shareholders of the Company, the re- appointment of Mr. Saroj Kumar Poddar, as a Director of the Company, liable to retire by rotation.

All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013, the rules framed thereunder and the Listing Regulations. In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the data bank maintained by the Indian Institute of Corporate Affairs.

During the Financial Year 2020-21, Mr. Anil Kapoor and Mr. Gaurav Mathur had not received any commission or remuneration from any subsidiary of the Company.

Five meetings of the Board of Directors were held during the Financial Year 2020-21.

Other information on the Directors and the Board Meetings is provided in the Corporate Governance Report attached as Annexure "C" to this Report.

A certificate obtained by the Company from a company secretary in practice, confirming that none of the Directors on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing as director of companies by the Securities and Exchange Board of India /Ministry of Corporate Affairs or any such statutory authority, is enclosed as Annexure "F" to this Report.

10. Internal Financial Controls

The Company has internal financial controls commensurate to the size and nature of its business. The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business and operations including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The details of internal control system are also given in the Management Discussion and Analysis Report attached as Annexure "A" to this Report.

11. Remuneration Policy

In pursuance of the provisions of Section 178 of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Remuneration Policy. The Remuneration Policy, inter-alia, includes the appointment criteria & qualification requirements, process for appointment & removal, retirement policy, remuneration structure, etc. of the Directors including Managing Director and Whole Time Director(s), Key Managerial Personnel (KMP) and other senior management personnel of the Company. As per the Remuneration Policy, a person proposed to be appointed as Director, KMP or other senior management personnel should be a person of integrity with high level of ethical standards. In case of appointment as an Independent Director, the person should fulfill the criteria of independence prescribed under the Companies Act, 2013, rules framed thereunder and the Listing Regulations. The Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Managing Director and Whole Time Director(s) and payment of sitting fee & commission to the Non-Executive Directors and describes fundamental principles for determination of remuneration of senior management personnel and other employees which are as follows:

a) demand-supply relationship of the concerned job expertise;

b) need of organization to retain and attract talent and its ability to pay;

c) employees' social aspiration for enhancing standard of living; and

d) compensation trends in the industries in which the Company operates.

The Remuneration Policy was amended with effect from February 04, 2021 mainly to modify the definition of "Senior Management" and deletion of the definition of "Management Committee" to keep flexibility in order to accommodate organizational changes from time to time.

The policy was also updated by including the provisions related to requirement of possession, by the Directors, of one or more core skills/ expertise / competencies identified by the Board of Directors.

The Remuneration Policy of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/pdf/ RemunerationPolicy.pdf.

12. Disclosures under the Companies Act, 2013, Rules thereunder and Secretarial Standards

a) Your Company has not issued any shares during the Financial Year 2020-21.

b) No significant and material orders have been passed by the regulators or courts or tribunals or statutory and quasi-judicial bodies impacting the going concern status and Company's operations in future.

c) All related party transactions entered during the Financial Year 2020-21, were on arm's length basis and in the ordinary course of business. No material related party transaction (in terms of the Company's Policy on Related Party Transactions) was entered during the year by the Company and no contracts or arrangements were entered during the year with related parties which are required to be disclosed under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2.

d) A copy of annual return of the Company is available on the website of the Company at the weblink: http://chambalfertilisers.com/ annualreturns/

e) The following information is given in the Corporate Governance Report attached as Annexure "C" to this Report:

i) The performance evaluation of the Board of Directors, the Committees of the Board of Directors, Chairman of the Company and the individual Directors;

ii) The composition of Audit Committee; and

iii) The details of establishment of Vigil Mechanism/Whistle Blower Policy.

f) The particulars of loans and guarantees given, security provided and investments made, if any, under Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

g) During the Financial Year 2020-21, the auditors, secretarial auditors and cost auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

h) The Company has complied with the applicable Secretarial Standards prescribed under Section 118(10) of the Companies Act, 2013.

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

j) There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year 2020-21 and the date of this Report.

13. Directors Responsibility Statement Your Directors hereby state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit and loss of the Company for the year ended March 31, 2021;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

14. Auditors and Cost Auditors

The Notes to the Financial Statements read with the Auditor's Reports are self-explanatory and therefore, do not call for further comments or explanations. There has been no qualification, reservation, adverse remark or disclaimer in the Auditor's Reports.

The shareholders of the Company, at the Annual General Meeting held on September 15, 2017, had appointed M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/ N500016) as Auditors of the Company to hold office for a term of 5 (five) consecutive years from the conclusion of thirty-second Annual General Meeting of the Company held on September 15, 2017 till the conclusion of thirty-seventh Annual General Meeting of the Company.

The maintenance of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, is required by the Company in respect of production of fertilisers and accordingly such accounts and records are made and maintained by the Company.

The Board of Directors of the Company has appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost records of the Company, as applicable, for the Financial Year ending March 31,2022. As required under the Companies Act, 2013 and Rules framed thereunder, your Directors are seeking ratification from the members of the Company for the remuneration payable to M/s. K.G. Goyal & Associates, Cost Accountants.

15. Secretarial Audit

The Board of Directors of the Company had appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for the Financial Year 2020-21. The Secretarial Audit Report issued by the aforesaid Secretarial Auditor is attached as Annexure "H" to this Report.

There has been no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.

16. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The energy conservation is of paramount importance for sustainability of the operations and it also results into saving of natural and financial resources. The Company always seeks to make its manufacturing facilities energy efficient and evaluates various options to achieve this objective. Gadepan-III Plant of the Company is energy efficient in comparison to the existing plants. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Accounts) Rules, 2014 is set out in Annexure "I" attached to this Report.

17. Risk Management

Your Company has developed and implemented a Risk Management Policy. The Risk Management Committee of the Company periodically reviews all risks, finalise the risk document and monitors various risks of the Company including the risks, if any, which may threaten the existence of the Company. The composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report.

The risk document containing Key and Non-Key risks including way forward for mitigation thereof, as approved by the Risk Management Committee, is also reviewed by the Audit Committee and the Board of Directors periodically.

18. Deposits

During the year, the Company has not accepted any deposits from the public under Chapter V of the Companies Act, 2013. There was no public deposit outstanding as at the beginning and end of the Financial Year 2020-21.

19. Particulars of employees

Your Company believes that human resource is vital to the growth and sustainability of an organization. Your Company always strives to keep its human resource motivated and encourages merit and healthy relations. The information required to be disclosed in pursuance of Section 197 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure "J" to this Report.

20. Employees Stock Option Scheme

The members of the Company had approved CFCL Employees Stock Option Scheme 2010, as amended and revised from time to time ("ESOS 2010") for grant of stock options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Whole Time Director(s)/ Managing Director of the Company. Each stock option when exercised would be converted into one fully paid up equity share of Rs. 10/- of the Company.

The Company has not granted any stock options during the year under review.

There has been no change in ESOS 2010 during the Financial Year 2020-21. ESOS 2010 is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations") and implemented through CFCL Employees Welfare Trust ("Trust"). For the purpose of ESOS 2010, the Trustee of the Trust was holding 5,81,000 equity shares of the Company as on March 31, 2021 (9,18,500 equity shares as on March 31, 2020), being 0.14 % of the paid up share capital of the Company. The ownership of these shares cannot be attributed to any particular employee till he/ she exercises the stock options granted to him / her and the concerned shares are transferred to him / her. Hence, the concerned employees to whom the stock options were granted under ESOS 2010 cannot exercise voting rights in respect of aforesaid shares held by the Trustee of the Trust as such employees are not holders of such shares. The Trustee has not exercised the voting rights in respect of the aforesaid shares during the Financial Year 2020-21.

The disclosures required to be made under ESOP Regulations read with SEBI circular no. CIR/CFD/Policy Cell/2/2015 dated June 16, 2015 are given on the website of the Company at the weblink: http://chambalfertilisers.com/pdf/ESOP-Disclosure-2020-21.pdf. The disclosures in respect of ESOS 2010 are also given in the notes to the Financial Statements.

21. Business Responsibility Report

In pursuance of the provisions of the Listing Regulations, the Business Responsibility Report for the Financial Year 2020-21, describing the initiatives taken by the Company from environmental, social and governance perspective, forms part of the Annual Report.

22. Investor Service Centre

The in-house Investor Service Centre of your Company is located in the Corporate Office of the Company at New Delhi which provides prompt and efficient service to the investors. The Company takes various initiatives for investor satisfaction including reminders to investors about unclaimed dividends.

The equity shares of your Company are listed at National Stock Exchange of India Limited and BSE Limited. The Company has paid annual listing fees to these Stock Exchanges for the Financial Year 2021-22.

The members are requested to refer to general shareholders' information given in Corporate Governance Report attached hereto.

23. Acknowledgements

The Board of Directors wishes to place on record its appreciation of the support and co-operation received from all the stakeholders including the Department of Fertilisers, Government of India, Government of Rajasthan and other State Governments, Financial Institutions & Banks, investors and customers. The Board of Directors also conveys its appreciation of the commitment, hard work and dedication of the employees at all levels.

For and on behalf of Board of Directors

Place : New Delhi Rita Menon Gaurav Mathur
Date : May 10, 2021 Director Managing Director