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Directors Report of Chambal Fertilisers & Chemicals Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the 31st Annual Report on the business and operations of the Company together with audited accounts for the financial year ended March 31, 2016.

1. Financial Results and Appropriations

(Rs. in crore)

Particulars 2015-16 2014-15

(a) Turnover (excluding excise duty) 9535.86 8868.05

(b) Gross Profit after Finance Cost but before Exceptional Items, Depreciation and Tax 776.67 680.46

(c) Depreciation / Amortization 160.38 173.32

(d) Profit before Exceptional Items and Tax 616.29 507.14

(e) Exceptional Items (370.05) (107.02)

(f) Profit before Tax 246.24 400.12

(g) Provision for Current Tax 188.57 148.56

(h) Provision for Deferred Tax Charge / (Credit) (28.63) 14.78

(i) Profit after Tax 86.30 236.78

(j) Balance of Profit Brought Forward 1482.89 1390.86

(k) Profit available for Appropriation 1569.19 1627.64

(l) Appropriations:

- General Reserve - 50.00

- Proposed Dividend on Equity Shares 79.08 79.08

- Tax on Dividend 16.10 16.10

- Proposed Dividend on Equity Shares held by Trust - (0.43)

- Reversal of Dividend on Equity Shares held by Trust related to earlier years 1.73 -

- Saving on payment of Dividend Distribution Tax (0.96) -

(m) Balance Carried Forward to Balance Sheet 1473.24 1482.89

2. Operations

The Company has two business segments viz. Fertilisers and other Agri-inputs and Shipping. During the year under review, the Company has completed the sale of its textile business i.e. Birla Textile Mills to Sutlej Textiles and Industries Limited as a going concern on slump sale basis with effect from April 1, 2015. The Fertiliser and other Agri-inputs Division registered an increase in the turnover mainly on account of higher sales of products like imported fertilisers and own manufactured Single Super Phosphate. The traded products continued to make significant contribution to the bottom-line of the Company. The Shipping Division has also registered higher turnover mainly on account of better realisations from own vessels and achieved much better performance in comparison to previous year.

During the year under review, your Company has decided to set up new Urea plant at Gadepan for production of 1.34 Million MT of Urea per annum at a cost of approximately USD 900 Million ("Gadepan - III Project"). The Company has awarded contracts to Toyo Engineering Corporation, Japan and Toyo Engineering India Pvt. Limited, India for implementation of Gadepan - III Project. The Company has fully tied up the debt portion of the cost of Gadepan - III Project and the aforesaid contractors have started implementation of Gadepan - III Project. The commercial production of Urea from Gadepan - III Project is scheduled to start in January 2019. This project will be a stepping stone in the journey of growth of your Company as there will be an increase of about 63% in the present Urea production capacity of the Company.

The Approval of the shareholders of the Company was taken during the year for sale of one or more than one or all five ships/ vessels or the entire shipping business of the Company.

During the year under review, the Company has made a provision of Rs. 296.19 Crore on account of impairment in the value of its investment in CFCL Technologies Limited, Cayman Islands, a subsidiary of the Company. In addition to this, the Company has made a provision for impairment loss of Rs. 111.99 Crore as a result of sale transaction of the vessel - Ratna Puja. In view of this, the Profit after Tax during the year under review was much lower in comparison to the previous year.

The detailed information on the business segments of the Company and the respective industries are given in the Management Discussion and Analysis Report attached as Annexure "A" to this report.

3. Dividend

The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each (Previous Year - Rs. 1.90 per equity share) for the financial year ended March 31, 2016. The total outgo on this account will be Rs. 95.18 crore including dividend distribution tax.

4. ''Corporate Governance Report'' and Code of Conduct

Your Company is committed to maintain highest standards of Corporate Governance and strives to improve the corporate governance standards and practices. Corporate Governance Report for the Financial Year 2015-16 is attached as Annexure "B". The declaration of the Managing Director confirming compliance with the ''Code of Conduct and Ethics'' is enclosed as Annexure "C" and Auditors'' Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "D".

5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID)

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

During the year 2015, IMACID achieved revenue of Moroccan Dirham (MAD) 2777.42 million (Rs. 18527.70 million) against revenue of MAD 2376.30 million (Rs. 16,686.12 million) achieved during the year 2014. The profit after tax of IMACID was MAD 194.01 million (Rs. 1,294.21 million) during the year as against MAD 90.09 million (Rs. 632.20 million) in the year 2014.

During the quarter ended March 31, 2016, IMACID achieved operating income of MAD 419.22 million (Rs. 2861.75 million).

The financial position of IMACID as at December 31, 2015 was as under:

Share Capital - MAD 620 million (Rs. 4,135.92 million)

Total Assets - MAD 1266.18 million (Rs. 8446.47 million)

Reserves and Surplus - MAD 256.09 million (Rs. 1708.33 million)

Total Liabilities - MAD 1266.18 million (Rs. 8446.47 million)

Investments - NIL

6. Subsidiaries

(i) Chambal Infrastructure Ventures Limited and its Subsidiaries

Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned subsidiary of your Company which was incorporated to pursue the business opportunities in Power sector. CIVL had established two down-stream wholly owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited ("CECL") and Chambal Energy (Orissa) Limited ("CEOL"). The Hon''ble High Court of Delhi has granted its sanction to the scheme of amalgamation of CECL and CEOL with CIVL. The order of the Hon''ble High Court has been filed by the aforesaid companies with the concerned Registrar of Companies. Accordingly, CECL and CEOL stand amalgamated with CIVL with effect from the appointed date of April 1, 2015.

The new site for CIVL''s power project in Odisha has been approved by the Government of Odisha and the matter is being pursued with the concerned authorities for renewal of Memorandum of Understanding for setting up power project.

(ii) CFCL Technologies Limited, Cayman Islands and its Subsidiaries

CFCL Technologies Limited, a subsidiary of the Company, operates business through its step-down subsidiaries mainly in USA and India. ISGN Corporation, USA is a wholly owned subsidiary of CFCL Technologies Limited. ISGN Solutions Inc., USA is a wholly owned subsidiary of ISGN Corporation, USA. ISGN Corporation is engaged in designing, developing, marketing and distribution of software products for mortgage lending industry in USA. ISGN Solutions Inc. is mainly engaged in providing loan fulfillment solutions in USA such as closing and settlement services, valuation services, mortgage processing services, vendor management solutions for residential mortgage lenders, etc. These businesses are being supported by ISG Novasoft Technologies Limited, India (a downstream subsidiary of CFCL Technologies Limited) through its centres in India.

The decline in the performance of Software Business continued in the Year 2015 due to the mortgage market seeing significant dip in business volumes across the industry. Considering the market scenario, financial condition and future prospects, ISGN Corporation, USA has entered into a stock purchase agreement on January 28, 2016 for sale and transfer of its entire shareholding in ISGN Solutions, Inc., USA to First source Group USA, Inc., USA for a sale consideration of USD 12.56 million (subject to closing and other adjustments). The shareholders of the Company has approved the aforesaid transaction through postal ballot on May 3, 2016. On completion of the transaction, ISGN Solutions, Inc. and its two subsidiaries viz. ISGN Fulfillment Services Inc., USA and ISGN Fulfillment Agency LLC, USA will cease to be subsidiaries of the Company.

Further, ISG Novasoft Technologies Limited has signed an agreement on January 28, 2016 for sale of its Business process outsourcing business to First source Process Management Services Limited, India on slump sale basis at a consideration of Rs. 3 crore.

The aforesaid transactions are expected to be completed by end of May 2016.

(iii) India Steamship Pte. Limited, Singapore

India Steamship Pte. Limited, Singapore is a wholly owned subsidiary of your Company and it has operated during the year by in-chartering the vessels.

(iv) India Steamship International FZE, UAE

India Steamship International FZE, UAE ("ISS, UAE") was a wholly owned subsidiary of India Steamship Pte. Limited, Singapore. During the year, your Company had acquired entire shareholding of ISS, UAE from India Steamship Pte. Limited, Singapore. Consequently, ISS, UAE became direct subsidiary of your Company. ISS, UAE has commenced the in-chartering of ships during second half of the Financial Year 2015-16.

(v) India Steamship Limited, India

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

The four downstream subsidiaries of the Company, namely Richmond Title Services, LP, USA, Richmond Title Genpar, LLC, USA, Richmond Investors, LLC, USA and ISGN Fulfillment Services Inc., Arizona, USA were dissolved during the year under review.

Save and except as mentioned above, no other subsidiary, associate or joint venture have been acquired/ included or ceased during the year under review.

The performance and financial position 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 Company shall place the audited financial statements of its subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013 and shall provide a copy of these statements to any shareholder seeking it. These documents will also be available for inspection by members during business hours at the registered office of the Company at Gadepan, Dist. Kota, Rajasthan.

7. Health, Safety, Quality and Environmental Protection

Your Company gives highest priority to Environment Protection and Safety with a well-defined Environment, Health and Safety ("EHS") policy. The adherence to EHS policy is continuously monitored by senior management through regular reviews.

Your Company has established, on a sustainable basis, an Integrated Management System based on OHSAS-18001:2007, ISO-14001:2004 and ISO-9001:2008. It has also adopted Process Safety Management and guidelines of British Safety Council. Your Company has achieved the mile-stone of Zero reportable accident during the financial year 2015-16.

The details of various activities and achievements of the Company in this regard are as under:

(a) Health & Hygiene

There is a strong focus on health assessment and occupational disease monitoring of employees and associates through periodic medical examinations and hygiene monitoring at work place. Apart from two full time Doctors and trained nursing staff, specialist doctors like child specialist, Eye specialist, dental surgeon, Gynecologist, ENT surgeon, etc. visit the Health Centre at Gadepan regularly. There are three ambulances available on round the clock basis at the plant location of the Company.

The Health Centre at Gadepan provides its services round the clock to employees, their families, contractor work force and villagers in the vicinity of the plants. For enhancing awareness towards health related matters, periodical training and awareness programs are organized through external experts.

(b) Safety Management

A robust occupational health and safety management system is in place in your Company at Gadepan to take care of all the employees, contractor workforce as well as equipment and machinery. Effective implementation of the safety system is ensured through Hazard identification, risk assessment & mitigation procedures, safety work permit system, etc. Before executing any maintenance job in the plant, a cross functional team of senior management members review the jobs on a daily basis from a safety perspective to ensure that all recommended actions to prevent hazards are taken.

The extensive trainings and drills were conducted by internal and external experts on rescue, work at height, working inside confined space, fire-fighting, emergency handling, electrical safety, material handling, road safety, use of Breathing Air sets, etc. To encourage safety awareness and involvement among employees and contractor workforce, scheme of "Near-Miss" & "Make- to Good" reporting is in place in the fertiliser plants.

In order to create more awareness on Safety & Environment, various programmes were organized throughout the year like, National Safety Week, Road Safety Week, Fire Services Day, World Environment Day, etc. involving employees, their families and contractor workforce.

Your Company has a well-defined "Onsite Disaster Management Plan" and MARG (Mutual Aid and Response Group) arrangement with neighboring industry. Regular mock drills, fire drills and table top drills were conducted to verify emergency preparedness. Prompt fire-fighting services were provided to villages surrounding Gadepan plants. As a part of safety improvement initiative, online monitoring and reporting system - Uttam Suraksha Setu is in place.

(c) Environment Management

Your Company is conscious of its responsibility towards environment protection. This has led to an increasing focus over the years on reduction of environmental impact with respect to natural resource consumption (including raw materials, fuels and water), waste generation and emissions to the atmosphere. Your Company has taken concrete steps to achieve zero liquid effluent discharge after implementation of Gadepan - III Project.

Investors, suppliers, customers, local communities as well as government and regulatory agencies are vital stakeholders in our efforts towards green manufacturing. Your Company has a robust mechanism in place to ensure that all environmental parameters are maintained within the permissible limits. A dedicated Environment Management Cell is in place at Gadepan to monitor the environmental compliances.

The Company''s Gadepan complex made a positive change in ecology due to development of a dense green belt / forest comprising of variety of fruits and shrubs. This has provided a soothing & healthy environment for people to live and work and habitat to many species of birds. Only treated waste water is used in maintaining the green belt through irrigation network spread all over the Gadepan complex.

(d) Quality Management

Your Company is ISO 9001:2008 certified and maintains high quality of product and processes. The quality assurance is ensured at all stages of manufacturing processes, maintenance and support services. Quality reviews are regularly conducted and feedback from end users (farmers) is accorded utmost importance. Sophisticated instruments are in place for monitoring of critical quality parameters.

(e) Achievements

Your Company regularly participates in national and international benchmarking surveys and awards for independent assessment and opportunity for continual improvement. Your Company has received following awards during the year under review:

- Environmental Protection Award (Winner) in the SSP Fertiliser Plants Category for the year 2014-15 from Fertiliser Association of India.

- "Rajasthan Energy Conservation Award-2015" by Govt. of Rajasthan, Department of Energy, Jaipur.

8. Corporate Social Responsibility ("CSR")

Your Company is conscious of its responsibility towards its stakeholders including the community at large and makes continuous efforts to contribute to their well-being. Your Company has taken several initiatives for sustainable development of rural community in the vicinity of its plants in partnership with local administration at Village, Block and District level.

The Company has made meaningful impact in the areas of education, healthcare, infrastructure development, soil health and skill development through its CSR programmes / projects. The CSR programmes / project of the Company are implemented directly as well as through KK Birla Memorial Society (KKBMS) and other Non-Governmental Organisations which are engaged in specific areas.

The major highlights of the CSR projects/ programmes of the Company during the Financial Year 2015-16 are as under:

a) School Education

The education is a flagship programme of the CSR activities of the Company. The Company is creating an impact in the lives of the children and youths by extending supports from pre-school education to job oriented courses at Industrial Training Institutes.

The Company has adopted 31 Balwadis in 26 villages of District Kota in partnership with Pratham Education Foundation. The Balwadis play an important role in preparing the children for pre-primary education. As a part of its CSR initiative, your Company has adopted 7 more schools during the year taking the total number of adopted schools to 39 Government Primary, Upper Primary, Secondary and Senior Secondary Schools in 26 villages in the vicinity of its plants in Kota and Baran Districts of Rajasthan. The objective of this programme is to improve the education standards in these schools. Pratham Education Foundation, a renowned Non-Governmental Organisation has been engaged to improve the learning level of students from nursery to 8th standard. Kumar Classes - a coaching institute from Kota has been engaged for remedial education for students of secondary and senior secondary classes. A significant improvement has been observed in the learning level of students in these schools post adoption by the Company. The renovation of 6 adopted schools was carried out during the year. Further, girls toilets were constructed in 6 schools in Sultanpur Block. The Company also provided stationery, school bags, note books and winter wears to around 3500 students. Your Company is also imparting basic computer courses to rural students through its 4 Community Information Technology Centre''s located in villages contiguous to its urea plants.

CFDAV School is being run in the Gadepan complex for Nursery to Class 10 students in collaboration with DAV Trust and Management Society. Around 64% students in CFDAV School are from adjoining rural areas.

b) Technical Education

The Company had adopted Industrial Training Institute (ITI) at Sangod and Sultanpur in 2011 and 2014 respectively under Public Private Partnership scheme ("PPP"). ITI Sangod has become one of the best institutions of Rajasthan and has received various accolades at state and national level. ASSOCHAM has awarded Gold Trophy to ITI, Sangod adjudging it as best ITI under PPP model category in India. During last 4 years, ITI Sangod has been able to achieve almost 100% placement of students in the Industry. To further strengthen the Company''s commitment towards skill education, your Company has adopted Government ITIs at Jhalawar and Baran during the year under review. The renovation work of these ITIs is under progress. The senior employees of the Company are involved in the management of these ITIs and Company''s engineers also take extra classes for students therein.

In addition to the above, your Company is running four vocational training centers in the villages near Gadepan. These centers are in operation in partnership with District Adult Education Association (supported by Jan Shikshan Sansthan). During the year, around 255 youths were trained in various skills.

c) Community Health Care

The Company provides free of charge healthcare in adjoining villages of Kota district and villages near Mussoorie (Uttarakhand) in collaboration with Manorama Devi Birla Charitable Trust. During the year under review, the Company has collaborated with the NGO - School Health Annual Report Programme (SHARP) to provide health services in the villages of Kota district.

d) Infrastructure Development

Your Company has continued to contribute towards village rural infrastructure development. During the year under review, the Company has constructed 8 cement concrete roads / pavements in the villages near Gadepan under PPP scheme. Construction of 5 basketball courts and 10 pathways were carried out in the adopted Government Schools.

e) Soil Health

The Company is running two state-of-the-art agriculture development laboratories in Agra and Kota. During the year under review, the Company has started operating a Mobile Soil Testing Van in Varanasi to facilitate farming community. This initiative has received accolades from the Prime Minister of India. Three soil testing vans operated by the Company reach to the farmlands deep into the rural area.

The composition of Corporate Social Responsibility Committee is given in the Corporate Governance Report. The details of the development and implementation of the Corporate Social Responsibility Policy and Annual Report on CSR activities as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 which is annexed herewith as Annexure "E".

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. 8.45 crore. As against this, the Company spent Rs. 9.06 crore on CSR projects / programmes.

9. Directors and Key Managerial Personnel

(i) Directors

The Board consists of eight directors - seven non-executive directors including four independent directors and a Managing Director. Mr. Shyam S. Bhartia (DIN: 00010484) is due for retirement at the forthcoming Annual General Meeting and has offered himself for re-appointment.

Mr. Aditya Narayan (DIN 00012084), had been appointed as an Independent Director of the Company at the Annual General Meeting of the Company held on September 15, 2015 to hold office from April 01, 2015 for a term upto the conclusion of the Annual General Meeting of the Company to be held in the calendar year 2018.

The Board of Directors at its meeting held on May 11, 2016 had re-appointed Mr. Anil Kapoor (DIN 00032299) as Managing Director of the Company for a period of 3 years with effect from February 16, 2017 and the Board commends the re-appointment of Mr. Anil Kapoor for approval of the shareholders.

During the year, the Managing Director has not received any commission or remuneration from any subsidiary of the Company.

All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149 of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Board met six times during the Financial Year 2015-16.

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

(ii) Key Managerial Personnel

Mr. M.S Rathore ceased to be Secretary of the Company with effect from May 01, 2015. The Board of Directors had appointed Mr. Rajveer Singh as Secretary of the Company and designated him as Key Managerial Personnel in such capacity, with effect from May 01, 2015.

10. Internal Financial Controls

The Company has policies and procedures in place for ensuring the orderly and efficient conduct of its business 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 given in the Management Discussion and Analysis Report attached hereto as Annexure "A".

11. Remuneration Policy

The Remuneration Policy of the Company including criterion for determining qualifications, positive attributes, independence of Directors and other matters as prescribed under Section 178 of the Companies Act, 2013 and Listing Regulations is annexed to this Report as Annexure "F"

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

a) Your Company has not issued any shares during the Financial Year 2015-16.

b) No significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

c) All Related Party Transactions entered during the year were on arm''s length basis. No material Related Party Transaction (transaction exceeding ten percent of the annual consolidated turnover of the Company as per last audited financial statements), was entered during the year by the Company.

The Company has sold and transferred its Textile Business i.e. Birla Textile Mills ("BTM") to Sutlej Textiles and Industries Limited ("STIL") as a going concern on slump sale basis with effect from April 1, 2015. The discussions were held with different parties for sale / disposal of BTM but same did not reach any fruitful conclusion. Then, STIL evinced their interest in purchasing BTM from the Company. It was decided to sell and transfer BTM in light of (i) there being limited scope for expansion of BTM at the current location in the State of Himachal Pradesh as the land in the factory premises was fully utilized, (ii) necessity of further capital expenditure of around Rs. 50 -60 Crore in coming years to maintain the productivity and keep the unit cost competitive; and (iii) downward trend in the textile business.

The Company has treated the said transaction as related party transaction and the shareholders of the Company has approved the said transaction at the Annual General Meeting held on September 15, 2015. The details of this transaction are given in Form AOC-2 attached to this report as Annexure "G".

d) The extract of Annual Return is attached to this Report as Annexure "H"

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

i. The Performance evaluation of the Board, the Committees of the Board, Chairperson and the individual Directors;

ii. The Composition of Audit Committee; and

iii. The details of establishment of Vigil Mechanism.

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

g) During the year, the auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

13. Directors Responsibility Statement

Your Directors hereby state that:

a) in the preparation of the annual accounts, the applicable accounting standards had 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, 2016 and of the profit and loss of the Company for the year ended March 31, 2016;

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 are 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

The Notes to the Financial Statements read with the Auditors'' Report are self-explanatory and therefore, do not call for any further comments or explanations.

M/s. S. R. Batliboi & Co. LLP, Auditors (Registration No. 301003E/ E300005) and M/s. Singhi & Co., Chartered Accountants (Registration No. 302049E) Branch Auditors of Shipping Business of the Company are retiring at the ensuing Annual General Meeting ("AGM") of the Company and being eligible, offered themselves for re-appointment. Your Directors are seeking re-appointment of M/s. S.R. Batliboi & Co. LLP, Auditors and M/s. Singhi & Co., Branch Auditors of Shipping Business of the Company from the conclusion of the ensuing 31st AGM of the Company till the conclusion of 32nd AGM of the Company.

The Board of Directors of the Company appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost accounts of the Company, as applicable, for the financial year 2016-17. As required under the Companies Act, 2013 and Rules framed thereunder, your directors are seeking ratification of the members for the remuneration payable to M/s K.G. Goyal & Associates, Cost Accountants.

15. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for the financial year 2015-16. The Secretarial Audit Report issued by the aforesaid Secretarial Auditors is annexed herewith as Annexure "I".

There is 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 Company continuously endeavors to make its plants energy efficient and reviews various options to conserve energy on regular basis. The energy conservation is of paramount importance for sustainable business and it also results into saving of natural and financial resources. The Company has four double hull Aframax Tankers and these ships are more energy efficient as compared to the old vessels. 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 "J" attached hereto.

17. Risk Management

Your Company has developed and implemented a Risk Management Policy. The Company has constituted Risk Management Committee which 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 circulated to the Audit Committee and the Board of Directors for their review periodically.

18. Deposits

During the year, the Company has not accepted deposits from the public under Chapter V of the Companies Act, 2013. Your Company has not defaulted in repayment of deposits or payment of interest during the year. There was no public deposit outstanding as on March 31, 2016.

19. Particulars of employees

Your Company recognizes that people are the most valuable resource of the Company. The committed work force has played an important role in the growth of the Company over the years. The Company always strives to keep its human resource motivated and encourages merit and healthy relations. 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, forms part of this Report and is attached hereto as Annexure "K".

20. Employees Stock Option Scheme

The members of the Company had approved CFCL Employees Stock Option Scheme 2010 on August 27, 2010 (as amended on September 13, 2013) for issue and allotment of options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10/- of the Company. Consequent upon promulgation of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations"), the shareholders of the Company had approved the revised CFCL Employees Stock Option Scheme, 2010 ("ESOS 2010") on September 15, 2015 in compliance with the ESOP Regulations.

The details of material changes made in CFCL Employees Stock Option Scheme 2010 during the year are as under:

a) Provision has been made for ''CFCL Employees Welfare Trust'' ("Trust"), to purchase shares from the secondary market.

b) The provision for direct subscription of shares by the employees upon exercise of stock options has been deleted as ESOS 2010 envisaged secondary acquisition of shares and in such case, as per ESOP Regulations, it has to be implemented through Trust only.

c) In order to give more time to the employees for exercise of options, the exercise period has been increased from five years to eight years from the date of vesting.

d) Certain other changes were made mainly to align ESOS 2010 with the requirements under ESOP Regulations The Company has not granted any stock options during the year.

ESOS 2010 is in compliance with ESOP Regulations and implemented through the Trust. The Trustee of the Trust is holding 22,53,402 equity shares (0.54% of the paid up share capital) of the Company for the purpose of ESOS 2010. The ownership of these shares cannot be attributed to any particular employee till he / she exercises the stock options granted 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 in the Annual General Meeting of the Company held during the Financial Year 20 15-16.

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://www.chambalfertilisers.com/pdf/esop-2016.pdf. The disclosures in respect of ESOS 2010 are also given in the notes to the Financial Statements.

21. Consolidated Financial Statements

In pursuance of the provisions of the Companies Act, 2013, Rules thereunder, Listing Regulations and the applicable Accounting Standards, the Company has prepared Consolidated Financial Statements. The Audited Consolidated Financial Statement alongwith Auditors'' Report and the Statement containing salient features of financial statements of subsidiaries and joint venture (Form AOC -

1) forms part of the Annual Report.

22. Investor Service Centre

The In-house Investor Service Centre of your Company located at New Delhi, provides prompt service to the investors. The Company takes various measures for investor satisfaction such as reminders to investors about new corporate benefits, undelivered shares, unclaimed dividend, etc.

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 2016-17.

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

23. Acknowledgements

Your Directors wish to place on record their appreciation of the support and co-operation received from all stakeholders including the Department of Fertilisers, Government of India, State Governments, Domestic and International Financial Institutions & Banks. Your Directors also convey their sincere appreciation of the commitment, hard work and devotion of every employee of the Company which has enabled the Company to achieve sustained performance.



For and on behalf of Board of Directors

Place: New Delhi S. K. Poddar

Date: May 11, 2016 Chairman


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 30th Annual Report on the business and operations of the Company together with audited accounts for the financial year ended March 31,2015.

1. Financial Results and Appropriations

(Rs. in crore) Particulars 2014-15 2013-14

(a) Turnover (excluding excise duty) 8868.05 7976.42

(b) Gross Profit after Finance Cost but before Exceptional Items, Depreciation and 680.46 576.23 Tax

(c) Depreciation / Amortization 173.32 230.31

(d) Profit before Exceptional Items and Tax 507.14 345.92

(e) Exceptional Items (107.02) -

(f) Profit before Tax 400.12 345.92

(g) Provision for Current Tax 148.56 40.14

(h) Provision for Deferred Tax 14.78 2.71

(i) Profit after Tax 236.78 303.07

(j) Balance of Profit Brought Forward 1390.86 1229.01

(k) Profit available for Appropriation 1627.64 1532.08

(l) Reversal of Dividend on Equity Shares held by CFCL Employees Welfare Trust (Trust) - 0.87

(m) Appropriations: * General Reserve 50.00 50.00

* Proposed Dividend on Equity Shares 79.08 79.08

* Tax on Dividend 16.10 13.44

* Proposed Dividend on Equity Shares held by Trust (0.43) (0.43)

(n) Balance Carried Forward to Balance 1482.89 1390.86 Sheet

2. Operations

The Fertilisers and other Agri-inputs business of the Company contributes 87% of the total revenue, whereas Shipping and Textile contributes the remaining. The Company has registered an increase in the turnover mainly on account of increase in sale of branded products like fertilisers, pesticides and other agri-inputs, increase in prices of natural gas and depreciation in value of Indian Rupee vis-a-vis USD (as the natural gas prices are denominated in USD). The turnover of Shipping Division was higher mainly on account of revenue from in-chartered vessels, better realisations from own vessels and foreign exchange rate variations. The turnover of Textile Division was almost at the level of last year.

The Fertilisers business faced multiple challenges during the year. The Company had to shutdown Gadepan - II plant from February 8, 2015 due to un-favourable policy of the Government of India for production beyond 100% capacity. This has resulted into lower production of Urea. Delays in disbursement of subsidy by Government of India continued to affect the profitability of the Company as the interest burden continued to mount. However, impressive performance of branded products gave a major boost to the profitability of the Company. The Company has established itself as a major player in its marketing territory offering wide range of products to farming community.

The Shipping Division made a come-back by achieving much better performance in comparison to the last year. The year started with a subdued note but it was looking up during the later part of the year as charter rates firmed up in March 2015.

The performance of Textile Division remained subdued due to low demand scenario in the market. The realisations remained under stress causing lower profitability of the Textile Division. During the last quarter, the Board of Directors of your Company has approved the sale of its textile business to Sutlej Textile & Industries Limited, as a going concern on slump sale basis. The parties are in the process of obtaining necessary approvals for the transaction. The detailed information on all the business segments of the Company and the respective industries are given in the Management Discussion and Analysis Report attached as Annexure "A" to this report.

3. Dividend

The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each (Previous Year - Rs. 1.90 per equity share) for the financial year ended March 31, 2015. The total outgo on this account will be Rs. 95.18 crore including dividend distribution tax.

4. 'Corporate Governance Report' and Code of Conduct

The Company is committed to maintain highest standards of Corporate Governance and strives to improve the corporate governance standards. Corporate Governance Report for the Financial Year 2014-15 is attached as Annexure "B". The declaration of the Managing Director confirming compliance with the 'Code of Conduct and Ethics' is enclosed as Annexure "C" and Auditors' Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "D".

5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID)

IMACID is a joint venture of your Company with two other partners - Tata Chemicals Limited and OCP, Morocco, each partner holding equal stake in the joint venture. IMACID is engaged in the manufacture of phosphoric acid in Morocco.

During the year 2014, IMACID achieved revenue of Moroccan Dirham (MAD) 2376.30 million (Rs. 16686.12 million) against revenue of MAD 2135.72 million (Rs. 14713.50 million) achieved during the year 2013. The profit after tax of IMACID was MAD 90.09 million (Rs. 632.60 million) during the year as against MAD 83.15 million (Rs. 572.80 million) in the year 2013.

During January - March 2015 quarter, IMACID achieved operating income of MAD 486.91 Million (Rs. 3045.17 million).

The Financial position of IMACID as at December 31,2014 was as under:

Share Capital - MAD 620 Million Total Assets - MAD 1444.71 Million Reserves and Surplus - MAD 150.12 Million Total Liabilities - MAD 1444.71 Million Investments - NIL

6. Subsidiaries

(i) Chambal Infrastructure Ventures Limited and its Subsidiaries

Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned subsidiary of your Company. CIVL was set up to pursue the business opportunities in Power Sector. CIVL had established two down-stream wholly owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited and Chambal Energy (Orissa) Limited. CIVL has identified a new site for its project in Odisha and the matter is being pursued with the concerned authorities for approval of the new site and renewal of Memorandum of Understanding.

During the financial year 2014-15, the Board of Directors of CIVL approved merger and amalgamation of Chambal Energy (Chhattisgarh) Limited and Chambal Energy (Orissa) Limited with CIVL. CIVL is in the process of filing the scheme with the Hon'ble Delhi High Court.

(ii) CFCL Overseas Limited, Cayman Islands

In pursuance of Section 186 of the Companies Act, 2013, a company should make investment through not more than two layers of investment companies. Accordingly, your Company has approved voluntary winding of its wholly owned subsidiary - CFCL Overseas Limited ("COL"). In pursuance of voluntary liquidation, all the assets of COL including its investments in CFCL Technologies Limited, Cayman Islands have been transferred to your Company (being sole shareholder of COL). As a result, CFCL Technologies Limited has become direct subsidiary of your Company. As per the Certificate of Dissolution dated March 26, 2015 issued by the Registrar of Companies, Cayman Islands, COL will be deemed to be dissolved on June 26, 2015.

(iii) CFCL Technologies Limited, Cayman Islands and its Subsidiaries

CFCL Technologies Limited, a subsidiary of your Company, operates business through its step-down subsidiaries mainly in USA and India. The Software Business is end-to-end provider of technologies and services to the mortgage industry in USA.

There was sharp decline in the performance of Software Business during the Year 2014. There was significant reductions in business volumes from all the key clients In USA market due to downward trend in the mortgage industry.

(iv) India Steamship Pte. Limited, Singapore and its Subsidiary

India Steamship Pte. Limited, Singapore ("ISS, Singapore") is a wholly owned subsidiary of your Company. ISS, Singapore has hired a vessel on time-charter for one year in August 2014. India Steamship International FZE, UAE is a wholly owned subsidiary of ISS, Singapore. There was no business activity in this entity during the year under review.

(v) India Steamship Limited, India (ISL)

ISL is a wholly owned subsidiary of your Company. There was no business activity in ISL during the year under review.

Save and except voluntary liquidation of CFCL Overseas Limited as mentioned earlier, no subsidiary, associate or joint venture have been acquired/ included or ceased during the year under review.

The performance and financial position 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 Company shall place the audited financial statements of its subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013 and shall provide a copy of these statements to any shareholder seeking it. These documents will also be available for inspection by members during business hours at the registered office of the Company at Gadepan, Dist. Kota, Rajasthan.

7. Health, Safety and Environmental Protection

The commitment of your Company to Environmental Protection and Safety begins with the comprehensive EHS (Environment, Health and Safety) policy formulated by the Company. Your Company accords highest priority to EHS which is reflected in the day to day operations of the Company. Apart from regular reviews and monitoring at the operating levels, the senior management also continuously monitors the EHS parameters. The Company strives for continuous improvement through benchmarking studies and other appropriate methodologies. Your Company has established and is maintaining an Integrated Management System; based on OHSAS- 18001:2007, ISO- 14001:2004,ISO-9001:2008 and Process Safety Management (PSM) and guidelines of British Safety Council. The township at Gadepan is also OHSAS-18001 & ISO-14001 certified.

(a) Health & Hygiene

Health assessment and occupational disease monitoring of employees and associates is done through regular periodic medical examinations. The Health Centre at Gadepan provides its services round the clock to employees, their families, contractor work force and villagers in the vicinity of the plants. Specialist doctors like child specialist, Eye specialist, dental surgeon, Gynaecologist, ENT surgeon visit regularly at Health Centre. The up-gradation of the Health Centre by addition of new equipment is a continuous process. Health and hygiene awareness campaigns were regularly held for employees through experts in various fields. Pulse polio vaccination, regular immunization programme to new born and swine flu vaccination drives were organised from time to time.

(b) Safety Management

A strong occupational health and safety management system is in place in your Company to ensure occupational health and safety of employees, contractor workforce as well as equipment and machinery. Further, your Company has implemented, in its operations at Gadepan, Process Safety Management System (PSM) developed by Occupational Safety and Health Administration (OSHA) for proactive identification, assessment & control of hazards. Effective implementation of the safety system is ensured through hazard identification, risk assessment and mitigation procedures, strong updated safety work permit system, etc.

The extensive trainings and drills were conducted by internal and external experts on rescue, work at height, working inside confined space, fire-fighting, emergency handling, electrical safety, material handling, road safety, use of Breathing Air sets, etc. To encourage safety awareness and involvement among employees and contractor workforce, scheme of "Near-Miss" & "Make-to Good" reporting is in place. Further, under the system of Pro-active safety observation, any one observing an unsafe act/ condition may immediately interact with and get the same corrected.

The concept of Behaviour Based Safety (BBS) for safety improvement in Urea bagging plant is working satisfactorily and noticeable improvement has been observed in work culture. The concept of BBS was introduced in the Single Super Phosphate (SSP) plant also. As a part of safety improvement initiatives, a Safety portal - Uttam Suraksha Setu has been developed and implemented during the year. This has enabled online reporting, management and monitoring of safety incidents and records.

Your Company has a well-defined "Onsite Disaster Management Plan" and MARG (Mutual Aid and Response Group) arrangement with neighbouring industry. Regular mock drills, fire drills and table top drills were conducted to verify emergency preparedness. Prompt services for fire fighting were provided to villages surrounding Gadepan plants. Various fire-fighting and emergency handling equipment have been added to further improve the capability.

(c) Environment Management

Environment protection is one of the top priorities of your Company and a strong Environment Management System is in place. Extensive environmental monitoring is carried out to assess pollution risk to all personnel working directly or indirectly with us and residing in surrounding areas and immediate corrective and preventive measures are taken. Online monitoring system for effluent and emissions are being installed.

The conservation of natural resources is a priority area for your Company. The measures like Rain Water Harvesting, Ground Water Recharging, Energy Conservation, etc. are some of the efforts continuously made by your Company for this purpose. Your Company continues to follow the 3R concept (Reduce, Re-use and Re-cycle) for waste management. Almost 100% condensate is recycled back to system. Your company has adopted best practices to manage solid / hazardous waste disposal after proper categorization. Use of polythene bags are strictly prohibited in Gadepan campus.

The Company's Gadepan complex made a positive change in Ecology due to development of a dense green belt with thousands of trees & shrubs with fruits and flowers in an area of about 153 hectares. Regular plantations are done in the campus. This has provided habitat to many species of birds. Only treated waste water is used in maintaining the green belt through irrigation network spread all over the complex.

(d) Quality Management

Your company is ISO 9001:2008 certified and proper attention is accorded to maintain quality of end product and processes. The quality assurance is ensured at all stages of manufacturing processes, maintenance and support services. Quality is continually improved by: "determining and taking care of internal and external customer requirements, future needs and expectations". Quality reviews are regularly conducted and feedback from end users - farmers is accorded high value.

(e) Health, Safety, Environment, Quality (HSEQ) Audits and Reviews

HSEQ system is continually improved by conducting periodic audits by teams of trained internal auditors and reputed external agencies. The better practices of other organisations are adapted as per our own requirements.

(f) Achievements

Your Company regularly participates in national and international benchmarking surveys and awards for independent assessment and opportunity for continual improvement. Your Company has received following prestigious awards during the year under review:

* National Award for prevention of Pollution for the year 2010-11 under the Fertiliser category from Govt. of India, Ministry of Environment and Forests.

* Certificate of appreciation from National Safety Council of India (Safety awards 2013) for the year 2010-2012.

* Environmental Protection Award (Winner) in the Nitrogenous Fertiliser Plants Category for the year 2013-14 from Fertiliser Association of India.

* Rajasthan Energy Conservation Award (RECA - 2014) from Department of Energy, Govt. of Rajasthan.

8. Corporate Social Responsibility (CSR)

Your Company strives to make difference in the lives of people with a special focus on neighbouring areas. Your Company has identified and implemented various CSR programmes / Projects which made perceptible positive impact mainly in the area of education and general awareness. The CSR programmes / projects of the Company are implemented directly, through KK Birla Memorial Society as well as in collaboration with other established and reputed Non-Government Organisations. The major highlights of the CSR projects/ Programmes of the Company during the Financial Year 2014-15 are as under:

a) School Education: The Company has adopted 32 Government Schools in 22 villages of District Kota in the vicinity of its plants at Gadepan. Intervention in school education is being carried out through two agencies namely Pratham Education Foundation and Kumar Classes for improving the education level of students. The education standards in Rajasthan are lower than the national average and that in Company's CSR area is substantially lower than the average standard of Rajasthan. After your Company's intervention, an impact assessment was carried out in March 2015. Good improvement has been observed in learning levels of students at all levels in 32 schools in last three quarters vis-a-vis baseline survey. As a pilot project, Computer education has been introduced in 10 schools to introduce digital literacy in Government Schools. The Company also provided free of charge school furniture, stationary, school bags, shoes, woollens, etc. in the adopted schools.

Major challenges faced in this intervention are (a) making government teachers accountable; and (b) availability of good private teachers, in particular the female teachers for Balwadi Centres.

b) Technical Education: Your Company has adopted 2 Industrial Training Institutes (ITIs) at Sangod and Sultanpur in Kota district of Rajasthan. ITI Sangod was taken over 2 years back and has made very good progress in terms of number of courses offered, student enrolment and campus placement of the students. Almost 100% eligible students of ITI, Sangod were placed with reputed companies. ITI Sultanpur was adopted during the year 2014-15. We have built necessary infrastructure, bought equipment and sought fresh affiliation approval from Central Government for the existing courses as well as introduction of new courses. Apart from the ITIs, the company is running 2 vocational training centres to train about 400 youths annually on the lines of Skill India Mission.

c) Development of Infrastructure: The Company has carried out following infrastructure development projects:

i) Renovation of newly adopted 6 Government schools.

ii) Construction of Girls toilets in 34 Secondary and Senior Secondary Government Schools in Sultanpur Block.

iii) Construction of 125 individual toilets in adjoining villages.

iv) Construction of pavements, drainage and roads in collaboration with MNREGA schemes.

d) Health Care: The Company provides healthcare free of charge in adjoining 23 villages of Kota district and 5 villages in Mussoorie in collaboration with Manorama Devi Birla Charitable Trust.

e) Soil Health: The Company is running Soil Health Laboratories at Agra and Kota apart from mobile vans, with an annual capacity of 50,000 samples of soil and water.

f) Disaster Relief: The Company has carried out relief work in Jammu & Kashmir through an NGO - Pragya International.

As part of its CSR programmes, the Company has also taken various initiatives under Swachh Bharat Mission, Gramin Swarojgar Yojana, etc.

The Company received various recognitions and awards for its CSR activities like ASSOCHAM- CSR Excellence Award, Think Media CSR Award etc. Further, the Manager (CSR) was selected amongst 50 talented CSR leaders by world CSR congress.

The composition of Corporate Social Responsibility Committee is given in the Corporate Governance Report. The details of the development and implementation of the Corporate Social Responsibility Policy and Annual Report on CSR activities as prescribed under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure "E".

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. 9.10 crore. As against this, the Company spent Rs. 8.36 crore on CSR projects / programs. Due to the low monetary value of individual projects in villages, the mobilization of resources was extremely challenging in terms of availability of trained manpower and contractors to complete the projects. Hence, it was not able to spend the balance amount.

9. Directors and Key Managerial Personnel

(i) Directors

The Board consists of eight directors - seven non-executive directors including four independent directors and a Managing Director. Mr. Saroj Kumar Poddar (DIN 0008654) is due for retirement at the forthcoming Annual General Meeting and has offered himself for re-appointment.

Mr. R.N. Bansal (DIN 00270908), Independent Director retired at the last Annual General Meeting of the Company. Further, M/s. Marco P.A. Wadia (DIN 00244357), Kashi Nath Memani (DIN 00020696), Dipankar Basu (DIN 00009653) and Ms. Radha Singh (DIN 02227854) were appointed in that meeting as Independent Directors for a term of 3 consecutive years.

Mr. Dipankar Basu submitted his resignation from the Board of Directors with effect from February 3, 2015. Mr. Basu was associated with the Company for 18 years and the Company immensely benefitted from his rich knowledge and experience. The Board expresses its sincere gratitude and appreciation of the outstanding contribution made by Mr. Basu during his tenure as a Director of the Company.

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, had appointed Mr. Aditya Narayan (DIN 00012084) as an Additional Director of the Company in the category of Independent Director with effect from April 1, 2015. In pursuance of Section 149 of the Companies Act, 2013, the Board is recommending the appointment of Mr. Aditya Narayan as an Independent Director of the Company with effect from 1st April, 2015, to hold office upto the Annual general Meeting of the Company to be held in the Year 2018. Mr. Aditya Narayan is not a relative (as defined under the Companies Act, 2013 and Rules thereunder) of any director of the Company.

The Board of Directors had re-appointed Mr. Anil Kapoor (DIN 00032299) as Managing Director of the Company for a period of 2 years with effect from February 16, 2015 and the Board commends the re-appointment of Mr. Anil Kapoor for approval of the shareholders.

During the year, the Managing Director has not received any commission or remuneration from any subsidiary of the Company.

All the Independent Directors have submitted declarations that they meet the criteria of independence as provided under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Board met seven times during the Financial Year 2014-15.

Other information on the directors and the Board Meetings is provided in the Corporate Governance Report annexed to this Report as Annexure "B".

(ii) Key Managerial Personnel

Pursuant to the provisions of the Companies Act, 2013, the Board appointed Mr. Abhay Baijal as the Chief Financial Officer of the Company and designated him Key Managerial Personnel in such capacity with effect from April 1, 2014. The Board has also designated Mr. Anil Kapoor, Managing Director and Mr. Multan Singh Rathore, Vice President — Legal, Corporate Communication and Secretary as Key Managerial Personnel, with effect from April 1,2014. Mr. M.S Rathore will cease to be Secretary of the Company with effect from May 01, 2015. The Board has appointed Mr. Rajveer Singh as Secretary of the Company from the same date.

10. Internal Financial Controls

The Company has policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to 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 given in the Management Discussion and Analysis Report attached hereto as Annexure "A".

11. Remuneration Policy

The Remuneration Policy of the Company including criterion for determining qualifications, positive attributes, independence of Directors and other matters as prescribed under Section 178 of the Companies Act and clause 49 of the listing agreement is annexed to this Report as Annexure "F"

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

a) Your Company has not issued any shares during the Financial Year 2014-15.

b) No significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

c) All Related Party Transactions entered during the year were in ordinary course of business and on arm's length basis. No material Related Party Transaction (transaction exceeding ten percent of the annual consolidated turnover as per last audited financial statements), was entered during the year by the Company.

Accordingly, disclosure of Related Party Transactions as required under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

d) The extract of annual return is attached to this Report as Annexure "G"

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

i. The Performance evaluation of the Board, the Committees of the Board, Chairperson and the individual Directors;

ii. The Composition of Audit Committee; and

iii. The details of establishment of Vigil Mechanism.

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

13. Directors Responsibility Statement

Your Directors hereby state that:

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 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, 2015 and of the profit and loss of the Company for the year ended March 31,2015;

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 are 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

The Notes on Financial Statements read with the Auditors' Reports are self-explanatory and therefore, do not call for any further comments or explanations.

M/s. S. R. Batliboi & Co. LLP, Statutory Auditors (Registration No. 301003E) and M/s. Singhi & Co., Chartered Accountants (Registration No. 302049E) Branch Auditors of Shipping Business of the Company were re-appointed from the conclusion of 29th Annual General Meeting (AGM) of the Company till the conclusion of 31st AGM of the Company to be held in the year 2016. Your Directors are seeking ratification of the appointment of M/s. S.R. Batliboi & Co. LLP, Statutory Auditors and M/s. Singhi & Co., Branch Auditors of Shipping Business of the Company from the conclusion of the ensuing 30th AGM of the Company till the conclusion of 31st AGM of the Company.

The Board of Directors of the Company appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost accounts of the Company, as applicable, for the financial year 2014-15. As required under the Companies Act, 2013 and Rules framed thereunder, your directors are seeking ratification of the members for the remuneration payable to M/s K.G. Goyal & Associates, Cost Accountants.

15. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. RMG & Associates, Practicing Company Secretaries for conducting secretarial audit of the Company for the financial year 2014-15. The Secretarial Audit Report issued by the aforesaid Secretarial Auditors is annexed herewith as Annexure "H".

There is no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report which may require explanation from the Directors.

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

The Company continuously endeavours to make its plants energy efficient and reviews various options to conserve energy on regular basis. The energy conservation is of paramount importance for sustainable business and it also results into saving of natural and financial resources. The Company has five double hull Aframax Tankers and these ships are more energy efficient as compared to the old vessels. 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 hereto.

17. Risk Management

Your Company has developed and implemented a Risk Management Policy. The Company has constituted Risk Management Committee which 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 circulated to the Audit Committee and the Board of Directors for their review periodically.

18. fixed Deposits

Your Company has discontinued accepting new deposits with effect from July 1, 2008. As on March 31,2015, fixed deposit amount of Rs. 133,871 pertaining to 4 depositors remained unpaid / unclaimed despite regular reminders to the concerned depositors. In addition to this, a sum of Rs. 38,735 towards interest on deposits is lying unpaid / unclaimed with the Company. Your Company has not defaulted in repayment of deposits or payment of interest during the year. The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

19. Particulars of employees

The human resource is one of the most important assets of the Company which has played pivotal role in its performance and growth. Your Company has very healthy work environment matched with adequate compensation packages which enables it to attract and retain high calibre employees. 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, forms part of this Report and is attached hereto as Annexure "J".

20. Employees Stock Option Scheme

The members of the Company had approved CFCL Employees Stock Option Scheme 2010 ("ESOS 2010") on August 27, 2010 for issue and allotment of options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10 of the Company. The ESOS 2010 is administered by the Nomination and Remuneration Committee of the Board of Directors of the Company. The disclosure in respect of ESOS 2010 is given in Annexure "K" attached hereto.

21. Consolidated Financial Statements

In pursuance of the provisions of the Companies Act, 2013, Rules thereunder, listing agreement with the Stock Exchanges and the applicable Accounting Standards, the Company has prepared Consolidated Financial Statements. The Audited Consolidated Financial Statement alongwith Auditors' Report and the Statement containing salient features of financial statements of subsidiaries and joint venture (Form AOC - 1) forms part of the Annual Report.

22. Investor Service Centre

The In-house Investor Service Centre of your Company located at New Delhi, provides prompt service to the investors. The Company takes various pro-active measures for investor satisfaction like timely reminders to investors about new corporate benefits, undelivered shares, unclaimed benefits, etc.

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 2015-16.

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

23. Acknowledgements

Your Directors wish to place on record their appreciation of the support and co-operation received from the Department of Fertilisers, Government of India, State Governments, Domestic and International Financial Institutions & Banks and other stakeholders. Your Directors also convey their sincere appreciation of the commitment, hard work and devotion of every employee of the Company which has enabled the Company to achieve sustained performance.

For and on behalf of the Board of Directors Place: New Delhi S. K. Poddar Date: April 30, 2015 Chairman




Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 29th Annual Report on the business and operations of the Company together with audited accounts for the financial year ended March 31, 2014.

1. Financial Results and Appropriations

(Rs. in crore)

Particulars 2013-14 2012-13

(a) Turnover (excluding excise duty) 7976.42 7337.48

(b) Gross Profit after Finance Cost but before Exceptional Items, Depreciation and Tax 576.23 666.81

(c) Depreciation / Amortization 230.31 222.04

(d) Profit before Exceptional Items and Tax 345.92 444.77

(e) Exceptional Items - (11.96)

(f) Profit before Tax 345.92 456.73

(g) Provision for Current Tax 40.14 121.07

(h) Provision for Deferred Tax 2.71 30.05

(i) Profit after Tax 303.07 305.61

(j) Balance of Profit Brought Forward 1229.01 1065.92

(k) Profit available for Appropriation 1532.08 1371.53

(l) Reversal of Dividend on Equity Shares held by CFCL Employees Welfare Trust (Trust) 0.87 -

(m) Appropriations:

- General Reserve 50.00 50.00

- Proposed Dividend on Equity Shares 79.08 79.08

- Tax on Dividend 13.44 13.44

- Proposed Dividend on

Equity Shares held by Trust (0.43) -

(n) Balance Carried Forward to Balance Sheet 1390.86 1229.01

2. Operations:

The Company has three business segments viz. Fertiliser, Shipping and Textile with Fertiliser being the largest amongst them. The Fertiliser Division comprises of manufacturing of Urea and Single Super Phosphate (SSP) and trading of fertilisers and other agri-inputs. The Company has registered an increase in the turnover of Own Manufacture Fertilisers mainly due to increase in prices of Natural Gas, depreciation in value of Indian Rupee vis-à-vis US$ (as the Natural Gas prices are denominated in US$) and increase in sales volume of Urea. There was decrease in turnover from Trading segment mainly due to reduction in prices of traded fertilisers and lower sales of traded SSP and pesticides. The Shipping business continues to under- perform. The turnover of Shipping Division is higher mainly because of revenue from in-chartered ships and foreign exchange rate variations. The Textile business has performed better in comparison to the previous year with higher turnover and increase in profitability.

The Fertiliser Business faced challenges on various fronts during the year under review. The higher inventories of phosphatic fertilisers in the market had dampening effect on sales of traded fertilisers. The un-favorable policy of Urea pricing in respect of production beyond re-assessed capacity has forced the Company to restrict production of Urea. During last few years, the Government of India has resorted to under-provisioning for fertiliser subsidy in the union budget. This has resulted into long delays in payment of subsidy to the fertiliser companies thereby substantially increasing industry''s interest burden.

The Shipping business continues to be under stress with freight rates and asset prices struggling at low levels. The signs of recovery were visible in January 2014 but the freight rates have again come down. The sustainable recovery in the shipping industry is likely to take some more time.

The performance of Textile business remained satisfactory with signs of stress during the later part of the Year. The Textile Business was able to achieve slightly better sales and profitability in comparison to the previous year.

The detailed information on all the three business segments of the Company and the respective industries are given in the Management Discussion and Analysis Report attached as Annexure "G" to this report.

3. Dividend

The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each (Previous Year – Rs. 1.90 per equity share) for the financial year ended March 31, 2014. The total outgo on this account will be Rs. 92.52 crore including dividend distribution tax.

4. ''Corporate Governance Report'' and Code of Conduct

The Company is committed to maintain highest standards of Corporate Governance and strives to improve the corporate governance standards. Corporate Governance Report for the Financial Year 2013-14 is attached as Annexure "D". The declaration of the Managing Director confirming compliance with the ''Code of Conduct and Ethics'' is enclosed as Annexure "E" and Auditors'' Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "F".

5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID)

IMACID is a joint venture of your Company with two other partners i.e. Tata Chemicals Limited and OCP, Morocco. Each of the three partners hold equal stake in the joint venture (i.e. 33.33% each). IMACID is engaged in the manufacture of phosphoric acid (P2O5) in Morocco.

During the calendar year 2013, IMACID produced 368,294 MT of P2O5 against a design capacity of 430,000 MT of P2O5. The sales during the year 2013 were 351,480 MT of P2O5 against the previous year sales of 254,919 MT of P2O5 and 54,436 MT of DAP (equivalent of 25,421 MT of P2O5 tolled through OCP). The plant was shut down from March 22, 2013 to May 7, 2013 due to adverse market conditions.

During the year 2013, IMACID achieved revenue of Moroccan Dirham (MAD) 2135.72 million (Rs. 1471.35 crore) against revenue of MAD 2264.13 million (Rs. 1388.86 crore) achieved during the year 2012. The profit after tax of IMACID was MAD 83.15 million (Rs. 57.28 Crore) during the year 2013 as against MAD 9.26 million (Rs. 5.68 crore) in the previous year.

IMACID achieved production and sales of 62,192 MT and 74,768 MT respectively of P2O5 with operating income of MAD 308.85 Million (Rs. 229.80 crore) during January – March 2014 quarter.

6. Subsidiaries

(i) Chambal Infrastructure Ventures Limited and its Subsidiaries

Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned subsidiary of your Company. CIVL was set up to pursue the business opportunities in Power Sector. CIVL had established two down-stream wholly owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited and Chambal Energy (Orissa) Limited for setting up power projects in the states of Chhattisgarh and Odisha, respectively. CIVL has identified suitable site for its project in Odisha and necessary approvals in this regard were being pursued. There was no activity during the year for power project in Chhattisgarh.

(ii) CFCL Overseas Limited, Cayman Islands and its Subsidiaries

CFCL Overseas Limited is a wholly owned subsidiary of your Company and a holding entity for software business. CFCL Technologies Limited, the flagship Company which controls the entire software business, is a subsidiary of CFCL Overseas Limited. CFCL Technologies operates business through its step-down subsidiaries mainly in USA and India.

The software business continued its focus on conservation of resources, cost optimization and making necessary investments to turnaround the business. The Software Business generated EBITDA of USD 4.98 million in calendar year 2013. Revenue of Software business saw a marginal decrease, from USD 78.20 million in 2012 to USD 74.80 million in 2013, driven by weak origination market.

The software business as a whole incurred a net loss of USD 5.90 million during the year 2013 as against net loss of USD 18.10 million incurred in the year 2012.

(iii) India Steamship Pte. Limited, Singapore and its Subsidiary

India Steamship Pte. Limited, Singapore is a wholly owned subsidiary of your Company mainly into chartering business. There was no business activity in this entity during the year. The Board of Directors of this company declared dividend of USD 3.25 per share amounting to USD 3,509,876 during the year, out of accumulated profits.

India Steamship International FZE, UAE is a wholly owned subsidiary of India Steamship Pte. Limited Singapore. There was no business activity in this entity during the year under review.

(iv) India Steamship Limited, India (ISL)

ISL is a wholly owned subsidiary of your Company. During the year, the issued and subscribed capital of the Company was reduced to Rs. 25,00,000/- (Rupees Twenty Five Lac only) divided into 2,50,000 (Two Lac Fifty Thousand) fully paid up equity shares of Rs. 10/- each from Rs. 51,05,00,000 (Rupees Fifty One Crore Five Lac only) divided into 50,000 (fifty thousand) equity shares of Rs. 10/- each fully paid up, 4,10,00,000 (Four Crore Ten Lac) partly paid up equity shares of Rs. 10/- each {Rs. 0.50 per share paid up} and 1,00,00,000 (One Crore) non-cumulative redeemable partly paid preference shares of Rs. 10/- each {Re. 1/- per share paid up} vide order dated November 28, 2013 passed by Hon''ble High Court of Rajasthan at Jaipur.

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

Exemption: The Government of India vide its circular dated February 8, 2011 granted general exemption to the companies from attaching with Annual Report, the copies of the Balance Sheet, Statement of Profit and Loss, Board of Directors'' Report and Auditor''s Report of its subsidiaries. Accordingly, the Board approved non-attachment of aforesaid documents of subsidiaries with the Annual Report of the Company. The Consolidated Financial Statements presented by the Company include the financial information of its subsidiaries, as applicable. The Company will make available the Annual Accounts of its subsidiaries along with relative detailed information upon request by investors of the Company or its subsidiaries. The Annual Accounts of the subsidiaries will be available for inspection by any shareholder at the corporate offices of your Company and respective subsidiaries during office hours.

7. Health, Safety and Environmental Protection

Your Company gives high priority to Health, Safety and Environment protection and operates with the motto of ''Safety First''. This aspect is reflected in the day to day operations of the Company. The senior management of the Company continuously monitors the progress and performance of the Company on the parameters of Health, Safety and Environment Protection. The Company strives for continuous improvement through benchmarking studies and other appropriate methodologies. The efforts are always on to deeply engrain the safety aspects in the people involved in the operations of the Company. Your Company has established and is maintaining an Integrated Management System at Gadepan; based on OHSAS-18001:2007, ISO-14001:2004, ISO-9001:2008. The township at Gadepan is also OHSAS-18001 & ISO-14001 certified.

(a) Health & Hygiene

The health assessment and occupational disease monitoring of employees and associates is done through regular periodic medical examinations.

A well equipped occupational health centre in the campus at Gadepan works round the clock to provide Health Services to employees, their families, contractor work force and villagers in the vicinity of the plants. New medical equipment and services are added to continuously upgrade the facilities at health centre.

Necessary training was imparted to the employees and workers to enhance their awareness towards health related matters. Some of our employees are certified first-aiders.

(b) Safety Management

A strong occupational – health and safety management system OHSAS-18001:2007 is in place in your Company in Fertiliser Division at Gadepan to ensure occupational health & safety of employees, contractor workforce as well as equipment and machinery.

Further, your Company has implemented, in its operations at Gadepan, Process Safety Management System developed by Occupational Safety & Health Administration (OSHA) for proactive identification, assessment & control of hazards.

To maintain and improve upon the well established safety systems, extensive trainings were conducted by internal & external experts on rescue, work at height, working inside confined space, fire fighting & emergency handling, electrical safety, material handling, road safety, etc.

As a new initiative, contractors'' safety committee has been formed under chairmanship of maintenance head for further increasing their involvement and improvement in safety compliance and ownership.

The concept of Behavior Based Safety (BBS), introduced last year for safety improvement in the bagging plant is working satisfactorily through selected BBS Champions; which include representatives from employees and contractors'' staff. Noticeable improvement in work culture is visible such as reporting of observations for safety improvement, reduction in unsafe acts & conditions and injuries.

Various safety projects have been undertaken to improve safety system of SSP plant at Gadepan. A unique initiative of providing automated machine guards in moving machinery was undertaken to ensure safe operations.

We have a well established safety reward system for encouraging employees and contractors'' staff for achieving safety excellence. The Company gave rewards for safe million man-hours, safe shutdown, reduction of injuries in bagging, best near miss reporting, best safety performance by a department, etc.

Your company is associated with international and national safety institutions of repute such as National Safety Council of US, British Safety Council, International Fertiliser Association, National Safety Council of India and other Govt. bodies. Safety month, National Safety Day, Road Safety Week, Fire Service Day & World Environment Day, etc., campaigns were organized involving employees, their families and contractors'' staff at Gadepan.

School children and staff were introduced to fire fighting & emergency handling equipments and procedure at Fire Station. As a special drive towards improvement in road safety, film shows and discussion by experts were organised for township residents. Environment safety workshop and fire fighting demo was organised for ITI Sangod students at ITI Sangod.

Emergency handling: Your Company has a well-defined "Onsite Disaster Management Plan". Regular mock drills & fire drills were conducted to verify the emergency preparedness. Prompt services for fire fighting were provided to surrounding villages. The on-site emergency plan and Mutual Aid & Response Group document has been thoroughly revised this year.

(c) Environment Management

i. Environment Protection - Environment protection is the top priority of the management. A strong Environment Management System ISO- 14001:2004 is in place in Urea and Ammonia production activities and the Township at Gadepan. Extensive environmental monitoring is carried out to assess pollution risk to all personnel working directly or indirectly with us or residing in surrounding areas and necessary corrective & preventive actions are taken.

ii. Sustainable Development – Your company is totally committed to sustainable development and has undertaken various environment improvement programmes to conserve natural and other resources viz. Rain Water Harvesting, Ground Water Recharging, Energy Conservation Measures, Pollution Control, Use of Solar Energy, etc. Few initiatives taken by your Company are installation of LED street lights, variable frequency drives, upgradation of synthesis gas compressor, installation of ammonia product heater, etc.

iii. Waste Management – Your Company continues to follow the 3R concept (Reduce, Re-use and Re-cycle) for waste management. Almost 100% condensate is recycled back to the system. Your Company has adopted best practices to manage solid / hazardous waste disposal after proper categorization. Recyclable waste is disposed off and saleable items are sold to approved recyclers. Use of polythene bags is strictly prohibited in the Gadepan campus.

iv. Green belt Development– Your Company''s complex at Gadepan is experiencing a positive change in Ecology due to development of a dense green belt/ forest with thousands of trees & shrubs in an area of about 153 hectares. This has provided habitat to many species of birds which includes large number of peacocks. Only treated waste water is used in maintaining green belt through a 65 kilometer long irrigation network spread all over the complex.

v. Water conservation– Your Company continuously works on various water optimization measures as our area is water scarce. Water audits and studies have been conducted through internal and external experts to explore more avenues of water conservation. Kalisindh water river mapping has been done for studying intake water quality. Special efforts have been made in optimization of water consumption at Gadepan. The specific consumption of water is 4.98 cubic meters per MT of Urea this year against the water consumption norms of 8.0 cubic meters per MT of Urea for fertiliser industry.

(d) Quality Management

Your Company is ISO 9001:2008 certified and adequate attention is accorded to maintain quality of end product and processes. To enhance customer satisfaction quality assurance is ensured at all stages of manufacturing processes and maintenance & support services. Quality is continually improved by determining and taking care of internal and external customer requirements, future needs and expectations. Regular quality reviews are conducted and feedback from end-users is valued high as they are pillars for quality improvement and sustenance.

(e) Health, Safety, Environment & Quality (HSEQ) Audits and Reviews

HSEQ system is continually improved by conducting Hazards & Risk assessments, periodic audits by teams of trained internal auditors and external agencies of repute. Learning visits to other good performing organizations were conducted and their better practices were adapted as per our own requirements. To strengthen the audit, various internal audits were conducted on systems such as ammonia storage, fire water pump house, safety showers, first-aid boxes, pull chords, etc.

(f) Achievements

Your Company regularly participates in national and international benchmarking surveys and awards for independent assessment and opportunity for continual improvement. Your Company has received following prestigious awards during the year under review:

- 1st prize (Platinum) in Large Size Category (FICCI Safety

Systems Excellence Awards for Manufacturing 2013)

- Certificate of appreciation from National Safety Council of India for Occupational Safety & Health for 2009- 2011 ("National Safety Council of India 2012" Safety Awards)

- Certificate of appreciation from Associated Chambers of Commerce and Industry of India for Corporate Social Responsibility (ASSOCHAM CSR Excellence Awards 2013-14)

8. Corporate Social Responsibility (CSR)

Your Company is committed in improving the quality of life of people with a special focus on neighboring areas. Your Company has taken number of initiatives for the community development in consultation with local administration at the village, block and district levels. Your Company has also formed an NGO – KK Birla Memorial Society to undertake CSR activities, in particular the Public-Private-Partnership (PPP) Schemes.

The Company has undertaken various CSR initiatives during the year under review, brief details of some of which are given below:

a) Education

CFCL is extending quality education to children from rural community by providing admission to Chambal Fertilisers DAV School. More than 50% students in this school are from surrounding rural community.

Your Company has adopted 24 primary and upper primary government schools of nearby 22 villages under PPP Scheme of Government of Rajasthan. Your Company completed renovation of Government schools and construction of girls'' toilets in each school and Stationary, school bags, note books and sweaters were provided to around 2000 students. The Company also organized sports, drawing and cultural competitions to motivate these children and prizes were given to them. Your Company is adopting another 5 Secondary & Senior Secondary and 3 Primary schools to take care of entire school education in its CSR project area.

A reputed NGO has been engaged in improving learning level of school children. The aim is to provide quality education to school children in partnership with Sarva Shiksha Abhiyan and Rastriya Madhyamik Shiksha Abhiyan of Government of India. The Company gave financial assistance for a few under-privileged girl students and for purchase of Genset for a school for blind children.

b) Technical Education

Your Company had adopted Government Industrial Training Institute (ITI) – Sangod in 2010-11 under PPP scheme. After complete renovation of the building and introduction of 4 new trades, the ITI has established itself as one of the top ITIs in Rajasthan under the guidance of your Company. The institute has been able to achieve 100% placement of the students in last 2 years. Encouraged by the success, your Company has adopted another ITI at Sultanpur (Rajasthan).

c) Vocational Education

Your Company has set up a vocational training center at Gadepan and Kundanpur villages to empower unemployed rural youth specially women. During this year, around 120 women were trained in ''Tailoring & Stitching Course'' and ''Beautician Course''.

d) Community Health Care

The Company operates a mobile Health Care Unit in 23 surrounding villages and provides free medical check up and medicines to people at their doorsteps. Ambulance facilities are also provided to community round-the-clock for taking patients to Kota hospitals in emergency situations, thus benefiting over 300 cases.

During the year, around 15,451 people were treated for different ailments. The community also avails the services of specialists in various fields such as pediatrics, gynecology, skin, dental, eye, etc. during their visits and free camps organized for them. Over 3,550 patients benefited during such visits and camps.

The Company has contributed Rs. 30 lac to Manorama Devi Birla Charitable Trust to support their community healthcare initiatives in Uttarakhand.

e) Rural Infrastructure

The Company has constructed pavement roads in Pachara, Motikuan, Bamori, Cheensa, Palaitha, Gadepan Ki Jhopariyan, Sarola, etc. villages to improve quality of life of rural folks. Pavement road and drain facility construction was completed in entire Gadepan village under PPP scheme.

The Company alongwith its employees provided relief by way of constructing 32 green houses, 16 toilets and 10 water storage tanks with filtration units in 4 villages of Chamoli district in Uttarakhand.

9. Disclosure of Particulars

The Company strives to make the plants as energy efficient as possible and reviews various options to conserve energy on regular basis. The improvement in energy efficiency not only helps in environment protection but it also adds to the bottom-line of the Company. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is set out in Annexure "A" attached hereto.

Information required to be furnished in Form A is not applicable to shipping industry. The Company has 5 double hull Aframax Tankers and these ships are more energy efficient as compared to the old vessels. The Shipping Division has no information to furnish in Form B regarding technology absorption.

10. Investor Service Centre

The In-house Investor Service Centre of your Company located at New Delhi, provides prompt service to the investors. The Company takes various pro-active measures for investor satisfaction like timely reminders to investors about new corporate benefits, undelivered shares, unclaimed benefits, etc.

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 2014-15.

The members are requested to refer to general shareholders'' information given in Corporate Governance Report appended to this report.

11. Fixed Deposits

Your Company has discontinued accepting new deposits with effect from July 1, 2008. As on March 31, 2014, your Company had 4 depositors with fixed deposits of Rs. 1.45 lac, who did not claim their Fixed Deposit amount despite being reminded regularly.

12.Employees Stock Option Scheme

The members of the Company had approved CFCL Employees

Stock Option Scheme 2010 ("ESOS 2010") on August 27, 2010 for issue and allotment of options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10 of the Company. The ESOS 2010 is administered by the Compensation Committee of the Board of Directors of the Company. Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is given in Annexure - "B".

13.Personnel

Your Company recognizes the contribution of its highly motivated human resource in its performance and growth. Your Company has very healthy work environment matched with adequate compensation packages which enables it to attract and retain high caliber employees. Information in accordance with section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report and is attached hereto as Annexure "C".

14.Directors

The Board consists of nine directors - eight non-executive directors and a Managing Director. Three directors namely M/s. R.N. Bansal, Marco Wadia and C.S. Nopany are due for retirement by rotation at the forthcoming Annual General Meeting. M/s. Marco Wadia and C.S. Nopany are eligible and have offered themselves for re-appointment. In pursuance of Section 149 of the Companies Act, 2013, the Board is recommending appointment of M/s. Marco Wadia, Dipankar Basu, Kashi Nath Memani and Ms. Radha Singh as Independent Directors of the Company to hold office for 3 (three) consecutive years for a term upto the conclusion of the Annual General Meeting of the Company to be held in the calendar year 2017. The Directors proposed to be appointed / re-appointed are not relatives (as defined under the Companies Act, 2013 and Rules thereunder) inter-se or of any other director of the Company.

Mr. R.N. Bansal has expressed his unwillingness for re-appointment. Mr. Bansal has been associated with the Company for last 18 years and the Company immensely benefitted from his rich knowledge and experience. The Board expresses its sincere gratitude and appreciation of the contribution made by Mr. Bansal as a Director of the Company.

Other information on the directors is provided in Corporate Governance Report annexed to this Report as Annexure "D".

15.Auditors

The Notes on Financial Statements read with the Auditors'' Reports are self explanatory and therefore, do not call for any further comments or explanations.

M/s. S. R. Batliboi & Co. LLP, Statutory Auditors and M/s. Singhi & Co., Branch Auditors of Shipping Business of the Company, are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your director are seeking the re-appointment of the Statutory Auditors and Branch Auditors from the conclusion of ensuing 29th Annual General Meeting (AGM) of the Company till the conclusion of 31st AGM of the Company.

The Board of Directors of the Company appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost records of the Company for the financial year 2013-14. The Company has filed with the Ministry of Corporate Affairs (MCA), Government of India, the Cost Audit Report and Compliance Report for the Financial Year 2012-13 for the Fertilizer and Textile Divisions of the Company on September 18, 2013 as against the last date of filing on September 30, 2013.

16. Directors Responsibility Statement

Your Directors hereby report:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

b) that 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 as at March 31, 2014 and of the profit of the Company for the year ended March 31, 2014;

c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) that the Company has adequate internal systems and controls in place to ensure compliance of laws applicable to the Company.

17. Consolidated Financial Statements

In accordance with ''Accounting Standard 21 – Consolidated Financial Statements'', the consolidated financial statements form part of this Report & Accounts. These consolidated financial statements also incorporate the ''Accounting Standard 27 – Financial Reporting of interest in Joint Ventures issued by the Institute of Chartered Accountants of India. The consolidated financial statements have been prepared on the basis of audited financial statements received from subsidiaries and joint venture entity.

18.Acknowledgements

Your Directors wish to place on record their appreciation of the assistance and co-operation received from the Department of Fertilisers, Government of India, State Governments, Domestic and International Financial Institutions & Banks and other stakeholders, whose continued support and co-operation has been instrumental in enabling the Company to achieve its goals. Your Directors also convey their sincere appreciation of the commitment, hard work and devotion of every employee of the Company which has enabled the Company to achieve sustained performance.

By order of the Board

Place: New Delhi S. K. Poddar

Date : May 09, 2014 Chairman


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 28th Annual Report on the business and operations of the Company together with audited accounts for the financial year ended March 31, 2013.

1. Financial Results and Appropriations

(Rs. in crore) Particulars 2012-13 2011-12

(a) Turnover (excluding excise duty) 7337.48 6455.24

(b) Gross Profit after Finance Cost but before Exceptional Items, Depreciation and Tax 666.81 821.71

(c) Depreciation / Amortization 222.04 262.08

(d) Profit before Exceptional Items and Tax 444.77 559.63

(e) Exceptional Items (11.96)

(f) Profit before Tax 456.73 559.63

(g) Provision for Current Tax 121.07 127.48

(h) Provision for Deferred Tax 30.05 184.86

(i) Profit after Tax 305.61 247.29

(j) Balance of Profit Brought Forward 1065.92 960.54

(k) Profit available for Appropriation 1371.53 1207.83

(l) Appropriations: - General Reserve 50.00 50.00

- Proposed Dividend on Equity Shares 79.08 79.08

- Tax on Dividend 13.44 12.83

(m) Balance Carried Forward to Balance Sheet 1229.01 1065.92

2. Operations:

The Company has three business segments viz. Fertilizer, Shipping and Textile with Fertilizer being the largest amongst them. The Fertilizer Division comprises of manufacturing of Urea and Single Super Phosphate (SSP) and trading of fertilizers and other agri- inputs. This division has registered a robust overall growth during the year under review. The Shipping business continues to be under stress and signs of recovery are not yet visible. The Textile business has improved its performance from second quarter of the Financial Year 2012-13 and achieved encouraging results.

The Company has put renewed focus on trading activity during last few years to fully leverage its goodwill and brand image in the market. This strategy has borne fruits with an excellent performance on revenue and profitability fronts from the trading activity in Fertilizer business. The SSP unit at Gadepan commenced production in second half of the year.

The worldwide Shipping business continues to remain sluggish with freight rates on the softer side due to continuing global recession and oversupply of tonnage. The time charter activity has also remained sluggish due to downturn in the market. This has adversely impacted the performance of the Shipping business in general. The Company sold one of its ageing vessels during the year and presently operates 5 (five) Aframax vessels, mostly for international trade.

The performance of Textile business at the beginning of the Financial Year 2012-13 was under pressure. However, it has picked up momentum from second quarter onwards and achieved excellent results during the year under review. The performance was supported mainly by good demand and better realizations from cotton yarn.

The detailed information on all the three business segments of the Company and the respective industries are given in the

Management Discussion and Analysis Report attached as Annexure "G" to this report.

3. Dividend

The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each, same as in the previous year. The total outgo on this account will be Rs. 92.52 crore including dividend distribution tax.

4. ''Corporate Governance Report'' and Code of Conduct

Your Directors continue to strive for further improvement in corporate governance standards and are committed for adhering good corporate governance practices. Corporate Governance Report for the Financial Year 2012-13 is attached as Annexure "D". Declaration of the Managing Director confirming compliance with the ''Code of Conduct and Ethics'' is enclosed as Annexure "E" and Auditors'' Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "F".

5. Joint Venture : Indo Maroc Phosphore S. A., Morocco (IMACID) Your Company has 33.33% stake in IMACID with two other equal partners - Tata Chemicals Limited and OCP, Morocco. IMACID is engaged in the manufacture of phosphoric acid (P2O5) in Morocco.

During the year 2012, IMACID produced 252,907 MT of P2O5 against the previous year production of 4,29,622 MT. Sales during 2012 were 254,919 MT of P2O5 and 54,436 MT of DAP (equivalent to 25,421 MT of P2O5, tolled through OCP) against the previous year sales of 412,950 MT of (P2O5).

The production and sales were substantially lower because of lower demand resulting into substantial reduction in revenue and profitability of IMACID. During 2012, IMACID achieved revenue of MAD 2264.13 million (Rs. 1388.86 crore) against revenue of MAD 3325 million (Rs. 2096.33 crore) achieved during the year 2011. The company earned a profit after tax of MAD 9.26 million (Rs. 5.68 crore) during the year 2012 as against MAD 366.49 million (Rs. 231.06 crore) in the year 2011.

IMACID achieved production and sales of 77,168 MT and 50,443 MT respectively of P2O5 with operating income of MAD 448.59 million (Rs. 274 crore) during the period January - March 2013. You may be aware that IMACID supplies acid mainly to India, where there was an oversupply of phosphatic fertiliser. Hence the plant was shutdown due to adverse market conditions. The company is utilizing this opportunity to carry out repairs to plant and equipment. The plant operations will commence soon.

6. Subsidiaries

(i) Chambal Infrastructure Ventures Limited and its Subsidiaries

Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned subsidiary of your Company to venture into Power Business. CIVL had established two down stream wholly owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited and Chambal Energy (Orissa) Limited for setting up power projects in the states of Chhattisgarh and Odisha, respectively. CIVL has identified suitable site for its project in Odisha and necessary approvals in this regard were being pursued. There was no activity during the year in power project in Chhattisgarh.

(ii) CFCL Overseas Limited, Cayman Islands and its Subsidiaries

CFCL Overseas Limited is a wholly owned subsidiary of your Company and a holding entity for software business. CFCL

Technologies Limited, the flagship Company which controls the entire software business, is a subsidiary of CFCL Overseas Limited. CFCL Technologies operates business through its step down subsidiaries mainly in USA and India.

The year 2012 was a year of consolidation for software business with revamp of leadership team including hiring a new CEO, making necessary investments to turnaround the business and putting the building blocks in place to steer the organization towards growth and profitability. The results of the aforesaid measures are beginning to bear fruit and the software business has added many new clients and successfully renegotiated a couple of existing loss making contracts. Revenue of Software business dropped from USD 92.85 million in 2011 to USD 78.20 million in 2012, primarily due to loss of one big client which filed for bankruptcy and general volume reduction in the Industry. The Software Business continued to make significant strides with renewed focus on operational efficiency, cost cutting, organization building and consolidation. It has been able to re-price successfully some significant loss making accounts and turned these accounts profitable.

CFCL Technologies Limited and its subsidiaries follow the January-December Financial Year. The software business as a whole incurred a net loss of USD 18.11 million during the year 2012 as against net loss of USD 19.98 million incurred in the year 2011.

(iii) India Steamship Pte. Limited, Singapore and its Subsidiary India Steamship Pte. Limited, Singapore operates through in- chartered vessels. During the year, India Steamship, Singapore had limited operations due to sluggish trend in the international shipping markets. It has entered into an agreement with Navig8 Inc., Marshall Islands to share the profit/ loss of a vessel which operated for part of the year.

India Steamship International FZE, UAE is a wholly owned subsidiary of India Steamship Pte. Limited, Singapore. There was no business activity in this entity during the year under review.

During the year 2012-13, India Steamship Pte. Limited, Singapore earned a revenue of USD 1.26 million and made a profit of USD 0.3 million.

(iv) India Steamship Limited, India (ISL)

ISL is a wholly owned subsidiary of your Company. During the year, there was no business activity in ISL.

Exemption: The Government of India vide its circular dated February 8, 2011 granted general exemption to the companies from attaching with Annual Report, the copies of the Balance Sheet, Statement of Profit and Loss, Board of Directors'' Report and Auditor''s Report of its subsidiaries. The Consolidated Financial Statements presented by the Company include the financial information of its subsidiaries, as applicable. The Company will make available the Annual Accounts of its subsidiaries along with relative detailed information upon request by investors of the Company or its subsidiaries. The Annual Accounts of the subsidiaries will be available for inspection by any shareholder at the corporate offices of your Company and respective subsidiaries.

7. Health, Safety and Environmental Protection

Your Company is committed to maintain high standards of Health, Safety and Environment protection by conducting all its operations in a proactive manner. Your Company ensures that these aspects are embedded in day to day activities and receive utmost importance and priority. With this objective, your Company has established and is maintaining an Integrated Management System based on OHSAS-18001:2007, ISO-14001:2004, ISO- 9001:2008 and Process Safety Management (PSM) system in Gadepan. The township at Gadepan is also OHSAS-18001 & ISO-14001 certified.

(a) Health & Hygiene

Your Company accords highest priority to health & hygiene of its employees and associates. Health assessment and occupational disease monitoring of employees and associates is done through periodic medical examination by a doctor who is trained in Occupational Health. Surveys, assessments and trainings are regular features and the plant and processes are continuously upgraded to improve work place and health standards.

The medical centre at Gadepan works round the clock to provide Health Services to employees, associated contractor work force, their families and villagers in the vicinity of the plants. New equipments and services are added to continuously upgrade the health care. Many officers of the Company have been imparted training on first aid and occupational health.

(b) Safety Management

A strong occupational - health and safety management system OHSAS-18001:2007 is in place in your Company in Fertiliser Division to ensure safety of employees, contractor workforce as well as equipment and machinery. Although not mandatory, your Company has implemented Process Safety Management (PSM) System developed by Occupational Safety & Health Administration (OSHA, USA) in its operations for proactive identification, assessment and control of hazards. Process incidents were reviewed as per PSM guidelines and trainings and audits were conducted for overall improvement.

Internal and external expert faculties conducted extensive trainings on rescue, fire fighting & emergency handling, electrical safety, material handling, road safety etc. to maintain and improve upon the well established safety system. E- learning on different safety topics has been initiated for executives to strengthen further safety trainings. The workers of associated contractors were involved in safety promotional activities & trainings to improve safety work culture and bring reduction in injuries.

During shutdown maintenance, extensive safety trainings under close supervisions were conducted by external experts. Personal Protective Equipments (handgloves, dust mask, ear plugs etc.) were provided free of cost to all contract workers.

An overall safety improvement project has been undertaken by your Company for bagging plant in association with a consultant. The concept of Behavior Based Safety (BBS) was introduced last year and is working satisfactorily through selected BBS Champions, which include representatives from employees and contractors'' staff. The efforts have shown improvement in work culture including reduction in unsafe acts and injuries.

Your Company is associated with world class safety institutions like National Safety Council of USA, British Safety Council, International Fertiliser Association, etc. In association with National Safety Council of India, National Safety Day, Road Safety Week, Fire Service Day & World Environment Day campaigns were organised involving employees, their families & contractors'' staff. Safety awareness materials are regularly distributed to employees, their families and contractor workers.

The scheme of "Near- Miss" & "Make-to Good" reporting is in place to encourage safety awareness among employees and contractor workforce. All near misses, minor injuries & incidents were reviewed; analyzed and corrective actions were timely taken. The Company has a well established safety reward system for encouraging employees and contractors'' staff for achieving various safety excellences.

Your Company has a well-defined "Onsite Disaster Management Plan". Regular mock drills and fire drills were conducted to check the emergency preparedness. Visits and consultations were done in near by industries to learn from each other and improve. Prompt services for fire fighting were provided to surrounding villages.

(c) Environment Management

Environment protection is one of the top priorities of your Company. A strong Environment Management System ISO- 14001:2004 is in place in production facilities as well as the Township at Gadepan to ensure environment protection, health & safety of employees, their families and contractor workforce. Extensive environmental monitoring is carried out to assess pollution risk to all personnel working directly or indirectly with us or residing in surrounding areas and necessary corrective & preventive actions are accordingly taken. Some of the steps taken in this direction are given below.

(i) Sustainable Development - Your Company is committed to sustainable development and has undertaken various environment improvement programmes such as Rain Water Harvesting, Ground Water Recharging, Energy Conservation Measures, Pollution Control, Use of Solar Energy, etc., to conserve natural resources.

(ii) Waste Management - Your Company continues to follow the 3R concept (Reduce, Re-use and Re-cycle) for waste management. Almost 100% condensates are recycled back to system. Your Company has adopted best practices to manage solid / hazardous waste disposal after proper categorization. Segregation of waste is ensured at source & separate bins have been created for collection of various categories of waste. Horticulture and domestic wastes are converted to manure and used in the green belt. Recyclable waste is disposed to recyclers and all saleable items are sold to approved recyclers. The use of polythene bags is strictly prohibited in the Gadepan campus for many years.

(iii) Green Belt Development- Your Company''s Gadepan complex is experiencing a positive change in Ecology due to development of a dense green belt / forest with thousands of trees & shrubs in an area of about 153 hectares. This has provided habitat to many species of birds which includes more than 700 peacocks. Only treated waste water is used in maintaining green belt through a 65 kilometer long irrigation network spread all over the complex.

(iv) Water Conservation - Your Company continuously works on various water optimization measures. Water audits and studies have been conducted through experts to explore more avenues of water conservation. Special efforts have been made in optimization of cooling water, fire water network, drinking water & de-mineralised water. The specific consumption of water was 5.01 cubic meters per MT of Urea this year against the water consumption norms of 8.0 cubic meters per MT of urea for fertiliser industry.

(d) Quality Management

Your Company is ISO 9001:2008 certified and adequate attention is accorded to maintain quality of end product and processes. To enhance customer satisfaction, quality assurance is ensured at all stages of manufacturing processes, maintenance and support services. Quality is continually improved by determining and taking care of internal and external customer expectations, future needs, etc.

(e) Health, Safety, Environment & Quality (HSEQ) Audits and Reviews

HSEQ system is continually improved by conducting Hazards & Risk assessments, periodic audits by teams of trained internal auditors and external agencies of repute. Surprise visits are made to the plant and canteen to ensure highest standard of housekeeping & hygiene. Safety systems of ammonia storage, ammonia feed pump areas and carbamate pump area have been upgraded based on the audit recommendations. ''Fitness for Service'' inspection for critical piping is under progress. All our Regional Marketing Offices in Fertiliser Division have been audited and staff has been trained to improve safety culture in the marketing team. HSEQ system performance is regularly reviewed at various levels to ensure its effectiveness and continual improvement.

(f) Achievements

Your company regularly participates in national and international benchmarking surveys for independent assessment which provides us an opportunity for continual improvement. Your company has received following prestigious awards during the year under review:

- "Environment Protection award" in continuation for three years; 2011-12, 2010-11 and 2009-10 from Fertilizer Association of India (FAI).

- "National Award for Excellence in Water Management 2012, Water Efficient Unit" from Confederation of Indian Industries (CII) under the category "Within the Fence".

8. Corporate Social Responsibility (CSR)

Your Company is committed towards the developement of neighboring areas for improving the quality of life. The Company has taken a number of initiatives for the community development in consultation with local administration at the village, block and district levels.

In order to initiate and sustain meaningful actions in this regard, your Company has full spectrum Corporate Social Responsibility (CSR) program under the umbrella of "Uttam Roshani". Your company has formed an NGO - KK Birla Memorial Society to undertake various CSR activities.

The "Uttam Roshani" program is designed as a participatory planning process to involve stakeholders and create their ownership for sustainable development of the area.

Under this Program, the thrust is on Health, Education and Infrastructure. Your Company has taken following initiatives on CSR front:

(a) Sanitation

To ensure sanitation among rural population in the vicinity of its plants, your Company has initiated a project to improve sanitary practices through awareness campaigns and construction of toilets. Your company has constructed around 800 individual toilets for Below the Poverty Lines (BPL) families. The project was completed in Financial Year 2012-13. Awareness about good sanitary habits is spread by regularly organizing Information, Education & Communication (IEC) activities on health and sanitation programmes in nearby villages/ schools.

(b) Community Health Care

The Company operates a mobile Health Care Unit in 23 villages surrounding Gadepan. A doctor and nursing assistant provide free medical check up and medicines to people at their doorstep.

During the year, over 30,000 people were treated for different ailments. The Medical Center in Gadepan campus provides free health service to local populace. Your company regularly organizes free medical camps for the community to avail the services of visiting specialists in various fields like pediatrics, gynecology, skin, dental, eye and ENT. Around 2600 patients benefited under this program during the year.

Ambulance facilities are also provided to community round the clock for taking patients to Kota hospitals in emergency. During this year, around 230 cases were helped through ambulance facility.

CFCL Ladies Club organizes a blood donation camp annually in association with Kota Blood Bank Society. The Company''s employees and their families have been actively participating in this initiative and 159 units blood were donated during this year.

(c) Primary & Upper Primary Education

Your Company is extending quality education to children from community through Chambal Fertilisers DAV School. Over 47 % students in this school are from surrounding community.

Your Company has adopted 24 primary & upper primary government schools of nearby 22 villages under Public Private Partnership (PPP) Scheme of Government of Rajasthan. During the year, your Company renovated 17 government schools and construction work is in progress in remaining 7 schools. Stationary, schools bags, note books, sweaters, etc. were provided to around 1850 students studying in these 24 schools. Library in each school is being established. To facilitate girl students, your Company has constructed new toilets for girls in 23 government schools. The Company in partnership with ''Sarva Shiksha Abhiyan'' - a Government Body, ensured construction of boundary wall & rooms in these schools.

In order to facilitate school drop out girls, the Company in partnership with IIMPACT (an NGO) has established 15 learning centers for over 400 drop out girls in surrounding villages and another 12 centres will be established in next 2- 3 months. 7 remedial learning centers for boys have been established to facilitate weak and drop out boys.

(d) Technical Education

Your Company had adopted Government Industrial Training Institutes (ITI) - at Sangod (Rajasthan) during the Financial Year 2010-11 in order to provide technical training to rural youth. The building of ITI - Sangod was renovated and new equipment and computers were installed for providing the training. A new block of building is under construction.

During the year, 4 new trades were introduced during the year after taking necessary approval from National Council for Vocational Training thus increasing the total trades to 7. The student strength has increased from around 100 to 280. We helped ITI last year in placing 94 students with some of the blue-chip companies.

(e) Vocational Education

Your Company has set up a vocational training center at Gadepan village to empower unemployed rural youth. During this year, 3 batches of tailoring & stitching courses were organized wherein 75 women from nearby villages were trained. It is planned to open new trades to facilitate more rural youths in the next year.

(f) Drinking Water & Rain Water Harvesting

Livelihood and health of community greatly depends on availability of adequate quality and quantity of drinking water. Chambal has helped in construction of Hand-pumps and tube-wells in surrounding villages.

(g) Rural Infrastructure

Your Company has been contributing towards rural infrastructure development by construction of school rooms, kharanja roads (stone pavement) with drain, gravel link roads, boundary wall, culvert, nallah etc. as per the need of the community. This year, your Company has constructed pavement roads in 3 villages in addition to construction of boundary walls, crematoriums, cement-concrete roads and a community center. Some of these works were carried out in participatory mode with Gram Panchayats.

(h) Agriculture & Veterinary Services

Agriculture and livestock development forms the backbone of rural livelihood and during times of stress, livestock becomes an alternate source of revenue for the farmers. Farmers at the grassroots'' level are largely unaware about the latest developments in the field of agriculture and animal husbandry. Recognizing this gap, your Company decided to enhance the awareness levels of farmers and started Uttam Krishi Clinics. The Clinic is mainly providing Agriculture Consultancy by experts, free soil testing and capacity building of farmers by conducting training programmes for new and improved techniques in the field of agriculture and animal husbandry.

Your Company regularly organizes veterinary camps for vaccination and treatment of animal health related problems, in collaboration with Veterinary Department, Government of Rajasthan.

(i) Reporting on triple bottom line performance

With the objective of assessing its Corporate Sustainability performance, the Company has been publishing annually A Sustainability Report on its triple bottom line performance since Financial Year 2009-10. The report is externally assured by Ernst & Young Private Limited.

9. Disclosure of Particulars

Your Company believes that improvement is a journey with new milestones to be achieved on continuous basis. The Company makes continuous efforts to make the plants as energy efficient as possible and reviews various schemes to conserve energy on regular basis. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is set out in Annexure "A" attached hereto.

Information required to be furnished in Form A is not applicable to shipping industry. However, it is ensured that every measure is taken to save and conserve energy at all stages of operation of the vessels as well as in on-shore office. The Company has 5 double hull Aframax Tankers and these ships are more energy efficient as compared to the old vessels. The Shipping Division has no information to furnish in Form B regarding technology absorption.

10. Investor Service Centre

The In-house Investor Service Centre of your Company located at New Delhi, continues to provide prompt investor service through quick resolution of investor grievances. The motto of ''high investor satisfaction'' is being pursued through pro-active actions like reaching out to investors regularly, timely reminders to investors about new corporate benefits, undelivered shares, unclaimed benefits, etc.

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 2013-14.

The members are requested to refer to general shareholders'' information given in Corporate Governance Report appended to this report.

11. Fixed Deposits

Your Company has discontinued accepting new deposits with effect from July 1, 2008. As on March 31, 2013, your Company had 10 depositors with fixed deposits of Rs. 3.03 lac, who did not claim their Fixed Deposit amount despite being reminded regularly.

12. Employee Stock Option Scheme

The members of the Company had approved Employee Stock Option Scheme 2010 ("ESOS 2010") on August 27, 2010 for issue and allotment of options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10 of the Company. The ESOS 2010 is administered by the Compensation Committee of the Board of Directors of the Company. Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is given in Annexure - "B".

13. Personnel

People are the most valuable assets of the Company. The Company continuously strives to encourage merit, healthy relations and the pursuit of excellence for the employees. Your Company has strategic and efficient recruitment and HR management process which enables it to attract and retain high caliber employees. Information in accordance with section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report and is attached hereto as Annexure "C".

14. Directors

The Board has eight non-executive directors and a Managing Director. Three directors namely M/s. S.K. Poddar, S.S. Bhartia and K.N. Memani are due for retirement by rotation at the forthcoming Annual General Meeting. These retiring directors are eligible and have offered themselves for re-appointment and they are not related to any other directors of the Company.

Other information on the directors is provided in Corporate Governance Report annexed to this Report as Annexure "D".

15. Auditors

The Notes on Financial Statements read with the Auditors'' Reports are self explanatory and therefore, do not call for any further comments or explanations.

The Company has received intimation that M/s. S.R. Batliboi & Co. has been converted to be a Limited Liability Partnership with effect from April 1, 2013 and is now known as S.R. Batliboi & Co. LLP. M/s. S. R. Batliboi & Co. LLP, Statutory Auditors and M/s. Singhi & Co., Branch Auditors of Shipping Business of the Company, are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The above re-appointments, if made, will be in accordance with the provisions of section 224 (1B) of the Companies Act, 1956.

The Board of Directors of the Company appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost accounts of the fertilizer and textile divisions of the Company for the financial year 2012-13. The Company has filed with the Ministry of Corporate Affairs (MCA), Government of India, the Cost Audit Report and Compliance Report for the Financial Year 2011-12 for the Fertilizer and Textile Divisions of the Company on January 11, 2013 and December 26, 2012 respectively as against the last date of filing on February 28, 2013.

16. Directors Responsibility Statement Your Directors hereby report:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relative to material departures;

b) that 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, 2013 and of the profit of the Company for the year ended March 31, 2013;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) that the Company has adequate internal systems and controls in place to ensure compliance of laws applicable to the Company.

17. Consolidated Financial Statements

In accordance with ''Accounting Standard 21 - Consolidated Financial Statements'', the consolidated financial statements form part of this Report & Accounts. These consolidated financial statements also incorporate the ''Accounting Standard 27 - Financial Reporting of interest in Joint Ventures'' issued by the Institute of Chartered Accountants of India. The consolidated financial statements have been prepared on the basis of audited financial statements received from subsidiaries and joint venture entity.

18. Acknowledgements

Your Directors wish to place on record their appreciation of the assistance and co-operation received from the Department of Fertilisers, Government of India, State Governments, domestic and International Financial Institutions & Banks and other stakeholders, whose continued support and co-operation has been instrumental in enabling the Company to achieve its goals. Your Directors also wish to place on record their sincere appreciation of the commitment, hard work and devotion of every employee of the Company which has enabled the Company to achieve sustained performance.

By order of the Board

Place : New Delhi S. K. Poddar

Date : April 30, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the 27th Annual Report on the business and operations of the Company together with audited accounts for the financial year ended March 31, 2012.

1. Financial Results and Appropriations

(Rs. in crore)

Particulars 2011-12 2010-11

(a) Turnover (excluding excise duty) 6455.13 4647.43

(b) Gross Profit after Finance Cost but before Exceptional Items,

Depreciation and Tax 821.71 704.38

(c) Depreciation / Amortization 262.08 267.95

(d) Profit before Exceptional Items and Tax 559.63 436.43

(e) Exceptional items - 4.37

(f) Profit before Tax 559.63 440.80

(g) Provision for Current Tax 127.48 159.93

(h) Provision for Deferred Tax 184.86 (44.31)

(i) Profit after Tax 247.29 325.18

(j) Balance of Profit Brought Forward 960.54 759.65

(k) Transferred from Debenture

Redemption Reserve - 3.12

(l) Profit available for Appropriation 1207.83 1087.95

(m) Appropriations:

- Tonnage Tax Reserve - 0.50

- General Reserve 50.00 35.00

- Proposed Dividend on Equity Shares 79.08 79.08

- Tax on Dividend 12.83 12.83

(n) Balance Carried Forward to

Balance Sheet 1065.92 960.54

2. Operations:

The financial year under review was a year of opportunities coupled with challenges. The performance of the Fertiliser Division of the Company was commendable both in terms of profitability and revenue. However, the Shipping and Textile Divisions have suffered due to overall dismal market scenario.

The Company has achieved highest ever production and sales of Urea. Similar uptrend was observed in volumes and profitability from the trading activity. The Company has expanded its market reach by setting up its marketing office at Aurangabad which will cater to Maharashtra market.

The Shipping Business has seen one of the worst years with bunker rates increasing sharply and asset and freight rates falling substantially. The time charter activity has also remained sluggish due to downturn in the market. This has severely impacted the performance of the Shipping business. The Company has six vessels (5 double hull and one single hull aframax tankers). The Company plans to dispose off the single hull vessel which is more than 23 year old.

During the year, the Shipping Division of the Company has opted out of Tonnage Tax Scheme under the Income Tax Act, 1961 and will be assessed under the normal tax regime w.e.f. April 01, 2011. Consequently, the Company has ascertained deferred tax liability on the difference between the written down value of the fixed assets pertaining to the Shipping Division as per books of accounts and the Income Tax Act, 1961 as on April 1, 2011 amounting to Rs.184.21crore which has been accounted for during the year. This non cash accounting charge has impacted the net profit of the Company during the Financial Year 2011-12

The Textile Division has faced high volatility in prices of raw material and yarn, movement of both the prices not being in tandem. The export markets have also remained sluggish during the year under review. All these factors have affected the performance of the Textile Division adversely.

The detailed information on all the three business segments of the Company and the respective industries are given in the Management Discussion and Analysis Report attached as Annexure "G" to this report.

3. Dividend

The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each (Previous Year - Rs. 1.90 per equity share). The total outgo on this account will be Rs. 91.91 crore including dividend distribution tax.

4. 'Corporate Governance Report' and Code of Conduct Your Directors confirm their ongoing commitment for adhering good corporate governance practices. Corporate Governance Report is attached as Annexure "E". Auditors' Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "D" and Declaration of the Managing Director confirming compliance with the 'Code of Conduct and Ethics' is enclosed as Annexure "F".

5. Joint Venture

Indo Maroc Phosphore S. A., Morocco (IMACID)

IMACID is a joint-venture of your Company established in Morocco. The Company has a 33.33% shareholding, together with two other equal partners - Tata Chemicals Limited and OCP, Morocco. IMACID is engaged in the manufacture of phosphoric acid (P2O5) which it exports to India primarily to Tata Chemicals Ltd and Zuari Industries Ltd for manufacture of granulated DAP and NPK fertilizers.

During 2011, the Company witnessed the highest ever production of 429,622 MT of P2O5 against a design capacity of 430,000 MT P2O5 . Sales during the year 2011 were 4,12,950 Mt of P2O5 against the previous year sales of 355,977 MT. During the year 2011, IMACID achieved revenue of MAD 3325 million (Rs. 2096.33 crore) against revenue of MAD 2284.07 million (Rs. 1246.69crore) achieved during the year 2010. IMACID earned profit after tax of MAD 366.49million (Rs. 231.06 Crore) during the year 2011 as against MAD 181.86 million (Rs. 99.26 crore) in the year 2010.

Strong financial performance and cash reserves facilitated payout of MAD 450 million (Rs.277.70 crore) as a special Dividend to its shareholders in March 2012 apart from dividend of MAD 62 million (Rs. 38.26 crore) paid during the Year 2011.

However, the plant has been shutdown from January 2012 onwards (except operations for some period in February 2012) due to adverse market conditions for its product. This opportunity was utilized to carry out crucial repairs to plant and equipment. The plant operations continue to remain suspended and shall start once the market conditions improve.

6. Subsidiaries

(i) Chambal Infrastructure Ventures Limited and its Subsidiaries

Chambal Infrastructure Ventures Limited ("CIVL") was incorporated by your Company to venture into Power business. CIVL had established two down stream wholly owned subsidiaries viz. Chambal Energy (Chhattisgarh) Limited and Chambal Energy (Orissa) Limited for setting up power projects in the states of Chhattisgarh and Odisha, respectively. CIVL is in the process of identifying suitable land parcels for its project in Odisha and matter is being pursued with the concerned authorities. There was not much progress in its power project endeavors in the state of Chhattisgarh.

(ii) CFCL Overseas Limited, Cayman Islands and its Subsidiaries

CFCL Overseas Limited is a wholly owned subsidiary of your Company and a holding entity for software business. CFCL Technologies Limited, a main entity which controls the entire software business, is a subsidiary of CFCL Overseas Limited. CFCL Technologies controls its software business through down stream subsidiaries mainly in USA and India.

The year 2011 was a year of consolidation for software business in achieving a significant stabilization of the operating margin and profitability. Software business made significant interventions and has successfully contained losses in the business from first three quarters of the year 2011. Revenue of Software business dropped from USD 128.65 million in 2010 to USD 92.85 million in 2011, primarily attributed to the decision to consciously terminate pure onshore accounts that had significantly depressed operating margins. The Software Business continued to make significant strides with continued focus on operational efficiency, cost cutting, organization building and consolidation which have enabled the Company to turn EBITDA positive from July - September quarter of 2011 onwards.

CFCL Technologies and its subsidiaries follow the January to December Financial Year. The software business as a whole incurred a net loss of USD 19.98 million during the year 2011 as against net loss of USD 26.28 million incurred in the year 2010.

(iii) India Steamship Pte. Limited, Singapore and its Subsidiary

India Steamship, Singapore does not own any vessel and operates through in-chartered vessels. During the year, the international shipping markets remained subdued forcing India Steamship, Singapore to contain its operations. The company operated an in-chartered vessel during first few months of the year 2011-12 and did not hire any vessel thereafter. India Steamship International FZE, UAE was incorporated during the year as a 100% subsidiary of India Steamship, Singapore at Hamriyah, Sharjah, UAE where tax regulation is liberal. The new entity has not yet commenced its operation.

During the year 2011-12, India Steamship, Singapore have earned a revenue of USD 2.89 million and incurred a loss (after tax) of USD 0.24 million.

(iv) India Steamship Limited, India (ISL)

ISL has been incorporated on April 01, 2011 as subsidiary of your Company. During the year, there was not much activity in ISL.

Exemption: The Government of India vide its circular dated February 08, 2011 granted general exemption to the companies from attaching with Annual Report, the copies of the Balance Sheet, Profit and Loss Account, Board of Directors' Report and Auditor's Report of its subsidiaries. The Consolidated Financial Statements presented by the Company include the financial information of its subsidiaries, as applicable. The Company will make available the Annual Accounts of its subsidiaries along with relative detailed information upon request by investors of the Company or its subsidiaries. The Annual Accounts of the subsidiaries will be available for inspection by any shareholder at the corporate office of your Company and respective subsidiaries.

7. Health, Safety and Environmental Protection

Health, Safety and Environmental protection has been given utmost priority since inception of your Company. With the objective of maintaining the highest Health, Safety, Environmental & Quality (HSEQ) standards, your Company has established and is maintaining an Integrated Management System (for Occupational HSEQ) based on OHSAS- 18001:2007, ISO-14001:2004, ISO-9001:2008 and Process Safety Management system. The year 2011-12 was an accident free year. Your Company has achieved 9.03 million man hours (654 days) accident free working.

(a) Health & Hygiene

Your Company accords highest priority to health & hygiene of its employees and associates. Health assessment and occupational disease monitoring of employees and associates is done through periodic medical examinations. The Company's medical officer who is additionally trained in Occupational Health conducts a survey to properly assess the needs and appropriate proactive actions are taken.

A well equipped medical centre in the campus at Gadepan works round the clock to provide Health Services to employees, associated contractor work force, their families and villagers in the vicinity of the plants. New equipment and services are added to continuously upgrade the health care. The plant and processes are continuously upgraded to improve work place and health standards.

Necessary training was imparted to the employees and workers to enhance their awareness towards health related matters. Some of our employees are certified first-aiders. Many officers of the Company have been imparted fast track emergency response training on first aid and occupational health.

(b) Safety Management

A strong occupational-health and safety management system OHSAS-18001:2007 is in place in your Company to ensure safety of employees, contractor workforce as well as equipment and machinery. The township at Gadepan is also OHSAS-18001:2007 certified. Your Company has implemented Process Safety Management System (PSM) developed by Occupational Safety & Health Administration,

USA (OSHA) in its operation for proactive identification, assessment & control of hazards. PSM is not mandatory but was adopted by your Company to fulfill its quest for highest safety standards in its operations. Process incidents were reviewed as per PSM guidelines and trainings and audits were conducted for overall improvement.

In order to keep its safety system agile and updated, extensive trainings were conducted by internal & external expert faculties on rescue, fire fighting & emergency handling, electrical safety, material handling, road safety, etc.

The scheme of "Near- Miss" & "Make-to-Good" reporting is in place in your Company which not only creates awareness among the workforce but also gives an opportunity to identify and correct possible safety concerns. The safety reward system has been reviewed and widened during the year to further strengthen the safety culture in the Company. To improve safety work culture and bring reduction in injuries more and more workers of associated contractors were involved in safety promotional activities & trainings.

As a special drive, a safety improvement project has been undertaken by your Company for bagging plant in association with a consultant. The concept of Behavior Based Safety (BBS) has been introduced and is working satisfactorily through selected BBS Champions. During shutdown maintenance, extensive safety trainings and supervisions were conducted by associating experts. Personal Protective Equipments (handgloves, dust mask, ear plugs, etc) were provided free to all contract workers.

Various initiatives were taken by your Company towards overall safety improvement, such as adding new safety & emergency handling equipments, additional safety procedures, visitors' safety film, screening of Environment, Health and Safety (EHS) documentary for township residents, pictorial booklet depicting dos & don't for bagging plant, fire alarm system upgradation, etc.

Your Company has a well-defined "Onsite Disaster Management Plan". The flip chart defining roles & responsibilities of key personnel was reviewed, revised & updated during the year. Regular mock drills & fire drills were conducted to check the emergency preparedness. The Company executives regularly visit near-by companies and consultations are held with them to share information and learn from each other's experience and improve.

(c) Environment Management

Environment protection is a top priority for the Company management. The urea & ammonia production activities and the township at Gadepan is ISO-14001:2004 certified. Extensive environmental monitoring is carried out to ensure effective environment management. The endeavors of the Company for environment protection are as under:

(i) Sustainable Development - Your Company is totally committed to sustainable development and has completed various environment related programmes like Rain Water Harvesting, Ground Water Recharging, Energy Conservation measures, Pollution Control, Use of Solar Energy, etc.

(ii) Waste Management - Your Company continues to follow the 3R concept (Reduce, Re-use and Re-cycle) for waste management. Almost 100% condensates are recycled back to system. Treated waste water is used for maintaining green belt through a 65 kilometer long irrigation network spread all over the complex.

Your Company has adopted best practices to manage solid/ hazardous waste disposal after proper categorization. Segregation of waste is ensured at source and separate bins have been created for collection of various categories of waste. Horticulture & domestic waste is converted to manure & used in the green belt. Recyclable waste is disposed to recyclers and all saleable items are sold to approved recyclers. Use of polythene bags is strictly prohibited in the Gadepan campus for many years.

(iii) Green belt- The area surrounding Gadepan complex is experiencing a positive change in Ecology due to development of a dense green belt / forest inclusive of around 2.0 lac trees in an area of about 212 hectares. This has provided habitat to more than 100 species of birds which includes more than 700 peacocks.

(iv) Water conservation-Your Company continuously works on various water optimization measures as our area is water scarce. Water audits and studies have been conducted through experts to explore more avenues of water conservation. Special efforts have been made in optimization of cooling water, fire water network, drinking water & de-mineralised water. The trend of consumption shows a continual improvement with the specific consumption of water at 4.82 cubic meters per MT of urea this year, as against 4.92 cubic meters per MT of urea during 2010-11, which is one of the best in the fertiliser industry. Water consumption norms for fertiliser industry is 8.0 cubic meters per MT of urea.

(d) Quality Management

Your Company is ISO 9001:2008 certified and adequate attention is accorded by your Company to maintain quality of end product and processes. Stringent monitoring of defined parameters of quality is ensured.

(e) Health, Safety, Environment & Quality (HSEQ) Audits Teams of trained internal auditors regularly conduct HSEQ audits with special emphasis on health & hygiene, house keeping, safety, environment and quality. HSEQ systems are periodically audited by various external agencies of repute in line with your management approach of continual improvement. Surprise visits are conducted to plant and canteen to ensure highest standard of housekeeping & hygiene. Ammonia Storage safety systems have been upgraded based on review by the designer and Risk based Inspection is under progress. To extend and improve safety culture among our marketing team, all our Regional Marketing Offices have been audited during the year and staff has been trained on safety.

(f) Achievements

Your Company regularly participates in awards and national & international benchmarking surveys for independent assessment which in turn provides an opportunity for improvement. Your Company has received following prestigious awards during the year under review:

- "Environment Protection award" for the year 2010-11 and 2009-10 from Fertiliser Association of India (FAI).

- "National Award for Excellence in Water Management 2011" from Confederation of Indian Industries (CII) under the category "Beyond the Fence".

- "National Award for Excellence in Energy Management"-2011 from CII.

- Rajasthan Energy Conservation Award 2011.

- Special commendation, Golden Peacock Award for Sustainability-2011.

8. Corporate Social Responsibility (CSR)

Your Company is committed towards the development of neighboring areas for improving the quality of life. To initiate and sustain meaningful actions in this regard, your Company has formed KK Birla Memorial Society to consolidate all Corporate Social Responsibility (CSR) activities. The Company has taken number of initiatives for the community development in consultation with local administration at the village, block and district levels.

The Company's CSR program is designed as per participatory planning process to involve stakeholders for sustainable development of the area. The focus of the Program is on formation and livelihood trainings of SHGs (Self Help Groups), Health & Hygiene, Human Health Care, Sanitation, Farmers education on Agriculture & animal husbandry, Livestock vaccination & breed improvement etc. Your Company has taken following initiative under the program:

(a) Sanitation

Your Company has initiated a project to improve sanitary practices through awareness campaigns and construction of toilets. Your Company has constructed 313 individual toilets for Below the Poverty Line families last year and another 402 toilets were constructed this year. Your Company has also constructed 1 0 girls' toilets in 1 0 Government schools.

(b) Community Health Care

The Company operates a mobile Health Care Unit manned by a doctor and nursing assistant in 14 surrounding villages. Ambulance facilities are also provided to community round the clock for taking patients to Kota hospitals in emergency situations. During this year, 222 such cases were attended through ambulance facility.

During the year, 34,741 people were treated for different diseases. The Medical Center in Gadepan campus provides free service to people from surrounding areas. The Company regularly organizes free medical camps by inviting specialists for attending various ailments and 2862 patients benefited during the year under this program.

(c) Education

The Company is extending quality education to children from contiguous villages through Chambal Fertilisers DAV School (CFDAV). Over 47% students in this school are from such villages. During the year, CFDAV was upgraded to class 10th standard and got affiliated with Central Board of Secondary Education (CBSE).

Your Company has recently adopted 24 primary & upper primary government schools of nearby 22 villages under Public Private Partnership Scheme of Government of Rajasthan. This initiative shall extend quality education to more children and shall endeavour to check drop out rates especially among girls.

Your Company adopted Government Industrial Training Institutes (ITI) at Sangod during 2010-11. The Management of the ITI is run by the Company and nearly 100 students were placed with the corporates after completion of their ITI course. The company is upgrading the infrastructure of the ITI and it is planning to start 4 new courses from the academic year 2012-13.

(d) Rural Infrastructure

The Company has developed rural infrastructure by constructing pavement roads, drains, school boundary walls, community centers, crematoriums in Karadia, Simliya, Ballabhpura Gadepan, Ballabhpura, Bambhori and Kalarewa villages.

(e) Reporting on triple bottom line performance

With the aim to assess its Corporate Sustainability performance and initiatives, the Company had commenced reporting, annually, on its triple bottom line performance from Financial Year 2009-10. The Company has published A sustainability report for the financial year 2010- 11 in accordance with Global Reporting Initiative (GRI) guidelines. The sustainability report is externally assured by Ernst & Young Private Limited. The report gives a bird's eye view on Sustainability performance of the Company and also offers an opportunity to assess and improve its sustainability initiatives.

9. Disclosure of Particulars

Your Company believes that improvement is a journey with new milestones to be achieved on continuous basis. The Company makes continuous efforts to make the plants as energy efficient as possible and reviews various schemes to conserve energy on regular basis. The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is set out in Annexure "A" attached hereto. Information required to be furnished in Form A is not applicable to shipping industry. However, it is ensured that every measure is taken to save and conserve energy at all stages of operation of the vessels as well as in shore office. The Company has 6 Aframax Tankers out of which 5 are double hull and these ships are more energy efficient as compared to the old vessels. The Shipping Division has no information to furnish in Form B regarding technology absorption.

10. Investor Service Centre

The In-house Investor Service Centre of your Company located at New Delhi, continues to provide prompt investor service through quick resolution of investor grievances. The motto of 'high investor satisfaction' is being pursued through pro-active actions like reaching out to investors regularly, timely reminders to investors about new corporate benefits, undelivered shares, unclaimed benefits, etc.

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 year 2012-13.

The members are requested to refer to general shareholders' information given in Corporate Governance Report appended to this report.

11. Fixed Deposits

Your Company has discontinued accepting new deposits with effect from July 1, 2008. As on March 31, 2012, your Company had 21 depositors with fixed deposits of Rs. 5.73 lac, who have not claimed their Fixed Deposit amount despite being reminded regularly.

12. Employee Stock Option Scheme

The members of the Company had approved Employee Stock Option Scheme 2010 ("ESOS 2010") on August 27, 2010 for issue and allotment of options exercisable into not more than 41,62,000 equity shares of face value of Rs. 10/- each to eligible employees and Managing Director of the Company. Each option when exercised would be converted into one fully paid up equity share of Rs. 10 of the Company. The ESOS 2010 is administered by the Compensation Committee of the Board of Directors of the Company. Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is given in Annexure - "B".

13. Personnel

Information in accordance with Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report and is attached hereto as Annexure "C".

14. Directors

The Board has eight non-executive directors and a Managing Director. Two directors namely M/s. Dipankar Basu and C.S. Nopany are due for retirement by rotation at the forthcoming Annual General Meeting. M/s. Dipankar Basu and C.S. Nopany are eligible and have offered themselves for re-appointment. Ms. Radha Singh is also retiring at the forthcoming Annual General Meeting of the Company. These directors are not related to any other directors of the Company.

The Company has received a notice in writing together with requisite deposit from a member proposing the appointment of Ms. Radha Singh as a Director of the Company, liable to retire by rotation.

Other information on the directors is provided in Corporate Governance Report annexed to this Report as Annexure "E".

15. Auditors

The Notes on Accounts read with the Auditors' Reports are self explanatory and therefore, do not call for any further comments or explanations.

M/s. S. R. Batliboi & Co., Statutory Auditors and M/s. Singhi & Co., Branch Auditors of Shipping Business of the Company, are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The above re-appointments, if made, will be in accordance with the provisions of Section 224 (1B) of the Companies Act, 1956.

The Board of Directors of the Company appointed M/s. K.G. Goyal & Associates, Cost Accountants for conducting audit of cost accounts of the Fertiliser Division of the Company for the financial year 2010-11 and 2011-12. The Company has filed the Cost Audit Report for the financial year 2010-11 with the Ministry of Corporate Affairs, Government of India on September 1, 2011 as against the last date of filing on September 27, 2011.

16. Directors Responsibility Statement Your Directors hereby report:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relative to material departures;

b) that 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, 2012 and of the profit of the Company for the year ended March 31, 2012;

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) that the Company has adequate internal systems and controls in place to ensure compliance of laws applicable to the Company.

17. Consolidated Financial Statements

In accordance with 'Accounting Standard 21 - Consolidated Financial Statements', the consolidated financial statements form part of this Report & Accounts. These consolidated financial statements also incorporate the 'Accounting Standard 27 - Financial Reporting of interest in Joint Ventures' issued by the Institute of Chartered Accountants of India. The consolidated financial statements have been prepared on the basis of audited financial statements received from subsidiaries and joint venture entity.

18. Acknowledgements

Your Directors wish to place on record their appreciation of the assistance and co-operation received from the Department of Fertilisers, Government of India, State Governments, domestic and International Financial Institutions & Banks and other stakeholders, whose continued support and co-operation has been instrumental in enabling the Company to achieve its goals. Your Directors also wish to place on record their sincere appreciation of the unstinted devotion, hard work and commitment of every employee of the Company.

By order of the Board

Place : New Delhi S. K. Poddar

Date : May 12, 2012 Chairman

 
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