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Chambal Fertilisers & Chemicals Ltd.

BSE: 500085 Sector: Agri and agri inputs
NSE: CHAMBLFERT ISIN Code: INE085A01013
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VOLUME 23509
52-Week high 515.95
52-Week low 260.75
P/E 9.88
Mkt Cap.(Rs cr) 13,346
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 318.00
CLOSE 312.60
VOLUME 23509
52-Week high 515.95
52-Week low 260.75
P/E 9.88
Mkt Cap.(Rs cr) 13,346
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Chambal Fertilisers & Chemicals Ltd. (CHAMBLFERT) - Auditors Report

Company auditors report

To the Members of Chambal Fertilisers and Chemicals Limited

Report on the Audit of the Standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements ofChambal Fertilisers and Chemicals Limited ("the Company") which comprise theBalance Sheet as at March 31 2022 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "Standalone Ind AS Financial Statements").

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid Standalone Ind AS Financial Statements givethe information required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022and total comprehensive income (comprising of profit and other comprehensive income)changes in equity and its cash flows for the year then ended.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the "Auditor's Responsibilities for the Auditof the Standalone Ind AS Financial Statements" section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the Standalone Ind AS Financial Statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key audit matters

4. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the Standalone Ind AS FinancialStatements of the current period. These matters were addressed in the context of our auditof the Standalone Ind AS Financial Statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
Assessment of implications of government policies/ notifications on recognition of subsidy revenue and its recoverability
[Refer to the accompanying notes 2(b)(xvi)(a) 8(B) 17 31 and 53(d) of the Standalone Ind AS Financial Statements.] Our procedures included the following:
During the year the Company has recognised subsidy revenue amounting to Rs. 11338.78 Crore and the aggregate amount of subsidy receivable as at March 31 2022 is Rs. 2102.54 Crore. We understood and evaluated the design and tested the operating effectiveness of controls as established by management in recognition of subsidy revenue and assessment of the recoverability of subsidy receivable.
The amount of subsidy revenue and the subsidy receivable are significant to the Standalone Ind AS Financial Statements. We evaluated the management's assessment regarding reasonable certainty of complying with the relevant conditions as specified in the notifications/policies.
We identified this as a Key Audit Matter since the recognition of subsidy revenue and the assessment of recoverability of the related subsidy receivables is subject to significant judgements of the management. Further the areas of subjectivity and judgement include interpretation and satisfaction of conditions specified in the notifications/ policies in the estimation of timing and amount of recognition of subsidy revenue likelihood of recoverability and allowance in relation to the outstanding subsidy receivables. We considered the relevant notifications/policies issued by various authorities to ascertain the appropriateness of the recognition of subsidy revenue and adjustments to subsidy already recognised in earlier years pursuant to changes in subsidy rates.
We evaluated the basis of judgements that management has made in relation to the notifications/policies including past precedence and subsequent evidence in the form of notifications/policies/clarifications as applicable.
We assessed the reasonableness of the recoverability of subsidy receivable by assessing the management's analysis and information used to determine the recoverability of subsidy receivable ageing of receivables and historical trends.
We evaluated adequacy of disclosures in the Standalone Ind AS Financial Statements.
Based on the above procedures performed the management's assessment of the implications of government notifications/ policies on recognition of subsidy revenue and its recoverability was considered to be reasonable.

Other Information

5. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the annualreport but does not include the Standalone Ind AS Financial Statements and ourauditor's report thereon. Our opinion on the Standalone Ind AS Financial Statementsdoes not cover the other information and we do not express any form of assuranceconclusion thereon.

In connection with our audit of the Standalone Ind AS FinancialStatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the Standalone Ind ASFinancial Statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of management and those charged with governance forthe Standalone Ind AS Financial Statements

6. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these StandaloneInd AS Financial Statements that give a true and fair view of the financial positionfinancial performance (including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

7. In preparing the Standalone Ind AS Financial Statements managementis responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the Standalone Ind ASFinancial Statements

8. Our objectives are to obtain reasonable assurance about whether theStandalone Ind AS Financial Statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS FinancialStatements.

9. As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also: Identifyand assess the risks of material misstatement of the Standalone Ind AS FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Actwe are also responsible for expressing our opinion on whether the Company has adequateinternal financial controls with reference to financial statements in place and theoperating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone Ind AS Financial Statements or if such disclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern. Evaluate the overallpresentation structure and content of the Standalone Ind AS Financial Statementsincluding the disclosures and whether the Standalone Ind AS Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

10. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant de_ciencies in internal control that we identify during our audit.

11. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the Standalone Ind ASFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other legal and regulatory requirements

13. As required by the Companies (Auditor's Report) Order 2020 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

14. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference tothe financial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements – Refer Note 25 to theStandalone Ind AS Financial Statements;

ii. The Company was not required to recognise a provision as at March 31 2022 underthe applicable law or accounting standards as it does not have any material foreseeablelosses on long-term contracts. The Company has made provision as required under theapplicable law or accounting standards for material foreseeable losses on derivativecontracts – Refer Note 14C to the Standalone Ind AS Financial Statements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312022.

iv. (a) The management has represented that to the best of its knowledge and beliefas disclosed in the notes to the accounts no funds have been advanced or loaned orinvested (either from borrowed funds or share premium or any other sources or kind offunds) by the Company to or in any other persons or entities including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries (Refer Note 52 (vii) to the financialstatements);

(b) The management has represented that to the best of its knowledge and belief asdisclosed in the notes to the accounts no funds have been received by the Company fromany persons or entities including foreign entities ("Funding Parties") withthe understanding whether recorded in writing or otherwise that the Company shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries (Refer Note 52 (vii) to the Standalone Ind AS FinancialStatements); and

(c) Based on such audit procedures that we considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement. v. The dividend declared or paid during the year by the Company is incompliance with Section 123 of the Act.

15. The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Pramit Agrawal
Partner
Place of the Signature : New Delhi Membership Number: 099903
Date : May 19 2022 UDIN: 22099903AJFOUR6558

Annexure A to Independent Auditors' Report

Referred to in paragraph 13 of the Independent Auditors' Report ofeven date to the members of Chambal Fertilisers and Chemicals Limited on the Standalonefinancial statements as of and for the year ended March 31 2022

i. (a) (A) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

(B) The Company is maintaining proper records showing full particularsof Intangible Assets.

(b) The Property Plant and Equipment of the Company are physicallyverified by the Management according to a phased programme designed to cover all the itemsover a period of two years which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme a portion of theProperty Plant & Equipment has been physically verified by the Management during theyear and no material discrepancies have been noticed on such verification.

(c) The title deeds of all the immovable properties (other thanproperties where the Company is the lessee and the lease agreements are duly executed infavour of the lessee) as disclosed in Note 3 to the financial statements are held in thename of the Company except for the following: (Amount in Rs. crores)

Description of property Gross carrying value Held in the name of Whether promoter director or their relative or employee Period held - indicate range where appropriate Reason for not being held in the name of the Company
Property Plant and Equipment-land- Freehold property 0.01 Individual sellers No 30/09/1989 The sale deed could not be executed due to death of sellers.
Property Plant and Equipment-land- leasehold 0.27 State Government No 30/09/1989 The transfer of title is pending as some procedural and administrative requirements are yet to be completed.
0.07 of Rajasthan No 30/09/1996
0.01 Individual sellers No 30/09/1991 The transfer of title is pending due to dispute with sellers.

(d) The Company has not revalued its Property Plant and Equipment(including Right of Use assets) or intangible assets or both during the year.Consequently the question of our commenting on whether the revaluation is based on thevaluation by a Registered Valuer or specifying the amount of change if the change is 10%or more in the aggregate of the net carrying value of each class of Property Plant andEquipment (including Right of Use assets) or intangible assets does not arise.

(e) Based on the information and explanations furnished to us noproceedings have been initiated on or are pending against the Company for holding benamiproperty under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) and Rules madethereunder and therefore the question of our commenting on whether the Company hasappropriately disclosed the details in its financial statements does not arise.

ii. (a) The physical verification of inventory excluding stocks withthird parties has been conducted at reasonable intervals by the Management during the yearand in our opinion the coverage and procedure of such verification by Management isappropriate. In respect of inventory lying with third parties these have substantiallybeen confirmed by them. The discrepancies noticed on physical verification of inventory ascompared to book records were not 10% or more in aggregate for each class of inventory.

(b) During the year the Company has been sanctioned working capitallimits in excess of Rs. 5 crores in aggregate from banks on the basis of security ofcurrent assets. The Company has filed quarterly statements with such banks which are inagreement with the unaudited books of accounts. Also refer Note 52(ii) to the standalonefinancial statements.

iii. The Company has during the year not made any investmentsgranted secured/ unsecured loans/advances in nature of loans or stood guarantee orprovided security to any parties. Therefore the reporting under clause 3(iii) (iii)(a)(iii)(b) (iii)(c) (iii)(d) (iii)(e) and (iii)(f) of the Order are not applicable to theCompany.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theAct in respect of the loans and investments made and guarantees and security provided byit.

v. The Company has not accepted any deposits or amounts which aredeemed to be deposits within the meaning of Sections 73 74 75 and 76 of the Act and theRules framed there under.

vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havenot however made a detailed examination of the records with a view to determine whetherthey are accurate or complete. vii.

(a) According to the information and explanations given to us and therecords of the Company examined by us in our opinion the Company is generally regular indepositing undisputed statutory dues in respect of income tax and goods and services taxand is regular in depositing undisputed statutory dues including provident fundemployees' state insurance duty of customs professional tax cess and othermaterial statutory dues as applicable with the appropriate authorities. Also refer note47 to the standalone Ind AS financial statements regarding management's assessment oncertain matters relating to provident fund.

(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of provident fundemployees' state insurance sales-tax duty of customs value added tax goods andservices tax and cess which have not been deposited on account of any dispute. Theparticulars of other statutory dues referred to in subclause (a) as at March 31 2022which have not been deposited on account of a dispute are as follows:

Name of Statute Nature of the dues Amount (Rs. crore)* Period to which the amount relates Forum where dispute is pending
Finance Act 1994 Service tax demand (including penalty) raised in respect of service tax not paid on payments made in foreign currency to foreign parties 174.15 FY 2007-08 to FY 2011-12 CESTAT Kolkata
Finance Act 1994 Department appeal against the refund of service tax on downward revision of Transmission charges 2.75 November 2008 to June 2010 High Court Jabalpur (Madhya Pradesh)
Central Excise Act 1944 Wrong availment of proportionate cenvat credit on input services 1.03 August 2014 to March 2015 CESTAT New Delhi
Central Excise Act 1944 Wrong availment of proportionate cenvat credit on input services 0.93 FY 2016-17 CESTAT New Delhi
Central Excise Act 1944 Wrong availment of proportionate cenvat credit on input services 0.70 April 2017 to June 2017 CESTAT New Delhi
Income Tax Act 1961 Income tax on non-allowance of special survey and dry lock expenditure 20.55 FY 1997-98 High Court Kolkata
Income Tax Act 1961 Disallowances for various expenses 232.91 FY 1998-99 1999-00; and FY 2001-02 to 2008-09 Supreme Court of India
Income Tax Act 1961 Disallowances for various expenses 2.47 FY 2009-10 to 2010-11 High Court Rajasthan (Jaipur)
Income Tax Act 1961 Disallowances for various expenses 59.02 FY 2011-12 to 2013-14 Income Tax Appellate Tribunal Jaipur
Income tax Act1961 Disallowances for various expenses 22.93 FY 2009-10 to 2011-12 FY 2013-14 and FY 2015-16 to 2016-17 Commissioner (Appeals) Kota
Income tax Act 1961 Demand (including interest) raised by tax authorities in respect of wrong availment of tax credit 16.27 FY 2012-13 Assistant Commissioner of Income Tax Kota
Rajasthan Entry tax Act 1999 Demand raised by authorities for levy of entry tax** - FY 2006-07 to FY 2014-15 Rajasthan Tax Board
Foreign Exchange Regulation Act1973 Penalty order passed by the Foreign Exchange Regulation Appellate Board for contravention of Section 4(1) of FERA 1947 (ISS) 0.01 FY 1980-81 FERA Board

* Amount under dispute is net of tax deposited if any.

** Demand of Rs. 49.72 crore has been fully deposited by the Company.

viii. According to the information and explanations given to us and the records of theCompany examined by us there are no transactions in the books of account that has beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 that has not been recorded in the books of account.

ix. (a) According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or otherborrowings or in the payment of interest to any lender during the year.

(b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the Company has not been declared Wilful Defaulter by anybank or financial institution or other lender or government or any government authority.

(c) In our opinion and according to the information and explanations given to us theterm loans have been applied for the purposes for which they were obtained.

(d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the Companywe report that no funds raised on short-term basis have been used for long-term purposesby the Company.

(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company has nottaken any funds from any entity or person on account of or to meet the obligations of itssubsidiaries or joint venture.

(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries or joint venture. The Company did not have anyassociates during the year.

x. (a) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly the reportingunder clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of sharesor fully or partially or optionally convertible debentures during the year. Accordinglythe reporting under clause 3(x)(b) of the Order is not applicable to the Company.

xi. (a) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company noticed or reported duringthe year nor have we been informed of any such case by the Management.

(b) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us a report under Section 143(12)of the Act in Form ADT-4 was not required to be filed. Accordingly the reporting underclause 3(xi)(b) of the Order is not applicable to the Company.

(c) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us and as represented to us by themanagement no whistle-blower complaints have been received during the year by theCompany. Accordingly the reporting under clause 3(xi)(c) of the Order is not applicableto the Company.

xii As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the reporting under clause 3(xii) of the Order is not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of related partytransactions have been disclosed in the standalone Ind AS financial statements as requiredunder Indian Accounting Standard 24 "Related Party Disclosures" specified underSection 133 of the Act.

xiv. (a) In our opinion and according to the information and explanation given to usthe Company has an internal audit system commensurate with the size and nature of itsbusiness.

(b) The reports of the Internal Auditor for the period under audit have been consideredby us.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the reporting on compliance with the provision ofSection 192 of the Act under clause 3(xv) of the Order is not applicable to the Company.

xvi. (a) The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly the reporting under clause 3(xvi)(a) of theOrder is not applicable to the Company.

(b) The Company has not conducted non-banking financial or housing finance activitiesduring the year. Accordingly the reporting under clause 3(xvi)(b) of the Order is notapplicable to the Company.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly the reporting under clause 3(xvi)(c) ofthe Order is not applicable to the Company.

(d) Based on the information and explanations provided by themanagement of the Company the Group does not have any CICs which are part of the Group.We have not however separately evaluated whether the information provided by themanagement is accurate and complete. Accordingly the reporting under clause 3(xvi)(d) ofthe Order is not applicable to the Company.

xvii. The Company has not incurred any cash losses in the financialyear or in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors duringthe year and accordingly the reporting under clause (xviii) is not applicable.

xix. According to the information and explanations given to us and onthe basis of the financial ratios (Also refer Note 52 (xii) to the financial statements)ageing and expected dates of realisation of financial assets and payment of financialliabilities other information accompanying the financial statements our knowledge of theBoard of Directors and management plans and based on our examination of the evidencesupporting the assumptions nothing has come to our attention which causes us to believethat any material uncertainty exists as on the date of the audit report that Company isnot capable of meeting its liabilities existing at the date of balance sheet as and whenthey fall due within a period of one year from the balance sheet date. We however statethat this is not an assurance as to the future viability of the Company. We further statethat our reporting is based on the facts up to the date of the audit report and we neithergive any guarantee nor any assurance that all liabilities falling due within a period ofone year from the balance sheet date will get discharged by the Company as and when theyfall due.

xx. As at balance sheet date the Company does not have any amountremaining unspent under Section 135(5) of the Act. Accordingly reporting under clause3(xx) of the Order is not applicable.

xxi. The reporting under clause 3(xxi) of the Order is not applicablein respect of audit of Standalone Financial Statements. Accordingly no comment in respectof the said clause has been included in this report.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Pramit Agrawal
Partner
Place of the Signature : New Delhi Membership Number: 099903
Date : May 19 2022 UDIN: 22099903AJFOUR6558

Annexure B to Independent Auditor's Report

Referred to in paragraph 14(f) of the Independent Auditor's Reportof even date to the members of Chambal Fertilisers and Chemicals Limited on the Standalonefinancial statements for the year ended March 31 2022

Report on the Internal Financial Controls with reference to FinancialStatements under clause (i) of sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference tofinancial statements of Chambal Fertilisers and Chemicals Limited ("theCompany") as of March 31 2022 in conjunction with our audit of the Standalone Ind ASFinancial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting ("the Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under Section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

6. A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at March 31 2022 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Pramit Agrawal
Partner
Place of the Signature : New Delhi Membership Number: 099903
Date : May 19 2022 UDIN : 22099903AJFOUR6558

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