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Chemfab Alkalis Ltd.

BSE: 541269 Sector: Industrials
NSE: CHEMFAB ISIN Code: INE783X01023
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OPEN 159.10
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VOLUME 9157
52-Week high 175.00
52-Week low 115.00
P/E
Mkt Cap.(Rs cr) 219
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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Chemfab Alkalis Ltd. (CHEMFAB) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the Eleventh Annual Report of ChemfabAlkalis Limited along with the Audited Standalone and Consolidated for financialstatements for the Financial Year ended 31st March 2020.

The summarized financial results for the Financial Year ended are as under:

Financial Summary:

Particulars Consolidated (Rs. In Lakhs)

Standalone (Rs. In Lakhs)

Year ended 31 March 2020 Year ended 31 March 2020 Year ended 31 March 2019
Summary of Profit and Loss Statement:
Total Revenue 20452.32 20452.32 19330.38
Profit before Finance Cost and Depreciation 5815.99 5830.32 6502.92
Less: Finance Cost 315.00 315.00 199.20
Profit before Depreciation 5500.99 5515.32 6303.72
Less: Depreciation and amortization 2508.76 2508.76 1492.12
Profit Before Exceptional Items 2992.23 3006.56 4811.60
Exceptional Items (321.03) (321.03) (1963.25)
Profit before Tax 2671.20 2685.53 2848.35
Less: Tax including Deferred Tax 126.59 126.59 1172.77
Profit after Tax 2544.61 2558.94 1675.58
Other Comprehensive Income 71.58 71.58 0.47
Total Comprehensive Income 2616.19 2630.52 1676.05
Summary of Retained Earnings Movement:
Balance brought forward from last year (11918.64) (11918.64) (13386.62)
Add: Profit after Tax 2544.61 2558.94 1675.58
Add: Other Comprehensive Income (Remeasurement of Defined Benefit Plans net of taxes) 73.53 73.53 1.72
Less: Impact of adoption of Ind AS 116 8.62 8.62 -
Less: Appropriations
Final Dividend 174.12 174.12 173.63
Tax on Dividend 35.79 35.79 35.69
Balance Carried to Balance Sheet (9519.03) (9504.70) (11918.64)

Performance and State of Affairs of the Company:

During the year the realization for Chemical Division decreased sharply due to adversemarket conditions which resulted in decrease in sales turnover and profitability of thecompany however the same was set off to some extent due to the stabilization and firstfull year operation of PVCO plant. Also during the year an amount of Rs. 706.70 Lakhswas recognized as impairment loss (as an exceptional item) on account of suspension of theoperations of Ongole Plant. During the year under review the group achieved Total revenueof Rs. 20452.32 Lakhs and made a Profit after tax (PAT) of Rs. 2544.61 Lakhs.

Dividend:

Your Directors recommended the payment of Dividend of Rs. 1.25 /- per share (12.50 %)for the year ended March 31 2020 absorbing a sum of Rs. 174.18 Lakhs considering sharesoutstanding as at 31 March 2020 subject to the approval of the Members at the ensuingAnnual General Meeting.

Transfer of profit to reserves:

The Company has not proposed to transfer any of its profits to reserves.

Material Changes occurred during the reporting period

No material changes have occurred or commitments have been made between financialperiod ended March 31 2020 and to the date of report which affect the financial positionof the Company.

BOARD OF DIRECTORS AND ITS COMMITTEES

A. Composition of the Board of Directors

The Board of Directors of the Company comprises of Non - Executive Chairman who is apromoter of the Company along with him other Six Non - Executive Directors including fourIndependent Directors. The Company has two women Independent Directors. The composition ofthe Board of Directors in compliance with regulation 17(1)(b) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and Section 149 of the Companies Act 2013.

The Company has received necessary declarations from the Independent Directors undersection 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as specified in Section 149(6) of the Companies Act 2013 and as perRegulation of the SEBI (Listing Obligations and Disclosures Requirements) Regulations2015.

All the four Independent Directors were registered with the data bank as per the rule 6of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules 2019.

The Independent Director registration details are as below:

Sl. No Name of the Director Registration number
01. T. Ramabadhran IDDB-DI-202002-007333
02. A. Janakiraman IDDB-DI-202002-007989
03. Sujatha Jayarajan IDDB-DI-201912-001692
04. R. Drushti Desai IDDB-DI-202002-015500

Board Composition:

The Board is well constituted with a composition of 3 Non - Independent Directors and 4Independent Directors.

Category Name of Directors
Non - Independent Director Mr. Suresh Krishnamurthi Rao
Mr. C S Ramesh
Mr. R Mahendran
Mr. A Janakiraman
Independent Director Mrs. Drushti Desai
Mrs. Sujatha Jayarajan
Mr. T Ramabadhran (from 27.06.2019)

Currently the Board has Seven Directors with the composition of Three Non -Independent and Four Independent Directors (with Two Women Independent directors) and allare Non - Executive Directors constituted in line with the terms of Section 149 of theCompanies Act 2013 and in terms of Regulations 17(1)(b) of the SEBI (LODR) Regulations2015.

B. Meetings

Number of Board Meetings held during the year along with the dates of the meetings:

(Disclosure in pursuant to 134 (3)(b) of the Companies Act 2013). During the FinancialYear 2019 - 2020 the Board of Chemfab Alkalis Limited met five times as under:

Sl. No Dates of meetings of the Board Quarter No. of Directors on the date of Meeting Total No. of Directors attended
1 07.05.2019 First 6 6
2 30.07.2019 Second 7 6
3 30.10.2019 Third 7 6
4 19.11.2019 Third 7 6
5 29.01.2020 Fourth 7 7

The meetings of the Board were held periodically with not more than one hundred andtwenty days intervening between two consecutive meetings of the Board as prescribed underSection 173(1) of the Act.

C. Re-appointment of Director Retiring by Rotation

In terms of Section 152 of the Companies Act 2013 Mr. R. Mahendran (DIN- 07451058)liable to retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. The Board of Directors based on the recommendation ofNomination and Remuneration Committee has recommended the re-appointment of Mr. R.Mahendran (DIN- 07451058) retiring by rotation.

D. Committees of the Board

The constitution and terms of reference of Audit Committee Nomination and RemunerationCommittee Stakeholders Relationship Committee and Risk Management Committee were alsoaligned with the requirements of regulations 18 to 22 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and the Companies Act 2013.

The Company has also constituted Corporate Social Responsibility Committee. A detailednote on the Committees of the Board of Directors is given in the Corporate GovernanceReport forming part of the Annual Report.

E. Performance Evaluation

Section 134 of the Companies Act 2013 states that formal evaluation needs to be madeby the Board of its own performance and that of its committees and the individualDirectors. Schedule IV of the Companies Act 2013 and regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 states that the performanceevaluation of Independent Directors shall be done by the entire Board of Directorsexcluding the Directors being evaluated.

Pursuant to the provisions of section 134 (3)(p) of the Companies Act 2013 and theSEBI (LODR) regulations 2015 the Board has carried out an evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsCommittees. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report.

F. Directors' Responsibility Statement

(Disclosure in pursuant to 134(3)(c) of the Companies Act 2013)

As required under Section 134(5) of the Companies Act 2013 the Board of Directorshereby confirm that -

(i) in the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures.

(ii) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of the affairs of the Company at the end of the Financial Year andof the profit of the Company for the Financial Year 2019 - 2020.

(iii) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) the Directors had prepared the Annual Accounts on a going-concern basis.

(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

G. Changes in Directors and Key Managerial Personnel

The SEBI has amended its Securities and Exchange Board of India (SEBI) (LODR)Regulations 2015 to give effect to the suggestions/recommendations provided by theCommittee under the Chairmanship of Mr. Uday Kotak with a view to enhancing the standardsof corporate governance of listed entities in India w.e.f. April 01 2019.

One of the significant amendments is insertion of subregulation in Regulation 17(1)restricting the age limit to seventy-five (75) years for appointment or continuation ofnon-executive Directors in the Board beyond which shareholders special approval isrequired.

Consequently the shareholders had approved in the Annual General Meeting held on27.06.2019 via special resolution reappointed Mr T Ramabadhran and regularized theappointments of Mr. A. Janakiraman and Mr. C. S. Ramesh.

Mr. Nitin S. Cowlagi Chief Financial Officer retired w.e.f. 07.04.2020 and upon therecommendation of Nomination and Remuneration Committee the Board appointed Mr. S.Prasath fellow member of Institute of Chartered Accountant of India as Chief FinancialOfficer of the Company w.e.f. 07.04.2020.

H. Changes in Subsidiaries Joint Ventures and Associates

Your Company had incorporated a wholly owned subsidiary namely ‘Chemfab AlkalisKaraikal Limited' on 19.12.2019 to manufacture all types of chemicals chemical compoundsand chemical products including but not limited to alkali acids Acids Bases SolventsAlcohols Gases Ethers Aliphatics Aromatics Aldehydes Ketones Amines Alkaloidscaustic soda Potassium Chlorate Sodium Chlorate Per chlorate other chemicals andtheir by-products or derivatives in all forms and kinds.

The said company had obtained a provisional allotment of undeveloped land comprising of65 acres (263055 sqm) located at extreme South West corner of the layout at IndustrialGrowth Centre Polagam Karaikal on premium lease basis for a period of 30 years initiallyand extendable up to a maximum period of 99 years for setting up of a unit for themanufacture of "Caustic Soda Lye".

The Company is in the process of getting firm allotment of land after land survey andget it registered along with obtaining statutory approvals for setting up its businessactivities.

I. Significant or Material Orders Passed by Regulators / Courts

There were no any significant or material order passed by the regulators/ courts duringthe reporting period.

J. Declaration by Independent Directors

The Company has received necessary declarations from Mr. T. Ramabadhran Mr. A.Janakiraman Mrs. Drushti Desai and Mrs. Sujatha Jayarajan independent directors underSection 149 (7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and regulation 25 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and their Declarationshave been taken on record.

K. Details in respect of Frauds

The Company's auditors' report does not have any statement on suspected fraud in thecompany operations to explain as per Sec. 134(3)(ca) of the Companies Act 2013.

L. Fixed Deposits:

During the year under review the Company did not raise funds by way of fixeddeposits from the public.

M. Details of contracts or arrangements with related parties:

The contracts or arrangements entered into with related parties along withjustification for entering into such contract or arrangement referred to in sub-section(1) of section 188 in the prescribed form no. AOC 2 are as per Annexure D.

N. Code of Conduct for prevention of Insider Trading:

The Company has a policy viz. "Code of Conduct for prevention of InsiderTrading" and the same has been posted on its website www.Chemfabalkalis.com.

0. Development and implementation of a Risk Management Policy:

The main objective of Risk Management is risk reduction and avoidance as alsoidentification of the risks faced by the business and optimizing of the risk managementstrategies. The Company has put in place a well-defined Risk Management framework.

The Company has constituted a Risk Management Committee even though the constitution ofRisk Management Committee is NOT applicable to the Company since it is mandatory only forthe top 500 listed Companies as per the listing regulations. The Risk Management Committeeassists the Board in drawing up implementing monitoring and reviewing the RiskManagement Plan. The Committee lays down the Risk Assessment and Minimization Proceduresand it reviews the Procedures periodically to ensure that the Executive Managementcontrols the risks through properly defined framework.

The Company has also obtained certification for ISO 14001 and OHSAS 18001 systems totake care of critical operational areas. The Company has also implemented Process SafetyManagement (PSM). We are the first company in our industry to implement the same. We arecontinuing with the publishing of sustainability report enhancing our commitment tosustainable development.

P. Technology absorption Conservation of energy and Research and development:

The Company has an in-house Research and Development Department where the main areasof focus are Energy Conservation Process Upgradation and Environmental Preservation. TheMinistry of Science and Technology Department of Scientific and Industrial ResearchGovernment of India has recognized the Company's in- house R&D facilities.

The Company has a sophisticated Quality Assurance (QA) Laboratory accredited by NABL inaccordance with the requirements of ISO/IEC 17025-2017. Samples from various Chlor- AlkaliIndustries in India is being analyzed at CCAL - QA Laboratory

Awards received during the year (2019-20):

1. CII- Environmental Best Practices Award - 2019:

"Most Innovative Environmental Project Award" for the conversion of flue gasinto value added products - Soda ash and Sodium Sulphite - Photograph enclosed.

2. ICC AWARD FOR EXCELLENCE IN MANAGEMENT OF HEALTH & SAFETY- 2018:

Certificate of Merit in CATEGORY II

The Company continues to take all possible steps to conserve energy in every area ofits operations. Brief details on Conservation of Energy and Technology Absorption aregiven in Annexure E.

Q. Cost Records

Your Company is maintaining cost records and reports in pursuant to the Companies (CostRecords and Audit) Rules 2014 as amended prescribed by the Central Government under sub- section (1) of Section 148 of the Companies Act

2013.

AUDIT RELATED MATTERS:

A. Statutory Auditors

As per the provisions of Sections 139 142 and other applicable provisions of theCompanies Act 2013 if any read with the Companies (Audit and Auditors) Rules

2014 the Auditors M/s. Deloitte Haskins & Sells LLP (Firm Registration No 117366W/W-100018) were appointed as Statutory Auditors of the Company at the Annual GeneralMeeting held on 04.09.2017 for a period of Five(5) consecutive Financial Years from2017-18 to 2021-22.

There are no qualifications or adverse remarks in the Statutory Audit Report whichrequire any explanation from the Board of Directors.

B. Cost Auditor:

As per Sec. 148 (6) of Companies Act 2013 and rule 6(6) of the Companies (Cost recordsand audit) Rules 2014 the applicability of Cost audit is based on being the overallannual turnover of the company from all its products and services during the immediatelypreceding financial year rupees one hundred crore or more and the aggregate turnover ofthe individual product or products or service or services being for which cost recordsare required to be maintained under rule 3 is Rupees thirty five crore or more.

In conformity with the said provisions of the Companies Act 2013 the Company hasappointed M/s. Madhavan Mohan & Associates Cost Auditors as the Cost Auditor forthe audit of cost accounts for your Company for the year ending 31st March 2021. Theremuneration to be paid to him is being ratified at this Annual General meeting.

There are no qualifications or adverse remarks in the Cost Audit Report which requireany explanation from the Board of Directors.

C. Secretarial Audit Report:

Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your Company has appointed Mr. M.R.Thiagarajan Company Secretary-in-Practice to undertake the Secretarial Audit of theCompany. The Secretarial Audit report in Form No.MR.3 for Financial year 2019 - 20 isannexed herewith as Annexure - I.

A Certificate from a Company Secretary in practice that none of the directors on theboard of the company have been debarred or disqualified from being appointed or continuingas directors of companies by the Board/Ministry of Corporate Affairs or any such statutoryauthority is annexed herewith as Annexure - J.

There are no qualifications or adverse remarks in the Secretarial Audit Report whichrequire any explanation from the Board of Directors.

D. Internal Financial Controls

Your Company has well defined and adequate internal controls and procedurescommensurate with its size and the nature of its operations. This is further strengthenedby the Internal Audit done concurrently During the year the Company got its internalcontrols over financial reporting and risk management process evaluated by independentconsultants.

Besides the Company has an Audit Committee comprising Independent and Non-ExecutiveDirectors which monitors systems controls financial management and operations of theCompany.

The Audit committee at its meeting held on June 04 2020 has evaluated the internalfinancial controls and risk management system.

E. Internal Auditor

The board appointed M/s. Mukesh Manish & Kalpesh Chartered Accountants asinternal auditor for the Financial Year 2020 - 21 based on the recommendation of the AuditCommittee.

BOARD COMMITTEE COMPOSITION

The Board has constituted the following committees viz. Audit Committee Nomination andRemuneration Committee Stakeholders' Relationship Committee Corporate SocialResponsibility Committee and Risk Management Committee.

A. Audit Committee

Pursuant to regulation 18 of SEBI (LODR) Regulations 2015 and the provision of Section177(8) read with Rule 6 of the companies (Meeting of Board and its Powers) Rules 2014 theCompany has duly constituted a qualified and independent Audit Committee. The AuditCommittee of the Board consists four "Independent Directors" and One "Non -Independent Director" as members having adequate financial and accounting knowledge.The composition procedures powers and role/functions of the audit committee and itsterms of reference are set out in the Corporate Governance Report forming part of theBoards Report.

During the period under review the suggestions put forth by the Audit Committee wereduly considered and accepted by the Board of Directors. There were no instances ofnonacceptance of such recommendations.

The board reconstituted the committee w.e.f. 30th July 2019 in terms ofSection 177 of the Companies Act 2013 and in terms of Regulation 18 of SEBI (LODR)Regulations 2015.

The Audit Committee acts in accordance with the terms of reference specified by theBoard of Directors in terms of Section 177(4) of the Act and in terms of Regulation 18 ofthe SEBI (LODR) Regulations 2015. It also oversees the vigil mechanism and is obliged totake suitable action against the Directors or employees concerned when necessary.

A detailed note on the Audit Committee is given in the Corporate Governance Reportforming part of the Annual Report.

B. Nomination and Remuneration Committee:

Consequent to the resignation of Mr. T. Ramabadhran the Board reconstituted thecommittee w.e.f. 30th July 2019 in terms of Section 178 of the CompaniesAct2013 and in terms of Regulation 19 of SEBI (LODR) Regulations 2015

Accordingly the Company has set up a Nomination and Remuneration Committee which hasformulated the criteria for determining the qualifications positive attributes andindependence of a Director and ensures that:

1) The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;

2) Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

3) Remuneration to Directors key managerial personnel and senior management involves abalance between fixed and variable pay reflecting short-term and long-term performanceobjectives appropriate to the working of the Company and its goals.

The Nomination and Remuneration Policy of your Company is set out and available in yourcompany website www. chemfabalkalis.com.

A detailed note on the Nomination and Remuneration Committee is given in the CorporateGovernance Report forming part of the Annual Report.

C. Stakeholders' Relationship Committee:

The board reconstituted the committee w.e.f. 30th July 2019 in terms ofSection 178 of the Companies Act 2013 and in terms of Regulation 19 of SEBI (LODR)Regulations 2015.

A detailed note on the stake holders' relationship Committee is given in the CorporateGovernance Report forming part of the Annual Report.

D. Risk Management Committee:

The Company has constituted a Risk Management Committee even though the constitution ofRisk Management Committee is NOT applicable to the Company since it is mandatory only forthe top 500 listed Companies as per the listing regulations. The Risk Management Committeeassists the Board in drawing up implementing monitoring and reviewing the RiskManagement Plan. The Committee lays down the Risk Assessment and Minimization Proceduresand it reviews the Procedures periodically to ensure that the Executive Managementcontrols the risks through properly defined framework.

E. Corporate Social Responsibility (CSR) Committee:

According to Section 135 of the Companies Act 2013 ("the Act") a Companyhaving a Net Worth of Rs.500 Crores or more or Turnover of Rs. 1000 Crores or more orNet Profit of Rs. 5 Crores or more during any financial year shall constitute a CorporateSocial Responsibility (CSR) Committee of the Board consisting of three or more Directorsof which at least one shall be an Independent Director.

A detailed note on the Committee is given in the Corporate Governance Report formingpart of the Annual Report.

As your Company's Net Profit is more than Rs 5 Crores the Board has constituted theCorporate Social Responsibility Committee in accordance with Section 135 of the CompaniesAct 2013. The Company is committed to operate in a socially responsible manner in termsof protecting the environment and conserving water resources and energy. Details of theCSR Policy drawn up by the Company and the CSR expenditure and initiatives taken duringthe year 2019 - 20 are given in Annexure - F to this Report.

OTHER MATTERS

A. Particulars of loans guarantees or investments u/s 186 of the Companies Act 2013

Your company had incorporated a wholly owned subsidiary in the name and style ofChemfab Alkalis Karaikal Limited on 19.12.2019 (CIN: U24100TN2019PLC133285) to carry onthe business of manufacturing all types of chemicals chemical compounds and chemicalproducts including but not limited to alkali acids Acids Bases Solvents AlcoholsGases Ethers Aliphatics Aromatics Aldehydes Ketones Amines Alkaloids caustic sodaPotassium Chlorate Sodium Chlorate Per chlorate other chemicals and their by-productsor derivatives in all forms and kinds.

The Company as on 31.03.2020 invested a sum of Rs. 80000000 (Rupees Eight Croresonly) in the form of 5320000 equity shares of Rs. 10/- each aggregating 53200000(Rupees Five Crore Thirty-Two Lakhs only) and in the form of 0.01% Cumulative ConvertiblePreference Shares of 2680000 at Rs. 10/- each amount to Rs. 26800000 (Rupees TwoCrore Sixty-Eight Lakhs only).

During the year under review the Company did not provide any loans guarantees u/s 186of the Companies Act 2013.

B. Remuneration details of Directors and Employees

The Company's policy on Directors' appointment and remuneration including criteria fordetermining qualification positive attributes independence of a director and othermatters provided under sub-section (3) of section 178 is posted in our company website inthe following link https://chemfabalkalis.com/investors/ and forms part of this Reportpursuant to first proviso of Sec. 178 of the Companies Act 2013.

C. Debentures

During the year under review the Company has not issued any debentures. As on datethe Company does not have any outstanding debentures.

D. Bonus Shares

During the year under review the Company has not issued any bonus shares.

E. Borrowings

The Company has outstanding borrowings including IND AS accounting adjustment entriesand interest accrued of Rs. 4245.20 Lakhs during the financial Year ended March 31 2020.

F. Deposits

The Company has not accepted any deposit in terms of Chapter V of the Companies Act2013 read with the Companies (Acceptance of Deposit) Rules 2014 during the year underreview and as such no amount on account of principal or interest on public deposits wasoutstanding as of the balance sheet date.

G. Transfer to Investor Education and Protection Fund

The details of transfer of shares of unclaimed dividend and the shares for sevenconsecutive years to the Investor Education and Protection Fund has been detailed in theCorporate Governance Report forming part of the Annual Report which is also available inthe company's website.

H. Credit Ratings

CARE has re-affirmed its rating of "CARE A - Stable" for Long term Bankfacilities; and CARE A2+ for Short term Bank facilities.

I. Code of Corporate Governance

In compliance with the requirement of regulations 24 to 27 of SEBI (Listing Obligationsand Disclosures Requirements) Regulations 2015 a detailed report on Corporate Governanceis annexed to this report as Annexure - H along with a Certificate from M/s.Deloitte Haskins & Sells LLP Chartered Accountants affirming compliance with the saidCode which is appended as Annexure - K.

J. Code of conduct for Directors and Senior Management:

The Board of Directors had adopted a code of conduct for the Board Members andemployees of the company This Code helps the Company to maintain the standard of BusinessEthics and ensure compliance with the legal requirements of the Company.

The Code is aimed at preventing any wrongdoing and promoting ethical conduct at theBoard level and by employees. The Compliance Officer is responsible to ensure adherence tothe Code by all concerned.

The Code lays down the standard of conduct which is expected to be followed by theDirectors and the designated employees in their business dealings and in particular onmatters relating to integrity in the work place in business practices and in dealing withstakeholders.

All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.

K. Management Discussion and Analysis Report

In accordance with the requirement of the Listing regulations the ManagementDiscussion and Analysis Report is presented in a separate section of the Annual Report isappended as Annexure - A.

L. Disclosure on Sexual Harassment of Women at workplace (Prevention Prohibition andRedressal) Act 2013:

The Company has in a place a Sexual Harassment Policy in line with the requirement ofSexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013.

Internal Compliant Committee (ICC) has been set up to redress the complaints receivedin connection with the sexual harassment in any form.

All employees (permanent contractual temporary trainees) are covered under thispolicy.

a. Number of complaints filed during the financial year - NIL

b. Number of complaints disposed of during the financial year - NIL

c. Number of complaints pending as on end of financial year - NIL

M. Vigil Mechanism:

The Company has established a vigil mechanism also called the Whistle Blower Policywhich has been adopted by the Board for Directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct or Ethics Policy. It provides for adequate safeguards against victimization ofpersons who use such mechanism and makes provision for direct access to the Chairperson ofthe Audit Committee in appropriate or exceptional cases. Confidentiality of Whistle Blowershall be maintained to the greatest extent possible. Details of the vigil mechanism isavailable in our Company's website.

N. Extract of the Annual Return:

An extract of the Annual Return as prescribed under subsection (3) of Section 92 and asper Sec. 134(3)(a) of the Companies Act 2013 ("Act") is appended as Annexure- B.

O. Employees' Stock Option Scheme:

The Shareholders of the Amalgamated entity Chemfab Alkalis Limited had approved theEmployees' Stock Option Scheme titled as "CAESOS - 2015" through Postal Balloton March 05 2016. "CAESOS-2015" is compliance with SEBI (Share Based EmployeeBenefits) Regulations 2014. The details are available on our website www.chemfabalkalis.com.

The purpose of the Scheme is:

i) to attract retain and motivate talented and critical employees.

ii) to encourage employees to align Individual performance with the Company'sObjectives; and

iii) to reward employee performance with ownership.

The details of CAESOS - 2015 form part of the Notes to Accounts of the FinancialStatements in this Annual Report.

As per the approval given by the Shareholders of Chemfab Alkalis Limited the Optionsgranted to the employees of the amalgamated Company Chemfab Alkalis Limited also carry theeligibility of application of the Swap ratio of 10:7 (i.e. 10 shares of Rs.10 each forevery 7 shares of Rs.5 each held) mentioned in the Scheme of Amalgamation of erstwhileChemfab Alkalis Limited to the Company approved by the NCLT vide its Order dated30.03.2017.

Shares allotted under employee stock option scheme is provided below:

Particulars No. of shares allotted
During the FY 2018 - 19 60000
During the FY 2019 - 20 59000
During the FY 2020 - 21 (allotted on 04.06.2020) 38570
Total shares allotted under CAESOS - 2015 157570

Price at which shares were issued: Rs.52.43

Sl. No Name of the Employee Total no. of shares allotted as on 04.06.2020
01. V.M. Srinivasan 81428
02. Nitin S. Cowlagi 56142
03. VR. Raguraman 20000
TOTAL GRANT 157570

Diluted EPS - Rs.18.27/- (Standalone)

Diluted EPS - Rs.18.16/- (Consolidated)

Equity Shares with differential voting rights: NA

Sweat Equity Shares: NA

Details of Wing rights not exercised: NA

P. Green initiatives

Pursuant to the Ministry of Corporate Affairs (MCA) circulars dated April 08 2020April 13 2020 and May 05 2020 the Company is providing facility of remote e-voting toits Members in respect of the business to be transacted at the AGM. Electronic copies ofthe Annual Report 2019 - 20 and Notice of the Eleventh Annual General Meeting are sent toall the members whose email addresses are registered with the Company/DepositoryParticipant(s). Further the soft copy of the Annual Report (in pdf format) is alsoavailable on our website https://chemfabalkalis.com/investors/

Pursuant to Section 108 of the Companies Act 2013 Rule 20 of the Companies(Management and Administration)

Rules 2014 and Listing Regulations the Company is providing e-voting facility to allmembers to enable them or cast their votes electronically on all resolutions set forth inthe notice. The instructions for e-voting are provided in the notice.

Q. Statement on Secretarial Standards

The Company is adopting compliances of applicable secretarial standards and othersecretarial standards to ensure good governance.

R. Human Resources

Employee relation continues to be cordial and harmonious at all levels and in all thedivision of the Company. The Board of Directors would like to express their sincereappreciation to all the employees for their continued hard work and dedication.

The number of employees as on March 31 2020 was 189. The table containing the namesand other particulars of employees in accordance with the provisions of Section 197(12) ofthe Companies Act 2013 read with Rule 5(1) and 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is appended as Annexure - G tothe Board's Report.

ACKNOWLEDGEMENT

The Directors thank the Shareholders Customers Dealers Suppliers Bankers FinancialInstitutions and all other business associates for their continued support to the Companyand the confidence reposed in its Management. The Directors also thank the Governmentauthorities for their co-operation. The Directors wish to record their sincereappreciation of the significant contribution made by the CCAL mates at all levels to itsprofitable and successful operations.

By Order of the Board of Directors
for Chemfab Alkalis Limited
Sd/-
Suresh Krishnamurthi Rao
Chairman
DIN:00127809
Place: Chennai
Date: 04.06.2020