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Tata Chemicals Ltd.

BSE: 500770 Sector: Industrials
NSE: TATACHEM ISIN Code: INE092A01019
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OPEN 1091.05
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VOLUME 269802
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P/E 29.19
Mkt Cap.(Rs cr) 27,863
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OPEN 1091.05
CLOSE 1105.00
VOLUME 269802
52-Week high 1194.00
52-Week low 773.90
P/E 29.19
Mkt Cap.(Rs cr) 27,863
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tata Chemicals Ltd. (TATACHEM) - Director Report

Company director report

TO THE MEMBERS OF TATA CHEMICALS LIMITED

The Directors hereby present their Eighty-Third (83rd) Annual Report onthe performance of Tata Chemicals Limited (‘the Company') together with theAudited Financial Statements for the Financial Year (‘FY') ended March 31 2022.

1. Financial Results

Rs in crore

Particulars Standalone Year ended March 31 2021 Consolidated Year ended March 31 2021
Revenue from continuing operations 3721 2999 12622 10200
Profit before depreciation and finance costs 1229 830 2550 1735
Depreciation and amortisation expense 222 197 806 760
Profit before finance costs 1007 633 1744 975
Finance costs 19 19 303 367
Profit before share of profit of joint ventures and tax 988 614 1441 608
Share of profit of joint ventures - - 226 26
Profit before tax 988 614 1667 634
Tax expense 201 135 267 198
Profit from continuing operations after tax 787 479 1400 436
Profit from discontinued operations after tax 15 - 5 -
Profit for the year 802 479 1405 436
Attributable to:
- Equity shareholders of the Company 802 479 1258 256
- Non-controlling interests - - 147 180
Other comprehensive income (‘OCI') 1538 1081 2960 1417
Total comprehensive income 2340 1560 4365 1853
Balance in retained earnings at the beginning of the year 6078 5860 6254 6186
Profit for the year (attributable to equity shareholders of the Company) 802 479 1258 256
Remeasurement of defined employee benefit plans (net of tax) 17 21 359 93
Dividends including tax on dividend# (255) (280) (255) (280)
Others - (2) - (1)
Balance in retained earnings at the end of the year 6642 6078 7616 6254

2. Dividend

For FY 2021-22 the Board of Directors has recommended a dividend of Rs12.50 per share i.e. 125% (previous year Rs 10 per share i.e. 100%) on the Ordinary Sharesof the Company. If declared at the ensuing Annual General Meeting (‘AGM') thetotal dividend outgo during FY 2022-23 would amount to Rs 318 crore (previous year Rs 255crore).

3. Performance Review & State of Company's Affairs

3.1 Consolidated:

On a consolidated basis the revenue from operations increased to Rs12622 crore in FY 2021-22 from Rs 10200 crore in FY 2020-21. The increase was mainly onaccount of higher soda ash volumes i.e. 3.7 million tonne in FY 2021-22 against 3.0million tonne in FY 2020-21. The soda ash realisations too remained robust and were higherthan previous year's levels. The profit before tax from continuing operationsincreased to Rs 1667 crore in FY 2021-22 from Rs 634 crore in FY 2020-21 up 163%.

3.2 Standalone:

On a standalone basis the revenue from operations increased to Rs3721 crore for FY 2021-22 from Rs 2999 crore in FY 2020-21. The increase was mainly onaccount of higher soda ash volumes i.e. 0.68 million tonne in FY 2021-22 against 0.62million tonne in FY 2020-21. Profit before tax from continuing operations stood at Rs 988crore in FY 2021-22 against Rs 614 crore in FY 2020-21 up 61%.

For more details on the Consolidated and Standalone performance pleaserefer to Management Discussion & Analysis.

4. Management Discussion & Analysis

The Management Discussion & Analysis as required in terms of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (‘SEBI Listing Regulations') forms part of this IntegratedAnnual Report.

5. Business Overview

The Company has two business segments viz. Basic Chemistry Products andSpecialty Products.

Basic Chemistry segment comprises inorganic chemicals led by Soda AshSalt and Sodium Bicarbonate. Scale supply chain efficiencies and customer relationshipsdrive this business. This segment has manufacturing operations spread across fourcontinents viz. North America (USA)

Europe (UK) Africa (Kenya) and Asia (India). These inorganic chemicalsprimarily service industries such as Glass (Automotive Architectural & Container)Detergent Food Pharma Animal Feed and Industrial Chemicals.

Specialty Products portfolio is driven by Chemistry-leddifferentiation. The Company has three key products in this segment comprising SpecialtySilica Prebiotics and Agri inputs. Specialty Silica range serves Food Rubber and Tyreindustry. Prebiotics and Formulations are targeted at Food Animal Feed and Pharmaceuticalapplications. Rallis India Limited a listed subsidiary of the Company produces andmarkets range of Agri inputs including Seeds for Indian and overseas farmers.

The Company is increasing its focus on Green Chemistry withSustainability as a key driver of value. Basic Chemistry will scale further by addingcapacities of the core products and leveraging cost competitiveness. The growth in SodaAsh demand is also driven by Solar Glass (used in Solar Electricity generation) andLithium Carbonate. The Specialty Products will focus on maximising value with asustainable portfolio low carbon footprint Specialty Silica and Prebiotics based onfermentation platform.

5.1 Basic Chemistry Products

Standalone (India)

For FY 2021-22 the revenues from the Basic Chemistry Products businessstood at Rs 3475 crore higher by 22%.

Soda Ash

The year started with the second wave of COVID-19 which suppressed thedemand and prices in the first quarter. However demand improved to pre-COVID levels bythe end of first half of the year. Subsequently as the impact of COVID-19 subsided andthe economy started opening up with easing of restrictions a gradual increase in demandwas visible. Imports were significantly lower due to global tightening of supplies andsupply chain disruptions. This period also witnessed significant cost increases due torising energy freight and raw salt costs. Realisations improved which helped the Companyabsorb these cost pressures. The skew in demand versus supplies has spilled over to FY2022-23 as supply chain disruptions continue.

Sales of soda ash for FY 2021-22 stood at 678130 metric tonne(‘MT') an increase of 9% over the previous year.

Sodium Bicarbonate

Sales of sodium bicarbonate stood at 120186 MT and witnessed a solidgrowth of 19% over the previous year.

The Company markets four value-added grades of Bicarb – Medikarb(pharma grade) Sodakarb (food grade) Alkakarb (feed grade) and Speckarb (industrialgrade).

Salt

The demand for salt was higher from the Company's key customerTata Consumer Products Limited during the year and the production was increasedappropriately to meet the increased requirement even amid the pandemic. The Companyrecorded highest ever production of salt at 12.61 lakh MT during FY 2021-22. In additiona project is under implementation to increase the salt manufacturing capacity to meet theprojected demand increase.

Other Products

Sale of cement stood at 4.37 lakh MT an improvement of 11% in FY2021-22. Cement realisations and margins remained healthy and Bromine production wasimpacted due to bittern dilution.

Subsidiaries

Tata Chemicals North America Inc. USA (‘TCNA') (as perUSGAAP)

During FY 2021-22 overall sales volumes were up by 26% a record forTCNA which was driven by an increase in volumes in the export markets.

TCNA posted a revenue of US$ 495 million (Rs 3688 crore) for FY2021-22 compared to US$ 388 million (Rs 2878 crore) in the previous year registering agrowth of 28%. For FY 2021-22 EBITDA at TCNA was US$ 106.2 million (Rs 791 crore)against US$ 48.1 million (Rs 357 crore) in FY 2020-21.

This sharp increase in volumes led to TCNA posting a profit after taxand non-controlling interest of US$ 49.9 million (Rs 372 crore) during FY 2021-22 comparedto a loss of US$ 12.8 million (Rs 95 crore) in FY 2020-21.

TCE Group Limited UK (‘TCE group') (as per IFRS)

TCE Group Limited's business consists of soda ash sodiumbicarbonate and energy units and British Salt Limited which manufactures and sells foodand industrial grade white salt. Together they are referred as ‘UK Operations'of the Company in this Report.

The turnover from the UK Operations for FY 2021-22 was ? 191.5 million(Rs 1949 crore) against ? 145.2 million (Rs 1409 crore) in the previous yearregistering a growth of 38%. Soda ash sales volumes were strong during the year withconsistent demand witnessed throughout the year. Sales of sodium bicarbonate wereconsistent although slightly down over FY 2020-21. The UK Operations maintained its coreUK market share and robust export demand into Europe and rest of the world includingnavigating into the post-Brexit period from January 2021.

The combined heat and power (CHP) facility at Winnington performed wellthroughout the year.

In the Salt business sales volumes were better than those recorded inFY 2020-21 amid rising energy costs and price increases in the market reflecting the same.

EBITDA for FY 2021-22 for the UK Operations was ? 12.2 million (Rs 124crore) against ? 14.2 million (Rs 138 crore) and the loss after tax was ? 8.4 million(Rs 85 crore) against the loss of ? 5.8 million (Rs 56 crore) in the previous year.

Tata Chemicals Magadi Limited Kenya (‘TCML') (as per IFRS)

During FY 2021-22 sales volumes were higher by 37% over FY 2020-21.TCML achieved a revenue of US$ 77.6 million (Rs 577 crore) for FY 2021-22 as againstrevenue of US$ 55.4 million (Rs 413 crore) in the previous year an increase of 40%. ForFY 2021-22 TCML registered an EBITDA of US$ 20.1 million (Rs 150 crore) against theEBITDA of US$ 9.6 million (Rs 71 crore) in the previous year higher by 108%. The increasein EBITDA was due to better realisations and cost control. TCML recorded a net profit ofUS$ 12.7 million (Rs 94 crore) in FY 2021-22 against a net profit of US$ 2.8 million (Rs20 crore) in FY 2020-21.

The county government had issued a demand during FY 2018-19 for anarbitrary increase in land rates which was struck down subsequently by the Hon'bleHigh Court. TCML has filed an appeal for reconsideration of the other related issuesraised in the petition before the Hon'ble High Court and the appeal is pending. TCMLis working with Kenya national authorities and government to arrive at a fair andtransparent resolution of the issues.

5.2 Specialty Products

Standalone Silica

The Company manufactures Specialty Silica products and sells to tyreand food industries. Silica is a versatile material with varied applications. With focuson green products and regulatory matters its use in the tyre industry is expected toaccelerate. During FY 2021-22 capacity utilisation improved with increasingapprovals_from leading tyre companies in India. As a mark of recognition the Company wasawarded the ‘Best Supplier in Innovation category for HDS Silica' by a leadingtyre company.

The Company's products are well accepted in new segments ofSilicone rubber applications and Battery separator segments.

Prebiotics & Formulations

The state-of-the-art manufacturing facility using fermentationtechnology of the Company is located in Mambattu Nellore District Andhra Pradesh and hassuccessfully stabilised its operations. There have been various optimisation projectswhich have been implemented with all key certifications like Food Safety SystemCertification - FSSC 22000 and FDA registration coupled with qualification from Key Globalcustomers which will enable the Company to increase volumes and reach 100% capacityutilisation in the coming year.

Subsidiary

Rallis India Limited (‘Rallis') (as per TCL consolidatedbooks)

Rallis is the Company's listed subsidiary focussed on specialtyproducts for the farm and agricultural sector consisting mainly of Crop Care and Seedsbusiness. Rallis achieved a consolidated revenue from operations of Rs 2602 crore in FY2021-22 compared to Rs 2424 crore in FY 2020-21 an increase of 7%. The profit after taxstood at Rs 164 crore down by 28% against a profit after tax of Rs 229 crore in FY2020-21. During FY 2021-22 the Domestic business of Rallis achieved a revenue of Rs 1468crore as against Rs 1287 crore in FY 2020-21 an increase of 14% on account of robustfarm demand. Key crops which have shown major growth are Paddy Cotton SugarcaneSoybean Pulses Chilli Tea Tomato and Grapes.

The International business of Rallis grew by 6% to Rs 787 crore in FY2021-22 from Rs 741 crore in FY 2020-21. The International business gained 17 newregistrations in the overseas market through strategic and partnership model. This modelhas helped Rallis register a healthy growth during the year under review and has alsobuilt the road for achieving the revenue in line with its long-term strategic planning.

Revenue of Seeds division of Rallis decreased by 13% over the previousyear to Rs 349 crore during the year under review mainly due to reduction in hybrid cropacres in Paddy and Millet and reduced availability of flagship hybrids in the Maizecategory. Changing weather and climate patterns impacted hybrid seed production and highercommodity prices led to increased cost of seed procurement creating pressure on grossmargins.

6. Responding to unprecedented challenges with resilience

As the global economy and society at large were gradually and steadilyrecovering from the after effects of the COVID-19 pandemic in FY 2021-22 theRussia-Ukraine crisis and supply chain disruptions created inflation headwinds.

Throughout the pandemic the Company practiced extreme care and cautiontowards the health and well-being of its employees and partners while ensuring this careand caution was extended to the community at large. The Company regularly adhered tovarious guidelines and advisories issued by the authorities from time to time includingmaintaining social distancing at all its plant operations.

The Company's UK business was impacted towards the end of FY2021-22 due to the Russia-Ukraine crisis. The impact was high on the natural gas pricesthat substantially went up. The Company took timely measures of hedging mechanism.

7. Finance and Credit Ratings

During the year under review while the focus continued on theliquidity cash flows and working capital intensi_ed efforts were made towards: a)bringing down interest costs at overseas subsidiaries through a series of refinancing andloan re-pricing exercises; and b) improving the yield on cash surplus investments amid alow interest rates scenario through broadening the spectrum of investment avenues withoutcompromising with safety and liquidity.

The overseas subsidiaries of the Company undertook a re-pricingexercise for US$ 275 million facility in TCNA USA refinancing exercises of US$ 100million in Valley Holdings Inc. USA US$ 45.5 million in Homefield Pvt UK Limited and US$46 million in TCML Kenya. The interest rates have been negotiated at rates lower than theerstwhile levels.

During FY 2021-22 Rallis a subsidiary and IMACID a joint venturepaid dividends of Rs 29 crore (FY 2020-21:

Rs 24 crore) and Rs 28 crore (FY 2020-21: Rs 26 crore) respectively tothe Company. Valley Holdings Inc. the Company's step-down overseas subsidiary whichholds investments in the US operations paid dividends aggregating to US$ 21.1 million (Rs157 crore) [FY 2020-21: US$ 20.9 million (Rs 155 crore)]. Another overseas subsidiary ofthe Company Tata Chemicals South Africa (Pty) Limited paid a dividend of South AfricanRand 30 million (Rs 15 crore) [FY 2020-21: Nil].

Despite global disruptions due to COVID-19 pandemic the Company'scredit ratings were reafirmed during the year under review. The Company as on March 312022 had the following credit ratings:

– Long Term Corporate Family Rating – Foreign Currency ofBa1/Stable from Moody's Investors Service

– Long Term Issuer Default Rating (IDR) of BB+ with Stable outlookfrom Fitch Ratings

– Long Term bank facilities (fund-based limits) of Rs 1300 croreand short term bank facilities (non-fund based limits) of Rs 2000 crore are rated at CAREAA+ (Outlook: Stable) and CARE A1+ respectively by CARE Ratings and

– Commercial Paper of Rs 100 crore is rated at CRISIL A1+ byCRISIL Ratings

8. Dividend Distribution Policy

In accordance with Regulation 43A of the SEBI Listing Regulations theBoard of Directors of the Company has adopted a Dividend Distribution Policy whichendeavours for fairness consistency and sustainability while distributing profits to theshareholders. The same is available on the Company's website athttps://www.tatachemicals.com/DividendDistPolicy.htm.

9. Transfer to Reserves

The Board of Directors has decided to retain the entire amount ofprofits for FY 2021-22 in the retained earnings.

10. Deposits from Public

The Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onMarch 31 2022.

11. Business Responsibility & Sustainability Report

The Company endeavours to cater to the needs of the communities itoperates in thereby creating maximum value for the society along with conducting itsbusiness in a way that creates a positive impact and enhances stakeholder value. As perRegulation 34(2)(f) of the SEBI Listing Regulations and in line with the SEBI Circularsdated May 5 2021 and May 10 2021 though voluntary for FY 2021-22 the Company has as amatter of good governance adopted the Business Responsibility & Sustainability Report(‘BRSR') disclosing initiatives by the Company taken from an environmentalsocial and governance perspective. The BRSR forms part of this Integrated Annual Report.

12. Related Party Transactions

In line with the requirements of the Companies Act 2013 (‘theAct') and SEBI Listing Regulations as amended from time to time the Company hasformulated a Policy on Related Party Transactions (‘RPT Policy') foridentifying reviewing approving and monitoring of Related Party Transactions. The RPTPolicy was revised pursuant to the amendment to the SEBI Listing Regulations and the sameis available on the Company's website at https://www.tatachemicals.com/RPTPolicy.htm.

All related party transactions entered into during FY 2021-22 were onarm's length basis and in the ordinary course of business and were reviewed andapproved by the Audit Committee. With a view to ensure continuity of day-to-dayoperations an omnibus approval is obtained for related party transactions which are ofrepetitive nature and entered in the ordinary course of business and on an arm'slength basis. A statement giving details of all related party transactions enteredpursuant to the omnibus approval so granted is placed before the Audit Committee on aquarterly basis for its review. The related party transactions entered into pursuant tothe omnibus approval so granted are also reviewed as part of the internal audit by anindependent external firm on a half-yearly basis.

The Company did not enter into any contracts or arrangements withrelated parties in terms of Section 188(1) and no material related party transactions wereentered into by the Company during the year under review. Accordingly the disclosure ofrelated party transactions as required under Section 134(3)(h) of the Act in Form No.AOC-2 is not applicable to the Company for FY 2021-22 and hence does not form part of thisIntegrated Annual Report.

In terms of Regulation 23 of the SEBI Listing Regulations the Companysubmits details of related party transactions on a consolidated basis as per the formatspecified in the relevant accounting standards to the stock exchanges on a half-yearlybasis.

The details of the transactions with related parties are provided inthe accompanying Financial Statements.

13. Risk Management

Risk Management at Tata Chemicals forms an integral part of Managementfocus.

The Risk Management Policy of the Company which is approved by theRisk Management Committee of the Board (‘RMC') and the Board of Directorsprovides the framework of Enterprise Risk Management (‘ERM') by describingmechanisms for the proactive identification and prioritisation of risks based on thescanning of the external environment and continuous monitoring of internal risk factors.The ERM framework identifies evaluates manages and reports risks arising from theCompany's operations and exogenous factors.

During the year under review the ERM Policy and Terms of Reference ofthe RMC were revised in line with the SEBI Listing Regulations to inter-alia set upstrategic policies including focus on ESG related risks risks revolving around cybersecurity and defining the role and responsibilities of the RMC.

The Company has deployed bottom-up and top-down approaches to driveenterprise-wide risk management. The bottom-up process includes identification and regularassessment of risks by the respective business units and implementation of mitigationstrategies. This is complemented by a top-down approach where the Risk Management Group(Senior Leadership Team) as well as the RMC identifies and assesses long-term strategicand macro risks for the Company.

The RMC oversees the risk management process in the Company. The RMC ischaired by an Independent Director and the Chairperson of the Audit Committee is also aMember of the RMC. Further the Chairman of the RMC briefs the Board at its Meetings aboutthe significant discussions at each of the RMC Meetings. This robust governance structurehas also helped in the integration of the ERM with the Company's Strategic PlanningProcess where emerging risks are used as inputs in such process. Identified risks are usedas one of the key inputs in the strategy and business plans.

A systematic review of risks identified is subject to a series offocussed meetings of the empowered Risk Management Group (Senior Leadership Team)respective Business-level / Subsidiary-level Committees and the RMC. The RMC meetsperiodically to review all the key risks and assess the status of mitigation measures.

Considering the volatility uncertainties and unprecedented challengesinvolved in the businesses the risk management function has gained more importance overthe last few years and it is imperative to manage and address such challenges effectively.With a view to have a focussed approach in doing so the Company has appointed a ChiefRisk Officer effective April 1 2022 to oversee the Risk Management function of theCompany.

Based on benchmarking and inputs from global standards on ERM the RiskManagement process has been deployed across geographies and businesses.

Some of the risks identified are set out in the Management Discussion& Analysis which forms part of this Integrated Annual Report.

14. Corporate Social Responsibility

The Corporate Social Responsibility (‘CSR') activities of theCompany are governed through the Corporate Social Responsibility Policy (‘CSRPolicy') approved by the Board. The CSR Policy guides in designing CSR activities forimproving quality of life of society and conserving the environment and biodiversity in asustainable manner. The CSR Committee of the Board oversees the implementation of CSRProjects in line with the Company's CSR Policy.

The Company has adopted a participatory approach in designingneed-based CSR programmes which are implemented through Tata Chemicals Society for RuralDevelopment (‘TCSRD') in partnership with the Tata Trusts and with variousgovernment and non-government institutions. The Company's CSR programme frameworkfocusses on building economic capital ensuring environmental integrity enablers forsocial economic and environmental development and building social capital.

Building economic capital: The Company focusses on povertyalleviation and creating livelihoods linked to farm and non-farm based activities.

Ensuring environmental integrity: The Company's main focusis on management of natural resources and conservation of environment. The key programmesinclude land and water management activities waste management preservation ofbiodiversity and mitigation of climate change impacts.

Enablers for social economic and environmental development: TheCompany's key programme is the Holistic Nutrition Programme which targets the first1000 days of a child. Additionally in the neighbourhood the Company conducts regularhealth and nutrition camps.

The education programme focusses on students starting from primary tothe post-graduation level. Educational support is provided for enrolment of children andimproving quality of education.

The Company helps to provide clean water through roof rainwaterharvesting structures repair of hand pumps supporting households with water puri_ersystems through Swach Tarang Project.

Building social capital: Building the social capital forlong-term sustainability is a key cross-cutting theme in all these programmes.

Women empowerment reducing inequality of marginalised communities(through Affirmative Action) partnerships for achieving goals and setting up sustainablesocial enterprise models (Okhai and Ncourage Social Enterprise Foundation) are keyinitiatives for achieving the same.

During the COVID-19 pandemic the Company proactively supported thecommunities and the Government. The Company also endeavours to respond to disasters thataffect any part of India and in the neighborhood of all its manufacturing plants.

In line with the amended Companies (Corporate Social ResponsibilityPolicy) Rules 2014 the Company revised its CSR Policy and Charter of the CSR Committeeduring the year. The revised CSR Policy inter alia includes changes in definitions CSRexpenditure treatment of surplus and setting off of excess spent guiding principles forselection implementation and monitoring of activities and approach direction and annualaction plan of the Board and CSR Committee of the Company. The CSR Policy is available onthe website of the Company at https://www.tatachemicals.com/CSRPolicy2021.htm.

The Annual Report on CSR activities for FY 2021-22 is enclosed as Annexure1 to this Report.

15. Whistleblower Policy and Vigil Mechanism

The Company has devised an effective whistleblower mechanism enablingstakeholders including individual employees and their representative bodies tocommunicate their concerns about illegal or unethical practices freely. The Company hasalso established a vigil mechanism for stakeholders to report concerns about any unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct.Protected disclosures can be made by a whistleblower through several channels. TheWhistleblower Policy (‘the Policy') of the Company provides for adequatesafeguards against victimisation of employees who avail of the mechanism. No personnel ofthe Company has been denied access to the Chairperson of the Audit Committee. The Policyalso facilitates all employees of the Company to report any instance of leak ofunpublished price sensitive information.

A dedicated third-party Ethics Helpline has been setup which is managedby an independent professional organisation for confidentially raising any ethicalconcerns or practices that violate the Tata Code of Conduct. The Ethics helpline servicesinclude toll free number web access postal services and email facilities.

The Policy is available on the website of the Company at:https://www.tatachemicals.com/WhistleblowerPolicy.htm.

16. Prevention of Sexual Harassment

Pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (‘POSH Act') and Rules made thereunderthe Company has formed an Internal Committee (‘IC') for its workplaces toaddress complaints pertaining to sexual harassment in accordance with the POSH Act. TheCompany has a detailed policy for prevention of sexual harassment at workplace whichensures a free and fair enquiry process with clear timelines for resolution.

The Policy is uploaded on the website of the Company athttp://www.tatachemicals.com/POSHPolicy.htm.

No complaints were pending at the beginning of the financial year.During the year under review one concern was reported which was investigated andappropriate action was taken. No complaint was pending as at the end of the financialyear.

To build awareness in this area the Company has been conductingawareness sessions during induction of new employees and also periodically for permanentemployees third-party employees and contract workmen through online modules and webinars.

17. Particulars of Loans Guarantees and Investments

The Company has not given any loans during the year under review. TheCompany has made investments of Rs 18 crore and Rs 115 crore in equity shares throughrights issue of The Indian Hotels Company Limited and Tata Projects Limited respectively.

During the year under review the Company has provided additionalcorporate guarantee of ? 14.4 million (Rs 147 crore) to Tata Chemicals Europe Limited asubsidiary of the Company.

Details of loans guarantees and investments covered under theprovisions of Section 186 of the Act are given in the notes to the Financial Statements.

18. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and itssubsidiaries for FY2021-22 are prepared in compliance with the applicable provisions ofthe Act and as stipulated under Regulation 33 of the SEBI Listing Regulations as well asin accordance with the Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015. The Audited Consolidated Financial Statements togetherwith the Auditor's Report thereon form part of this Integrated Annual Report.

Pursuant to the provisions of Section 136 of the Act the FinancialStatements of the Company Consolidated Financial Statements along with relevant documentsand separate annual accounts in respect of subsidiaries are available on the website ofthe Company.

The annual accounts of the subsidiaries and related detailedinformation will be made available to investors seeking information till the date of theAGM. They are also available on the website of the Company athttps://www.tatachemicals.com/investors/agm-documents.

19. Subsidiary Companies Joint Ventures and Associate

As on March 31 2022 the Company had 28 (direct and indirect)Subsidiaries (2 in India and 26 overseas) 3 Joint Ventures (‘JV') and 1Associate. There has been no material change in the nature of the business of thesubsidiaries. The changes pertaining to Subsidiaries JVs and Associate during the yearare as under:

1. Following wholly-owned step-down subsidiaries of the Company whichwere dormant in nature have dissolved and accordingly ceased to be subsidiaries witheffect from the dates given below:

- NHO Canada Holdings Inc. effective August 30 2021

- General Chemical International Inc. effective August 30 2021

- Irish Feeds Limited effective September 14 2021

- TCNA (UK) Limited effective November 30 2021

2. PT Metahelix Lifesciences Indonesia a subsidiary of Rallisreceived approval for the cancellation of its Tax Identification Number on March 23 2022and accordingly ceased to be a subsidiary of the Company with effect from such date.

3. The name of Tata Chemicals Africa Holdings Limited subsidiary ofthe Company was changed to TC Africa Holdings Limited effective October 11 2021.

4. Tata Chemicals International Pte. Ltd.'s (‘TCIPL'subsidiary of the Company) holding in JOil (S) Pte. Ltd. JV reduced from 33.78% to 17.07%and consequently JOil has been classified as an associate of TCIPL and that of the Companywith effect from September 21 2021.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements)(Second Amendment) Regulations 2021 the Company's Policy on determining materialsubsidiaries was amended during the year and the same is uploaded on the Company'swebsite at https://www.tatachemicals.com/policy-on-determining-material-subsidiaries.pdf.

A report on the financial position of each of the subsidiaries jointventures and associate as per Section 129(3) of the Act is provided in Form No. AOC-1enclosed to the Financial Statements.

20. Internal Financial Controls

Internal financial control systems of the Company are commensurate withits size and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable accounting standards and relevant statutessafeguarding assets from unauthorised use executing transactions with properauthorisation and ensuring compliance of corporate policies. The Company has awell-defined delegation of authority with specified limits for approval of expenditureboth capital and revenue. The Company uses an established Enterprise Resource Planning(ERP) system to record day-today transactions for accounting and financial reporting. TheAudit Committee deliberated with the members of the Management considered the systems aslaid down and met the internal audit team and statutory auditors to ascertain their viewson the internal financial control systems. The Audit Committee satisfied itself as to theadequacy and effectiveness of the internal financial control systems as laid down and keptthe Board of Directors informed. However the Company recognises that no matter how theinternal control framework is it has inherent limitations and accordingly periodicaudits and reviews ensure that such systems are updated on regular intervals.

Details of internal control system are given in the ManagementDiscussion & Analysis which forms part of this Integrated Annual Report.

21. Directors' Responsibility Statement

Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory cost and secretarial auditors and external consultant(s) including audit ofinternal financial controls over financial reporting by the statutory auditors and thereviews performed by the Management and the relevant Board Committees including the AuditCommittee the Board is of the opinion that the Company's internal financial controlswere adequate and effective during FY 2021-22.

Accordingly pursuant to Sections 134(3)(c) and 134(5) of the Act theDirectors to the best of their knowledge and ability confirm that for the year endedMarch 31 2022:

a) in the preparation of the annual accounts the applicable accountingstandards have been followed and that there are no material departures;

b) they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

c) they have 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;

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

e) they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively; and

f ) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

22. Corporate Governance and Compliance

The Company strives to evolve and follow the best governancepractices not just to boost long-term shareholder value but also to respect minorityrights. The Company considers the same as its inherent responsibility to disclose timelyand accurate information to its stakeholders regarding its operations and performance aswell as the leadership and governance of the Company. The Company is committed to the TataCode of Conduct which articulates values and ideals that guide and govern the conduct ofthe Tata companies as well as its employees in all matters relating to business. TheCompany's overall governance framework systems and processes reflect and support itsMission Vision and Values.

At Tata Chemicals human rights is also an integral aspect of doingbusiness and the Company is committed to respect and protect human rights to remediateadverse human rights impacts that may be resulting from or caused by the Company'sbusinesses. In furtherance to this the Company has adopted the ‘Tata Business andHuman Rights Policy' which aligns with the principles contained in the UniversalDeclaration of Human Rights International Labour Organsations (ILO) Declaration onFundamental Principles and Rights at Work and the United Nations Guiding Principles onBusiness and Human Rights and is consistent with the Tata Code of Conduct.

The Company's governance guidelines cover aspects mainly relatingto composition and role of the Board Chairman and Directors Board diversity retirementage for the Directors and Committees of the Board.

The Company has in place an online compliance management system formonitoring the compliances across its various plants and offices. A compliance certificateis also placed before the Board of Directors every quarter. In compliance with the SEBIListing Regulations the Corporate Governance Report and the Secretarial Auditor'sCertificate form part of this Integrated Annual Report.

23. Directors and Key Managerial Personnel

Directors

Appointment

At the 82nd AGM of the Company held on July 2 2021 the Members of theCompany appointed Mr. Rajiv Dube as an Independent Director for a term of five (5)consecutive years and Mr. N. Chandrasekaran as a Non-Executive Non-Independent Directorof the Company.

Re-appointment

In accordance with the provisions of Section 152 of the Act and theArticles of Association of the Company Mr. S. Padmanabhan Non-Executive Non-IndependentDirector of the Company retires by rotation at the ensuing AGM and being eligible hasoffered himself for re-appointment.

Independent Directors

In terms of Section 149 of the Act Ms. Vibha Paul Rishi Ms. PadminiKhare Kaicker Dr. C. V. Natraj Mr. K. B. S. Anand and Mr. Rajiv Dube are the IndependentDirectors of the Company. The Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed underSection 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and areindependent of the Management. In terms of Regulation 25(8) of the SEBI ListingRegulations they have confirmed that they are not aware of any circumstance or situationwhich exist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgement and without any externalinfluence. The Board of Directors of the Company has taken on record the declaration andconfirmation submitted by the Independent Directors after undertaking due assessment ofthe veracity of the same.

The Board is of the opinion that all Directors including theIndependent Directors of the Company possess requisite qualifications integrityexpertise and experience in the fields of science and technology digitalisationstrategy finance governance human resources safety sustainability etc.

The Independent Directors of the Company have confirmed that they haveenrolled themselves in the Independent Directors' Databank maintained with the IndianInstitute of Corporate Affairs (‘IICA') in terms of Section 150 of the Act readwith Rule 6 of the Companies (Appointment & Qualification of Directors) Rules 2014.

Details of Familiarisation Programme for the Independent Directors areprovided separately in the Corporate Governance Report which forms a part of thisIntegrated Annual Report.

During the year under review the Non-Executive Directors of theCompany had no pecuniary relationship or transactions with the Company other than sittingfees commission and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Board/Committees of the Company.

Key Managerial Personnel (‘KMP')

Pursuant to the recommendation of the Nomination & RemunerationCommittee (‘NRC') and Audit Committee the Board appointed Mr. Nandakumar S.Tirumalai as the Chief Financial Officer and Key Managerial Personnel of the Company witheffect from April 1 2021.

In terms of the provisions of Section 2(51) and Section 203 of the Actthe following are the KMP of the Company:

• Mr. R. Mukundan Managing Director & CEO

• Mr. Zarir Langrana Executive Director

• Mr. Nandakumar S. Tirumalai Chief Financial Officer

• Mr. Rajiv Chandan General Counsel & Company Secretary

Procedure for Nomination and Appointment of Directors

The NRC is responsible for developing competency requirements for theBoard based on the industry and strategy of the Company. The Board composition analysisreflects in-depth understanding of the Company including its strategies environmentoperations financial condition and compliance requirements.

The Committee is also responsible for reviewing the profiles ofpotential candidates vis-?-vis the required competencies and meeting the potentialcandidates prior to making recommendations of their nomination to the Board. At the timeof appointment specific requirements for the position including expert knowledge expectedis communicated to the appointee.

The list of core skills expertise and competencies of the Board ofDirectors as are required in the context of the businesses and sectors applicable to theCompany are identified by the Board and are available with the Board. The Director havealso reviewed the list of core skills expertise and competencies which were mappedagainst them. The same is disclosed in the Corporate Governance Report forming part ofthis Integrated Annual Report.

Scientific Advisory Board

The Board has constituted a Scientific Advisory Board consisting ofscientists with relevant domain expertise under the Chairmanship of Dr. C. V. NatrajIndependent Director of the Company with a view to synergise the Research &Development initiatives at the Company's Innovation Centre and Research &Development Centres of Rallis India Limited (Crop Care and Seeds). Further details in thisregard are provided in the Corporate Governance Report.

Criteria for determining Qualifications Positive Attributes andIndependence of a Director

The NRC has formulated the criteria for determining qualificationspositive attributes and independence of Directors in terms of provisions of Section 178(3)of the Act and the SEBI Listing Regulations. The relevant information has been given in Annexure2 which forms part of this Report.

Board Evaluation

The Board has carried out the annual evaluation of its own performanceand that of its Committees and individual Directors for the year pursuant to theprovisions of the Act and the SEBI Listing Regulations. The exercise of performanceevaluation was carried out electronically through a secure application. This resulted insaving paper reducing the cycle time to make documents available to the Board/CommitteeMembers and in increasing confidentiality and accuracy. The performance of the Board andindividual Directors was evaluated by the Board after seeking inputs from all theDirectors. The criteria for performance evaluation of the Board included aspects such asBoard composition and structure effectiveness of Board processes contribution in thelong-term strategic planning etc. The performance of the Committees was evaluated by theBoard after seeking inputs from the Committee Members. The criteria for performanceevaluation are broadly based on the Guidance Note issued by SEBI on Board Evaluation.

The Chairman of the Board had one-on-one meetings with each IndependentDirector and the Chairman of the NRC had one-on-one meetings with each Executive andNon-Executive Non-Independent Directors.

In a separate meeting the Independent Directors evaluated theperformance of Non-Independent Directors and performance of the Board as a whole includingthe Chairman of the Board taking into account the views of Executive Directors andNon-Executive Directors. The NRC reviewed the performance of the Board its Committees andof the Individual Directors. The same was discussed in the Board Meeting that followed themeeting of the Independent Directors and the NRC at which the feedback received from theDirectors on the performance of the Board and its Committees was also discussed.

The Company follows a practice of addressing each of the observationsand suggestions by drawing up an action plan and monitoring its implementation through theAction Taken Report which is reviewed by the Board of Directors from time to time.

24. Remuneration Policy

The Company has in place a Remuneration Policy for the Directors KMPand other employees pursuant to the provisions of the Act and the SEBI Listing Regulationswhich is set out in Annexure 3 forming part of this Report.

25. Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed pursuant tothe provisions of Section 134 of the Act read with the Companies (Accounts) Rules 2014are provided in Annexure 4 forming part of this Report.

26. Particulars of Employees

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (‘Rules') are enclosed as Annexure5 forming part of this Report.

The statement containing particulars of employees as required underSection 197(12) of the Act read with Rule 5(2) and 5(3) of the Rules forms part of thisReport. Further the Report and the Accounts are being sent to the Members excluding theaforesaid statement. In terms of Section 136 of the Act the said statement will be openfor inspection upon request by the Members. Any Member interested in obtaining suchparticulars may write to the Company Secretary at investors@tatachemicals.com.

27. Auditors

I. Statutory Auditors

At the 78th AGM held on August 9 2017 B S R & Co. LLP CharteredAccountants (Firm Registration No. 101248W/W-100022) [‘B S R & Co.'] wereappointed as Statutory Auditors of the Company for a period of five (5) consecutive yearsby the Members.

The report of the Statutory Auditors along with notes to Schedules is apart of this Integrated Annual Report. There has been no qualification reservationadverse remark or disclaimer given by the Auditors in their Report.

Further in terms of Sections 139 and 142 of the Act the Board ofDirectors has on the recommendation of the Audit Committee recommended there-appointment of B S R & Co. as the Statutory Auditors of the Company for a secondterm of five (5) consecutive years from the conclusion of the 83rd AGM till the conclusionof 88th AGM for the approval of the Members. Accordingly an ordinary resolution seekingMembers' approval for the same forms part of the Notice of the 83rd AGM forming partof this Integrated Annual Report. The Company has received a written consent andeligibility certificate from B S R & Co. confirming that they satisfy the criteriaprovided under Section 141 of the Act and that the appointment if made shall be inaccordance with the applicable provisions of the Act and rules framed thereunder.

II. Cost Auditors

As per Section 148 of the Act read with the Companies (Cost Records andAudit) Rules 2014 the Company is required to prepare maintain as well as have the auditof its cost records conducted by a Cost Accountant and accordingly it has made andmaintained such cost accounts and records. The Board on the recommendation of the AuditCommittee has appointed D. C. Dave & Co. Cost Accountants (Firm Registration No.000611) [‘D. C. Dave & Co.'] as the Cost Auditors of the Company for FY2022-23.

D. C. Dave & Co. have confirmed that they are free fromdisqualification specified under Section 141(3) and proviso to Section 148(3) read withSection 141(4) of the Act and that the appointment meets the requirements of the Act. Theyhave further confirmed their independent status and an arm's length relationship withthe Company.

The remuneration payable to the Cost Auditors is required to be placedbefore the Members in a General Meeting for their ratification. Accordingly a resolutionseeking Members' ratification for the remuneration payable to D. C. Dave & Co.forms part of the Notice of the 83rd AGM forming part of this Integrated Annual Report.

III. Secretarial Auditors

In terms of Section 204 of the Act and Rules made thereunder Parikh& Associates Practicing Company Secretaries (Firm Registration No. P1988MH009800)have been appointed as Secretarial Auditors of the Company to carry out the secretarialaudit for FY 2022-23. The report of the Secretarial Auditors for FY 2021-22 is enclosed asAnnexure 6 forming part of this Report.

There has been no qualification reservation adverse remark ordisclaimer given by the Secretarial Auditors in their Report.

28. Reporting of Fraud

During the year under review the Statutory Auditors Cost Auditors andSecretarial Auditors have not reported any instances of frauds committed in the Company byits officers or employees to the Audit Committee under Section 143(12) of the Act detailsof which need to be mentioned in this Report.

29. General Disclosures

I. Details of Board Meetings

During the year under review seven (7) Board Meetings were helddetails of which are provided in the Corporate Governance Report.

II. Composition of Audit Committee

The Audit Committee comprised four (4) Members out of which three (3)are Independent Directors and one (1) is a Non-Executive Director. During the year underreview ten (10) Audit Committee Meetings were held details of which are provided in theCorporate Governance Report. During the year under review there were no instances whenthe recommendations of the Audit Committee were not accepted by the Board.

III. Composition of CSR Committee

The CSR Committee comprised three (3) Members out of which one (1) isan Independent Director. During the year under review four (4) Meetings of the CSRCommittee were held details of which are provided in the Corporate Governance Report.During the year under review there were no instances when the recommendations of the CSRCommittee were not accepted by the Board.

IV. Secretarial Standards

The Directors have devised proper systems and processes for complyingwith the requirements of applicable Secretarial Standards issued by the Institute ofCompany Secretaries of India and such systems were adequate and operating effectively.

30. Other disclosures:

(a) No significant and material orders were passed by the regulators orthe courts or tribunals impacting the going concern status and the Company'soperations in future. (b) In 2020 Allied Silica Limited (ASL) has filed an applicationunder Section 9 of the Insolvency and Bankruptcy Code 2016 (‘IBC') against theCompany and the same is pending before the National Company Law Tribunal Mumbai Bench asat the end of the year. The Company has contested the proceedings among other things onthe grounds that no operational debt is due and payable the alleged debt is not anoperational debt the party is not an operational creditor under the IBC and that there ispre-existence of disputes between the parties.

(c) There has been no change in the nature of business of the Companyas on the date of this Report.

(d) There were no material changes and commitments affecting thefinancial position of the Company between the end of the financial year and the date ofthis Report.

31. Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return in Form MGT-7 as on March 31 2022 is available on the Company'swebsite at https://www.tatachemicals.com/MGT72022.pdf.

32. Acknowledgements

The Directors appreciate and value the unstinted support and thecontribution made by every employee of the Company including all the workmen at themanufacturing plants in these challenging times.

The Directors acknowledge the support extended by the Company'sUnions and would also like to thank the financial institutions banks governmentauthorities customers vendors and other stakeholders for their continued support andco-operation.

On behalf of the Board of Directors
N. Chandrasekaran
Chairman
DIN: 00121863
Mumbai April 29 2022

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