Your Directors present their 52^nd Annual Report together with the Audited Financial Statements of the Company for the year ended 31^st March 2023.

FINANCIAL SUMMARY

DIVIDEND

Taking into account the financial position of the Company and the norms of your Company's Dividend Distribution Policy, the Directors have recommended a Dividend of Rs. 1.50 (15% on the face value) per equity share of Rs. 10 each fully paid-up, for the year 2022-23 on the paid up equity share capital.

STATE OF COMPANY’S AFFAIRS Production

During the financial year 2022-23 the Plants were in operation for 361 on stream days and produced the highest ever production of 759,199 MT of Urea since the commissioning of the Plant. For the whole year the Company had received

0.9 MMSCMD of Natural Gas (NG). During the year, your Company manufactured 759,199 MT of Neem Coated Urea and sold 757,984 MT. The Plants were operated using Natural Gas (NG), imported Naphtha and Furnace Oil and achieved energy efficiency levels of 6.176 Gcal/MT of Urea.

Handling of Imported Naphtha

Your Company has an arrangement with Indian Oil Corporation (IOC) for using their Tank Farm Facility at Tuticorin Port premises for handling a part of Company's Imported Naphtha shipments. This has facilitated your

Company for speedy discharge of cargo, thereby minimizing the demurrage to a large extent. This arrangement will be continued until such time a reliable supply of full quantum of NG is assured.

Progress of NG Supply Pipelines

IOC, authorized to lay the Natural Gas Pipeline from Ennore to Tuticorin, has completed the 145 km Natural Gas pipeline in Ramanathapuram - Tuticorin sector in the first phase and laying of the pipeline from Ennore to Ramnad line merging at Sayalkudi is in progress. It is expected to be ready by October 2023. On completion of this pipeline your Company will receive its full requirement of 1.5 MMSCMD of NG. Compressor station at Ramnad is ready for operation and your Company is getting high pressure gas with a quantity of 0.9 MMSCMD. To adhere to the Policy of the Government, various modifications are being carried out in a phased manner to be a Gas based plant, to maintain Urea production level of 2080 MTPD.

PUBLIC DEPOSITS

There are no deposits covered under Chapter V of the Companies Act, 2013 (the Act) during the year 2022-23, which are required to be furnished.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared in accordance with Ind AS and forms part of the Annual Report.

FINANCIAL STATEMENTS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the Statement containing salient features of the Financial Statements of the Company's Associates and Joint Ventures (in Form AOC-1) is attached to the Financial Statements. Your Company has no Subsidiaries.

TAMILNADU PETROPRODUCTS LIMITED (TPL)

During the year 2022-23, revenue from operations was ? 2,150.25 crores as compared to ? 1,805.58 crore in 2021-22 up by 19%. The company's top line increased due to increase in crude price and higher CS (Caustic Soda) Lye price realisation. Linear Alkyl Benzene (LAB) the major product of the company's contributions reduced substantially due to increase in raw material cost and competition from low-priced imports consequent to expiry of Anti-dumping duty on imports from China, Iran & Qatar in April 2022. However C S Lye product increased its contribution due to better prices.

The Company has received BIS certification for LAB product, first in the Country. The Board of TPL has recommended a dividend of ?1.50 per equity share of ?10 each fully paid-up for the year 2022-23 (15% in the previous year) subject to the approval of Members.

TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LIMITED (TFL)

Refurbishment of defective systems and installation of newer ones continued during the year to stabilize and also increase the production. Salt was procured from Gujarat in addition to what is available in the local salt market. Throughout the year the price of ammonia, a major raw material remained high. The selling price of soda ash and ammonium chloride also remained high. Hence for the first time after 20 years TFL made profit in all the four quarters, registering a significant net profit for the whole year. The company revalued its land and buildings and thus the net worth has become positive. It is expected that the company will continue this trend and the carried over losses will get wiped out in the next 3 years.

GREENAM ENERGY PRIVATE LIMITED (GREENAM)

The 22.0 MW AC Floating Solar Project ever since its commissioning during March 2022 has been operating successfully. During the year 35.53 million units of electricity were supplied to the captive consumers.

Drawing power from GREENAM enables your Company to meet the Renewable Power obligations as stipulated by the Government as well as substantially save on water lost by evaporation from the company's water reservoirs. During the year, the GREENAM has made a profit of ?2.18 crores with the total revenue of ?18.71 crores. Like any renewable project, the EBITDA is high at ?17.12 crores, around 91.5% of the revenue.

From the beginning of the year 2023-24, the plant is operating to its full capacity and hence is expected to perform better than the last year by atleast 10%.

SAFETY, HEALTH AND ENVIRONMENT

DNV (Det Norske Veritas) conducted the Recertification audit for QMS.ISO 9001:2015, EMS - ISO 140001:2015 and certified that all the requirements as per the standards are being practiced and there is no non-conformity points. QMS, EMS systems and OHS system certificates are valid till January 2026. DNV have audited the periodical medical examination report being done by the Company for all employees and found to be in order. Green Belt development is being given at importance and is a continuing activity with about 1184 tree saplings planted during this year. Your Company has obtained Consent to Operate with mixed feed stock, viz., Natural Gas and Naphtha, valid up to 31 ^st March 2026.

HUMAN RESOURCE AND INDUSTRIAL RELATION

Your Company continues to provide a conducive work environment and opportunities for development of its employees. Industrial Relations in the Company have been cordial during the year under review. The number of employees as on 31^st March 2023 is 580. Your Company continues with the regular campus recruitment programme as a process of building the organization from the bottom.

ANNUAL RETURN

Annual Return in Form MGT-7 for the year 2021-22 as required under Section 92 of the Act has been placed on the website of the Company. The Form MGT-7 for the year 2022-23 shall be filed with Registrar of Companies within the prescribed time after the 52^nd Annual General Meeting of your Company to be held on 27^th September 2023. Thereafter it can be accessed using the web link: https://www. spic.in/ investors/annual-return/.

DIRECTORS

Since the date of last Report, the Board of Directors had appointed Ms. Jayashree Muralidharan, I.A.S, with effect from 3^rd November 2022, Dr. V Jaya Chandra Bhanu Reddy, I.A.S. with effect from 29^th March 2023 and Mr. C Samayamoorthy,

I.A.S. with effect from 11^th August 2023 as Nominee Directors of TIDCO and Ms. Devaki Ashwin Muthiah as Nominee Director of private promoter with effect from 24^th May 2023. Ms. Vandana Garg, I.A.S. and Ms. A R Rajalakshmi, Nominee Directors of TIDCO resigned with effect from 10^th November

2022 and 13^th June 2023 respectively.

The Board of Directors at their Meeting held on 7^th July

2023 accepted the resignation of Mr. S R Ramakrishnan as Director / Whole-time Director to be effective from the end of his tenure on 29^th July 2023. In the same Board Meeting, Mr. E Balu was inducted as Director and appointed as Wholetime Director w.e.f 30^th July 2023 for a period of three years on terms and conditions subject to approval of shareholders of the ensuing 52^nd AGM.

The Board of Directors placed on record the invaluable services rendered by M/s. Vandana Garg, I.A.S, A R Rajalakshmi as Directors and Mr. S R Ramakrishnan as Whole-time Director during their tenure.

Ms. Jayashree Muralidharan, I.A.S. shall retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers herself for re-election.

The Board of Directors vide Resolution dated 17^th January 2023 re-appointed. Mr. S Radhakrishnan as Independent Director for a second term of 5 years from 7^th February 2023, and the approval of the shareholders was obtained through Postal Ballot on 30^th March 2023. In the opinion of the

Board, Mr. S Radhakrishnan, re-appointed as Independent Director during the year, is a person of integrity, with expertise, experience & proficiency. He is independent of the Management.

All the Independent Directors of the Company on the date of this Report have duly submitted the disclosures to the Board stating that they have fulfilled the requirements set out in Section 149 (6) of the Act and the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, as amended so as to qualify themselves to act as Independent Directors.

TRANSFER OF SHARES IN RESPECT OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) AUTHORITY

Pursuant to Section 124 (6) of the Companies Act, 2013 read with The Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules 2016, the Company during March 2018 transferred to IEPF Authority, 1,66,454 equity shares in respect of 1008 shareholders.

As per the information provided by the Registrars and Transfer Agent, out of the 1,66,454 equity shares, which remained unclaimed by 1008 shareholders at the beginning of the year, 1000 shares were released to 2 shareholders during the year. As at the end of the year 1,65,454 shares remained unclaimed by 1006 shareholders.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

Independent Directors are familiar with their roles, responsibilities in the Company, nature of the industry, business model etc., through familiarisation programmes. Documents / Brochures, Reports and Internal Policies of your Company are provided to them. Presentations are made at the Board / Committee Meetings, on Company's Performance, business strategy, risks involved and global business environment. Details of means of familiarization of the business to Independent Directors are disclosed on the Company's website under the following web link: https://www.spic.in/wp-content/uploads/2022/07/ Familiarization-Programmes-2022-23.pdf

PARTICULARS OF REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

The statement in terms of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed vide Annexure II (Page no. 26) forming part of this Report.

STATUTORY AUDITORS

M/s. MSKA & Associates, Chartered Accountants (Firm Registration No.: 105047W) Chennai, the Statutory Auditors appointed by the shareholders for a period of five years from

2022-23 shall hold office from the conclusion of 51^st AGM till the conclusion of 56^th AGM of the Company on a remuneration of ?24 lakh plus out of pocket expenses and applicable taxes for audit and related services, for each year and the Board of Directors has been authorized to revise the remuneration during the term. There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in their Report on the Standalone and Consolidated Financial Statements of your Company for 2022-23.

COST AUDITOR

M/s. B Y & Associates, Cost Accountant (Firm Registration No. 003498) was appointed as the Cost Auditor of the Company for the year 2022-23 to carry out the audit of your Company's Cost Accounts and Records of fertilizer business. The Company is required to maintain Cost Records as specified by the Central Government under Section 148 (1) of the Act and that accordingly such accounts and records were made and maintained. The Cost Audit Report for the previous year ended 31^st March 2022 was duly filed within the time stipulated under the Act.

In accordance with Section 148(1) of the Act, the Company has maintained the accounts and cost records for 202223, as specified by the Central Government. The Board of Directors at their Meeting held on 24^th May 2023, on the recommendation of the Audit Committee, have re-appointed M/s. B Y & Associates, Cost Accountant (Firm Registration No. 003498) as Cost Auditor for the year 2023-24 at a remuneration of ?1,50,000/- plus reimbursement of actual out-of-pocket expenses subject to ratification by Members at the ensuing 52^nd AGM.

SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Act, Regulation 24A of Listing Regulations, your Company appointed Ms. B Chandra, Practicing Company Secretary, Chennai as Secretarial Auditor for 2022-23. The Company has complied with the requirements of the Secretarial Standards specified by the Institute of Company Secretaries of India constituted under Section 3 of the Company Secretaries Act, 1980, and approved as such by the Central Government.

The Secretarial Audit Report for the year 2022-23 as furnished is given as Annexure III (Page no. 29) to this Report. There is no qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditor in their Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions contained in Section 134 (3) of the Act, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the Management confirm that:

a) In the preparation of the annual financial statements

for the year ended 31^st March 2023, the applicable Accounting Standard had been followed along with proper explanation relating to material departures;

b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2023 and of the profit of the Company for the year ended on that date;

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

d) The annual accounts have been prepared on a going concern basis;

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

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

REPORTING OF FRAUDS BY AUDITORS

As per Section 143(12) of the Act, during the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee formed as per the requirements of Act.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

No loans or guarantees were given by the Company under Section 186 of the Act during the year under review. Your Company, during May 2022, pledged 34,00,000 equity shares of 10/- each held in Greenam in favour of Indian Renewable Energy Development Agency Limited (IREDA) to secure the term loan of ' 88 and '70 crores sanctioned to Greenam to meet its capital expenditure for its floating solar power project.

RELATED PARTY TRANSACTIONS

The transactions entered into by your Company during the year 2022-23 with Related Parties as defined under the Act were in the ordinary course of business and at arm's length basis. Details of contracts / arrangements with related parties as required under Section 188 (1) and 134 (h) of the Act in Form AOC-2 is attached as Annexure V (Page no. 32).

The details of transactions with any person or entity belonging to the Promoter/Promoter Group which holds 10% or more shareholding in the Company, in the format prescribed under Ind AS are furnished in Note No. 38 of Notes on Accounts.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY THAT HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT.

There has been no material changes or commitments affecting the financial position of your Company that has occurred between the end of the financial year i.e., 31^st March 2023 and the date of this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Conservation of Energy

Your Company has an Energy Audit group, which identifies potential areas for improvement, scans the environment for innovative and reliable solutions and considers proposal for implementation. Efforts are continuously being taken to reduce energy consumption in the Plants.

Some of the activities implemented during the year:

• Improvement to the efficiency of the Turbo Generator I.

• New boiler at the downstream of ammonia converter, generating 60mTPH of steam from the heat available with the gas, has been installed.

• Heat Recovery & Steam Generation system which recovers the heat from the Gas Turbine flue gas has been installed.

• Critical turbines were overhauled to improve the efficiency.

• Periodical Steam system audit was carried out and the faulty traps and leaks were addressed immediately.

Technology Absorption - Nil Foreign Exchange Earnings and Outgo

The foreign exchange earned in terms of actual inflows and the foreign exchange outgo in terms of actual outflows during the year:

INTERNAL FINANCIAL CONTROL & RISK MANAGEMENT SYSTEM

Your Company has adequate internal financial control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems were reviewed by Statutory / Internal Auditors and reported to the Audit Committee of the Board, for identification of

deficiencies and necessary time bound actions were taken to improve efficiency at all levels. The Committee also reviews the Report of Internal Auditors, key issues, significant processes and accounting policies. Risk Management is an integral part of the business process. Your Company pursuant to Listing Regulations has constituted a Risk Management Committee and has a Policy on Risk Management to identify and draw mitigation plans to manage risk. The Board of Directors reviews the Risk Management Report periodically.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future.

CORPORATE GOVERNANCE

Corporate Governance Report 2022-23 along with the Certificate of the Statutory Auditors, M/s. MSKA & Associates, Chartered Accountants, confirming compliance to conditions of Corporate Governance as stipulated in the Listing Regulations forms part of this Report.

PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS

Your Company has a structured framework for evaluation of the Individual Directors, Chairperson, the Board as a whole and its Committees. The Independent Directors at their Meeting held on 28^th March 2023 evaluated the performance of Non-Independent Directors, Board as a whole, the Chairperson and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Board of Directors at their Meeting held on 24^th May 2023 evaluated the performance of all Independent Directors and the Board as a whole and its Committees. The evaluation criteria was based on the participation, contribution and guidance offered and understanding of the business etc., which are relevant to the Directors in their capacity as Members of the Board/ Committees.

NUMBER OF MEETINGS OF THE BOARD / AUDIT COMMITTEE

The details of the Meetings of Board and Audit Committee held and its composition are provided in the Corporate Governance Report.

POLICIES

POLICY ON MATERIAL SUBSIDIARY

Company has a Policy on Material Subsidiary approved by the Board of Directors as per the Listing Regulations and is available on the Company's website under the web link:https://www.spic.in/wp-content/uploads/2021/02/ MATERIAL-SUBSIDIARY-POLICY.pdf

NOMINATION AND REMUNERATION POLICY

Your Company has a Nomination and Remuneration Policy as required under Section 178(3) of the Act and the Listing Regulations. The details of the Policy are available in Annexure I (Page no. 24) to this Report

POLICY ON RELATED PARTY TRANSACTIONS

The Policy on Related Party Transactions as required under the Listing Regulations and the Act, is available on the Company's website under the web link: https://www.spic. in/wp-content/uploads/2021/02/Policy-on-Related-Parties-30th-Mar-2022.pdf

POLICY ON INSIDER TRADING

Your Company has a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company in line with SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended. The details of the Policy are available on the website of the Company under weblink: https://www. spic.in/wp-content/uploads/2021/02/Policy-for-Determining Material-Events.pdf

POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH)

The Company has zero tolerance for sexual harassment at workplace. A policy is in place and an Internal Complaints Committee has been constituted which is monitoring the prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of POSH and the Rules made thereunder. There were no complaints reported under the POSH during the year under review.

VIGIL MECHANISM

Pursuant to the provisions of Section 177 of the Act and the Listing Regulations, Whistle Blower Policy for Directors and employees to report genuine concerns or grievances including reporting of instances of leakage of Unpublished Price Sensitive Information (UPSI) is in place and a Vigil Mechanism established, the details of which are available on the website of the Company under weblink: https://www.spic. in/wp-content/uploads/2021/02/Whistle- Blower-Policy-and-Vigil-Mechanism-24.03.2020.pdf.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has a CSR Policy in line with the provisions of the Act. As a responsible corporate citizen, your Company in its endeavour to contribute for the sustained development and growth of the Society at large has taken several initiatives voluntarily. Your Company is not required to spend towards CSR activities, in view of absence of profits computed under Section 198 of the Act. However, the details of CSR

initiatives undertaken voluntarily by your Company are given in Annexure IV (Page no. 31) to this Report. The details of the Policy are available on the website of the Company under weblink: https://www.spic.in/wp-content/uploads/2021/02/

Corporate-Social-Responsibility-Policy.pdf DIVIDEND DISTRIBUTION POLICY Dividend Distribution Policy has been formulated as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Second Amendment) dated 5^th May 2021. The details of the Policy are available on the website of the Company under weblink: https://www.spic. in/wp-content/uploads/2021/08/Dividend-Distribution-Policy. pdf.

MANAGEMENT DISCUSSION AND ANALYSIS Industry Overview

The year 2022-23 recorded higher agricultural production over the previous year with a marginal increase in the cropped area by 5.96 %. The increase in production of food grain, Oil seeds, Sugarcane and Cotton is 2.5%, 5.4%, 6.7% & 8.4%, respectively over the previous year. The uneven distribution of monsoon during Kharif resulted a reduction in the area under cultivation, while the Rabi crop compensated for this shortfall. The enhancement of support price (9%) by the Government for the produce propelled the area under cultivation during the year.

The overall availability of Urea during the year was satisfactory, inspite of reduction in imports. The supplies from the indigenous production increased by 14% at 28.49 million tonnes, from 25.08 million tonnes, a year ago. The total sales during the year stood at 35.73 million tonnes as against 34.18 million tonnes during the previous year.

Your Company continued to extend service to the farmers for improved cultivation practices, soil health management, integrated nutrient and pest management practices to bring down the cost of cultivation as well as to reduce the deposit of toxic residues in the environment.

Your Company undertook the following activities during the year.

1. DBT (Direct Benefit Transfer) in Fertilizers:

Your Company is the Lead Fertilizer Supplier (LFS) for Tamil Nadu and Puducherry. As an LFS, we ensured the active usage of ePOS devices to conduct Fertilizer Sales at the fertilizer retail points. The repeated conduct of awareness programs among the farmers and capacity building exercise to retailers in association with the officials of Agriculture Department and National Informatics Centre (NIC) ensured 95% adherence of fertilizers sales through ePOS devices. The nonadherence is due to non-functioning of ePOS machines due to network disturbance and power failures. There

are 12,763 ePOS machines have been deployed and monitored by us.

2. Pradhan Mantri Kisan Samridhi Kendra (PMKSK):

The Department of Fertilizers, Government of India has introduced a new concept of Pradhan Mantri Kisan Samridhi Kendra (PMKSK) during the year, with an aim to provide quality agri inputs & required services under one roof as an “one stop shop' for the farming community to impart the latest technologies in Agriculture for resource optimization and to increase the returns from the farms.

As per the mandate, your Company established 2,473 PMKSKs spread across Tamil Nadu, Puducherry, Kerala, Karnataka, Andhra Pradesh, Telangana & Maharashtra. These Centers provide support facilities for testing of soil, irrigation water & agri inputs like fertilizers & seed apart from educating the farmers to practice soil test based nutrient management, integrated pest management, soil health management, etc.

3. Mobile Soil Testing Lab Services (MSTL):

Through our Mobile Soil Testing Facility, we have extended the soil testing services to farmers located in the State of Tamil Nadu and in the bordering districts of the neighboring states of Karnataka and Andhra Pradesh. Based on the soil fertility reports, we encouraged the farmers to use enough manures for sustaining and improving the soil fertility and productivity levels.

4. Training to Farmers:

We offered In-house training programs to progressive farmers from the State of Tamil Nadu in our training center located at Tuticorin. The outreach programs were also conducted to farmer groups to impart latest agro technologies for enhancing economic returns from farming.

5. Model Integrated Agriculture Farm:

As part of the In-house training programs, we have established and managing a demonstration field of “an integrated agriculture farm” having high value agriculture crops, medicinal plants, mushroom cultivation and animal husbandry in Tuticorin. The trainees are exposed to this concept for quicker adaptation of Integrated Agriculture Practices for enhancing the returns from farming.

6. Pannai Cheythi Malar:

The bimonthly Tamil Magazine covers articles relevant to current challenges in farming with suitable solutions. The success stories of farmers adopting latest technologies are also published to create awareness.

This is becoming a platform for sharing new found knowledge / technologies in improving the productivity of farms.

Prospects for 2023-24

Rainfall forecast and demand estimation of Urea

As per IMD 1^st stage long range forecast for monsoon, India is likely to witness normal rainfall during southwest (SW) monsoon season. However, due to delay in the onset of the SW monsoon, delays and disruption in sowing is witnessed mostly from rain fed areas of southern states.

Considering this IMD forecast of normal annual rainfall, the country will be working towards a targeted food grain production at 332 million tonnes for the year compared to expected production of 328 million tonnes during 2022-23. Demand estimation of Urea for the year 2023-24 based on IMD report is encouraging. The estimated domestic production of Urea is close to 30 Million tonnes, with significant reduction in the imports. The additional quantity is expected from enhancement of production of existing units as well as from the commencement of production from new plants.

Nano Urea

Nano Urea, a liquid formulation containing 4 ~ 14 % Nitrogen has been introduced by Indian Farmers Fertilizer Cooperative Ltd (IFFCO) during 2021. This is recommended as a substitute product for the prilled and granulated Urea. The acceptance of this Nano Urea by the farmer is yet to gain momentum due to the instability of Nutrient content, non-compatibility with other agro chemicals and higher cost of application. As Urea forms 82 % of the total nitrogenous fertilizers consumed in India, Government is encouraging fertilizer companies to formulate strategies to replace Urea with Nano-Urea.

National Fertilizers Limited (NFL) and Rashtriya Chemicals and Fertilizers Limited (RCF), under administrative control of Department of Fertilizers, has signed Non-Disclosure Agreement (NDA) & Memorandum of Understanding (MoU) with IFFCO to transfer the technology of Nano Urea from IFFCO.

Your Company has entered into a research tie up with Tamil Nadu Agriculture University for a detailed field study to know the efficacy and phytotoxicity of Nano Urea in comparison

to SPIC Urea (Prilled Urea). This study will also reveal the economic benefit of using Nano Urea over SPIC Urea in Paddy cultivation. Once the field trails are completed, more information on the efficacy of the product to device suitable strategy of employing Nano Technology in Nutrient Delivery Systems would be available.

All India Urea Production, Import, Supplies and sales with previous year.

Tissue Culture Business:

Your Company supplies highest quality of Tissue Culture Banana plants to the farmers of Tamil Nadu, Andhra Pradesh, Telangana and Karnataka. Your Company is offering after sales services to the farmers by providing technical assistance on Banana cultivation. The unit is accredited by the Department of Biotechnology with NCS-TCP certification. Having got the protocols customized for the production of high value crops like ornamentals, orchids etc., your Company will enter into this ornamental plants segment in the near future. In order to increase the profitability by optimizing the cost, we are undertaking laboratory modernization activities with induction of higher efficiency machines with high energy consuming ones, redesigning the process flow, and adoption of new systems to enhance sterility standards in the production laboratories.

It is expected to be completed by December 2023, to commence the commercial production of high value crop plants by January 2023.

Financial Ratios

The significant changes in the financial ratios of the Company, which are 25% or more as compared to the previous year are summarized below:

CHALLENGES

Enhanced production and supply of Urea to the market: The enhancement in the production and supply is expected to the tune of 150 to 200 Kt per year. This enhancement is less than the imported stocks made available to southern states to meet the demand. With our increased supplies to southern states, it is expected that, the import of Urea will come down to that extend. The additional supply of Urea is in line with the objective of Government of India to be self-reliant in Urea. The current market share for Urea in TN is close to 30% and additional allocation from DoF will increase the share to 45 %.

The instances of sale of Urea without the use of ePOS machine at the retail locations: We have a system by which we can monitor the quantity of stocks available at each of the license holder in the state of TN. This helps us to identify the piling up of stock to undertake physical verification and completion of ePOS sales through the intervention of the State AGrl (Agriculture) Dept. In addition to this, our district

wise supply plan is very much dependent on the stock availability at all stages like Whole sellers' account and retailers' account. This enables us to moderate the supplies and to prevent the instances of sale of Urea outside ePOS machines.

ACKNOWLEDGEMENT

Your Company is grateful for the co-operation and continued support extended by the Department of Fertilizers, Ministry of Chemicals and Fertilizers, Ministry of Petroleum and Natural Gas, Ministry of Agriculture, Ministry of Shipping, Ministry of Corporate Affairs and other Departments of the Central Government, the Government of Tamil Nadu, Governments of other States, Tamil Nadu Industrial Development Corporation Limited, Tamil Nadu Generation and Distribution Corporation Ltd., Indian Oil Corporation Limited, Oil and Natural Gas Corporation Limited, Financial Institutions and Banks. The Directors appreciate the dedicated and sincere services rendered by all the employees of your Company.