Securing the present and the future

7/27/2019 Securing the present and the future

1/821

Securing the present and the future

Sustainability Report 2011-12


2/823

CHAMBAL SUSTAINABILITY POLICY

Chambal is committed to building a sustainable enterprise for the benefit of its presentand future generation of stakeholders. The Company has integrated responsiblepractices into its business strategies and operations to manage the three challenges economic prosperity, social development and environmental integrity.

Guiding Principles Towards this commitment, the Company shall:

Build a sustainable enterprise that effectively balances financial strengths withsocial and environmental responsibilities

Deliver sustainable top-line and bottom-line growth while maintaining the highestcorporate governance standards

Reduce its environmental footprint by investing in eco-friendly and reliabletechnologies and practices

Increase efficiency by optimum utilization of resources and technologyPromote sustainable farming practices to boost crop productivity in rural Indiathrough its soil testing facilities and advisory services

Work towards improving the quality of life by making the communities self-reliantin areas within which it operates

Build lasting social capital through interventions in the infrastructure, healthcareand education domains for the community residing in the vicinity of its fertiliserplants

Ensure welfare, growth and safety of all people associated with itEmpower its employees and continuously develop their knowledge and skill sets,so that they realize their true potential and drive the Companys growth

Promote inclusive growth and equal opportunity by remaining a caste, gender andreligion neutral organisation


3/824

31Opportunities, Threats andRisk Management

35Accountability Framework

39Stakeholder Engagement

43 Triple Bottom-line PerformanceEconomic Footprint

47 Triple Bottom-line PerformanceEnvironmental Performance

Table of Contents

8Securing the Present and the Future

6Chairmans Message

27About Chambal Fertilisers

26Report Parameters


4/825

57 Triple Bottom-line PerformanceSocial Responsibility

81Feedback Form

70Assurance Statement

72 National Voluntary Guidelines on social, environmental andeconomic responsibilities of business (Ministry of CorporateAffairs, Government of India)

74GRI Index

78Glossary of Terms

80Application Level


5/826

Chairmans Message

Dear Stakeholder,

It is my pleasure to present thethird Sustainability Report of Chambal Fertilisers and ChemicalsLimited. I take this opportunity toshare with you the sustainabilityperformance and relateddevelopments in the Company.

It is a historical fact that businesshas played an important catalyticrole in spurring development of

societies around the world, beit infrastructure development,employment generation, healthcaresupport, education services orpoverty eradication.

It is also true that social andbusiness development haveunfortunately led to environmentaldegradation, social inequities,

unsustainable consumptionand unbalanced life styles. Tomitigate the negative effects of such a development model, theneed of the hour is sustainability.

Sustainability, in fact, is theonly viable panacea for securingthe future of present and futuregenerations of our planetsinhabitants. It is the sensibleway to preserve and enrich theblessings of Mother Nature, whichis critical for the well-being andsurvival of the human species andother life forms.

To usher in a sustainable world,businesses, in partnership withother stakeholders of the civilsociety, have to take the lead. Therecent Rio+20 Conference andthe UN Global Compact CorporateSustainability Forum reiterated theneed for business involvement insustainable development.

At Chambal, our idea of sustainable development issynonymous with what we callLive Responsibly, a frameworkwe conceptualized last year. ToLive Responsibly is to ascribeto sustainability both on anindividual and collective basis. Itis a commitment to create lastingshareholder-value and wealth;

build societal capital; preserve andenrich natural resources; and findmore just and inclusive ways of living, working and doing business.

For Chambal, 2011-12 was ayear of opportunities coupledwith challenges. The performanceof the fertilizer division of theCompany was commendable

both in terms of profitability andrevenue. The Company recorded itshighest ever production and salesof urea. However, the shippingand textile divisions faced severe

recessionary trends and as a resulttheir performance was adverselyaffected.

In 2011-12, Chambal achieveda turnover of ` 6455.13 crore asagainst ` 4647.43 crore during2010-11. While our CompanysProfit Before Tax (PBT) increasedby about 27% as compared to the

previous year, there was a marginaldecrease in Profit After Tax (PAT)due to one time provision fordeferred tax liability on account of opting out of tonnage tax schemefor our shipping division. EconomicValue Generated by the Companyin 2011-12 was ` 6616.49 croreas compared to ` 4752.58 crorein the previous year, an increaseof 39%.

Urea production has been almoststagnant in India for the last 13years, whereas there has beena steady increase in demand of urea, resulting in a significant gapbetween demand and supply. TheGovernment is in the process of formulating a new investmentpolicy to encourage capacity

addition. The new policy willgive us the impetus for furtherexpansion in this space, whichis essential for the growth of ourCompany. We have also decidedto set up a SSP plant with anannual capacity of 2 lakh tonnesat Gadepan that will add to thebasket of nutrients that we offer tothe farmers. This plant is expected

to go on stream in the thirdquarter of 2012-13.

Chambal is committed to reducingits environmental footprint by


6/827

judicious consumption of naturalresources. Our two units atGadepan are amongst the lowestwater consuming plants in theindustry. During the reporting year,the specific consumption of waterwas 4.82 cubic meters per MT of urea as against 4.92 cubic metersper MT of urea during 2010-11.In the reporting year, we also

recorded our lowest-ever specificenergy consumption per tonneof urea for both our units i.e. 5.51Gcal/MT of urea at Gadepan Iand 5.37 Gcal/MT of urea atGadepan II.

Chambal is committed toimproving the quality of life of thepeople residing in the vicinity of its plants through its CorporateSocial Responsibility programmenamed Uttam Roshani. Forsustained focus on this activity, weestablished the K K Birla MemorialSociety (KKBMS) in 2011-12.Some special projects that we haveundertaken in the recent past are:

We have adopted 24 primary1.and upper primary governmentschools in 22 villages underthe Public-Private Partnershipscheme of the Government of Rajasthan. This initiative aims

to extend quality education tochildren and will make efforts tocontrol school drop-out rates,especially among girls.

Chambal had adopted ITI -2.Sangod, (Rajasthan) in 2010-11, under the Public-PrivatePartnership Scheme of RajasthanGovernment. In the reportingyear, we undertook majorupgadation of the infrastructureby repairing and renovatingthe building. We have alsoprocured equipment and toolsto introduce four additionaltechnical streams which are dueto commence soon at this ITI.Our active involvement in theinstitute has resulted in campusplacements of 94 students

with some leading companiesincluding Chambal Fertilisers.

Chambal established 15 Village3.Learning Centres in its vicinityto promote Girl Child educationthrough an NGO IIMPACT for capacity-building of thesechildren and bring them backin the mainstream governmentschools.

For us, the health and safety of our people is a strategic priority.

We operate our plants as per the

highest international benchmarksof health, safety, environment andquality. The Company has wonmany international safety awards.

The reporting year 2011-12 wasan accident-free year and theCompany completed 9.03 millionman-hours (654 days) of safeoperations.

Our third Sustainability ReportSecuring the Present and theFuture gives our Triple BottomLine performance on all 49 coreindicators and conforms to A+Application Level of GRI-G3guidelines. The report has beenexternally assured by a third party-Ernst & Young.

In the end, I would like to reiteratethat if businesses and the worldare serious about securing theirpresent and future, they willhave to learn to Live Responsibly.Chambal, on its part, is committedto making that goal an intrinsicpart of its business ecosystem.

With best wishes,

Saroj K. Poddar Chairman


7/828


8/829

Inspired by a vision to Live Responsibly or put sustainability in action,Chambal has created a business eco-system to serve the interests of itspresent and future generations of stakeholders.

The principal tenets of the Chambal business eco-system are:

A belief in the inter-connectedness and inter-dependence of all lifeforms; and their intrinsic unity with planet Earth. The core idea beingthat because the well-being of one impacts the well-being of all,development has to be inclusive.

A commitment to balance the need to consume Earths resources, withthe bigger need to preserve and replenish them.

The idea that an organisations basic drive to create wealth has to bemaximized, but balanced by the need to create social capital.

The belief that integrity, transparency and fairness in business dealingsare the cornerstones of a responsible organisation.

And Finally, an important responsibility of an organisation is to createan environment for ensuring that employees lead safe, healthy andhappy lives.

Securing the presentand the future


9/8210

I understand that thefuture of my business

depends on crops beinggrown more sustainably.Chambal is a trustworthypartner in this endeavour.

Ajit Singh, Chilli Farmer


10/8211

We are actively promotingsustainable farming practices

At Chambal, the key focus of our sustainable farming programme(christened Uttam Bandhan) is soil health.

We are helping over 90,000 farmers in ten states to address concernsabout nutrient-deficient soils, poor quality agri-inputs, falling watertables and indiscriminate use of fertilizers and pesticides.

Our two agriculture development institutes at Sriganganagar andAgra, string of satellite labs at Kota, Baran, Brundi and Jhalawar andtwo mobile vans carry out over 65,000 soil tests every year. The soilreports are used to advise farmers on the correct use of agri-inputs, cropplanning and good agricultural practices.


11/8212

Chambal is

playing a key role inraising the standardof living in our

village.Sunita Ram, Housewife


12/8213

We are implementing a slew of societal value creation programmesfor accelerating economic growthand social development

Uttam Roshani is Chambals over-arching CSR initiative for creatingcomprehensive development in 22 villages that are in the vicinity of ourplants at Gadepan.

The programme has five spearheads to help us realize our developmentobjectives: education, healthcare, livelihood, rural infrastructuredevelopment and agriculture and veterinary services. Each of theseinitiatives has been designed to elicit public participation and leadershipat the grassroot level.


13/8214

Chambal shares ourconviction that business

and civil society mustwork jointly towardsbuilding sustainable

communities.Rekha Solanki, K K Birla Memorial Society


14/8215

We are strengthening the bandwidthof our outreach programmes byforging a strong partnership withNGOs and civil society

We are promoting the participatory model of development bypartnering NGOs, civil society, domain experts, local government andself-help groups on the ground.

This is helping us shed the ivory tower mindset and get a pulse of the real needs and problems of local communities. In this way, we aremaking well-targeted interventions in education, healthcare, agricultureand livestock development, environment, infrastructure development andentrepreneurial skill building in 22 villages that lie in close proximity of our manufacturing plants.


15/8216

I believe the schoolChambal establishednear my village is astepping stone to

realizing my dreams.Sukhman Singh, Class 7 Student


16/8217

We are securing the future of futuregenerations of rural communitiesby strengthening the educationinfrastructure

Chambal believes that education is the critical catalyst for raising theaspiration levels of children and ushering in social development that istruly sustainable.

We are making important interventions in strengthening the educationalquotient of village communities under the Uttam Roshani programme.

The focus areas are upgrading existing infrastructure, developingeducational materials, making schooling accessible to the underprivilegedsections of society and building capacity of teachers.


17/8218

Chambal has struck

the right balance byequating the concernsof shareholders with

those of society.Mathew George Chandy, Vice-President

- Corporate Banking, HDFC Bank


18/8219

We are pursuing a comprehensivebusiness strategy, whose twin pillarsare wealth creation and sustainability

All our efforts are directed toward enhancing productivity andexcellence with a view to achieving sustained growth and profitability.

This wealth creation objective is balanced by our commitment tobuilding environment and social capital.

We have successfully embedded sustainable practices into our businessstrategies, manufacturing value chain, product life cycle and communitydevelopment programmes.


19/8220

As a supply chain vendor, I fully endorse

Chambals sustainability vision and programmes.

Narinder Arora, General Manager Corporate Retail and Industrial Sales

Bayer CropScience Limited


20/8221

Chambal believes that to achieve lasting sustainability, all its

stakeholders have to come on board. Thats why we are closely workingwith all our important stakeholders in the value chain suppliers,contractors and service providers sensitizing and encouraging them toimplement sustainable practices in a time-bound and realistic manner.

While adhering to the highest corporate governance standards,we encourage our stakeholders to conform to similar benchmarks of responsibility, ethics, transparency and integrity in the conductof business.

We are engaging with and persuadingour partners to conduct theirbusiness in a responsible manner


21/8222

Chambal is a competency-driven organisation where

individuals get opportunities torealize their career potential andare encouraged to lead qualitylives outside the work place.

Ankush Jain, Deputy Manager, Finance, Chambal


22/8223

Chambal is committed to a workplace environment that helps employees

realize their career potential and enhance their quality of life.

The Company has a well-defined HR programme which has incorporatedsome of the worlds best HR practices to help us fulfil the abovetwin objectives. These practices cover a large number of areas suchas empowerment, continuous learning, leadership capacity building,meritocracy and equal opportunity.

We also strive to keep every Chambal employee healthy and safe. The Company has an international standard safety and occupationalhealth programme conforming to OHSAS 18001:2007.

We are encouraging our employeesto achieve the right work-life balancein their lives


23/8224

Chambal employeesare playing a key role inreducing our carbon and

water footprint as perregulatory environment

standards.Vishal Mathur, DGM, HR, Chambal


24/8225

We are sensitizing our employeesto adopt a more proactiveapproach for the conservation andenrichment of the environment

Chambal is committed to investing in eco-friendly technologies andpractices across the business value chain. The key objectives of ourenvironment preservation and regeneration programme are optimizingresource efficiency, managing waste, controlling pollution, re-chargingground water and using green energy where ever possible.

We adhere to the best international environment standards such asISO-14001:2004 (Environment Management System Standard) andISO-9001:2008 (Quality Management System Standard).


25/8226

Report Parameters

to remain in accordance with theGlobal Reporting Initiative (GRI)Sustainability Reporting (2006) GRIG3 Guidelines.

In addition, this report is in compliance with the National Voluntary Guidelineson social, environmental and economicresponsibilities of business (Ministry of Corporate Affairs, Governmentof India). Te nine principles of theguidelines have been mapped againstthe disclosures in this Report in therelevant sections.

Indicator Selection and Applicationlevel

Tis report has been prepared as perA Application level and includes all49 core performance indicators and7 additional indicators which arematerial to the organisation.

Boundary, Scope and Data Collection

Te report boundary comprehensively covers our two urea plants, at Gadepan,District Kota, Rajasthan (India) andalso covers social performance (socialdevelopment and outreach, workforcebreak-up, employee turnover andproduct responsibility) of agribusiness.

Te Economic Performance data reported is drawn from Companysaudited Annual Accounts for FY 2011-12 unless otherwise stated.

Te performance data does notinclude data from residential townshipat Gadepan (Kota) and informationrelated to traded products, unlessotherwise explicitly stated. All nancialgures in the report are in IndianRupees, unless otherwise indicated.

In order to show trends, most of theperformance indicators have been

presented for three years - FY 2009-10,FY 2010-11 and FY 2011-12.

Tis report was made possiblethrough the collaborative efforts of our various departments: Production,Environment, Utilities, Safety,

echnical, Stores, Marketing,Finance, Legal & Secretarial, HumanResources, CSR and CorporateCommunications.

Disclaimer

Te terms Chambal, the Company,the organisation, we, us, refers toChambal Fertilisers and ChemicalsLimited and are used purely forconvenience sake and is not intendedto mislead the reader.

Assurance

Te contents of this report have beenveried by an independent consultant,Ernst and Young Pvt. Limited.Teir Assurance Statement is includedin the report.

Te corporate office of ChambalFertilisers and Chemicals Limited islocated atCorporate One, First Floor5 Commercial Centre, Jasola

New Delhi - 110 025 India Phone: +91 11 46581300 / 41697900Fax: + 91 11 40638679

Any query with respect to this reportmay be addressed to CorporateCommunications at the above address ore-mail at [email protected]

Chambal Fertilisers and ChemicalsLimited is committed to build a sustainable enterprise that effectively balances nancial strengths with socialand environmental responsibilities.

Tis Sustainability Report is a partof a broader stakeholder disclosureprocess, which includes Chambals

Annual Report, websites and otherpublications.

Purpose and Audience of Reporting

Trough the third edition of ourSustainability Report, we wish tocommunicate with our stakeholdersabout our sustainable developmentpolicies, practices and performance forFY 2011-12.

Chambal Fertilisers initiated reporting its sustainability performance in FY 2009-2010. Its last Sustainability Report titled Live Responsibly waspublished for the FY 2010-11 andconformed to A+ Application levelof GRI.

Te Corporate Sustainability Reportof the Company is published annually and is distributed to its key stakeholdersas well as electronically transmitted toits shareholders.

Dening the Report Content

Tere has been no signicant changein the reporting scope or boundary limits over the last year. Te reporting principles and methodology continues


26/8227

Te Legacy t

Te Fortet

Shareholding Patternt

Market Presencet

Brands and Productst

Other Businessest

Awards and Recognitionst

AboutChambal Fertilisers


27/8228

supplies products for each stage of thecrop cycle and provides services whichhelp promote sustainable agriculture.

We provide, through our dealers,urea and other agri-inputs like DAP(di-ammonium phosphate), MOP(muriate of potash), SSP (single superphosphate), pesticides, seeds andother micro nutrients. Most of these

About Chambal Fertilisers

Te Legacy

Chambal Fertilisers was established in1985. Te rationale for setting up theCompany was sound. 70% of India

was an agrarian society. Tere was anacute shortage of fertilizers, which wasthe basic need of farmers. Tere was a clear need for self-reliance in such animportant eld as agriculture. ChambalFertilisers and Chemicals Limited waspromoted by Zuari Industries Limited(A part of the K K Birla Group) tomeet the farmers need of quality agri-inputs at their doorstep. It also madeeconomic sense.

Te Forte

oday, we are one of the largest privatesector fertiliser producers in India.Our two hi-tech nitrogenous fertiliser

(urea) plants are located at Gadepanin Kota district of Rajasthan. Te twoplants produce over 2 million tonnesof urea per annum. Te rst plant wascommissioned in 1993 and the secondone in 1999. Both the plants use state-of-the-art technology from Denmark,Italy, United States and Japan.

Shareholding Pattern

Te equity shares of the Company arelisted at the National Stock Exchange of India Limited and the B S E Limited.Its shareholding pattern as on March31, 2012 is given in Graph 1.

Market Presence

Chambal caters to the needs of thefarmers in eleven states in northern,eastern, central and western regionsof India and is the lead fertiliser

supplier in the state of Rajasthan.Te Company has a vast marketing network comprising 12 regional offices,1,700 dealers and 20,000 villagelevel outlets.

Te agri-business division of theCompany operates in the following states:

BiharChattisgarhGujaratHaryana

Jammu & KashmirMadhya Pradesh

Maharashtra PunjabRajasthanUttar PradeshUttarakhand

Brands and Products

Te key driver of Chambals agri-business is a vision to provide integratedcrop solutions to farmers. At the

forefront of this vision is its agshipUttam Bandhan programme, one of thelargest technology-based interventionsby a private sector fertiliser Company,

which is ensuring re-vitalization of cultivable land in rural India. Chambal

Chambal Fertilisersand Chemicals isone of the largest

private sector fertiliserproducers in India. Itstwo plants produce

over 2 million tonnesof urea per annum.

Graph 1: Shareholding pattern


28/8229

products are sourced from reputedsuppliers and sold under the Uttamumbrella brand. Te Company isa leader in the pesticide business innorth India.

Other Businesses

Chambal Fertilisers has consolidatedits position in the agri-businessand diversied into other sectors.Its shipping division under thename India Steamship operates 6

Aframax tankers with a combinedcapacity of over 6,00,000 DW .Birla extile Mills is the textile divisionof Chambal Fertilisers, located atBaddi, in Solan district of HimachalPradesh. Te mill has a state-of-the-artspinning unit with a capacity of over83,000 spindles.

Additionally, we have a joint venturein Morocco for manufacturing phosphoric acid; and subsidiaries inthe software sector.


29/8230

Chambals agri-business vision is to provide integrated cropsolutions to farmers. The key driver of this vision is its flagship

Uttam Bandhan programme, one of the largest technology-based

interventions by a private sector fertiliser Company, which isensuring re-vitalization of cultivable land in rural India.


30/8231

Global Sustainability rendst

Risk Management Framework t

Fertiliser Industry Structure and Developmentst

Opportunities & Treatst

Risks and Concernst

Outlook t

Opportunities, Threatsand Risk Management


31/8232

Opportunities, Threats and Risk Management

I. G LOBAL SUSTAINABILITY TRENDS

Chambal keeps itself abreast of globalsustainability concerns like energy consumption, eco-friendly packaging and responsible labeling and voluntary programmes like Responsible Care, IFA (International Fertilizer Association)guidelines, etc. Te Company has alsoimplemented voluntarily codes likeProcess Safety Management (PSM) to

ensure high level of safety at its plants. We benchmark ourselves with the bestin the international arena by continuously re-assessing and investing in the latest systems, processes andtechnologies.

II. R ISK M ANAGEMENT FRAMEWORK

We understand that continuousassessment of our risk prole willdetermine the level of our economic

success. Te Companys presencein various businesses requires it toidentify, measure and manage its risks

effectively, and to allocate necessary resources for the same.

At Chambal, the key responsibility of Risk Management vests with theBoard of Directors. Our robust Risk Management Policy framework helpsus identify our inherent key and non-key risks. Te policy is reviewed on a half yearly basis and the changes along

with the revised policy are informed tothe Board.

III. F ERTILISER INDUSTRY STRUCTURE AND DEVELOPMENTS

a) Raw Material

Natural gas is the main input forproduction of urea. Te natural gassupplies in India are through twosources: a) Domestically producednatural gas and b) Re-gasied Liquied

Natural Gas (RLNG). Te internationaloil prices have a direct bearing on thegas prices due to a close correlation

between oil and gas prices. Tere were high hopes of abundant naturalgas supply upon commencement of supplies from KG-D6 gas elds of Reliance Industries Limited (KGD6).However, the euphoria was cut short by dwindling natural gas production fromKG-D6. Tis has put more pressure onthe supply side and in turn, on prices of natural gas in the spot market in India.

Te increasing demand-supply gap isbeing met through spot RLNG whichis costlier than gas being supplied fromother sources. Tis cost has furtherescalated due to weakening of theIndian Rupee against the US Dollar.

We have a range of suppliers of naturalgas; and our urea plants at Gadepanare using gas in the form of feed andfuel. Te Company has long termgas supply agreements for its needs.RLNG constitutes a major quantumof gas supplies and the prices underthe contracts have been rising due toincrease in the international oil prices.

We resort to buying gas on a spot basisto sustain the urea output in the eventof reduction in supplies from long term sources.

Chambal keepsitself abreast of

global sustainabilityconcerns like energyconsumption, eco-

friendly packagingand responsible

labeling.


32/8233

The Governmentof India is currently

working on theNew InvestmentPolicy (NIP) to

create a conduciveinvestment climate

for the ureaindustry.

new investments in the urea sectorand thereby reduce the countrysdependence on costly imports.

c) Developments in Government Policies

New Pricing Scheme (NPS) StageIII which was valid up to March 31,2010, has been further extendedprovisionally.

Te Government of India is currently working on the New Investment Policy (NIP) to create a conducive investmentclimate for the urea industry. TeCompany is actively tracking thesedevelopments and poised to makeinvestments as and when a favorablepolicy is announced by the Governmentof India. Te New Investment Policy isexpected in the current scal.

Te Government of India proposesto give fertiliser subsidy directly to thefarmers as against routing it throughfertiliser producers. Te task forceconstituted to implement the directsubsidy to farmers has suggested a three phase road-map for this purpose.

Under Phase-I, the data regarding supply of fertilisers up to the retailerpoint has to be captured in thesystem. Phase-II envisages paymentof fertiliser subsidy to the retailers.Under Phase-III, the subsidy will bepaid directly to the farmers. Phase-Iis currently under implementation.Te roll out of Phase-II was plannedfrom 1st June 2012, but nal decision isstill pending.

IV. O PPORTUNITIES & T HREATS

We are continuously tracking Government policies. Tere is hopethat the new investment policy willaddress the concerns of the industry and will act as a catalyst for long awaited investments in the urea sector.

We are gearing up to expand capacity in the fertiliser business and have

commenced several preparatory activities. However, shortage andincreasing prices of natural gas is a major challenge to the expansion plansof the Company.

b) Demand Supply Scenario

Urea production has been almoststagnant in India for the last 13 years

whereas there has been a steady increasein demand for urea, resulting in a signicant gap between demand andsupply. While no new plant has comeup since 1999, small capacities havebeen added through de-bottlenecking projects. Te country is, therefore,far from self-reliant in nitrogenousand phosphatic fertilisers. India hasimported around 8.0 million tonnes of urea during 2011-12. Large imports of urea by India, signicantly impact theinternational urea prices. Urea importprices were volatile during the yearand varied between USD 350 andUSD 550 per M . A positiveGovernment policy interventionis urgently needed to encourage


33/8234

Implementation of Nutrient BasedSubsidy by the Government of India has given major impetus to the trading activity of the Company. Te strong marketing network and brand imagegives an upper hand to the Company in ramping up sales volumes of tradedproducts.

We are setting up a single superphosphate (SSP) production facility at Gadepan with a capacity of 600M per day. Production is expectedto commence in the third quarterof the Financial Year 2012-13.SSP is used as a substitute to di-ammonium phosphate (DAP) and has

very good potential in view of the highprices of DAP.

V. R ISKS AND CONCERNS

Te urea segment of the fertiliserindustry operates in the Governmentcontrolled regime, placing highdependence on urea pricing policy

of the Government of India. Further,in a rising interest cost environment,delays in payment of subsidy by the Government may cause seriousnancial burden on the industry. Highvolatility in foreign exchange rates andlikely reduction in demand of DAPdue to high market prices may impact

the protability from trading activitiesof the Company.

VI. O UTLOOK

Urea is not likely to face any challengein terms of sales volumes due tothe huge demand - supply gap. Tepositive monsoon predictions arelikely to support the growth plans of the Company in traded products andproposed SSP production. Considering the huge demand - supply gap and everincreasing subsidy outgo on importedurea, it is expected that Governmentof India will come out with a urea investment policy which will attractdesired investment in this sector.

Implementationof Nutrient Based

Subsidy by theGovernment of India

has given a majorimpetus to the

trading activity of the

Company.

The Companyis setting up

a Single SuperPhosphate (SSP)

productionfacility at

Gadepan with acapacity of 600

MT per day.


34/8235

Board of Directorst

Governance Committeest

Investor Servicest

Code of Internal Procedures and Conduct fortrading in Securities of the Company

Code of Conduct and Ethicst

Prevention of Corruptiont

Public Policy t

AccountabilityFramework


35/8236

Accountability Framework

Chambal believes that corporategovernance is not just limited tocreating checks and balances. It is moreabout creating organization excellenceleading to increasing employee andcustomer satisfaction and shareholdervalue. Te primary objective of corporate governance is to createand adhere to a corporate cultureof conscience and consciousness,transparency and openness, to developcapabilities and identify opportunitiesthat best serve the goal of value creation.

We believe we must leverage ourhuman and capital resources totranslate opportunities into results,create awareness of our corporate visionand spark dynamism andentrepreneurship at all levels.

Above all, corporate governancemust balance individual interest

with corporate goals and operate within accepted norms of propriety,equity, fair play and a sense of justice.

Accountability and transparency

are key drivers to improve decision-making and the rationale behindsuch decisions, which in turn createsstakeholder condence.

At Chambal, the Board of Directorsstrive to create an environment, whichis conscience-driven, accountableand ensures that the managementand employees act with integrity andresponsibility. As the highest decisionmaking body of the organisation, theBoard relentlessly pursues long-term


36/8237

securities, issue of duplicate certicates,review and redressal of investorgrievances, decide the dates of book closure/ record dates in respect of theshares issued by the Company, etc.In order to provide quick service toinvestors, the Board has delegatedenough powers to a few executives todeal with various matters including transfer of shares across the counter,transmission of securities, etc.

3. Remuneration Committee

Te Committee was formed torecommend appointment of Managing Director(s)/ Whole ime Director(s)/Manager and to review and approvethe remuneration including thecompensation package, annualincrements, incentives, additionalperquisites, etc. of the Managing Director(s)/ Whole ime Director(s)/Manager and Senior Executives of the Company.

4. Banking and Finance Committee

Te Committee was formed to approvesanction of various types of nancesincluding working capital facilities,

loan facilities, etc. and any otherspecic matter delegated by the Boardfrom time to time.

5. Project Monitoring CommitteeTe Committee was formed anddelegated powers to review progress of various projects of the Company andapprove contracts of certain value.

corporate values and sets the strategicframework for growth.

As on 31 March 2012, the Boardconsisted of nine Directors, including one Managing Director and eightNon- Executive Directors, of whichve are Independent Directors.

GOVERNANCE COMMITTEES

Te Board of Directors review the performance of the Company from time to time. Tere are eightCommittees of the Board of Directors,

which have been delegated adequatepowers to discharge urgent business of the Company.

Senior officials of the Company helpthe Directors in the discharge andimplementation of their duties. TeCompany pays sitting fees to the Non-Executive Directors for attending the meetings of the Board and itscommittees. Apart from the sitting fee,the Company pays commission to each

of the Non executive directors.1. Audit Committee

Apart from all the matters provided inClause 49 of the Listing Agreementand Section 292A of the Companies

Act, 1956, the terms of reference of the Audit Committee include:

Approve internal audit programme;tReview with statutory auditors theirtndings, observations, suggestions,internal control systems, scope of audit, other related matters andmajor accounting policies followedby the Company;Review the contracts entered intotby the Company, valuing morethan ` 75 million and the contractsentered in the register maintainedunder Section 301 of theCompanies Act, 1956, if any; and

Review Internal Audit Reports.t2. Investors Grievance Committee

Te Committee was formed to approvethe matters relating to allotment of

The Board of Directors strive

to create anenvironment, which

is conscience-driven, accountable

and ensures that

the managementand employees actwith integrity and

responsibility.


37/8238

6. Quarterly Results Review Committee

Te Committee was formed to deal with all the matters pertaining toapproval of the unaudited quarterly results of the Company.

7. Compensation Committee

Te Committee was formed toformulate Employee Stock OptionScheme and its administration.

8. Restructuring Committee

Te Committee was formed to explorevarious options to restructure theshipping business of the Company,recommend to the Board suitableoption(s) for restructuring of theshipping business and do all other acts,deeds and things as may be necessary in this regard.

INVESTOR SERVICES

As on 31 March 2012, we had a baseof 1,72,042 shareholders. o provideprompt service to the investors throughquick redressal of investor grievances,

we have an in-house Investor ServiceCentre. Te motto of high investorsatisfaction is being pursued throughproactive actions like reaching out toinvestors regularly, timely reminder toinvestors about unclaimed corporatebenets, etc.

CODE OF INTERNAL PROCEDURES AND CONDUCT FOR TRADING IN SECURITIES OF THE COMPANY

We have a Code of Internal Proceduresand Conduct for rading in Securitiesof the Company. Tis code, inter alia,prohibits purchase and sale of sharesof the Company by our Directors,Officers, Designated Employees andtheir dependents while in possession of unpublished price sensitive information

relating to the Company.

CODE OF CONDUCT AND ETHICS

In order to maintain the higheststandards of ethics and governance

while conducting of our business anddealings, we have adopted a Code of Conduct and Ethics. Te Code actsas a guiding document for suggestivebehavior in dealing with the Company,fellow directors, employees and theexternal operating environment. Tepurpose of this code of conduct is topromote conduct of business in anefficient and transparent manner and

to meet its obligations to shareholdersand all other stakeholders. Tis code of conduct is also a tool in carrying outthe Companys social responsibility in a more effective manner. It is applicableto the Board of Directors and membersof the core management team including members of management one levelbelow executive directors and allfunctional heads. Te Code covers issueslike regulatory compliance, conict of interest, bribery and corruption, safety,environment and health, nancial andoperational integrity etc.

All Board Members and SeniorExecutives of the Company affirmedtheir compliance with the Code of Conduct and Ethics during the year2011-12. A certicate to this effectforms a part of Annual Report for the

year 2011-12.

Te code is available at www.chambalfertilisers.com/images/pdf/Code_of_Conduct.pdf

PREVENTION OF CORRUPTION

We believe that we have to set exemplary standards of ethical behaviourand therefore have zero tolerancefor corruption at the workplace.In addition to the Code of Conductand Ethics, we have an adequateinternal system to control corruption.Te system comprises authorizationlevels, supervision, checks andbalances, nancial limits of authority and procedures through documentedpolicy guidelines and manuals, whichprovide that all transactions areauthorized, recorded and reportedcorrectly and compliance with policiesand statutes are ensured. Due to thisstrict internal control system, we donot foresee any need to conduct any corruption related risk analysis andrelated trainings for its employees.

Any proven cases of corruption resultin immediate termination of service.During the reporting year there wereno reported cases of corruption in theorganisation.

PUBLIC POLICY

Chambal actively participates in publicpolicy debates and discussions relating to fertiliser industry. Te Company isa member of various industry associations and safety councils bothin India and abroad. We regularly participate in various industrialforums to share insights and presentviewpoints on issues related to business,environment and society.


38/8239

Chambal Linkagest

Government of India/ Regulatorst

Investors & Bankerst

Employeest

Industry / Other Associationst

Suppliers / Vendorst

Local Communities / NGOst

Media t

Customerst

StakeholderEngagement


39/82


40/8241

Investors & Bankers

Shareholders

Advertisement in leading

National/ Regional dailies,business newspapers,Chambal website/Stock Exchange portals,Shareholders AnnualGeneral Meeting, Mail/e-mail /phone

Financial results

announcement, Importantcompany developments,Company Performance

Annual Reports/ Half Yearly Results/Reminderfor unpaid dividend,Shareholders queries

As per statutory/ businessrequirement

Financial Institutions/Bankers (Consortium of 11banks)

One to one interaction,Consortium Meetings/

Audits

Information submission, Working capital funding Regular

Employees

Dy. General Managersand above

Performance AnalysisReport Meetings

Review of businessperformance Monthly

All Employees

Engagement Survey,Performance ManagementSystems , raining Programs

Performance Improvement Action PlanCareer Development Plans

raining Needs

Periodical

Intranet, SAP Portal, In-house Magazine, E-mailNewsletter, Employee

Functions/ Picnics/ Get-togethers

Company Information/Policies/ Help desks/ Industry News,Celebrations

Regular

Industry / Other Associations

Industry / Other Associations(as per Figure 1)

Meetings, Seminars,Conferences, one to oneinteraction

Need based , Industry networking, Employeerelated, rainings, safety promotion activity

Regular

Suppliers / Vendors

Contractors / ServiceProviders / Suppliers /Vendors

One to one interaction /raining Programs/ Vendor Appraisal

Need Based/Quarterly performancereview

As per business requirement/ Regular

Local Communities / NGOs

4 Gram Panchayats covering 22 villages in the vicinity of Chambal Plants at Gadepan(Rajasthan) / NGOs

Health & Hygieneactivities, ree plantation,

Agriculture & AnimalHusbandry/ Livestock Camps, Rural infrastructuredevelopment, Vocational

raining Programs/ womenempowerment through Self Help Group, Educationsupport, Radio Programs

Regular


41/8242

Media

Media Advertising Campaign,Corporate Interviews/ PressReleases, Website

Company/ ProductInformation As per business requirement

Customers

Farmers

Plant Visits, one to oneinteraction, SMS Service/Phone Helpline, Website,Newsletter, Meetings,raining Programmes,

Promotional Campaigns

Crop / product relatedinformation Regular

Business Partners/ Retailers/Dealers

raining Programs/Meetings/ Surveys Regular

Table 1: Stakeholder groups and modes of engagement


42/8243

Economic Footprint

Triple Bottom-linePerformance


43/82


44/8245

Te Company has expanded its marketreach by setting up its marketing officeat Aurangabad which will cater toMaharashtra market. Te Company is planning to increase its presencein Punjab by opening a new office atBathinda, in addition to the existing office at Chandigarh.

Economic Value Generated by theCompany in 2010-11 was ` 66164.87million as compared to ` 47525.78million in the previous year, anincrease of 39%. Te Company Boardrecommended a dividend of ` 1.90per equity share in the reporting year.Te total dividend outgo for 2011-12

will be ` 919.08 million (including

Performance Snapshot FY 2009-10 FY 2010-11 FY 2011-12 Unit

ProductionUrea 2.03 2.10 2.15 Million M

Sales4

Urea 2.01 2.04 2.13 Million M

raded Items - SalesDi - ammonium Phosphate 141647 401487 524981 M

Muriate of Potash 86498 98278 52480 MSingle Super Phosphate 697 72311 108174 M

Pesticides 1625 1929 2433 Million `

Micro-nutrients and Zinc 423 537 406 Million `

Seeds 298 439 557 Million `

Prot Before ax (PB ) 3588 4408 5596 Million `

Prot After ax (PA ) 2491 3252 2473 Million `

Employees 853 878 932 NumberEnergy 4407733 4588682 4534277 GcalSpecic Energy Consumption

Gadepan I 5.640 5.550 5.51 Gcal/M Urea Gadepan II 5.432 5.440 5.37 Gcal/M Urea

GHG Emissions 1032995 1065306 1074692 M CO 2Specic Water Consumption 5.05 4.92 4.82 m3/M Urea Water Discharge 1307807 1144069 1454738 5 m3

Air EmissionsUrea Dust 751.33 783.12 759.87 M Ammonia 502.38 613.56 598.28 M

NOx 399.47 413.14 424.84 MTable 3: Performance at a glance 64 Ammonia Sales for the FY 2009-10, 2010-11 and 2011-12 was 14000 M , 18000 M and 13000 M respectively 5 Increase in water discharge is on account of increased raw water hardness and higher urea production6 Economic data pertains to the entire company


45/8246

dividend tax). otal subsidy income of the Company in 2011-12 increased to

` 32,155.85 million from ` 21,868.35million in 2010-11.

Chambal considers India as its localmarket and understands the associatedimportance of procuring major inputmaterial from within the country.Tis practice of ours not only makesgood business sense but also has a positive impact on the local economy.In the reporting year, a very largeextent our suppliers of goods and raw materials (Excluding capital equipment

and OEM spare parts) at our Gadepanunit, Kota were based in India.


46/8247

Environmental Performance



47/8248

Environmental Performance

Te need for a comfortable lifehas led humankind to create a highly consumption-oriented society Unbridled consumption which requiresvast amounts of energy is causing problems like resource depletion, global

warming and environmental damage.

We are committed to the conservationof resources and preservation of the ecosystem in which we operate.

We have set up a well-denedEnvironment Management Systemfocusing on energy efficiency,pollution prevention and control,renewable energy use, reduction,recycling and reusing of waste and

water. Raw materials, water, emissionsand energy consumption continueto be material issues for ourorganisation. We constantly monitorand analyze our performance on thesecritical issues.

R ESOURCE OPTIMIZATION

Te production of our key product,urea entails consumption of largeamounts of energy and water. Weare aware that the more we optimizeconsumption of these resources, themore sustainable our operations willbe. Each year, we raise the bar to lower

our energy consumption and take

necessary measures to achieve pre-dened targets.

Natural gas is the primary raw materialfor manufacturing ammonia, whichin turn, is used to produce urea.In addition to natural gas, we consumeprocess chemicals like poly alumina chloride, sulphuric acid, hydrochloricacid, lye, catalysts and resins insignicant quantities. Judicious use of resources is a fundamental economicprinciple for us and we strive continually to use our materials efficiently.

Our primary product, urea is suppliedto the farmer in HDPE or PPE bags.

o minimize consumption of

chemicals, we are following a well-dened resin replacement road map;and monitor and track chemicalconsumption regularly. We havealso trained operators for carrying out correct operational procedures.

Te material consumption gures with respect to urea and ammonia production are given in able 4:

R EDUCING OUR C ARBON FOOTPRINT

Widespread energy usage in all spheresof life has serious ramications onclimate change. Te fertilizer industry is a highly energy-intensive sector. Teindustry relies on both direct (natural

gas, naphtha, coal, furnace oil, etc)

Material Unit FY 2009-10 FY 2010-11 FY 2011-12Natural Gas 000' Sm3 805019 834947 851344Hydrochloric Acid M 1451 1534 1544Sulphuric Acid M 851 736 929Lye M 670 727 663Poly Alumina Chloride M 102 117 134Neem Oil Ltr. 551854Packaging Bags Nos 40570664 42083601 42986085Production Unit FY 2009-10 FY 2010-11 FY 2011-12

Ammonia Million M 1.18 1.22 1.24Urea Million M 2.03 2.10 2.15

Table 4: Resource Consumption


48/8249

Chambal has setup a well-defined

EnvironmentManagement Systemfocusing on energyefficiency, pollution

prevention andcontrol, renewable

energy use, reduction,recycling and re-useof waste and water.

During the reporting year, our directenergy consumption for Gadepan-Iplant was 2.51 million Gcal (10494354GJ) and for Gadepan-II plant,2.03 million Gcal (8489757 GJ).

We have our own natural gas basedcaptive power plants, hence we buy only small amounts of electricity fromthe grid. In the reporting period, ourindirect energy consumption was4354.4 Gcal (18231 GJ), which isapproximately 0.09% of our totalenergy consumption7.

GREEN HOUSE G AS EMISSIONS AND CLIMATE CHANGE

Te fertilizer industry recognizes thatit contributes directly and indirectly toemissions of greenhouse gases (GHGs),particularly carbon dioxide (CO2)and nitrous oxide (N2O), throughthe production, distribution and useof fertilizers.

Chambal is aware that use of cleanerenergy like natural gas instead of naphtha and promoting good nutrientmanagement practices amongstfarmers may partially offset increasedemissions.

Our strategy to achieve reductionsin GHG emissions are focused onincreasing our energy efficiency inthe short term; and plans toincorporate proven emissions-reducing

and indirect (electricity from the stategrid) sources of energy. Manufacturing of urea entails consumption of fossilenergy such as natural gas, naphtha, etcnot only as fuel but also as feedstock.Natural gas being the cleanest fossilfuel is preferred over naphtha.

We have initiated various technologicaland operational changes to reduce ourenergy consumption, utilize waste heat,strive for renewable energy options anduse energy efficient products, whereverpossible. We installed KRES in 2009and carried out revamping of our plantsin 2008-10. In the reporting year,

we undertook the following energy-efficiency programmes. ( able 5)

For the reporting year 2011-12,Chambals specic energy consumption

was 5.51493 Gcal/M and 5.37046Gcal/M of urea at Gadepan-I andGadepan-II plants respectively. Terehas been a reduction in specic energy consumption to the tune of 0.035 Gcalper metric tonne of urea and 0.07 Gcalper metric tonne of urea for Gadepan-Iand Gadepan-II respectively over theprevious year, which is mainly dueto the above mentioned schemes andstabilized operation of the plants.

In the reporting period, we used1379 Gcal (5774 GJ) of naphtha,

which was approximately 53% lesscompared to the previous year.

Replacement of CO2 stripper top trays with improved design trays inCO 2 removal section of Ammonia-II plant.

Replacement of Secondary Reformer catalyst with new catalyst in Ammonia-II plant.

Part replacement of natural gas line with higher size line to reduce thepressure drop in Ammonia-II plant.

Complete overhauling of air compressor along with replacement of high pressure and low pressure rotor in Ammonia-II plant.

Replacement of Ammonia Refrigerant condenser (EA-706) in Ammonia-II plant.

rimming of impeller of Hydrolyser Feed pump in Urea-II plant.

Table 5: Energy efficiency initiative in FY 2011-12

technologies in our operations in themedium and long terms.

Te major sources of emissions infertilizer production are use of fossil fuel(natural gas, naphtha, etc) as feedstock and fuel. We primarily use natural gas the cleanest of fossil fuel, as feedstock and fuel. Naphtha is used only onaccount of unavailability of naturalgas which is very rare. Use of naturalgas has helped us to keep our GHGemissions low. Almost all of the CO2 formed during ammonia productionis reused in urea production. TusGHG emissions from our operationsare primarily due to natural gas ornaphtha consumed as fuel. During the reporting period, GHG emissionsfrom the use of natural gas, naphtha asfuel and using electricity from the grid

were 1.07 million tCO2.

In the reporting period, we estimated558.87 M CO 2 emissions fromemployee transportation by buses/ cars(including personal vehicles) and othercompany operated vehicles in the plantarea . Tough these emissions are notsignicant in quantum, this exerciseis a small effort from our side inunderstanding GHG impacts beyondthe production process.

7 otal energy consumption = Energy used as fuel and purchased energy


49/8250

Graph 2 Graph 5

Graph 3 Graph 6

Graph 4Graph 2: Direct Energy Consumption (Energy as fuel)

Graph 3: Indirect Energy Consumption (Electricity purchased)

Graph 4: Specic Energy Consumption

Graph 5: Total GHG Emissions 8

Graph 6: Specic GHG Emissions

8 Excludes GHG emissions due to venting and aring during plant upsets/ trips and plant process.


50/8251

We are mitigating climate change by reducing energy consumption, using clean fossil fuel and by developing a green cover around our plants.Te green cover around our premiseshelps in sequestering CO2 emissionsfrom the atmosphere. In order tounderstand the GHG benet of extensive green cover at Chambal,

we conducted a preliminary study toestimate amount of CO2 sequesteredby trees. Tis exercise reaffirmsChambals endeavour to mitigateclimate change.

R EDUCING OUR W ATER FOOTPRINTFrom inception, we have viewed

water as a precious resource since ourfertilizer plants are located in a water-scarce state. o overcome this challenge

we have been working tirelessly formore than a decade to reduce our

water consumption per M of urea as well as implement rainwater harvesting in the region. We are committed notto use ground water for our operations.

reated waste water is being used inmaintaining the green belt through a 65 km long irrigation network spreadall over the Gadepan complex, whichin turn, is helping us save fresh water.In 2003-04, we had constructed a check-dam on the nearby Kalisindhriver (capacity 7 million m3). Anothercheck-dam (capacity 3.4 million m3)

built on the Parwan river for rainwaterharvesting was commissioned in thereporting year.

As a result of our continuous efforts likeharvesting, recycling and reusing water,

water consumption of our two unitsat Gadepan is much below the limitprescribed by Corporate Responsibility for Environment Protection (CREP)guidelines. Te Indian fertilizer industry has been permitted a maximum waterconsumption of 8 cubic meters pertonne of urea for gas-based urea plants,as per the CREP Guidelines. Tetrend of consumption at Chambalshows a continual improvement.During the reporting year, our specicconsumption of water was 4.82 cubicmeters per M of urea as against4.92 cubic meters per M of urea during 2010-11.

In the reporting year, our total water withdrawal from the Kalisindhriver was 10733995 m3 as against10988245 m3, in the last reporting year. In 2011-12, we replaced drinking

water/re water header and cooling tower drift eliminator, thereby reducing our specic water consumption by 2.033% compared to 2010-11.

R ESPONSIBLE EFFLUENT M ANAGEMENT

Under the guiding policy of atsource treatment of effluents andrecycling of treated effluents back into the process, we initiated thefollowing recycling processes at thedesign stage itself:

Ammonia and urea processtcondensates are treated in ammonia and urea plants respectively andrecycled into the process after passing

Graph 7: Water consumption in plant process Graph 8: Specic water consumption


51/8252

them through the demineralisationplant.

urbine condensate is also recycledtinto the process after treatment inthe demineralisation plant.

Boiler blow down water is reused astcooling water make-up.

Beside the above measures, theeffluents generated from other points

like seal water of pumps, steam trapsand sample cooler drains are sent tothe effluent treatment plant (E P)

where they are further diluted by othereffluent streams. E P also receivestreated effluents from DM plant, lterback wash water, etc. We have also setup a sewage treatment plant (S P)

which treats sanitary waste-water fromthe township.

In the reporting year, nearly 72% of waste water was recycled back intothe system, and the balance amount isused in the irrigation network withinthe complex. We do not use fresh-waterfor irrigation or horticultural purposes.During FY 2011-12, we used a totalof 1282932 m3 of treated effluent waterfor irrigation. We discharged 171806 m3 of waste water into the Kalisindh

Parameter Unit FY 2009-10 FY 2010-11 FY 2011-12 Permissible Limits(Mg/l)Biological Oxygen Demand Mg/l 10 7.9 8.0 30

Chemical Oxygen Demand Mg/l 69.5 63.7 52.8 250Nitrate Nitrogen Mg/l 5.7 6 6.2 10otal Ammonical Nitrogen Mg/l 5.4 5.7 6.5 50otal Dissolved Solids Mg/l 1400 1548 1768 2100otal Kjeldahl Nitrogen Mg/l 18.4 16.4 16 100otal Suspended Solids Mg/l 81 79 81 100

Table 6: Effluent discharge quality and their permissible limits

Parameter Unit FY 2009-10 FY 2010-11 FY 2011-12Biological Oxygen Demand M 13.1 9. 0 10.3Chemical Oxygen Demand M 90.9 72.9 67.7Nitrate Nitrogen M 7.5 6.9 8otal Ammonical Nitrogen M 7.1 6.5 8.3otal Dissolved Solids M 1831 1771 2268otal Kjeldahl Nitrogen M 24.1 18.8 20.5otal Suspended Solids M 105.9 92.1 103.7

Table 7: Effluent Load 9

Parameter Unit FY 2009-10 FY 2010-11 FY 2011-12

Biological Oxygen Demand Kg / 000 M Urea Production 6.45 4.29 4.8

Chemical Oxygen Demand Kg / 000 M Urea Production 44.76 34.71 31.55

Nitrate Nitrogen Kg / 000 M Urea Production 3.69 3.29 3.73

otal Ammonical Nitrogen Kg / 000 M Urea Production 3.50 3.09 3.87

otal Dissolved Solids Kg / 000 M Urea Production 901.62 843.26 1056.88

otal Kjeldahl Nitrogen Kg / 000 M Urea Production 11.87 8.95 9.55

otal Suspended Solids Kg / 000 M Urea Production 52.15 43.85 48.32

Table 8 Specic Effluent Load 9

9 Effluent load quanties total weight of standard effluent parameters such as Biological Oxygen Demand (BOD),otal Suspended Solids ( SS), etc. e.g; onnes/ year discharged.


52/8253

river in the rainy season in 2011-12. We ensure that the quality of thedischarge is within the norms speciedby the regulatory authorities.

SPILL M ANAGEMENT S YSTEM

Chambal has a well-denedEnvironmental Operation ControlProcedures (OCP) to prevent andmanage spills. Te Company regularly conducts integrity checks for reactors,vessels, anges, valves and pipelines forleaks. In order to keep a regular check,the drains are monitored at speciedintervals and these observationsare recorded and reported to themanagement. For each spillage, wecarry out root cause analysis and takecorrective and preventive actionsto ensure that such events do notoccur again. GV (geomarco vetrocoke) and beneld solution,chlorine, ammonia, urea, oil,

freon and naphtha, are a few of the substances for which we have

well-dened spill managementsystems in place. During the reporting period, there was a spillage of sulphuric acid (approx 0.32% of total

consumption) which was containedand reclaimed.

OTHER A IR EMISSIONS

In addition to GHG emissions,ammonia, urea dust, suspended


53/8254

particulate matter (SPM) and oxidesof nitrogen and sulphur are the majorair emissions from our manufacturing process. Various control measures andinitiatives to minimize air emissions aregiven below.

R ESPONSIBLE W ASTE M ANAGEMENT

Chambal has a comprehensive WasteManagement Manual under Health,

Safety, Environment & Quality (HSEQ) system which has thefollowing elements:

Categorizatiot n of wastes ashazardous and non-hazardous fordifferentiated management.

Identication at the lowesttcomponent level.

Linking all possible sourcestof generation and location of generation.

Concept of waste bins based ontcategories, placement of bins nearestto generation point.

Methodology of shifting to largertcategorized bins to collect wastesfrom smaller bins.

Identication of recyclers/reuserstand methodology of lifting segregated components from binsdirectly for nal disposal.

o manage household waste, we haveprovided non-biodegradable and bio-degradable bins to each household.

We collect segregated house hold waste from each house and send bio-degradable waste for composting and non-biodegradable waste fordisposal to recyclers. Similar practice of collection and disposal are followed for

domestic waste from bulk sources suchas canteen, guest house and shopping centre. Composting of horticulture

waste is carried out in NADEP pitsand used as manure in the green belt.

We understand the severe ramicationsof use of polythene bags; hence, wedo not permit use of polythene bags.

As a result, the township is now 100%free of polythene bags.

Inside the factory premises, we havecolour coded and labeled wastecollection bins and storage areas, andfor many wastes, we have restrictedaccess to authorized personnel.Te wastes generated in our plantslargely comprise used oil, spent catalyst,lead batteries, ferrous waste and waste

HDPE bags. We dispose off hazardous waste (except bio-medical wastes) toauthorized external agencies for thetransportation, treatment and naldisposal of such waste.

We also generate small quantity of biomedical waste at our occupationalhealth centre, which we dispose off in

FY 2009-10 FY 2010-11 FY 2011-12

kg CFC-11 equivalent

(ODS emission)25.03 30.86 15.62

Table 9: Ozone Depleting Substance (ODS) Emissions


NO x M 399.47 413.14 424.84

Urea Dust M 751.33 783.12 759.87

Ammonia M 502.38 613.56 598.28Table 10: Air Emission Load (Yearly average values)


NO x Kg/ M Urea production 0.2 0.2 0.20Urea Dust Kg/ M Urea production 0.4 0.4 0.35

Ammonia Kg/ M Urea production 0.2 0.3 0.27Table 11: Specic Air Emission Load (Yearly average values)

Earth Hour

This year, Chambalites

participated in the globallights out event byswitching off all non-

essential office lights beforeleaving the office buildingon Friday 30 March 2012,the day before The EarthHour. In addition, all the

employees were encouragedto participate by turning off the lights in their homes,

during the event.


54/8255

an environment friendly way as per therequired norm. We strictly adhere to all

laid down laws for storage and disposalof wastes.

SUSTAINING BIODIVERSITY

Since different species contributedirectly to the well-being of theecosystem, the healthy survival of future generations and in meeting development goals, it is of criticalimportance that diversity of species beprotected. Our vision and commitmentto work for the greater environmentalgood has led us to initiate somesignicant bio-diversity conservationmeasures. We have set up a fund incollaboration with Hadoti Naturalists

Society (a local body), and the ForestDepartment, Government of Rajasthan

to conserve wildlife and preserve thehabitat of endangered species at SorsanPreserve which is located about 10 kmfrom our manufacturing facility inRajasthan.

Our pro-active attitude and enthusiasmtowards environment conservationhave helped us develop 400 acres of green oasis (approximately 40% of the total land area) in the midst of a

rocky, barren and dry land allottedto us. Tis green oasis houses twoplants and a township with all thenecessary amenities for more than 400employees and their families. We have

planted many local and exotic plants inthe premises based on sound scientic

evaluation and developed water bodiesso that our intervention does notnegatively impact the local ora andfauna. oday, our ecological townshiphas more then 100 species of ora,and several animal and avian species(local and migratory) such as peacocks,monkeys, rabbits, reptiles and many non-predatory animals. Our townshipis also ISO 14001 and OSHAS 18001 certied.

o sensitize employees and theirfamilies on environment issues, weregularly organize nature walks, postercompetitions, nukkad nataks, tree

ype of waste reatment and Disposal 2009-10 Amount (Kg)2010-11

Amount (Kg)2011-12

Amount (Kg)Sharp waste Autoclaved and Buried 4.58 4.91 3.81

Contaminated waste Autoclaved ,chemically treatedand buried 4.82 5.42 5.29

Disposable waste reated chemically and buried 4.82 5.32 4.73Table 12: Disposal of Biomedical waste

Name of Waste Disposed ype of waste Unit FY 2009-10 FY 2010-11 FY 2011-12Spent Oil Hazardous M 23.36 25.74 36.43Spent Catalyst Hazardous M 83.16 163.81 71.1Ferrous Scrap MS drum Hazardous M 1.09 1.06 1.28Lead Acid Battery Hazardous M 0.45 0.77 1.54HDPE Scrap Non-Hazardous M 44.19 59.07 61.38Paper Non-Hazardous M 10.91 7.63 7.66MS Scrap Non-Hazardous M 313.87 86.63 118PVC Non-Hazardous M 12.85 9.79 7.32Resin Non-Hazardous Lit 21,000

Table 13: Major categories of waste disposed off


55/8256

plantations and bird watching trips. We also carry out interactions withBombay Natural History Society (BNHS) on environmental issues.Officials of BNHS visit the campusneed based and give suggestions andadvice on improving the ora in thecampus.

ENVIRONMENTAL E XPENDITURE

We incurred expenses deriving fromactions related directly and indirectly to the environment, as well as otherexpenses connected with ecological

fees and taxes. Direct environmentalinvestments are also made, suchas those related to environmentally-friendly technologies. Te expenditureon various initiatives towards

waste disposal, emissions treatment,and environmental managementincurred during the 2011-12 was

` 3.87 million.

Our proactive approach towards

conserving our environment showsour commitment to complying withthe environmental laws and securing our ISO 14001: 2004 and OHSAS18001:2007 certications.

ype of Expenditure Description of Expenditure

Direct and Variable cost incurred in ` MillionFY 2009-10 FY 2010-11 FY 2011-12

Waste disposal,

emissionstreatment andremediation costs

Cost of treating wastewater or disposing

solid waste/ sludge to an externalcontractor or destination plus operating and maintenance cost

1.12 2.63 0.44

Clean-up costs including costs of remediation of spills etc. 2.64

Prevention andenvironmental

management costs

Cost for employing external authoritiesfor lab testing and sampling 0.19 0.23 0.25

Annual costs of ISO 14001 and othersuch certications for managementsystems

0.23 0.03 0.06

Purchase of green fuel, recycledmaterials or any other such purchase toreduce environmental footprint

0 0.06 0

Consent to operate and otherenvironmental compliances 0.27 0.54 0.48

otal 1.81 3.49 3.87Table 14: Expenditure on Environment Management (Data has been rounded off)

World Environment Day celebrations

Week long activities were organized for increasing awareness,involvement and commitment of our employees, familymembers and contractors workforce towards the cause of protecting and preserving environment on the occasion of

World Environment Day 2011.

Additionally, trainings were organized covering contractorworkmen on control of urea spillage and waste management andfor our employees on legislative responsibility on environmentmanagement, pollution abatement, waste management andclimate change.

Children of Uttam Nagar came out with brilliant ideas duringthe spot painting competition. A written quiz on environmentwas conducted for children and the top 8 children participatedin an oral quiz on WED function. A Hindi film, ChangingClimates: The impact was screened for township residents.Uttam Nagar children enacted a drama Water World. In themorning, township residents organized an environment marchand planted trees.

Employees and their family members participated in poster and

slogan competitions. The families who consumed less water and electricity wererecognized for their commitment to the environment.


56/8257

Social Responsibility



57/8258

Social Responsibility

V ALUING HUMAN C APITAL

Chambal is an enterprise whosefoundation stones are integrity,transparency and accountability.

We believe in passionately pursuing excellence; and provide a work-lifebalance environment for all ouremployees. We encourage openand transparent communication topromote diversity of ideas at all levels.

Chambal is running two high-techplants at Gadepan, Rajasthan whichrequires highly qualied, motivatedand trained manpower. Terefore,retention of trained and experiencedmanpower is very critical for operationsof the plants. Our human resourcestrategy is aligned to our business needsand seeks to ensure that appropriate

talent acquisition and retention plansare in place and reviewed periodically.

As a part of our talent retentionstrategy, we have come out withsuitable interventions, including retention incentive and stock optionsfor key personnel. As a result, employeeturnover has continued to decline inthe last four years.

Chambal, a professionally managedcompany, has a team which is energetic,motivated and a perfect blend of youthand experience. In the reporting year,the average age of our employees was35.35 years as against 36.46 years in2010-11. As on March 31, 2012, thetotal employee strength of its agri-business division was 932. In addition,

we engaged 982 contract workersduring the reporting year.

Chambal is a merit-driven organization. We regularly recruit talent from thepremier management and engineering institutes of the country. We denelocal persons as those who reside withinIndia. General Manager and above areregarded as senior management in theCompany. While we do not have a specic policy for hiring senior officialsfrom the local community, 100% of

our senior management employees arefrom India.

EMPOWERING THE W ORKFORCE

Chambal is committed to empower its

employees and continuously developtheir knowledge and skill sets, so thatthey realize their true potential anddrive the Companys growth. Priority is always given to internal resources

when it comes to career and growthopportunities through job rotation,

job enrichment and promotion. Careerprogression of all our employees arebased on a well-structured and time-bound Performance ManagementSystem (PMS).

A professionally-managed company,

Chambal has a teamwhich is energetic,

motivated and aperfect blend of youthand experience.

Management LevelFY 2009-10 FY 2010-11 FY 2011-12

Male Female Male Female Male Female Less then30 yearsBetween 30to 50 years

More then50 years

Senior Management 20 0 19 1 17 1 0 7 11

Middle & JuniorManagement 449 5 455 5 492 5 127 338 32

Workmen 334 11 340 10 359 10 176 166 27

GE s / MOs /M s 9 0 19 1 21 0 21 0 0

rainees 25 0 28 0 27 0 27 0 0

Table 15: Composition of workforce (excluding contract workers) by category, gender and age

Graph 9: Workforce turnover in percentage


58/8259

Chambal also has a self-developmentscheme for employees to enhance theirknowledge and skills by enrolling inprofessional training courses. Underthis scheme, 50% of the tuition feesubject to a maximum of ` 50,000 isreimbursed by the Company.

Furthermore, we regularly train ourcontractual workforce on varioussubjects like emergency handling,rst aid, workplace safety, reghting, environment management

and general health and hygiene.

During 2011-12, 49 HSE (Health,

Safety and Environment) training

TRAINING AND DEVELOPMENT

At Chambal, training and developmentof people for their growth, aligned with the companys business needs,is an on-going process. Te training needs of our employees are capturedthrough the annual PMS. Tese needsare then categorized and evaluatedfor organizing customized training programmes. Apart from in-housetraining programmes, the employeesare also nominated for variousexternal management development

programmes.

Employee urnover 10 in 2011-12

Management Level Age Group Gender Region

Less then

30 years

Between 30

to 50 years

More then

50 yearsMale Female India

Senior Management11 0 1 0 1 0 1Middle & Junior Management 9 25 4 36 2 38

Workmen 18 5 0 23 0 23GE s / MOs / M s 9 0 0 0 0 9rainees 0 1 0 1 0 1O AL 36 30 5 69 2 72

Table 16: Employee turnover

10 Number of employees who leave the organization voluntarily or due to dismissal, retirement, or death in service.11 Does not include one senior management person transferred to a group company in FY 2011-12

, Def ensiv e Driving

& Heig ht, Energ y Conserv ation

, HA ZOP

Tribolog y & Lubrication Ma nagement

Prog ra mmable Log ic Controller

& S AP R efresher

Low Voltage Sw itch Gea r Ma intena nce

Graph 10: Average training time


59/8260

programmes were conducted, in which1289 contract workers participated.

EMPLOYEE BENEFIT SCHEMES

We have various employee benetschemes to secure the nancial futureof our staff. Te Chambal employeesenior staff superannuation fundand Chambal non-managementemployees superannuation fundprovides for pension benets tothem. Te provident fund schemeis managed by Chambal through a trust. Employees who have completed5 years of service are eligible forgratuity and the Companys employeesgroup gratuity trust fund provides forgratuity benets. Life insurance benetto each employee is also coveredunder gratuity and superannuationschemes. All employees are eligible forthe group personal accident scheme,group health insurance scheme andgroup term solution scheme. In case of accidents, the personal accident schemeensures compensation for treatmentexpenses, permanent/partial disability,permanent/temporary loss of earning capacity including salary componentand death coverage. Te health

insurance scheme covers hospitalizationexpenses of employees and their family members, while under the termsolution scheme life of each employee isinsured. All retired employees and their

spouses are covered under group healthinsurance policy up to the age of 85years. In addition, Chambal provideshome, vehicle and furniture loans toemployees according to eligibility atlow interest rates. All managementgrade employees are supported formembership of one professional body,

wherein the annual membership fee isborne by the Company.

W ORKPLACE S AFETY

Work place safety is a top priority for Chambal. Te reporting year2011-12 was an accident-free yearand the Company completed 9.03million man-hours (654 days) of safeoperations.

S AFETY M ANAGEMENT S YSTEMS A strong occupational-health andsafety management system OHSAS-18001:2007 is in place to ensuresafety of employees, contractor

workforce as well as equipment andmachinery. Te township at Gadepanis also OHSAS-18001:2007 certied.

We have implemented the ProcessSafety Management System (PSM)complying to Occupational Safety &Health Administration, USA (OSHA)standard CFR1910.119 in ouroperation for proactive identication,assessment and control of hazards.PSM is not mandatory but wasadopted by us to fulll our questfor highest safety standards in ouroperations. During the reporting

year, process incidents were reviewedas per PSM guidelines and trainingsand audits were conducted for overallimprovement of safety managementsystems.

EMERGENCY H ANDLING

We have a well-dened On-siteDisaster Management Plan which alsoinvolves local administration and otherindustries in the area. Regular mock drills and re drills were conductedto check the emergency preparedness.Te Company executives visit near-by companies and consultations are held

with them to share information andlearn from each others experience.

S AFETY TRAINING

In order to keep our safety systemagile and updated, extensive trainings

were conducted by internal andexternal expert faculties on rescue,re ghting and emergency handling,electrical safety, material handling androad safety.

Parameters 2009-10 2010-11 2011-12No. of Injuries 1 1 0No. of Fatalities 0 0 0Lost Days 68 91 0Injury Rate12 0.051 0.050 0Lost Day Rate13 3.49 4.55 0

Near-misses reported 260 342 454

Table 17: Safety Statistics 12 Injury Rate = ( otal No. of reportable injuries X 200000)/ otal No. of hours worked (permanent + contractual)13 Lost Day Rate = ( otal No. of lost days X 200000)/ otal No. of hours worked (permanent + contractual)


60/8261

S AFETY R EVIEW S YSTEM

Chambal has a three-tier Safety Review System which consists of plant, management and safe operationscommittees. Tere are 10 committeesat the plant with representation fromall the concerned departments. Tesecommittees meet on a monthly or bi-monthly basis to review thesafety systems. Te Safe OperationCommittee is the apex safety committeethat comprises all department heads,headed by President- Operations andmeets once every three months. Eachcommittee and its constituent membershave clearly delineated roles andresponsibilities for implementation,review and monitoring of health andsafety aspects of the organization.Te safety system is also regularly reviewed by the Managing Director.EHS performance is reported to theBoard of Directors.

NEAR MISSES AND M AKE-TO-GOODS

o encourage safety awareness among employees and contractor workforce, a scheme of Near-Miss and Make-to-Good reporting is in place. All nearmisses, minor injuries and incidents

were reviewed, analyzed, and correctiveactions were taken. In the reporting year, 454 near misses and 472 maketo goods were reported.

S AFETY OF CONTRACT W ORKERS

For Chambal, the well-being and safety of its contract workers is a priority.Our agreements with contractors

include provisions on various safety related issues e.g. right to levy penaltiesfor any unsafe act or violation of safety norms by the workers.

We also have a system of nominating senior employees as safety stewardsfor each of our contractors with theaim to promoting safety awarenessamongst workers. o identify lapsesand areas of improvement, review meetings with contractors areconducted every quarter.

At the plant entrance, risks andprecautions are explained to each

worker. During execution the jobsare supervised by job in-charges andother senior officers to ensure safety compliance. Whenever any violationis observed, the concerned workmenand job supervisors are counseled

and violation, if any, is recorded. All the safety violations are recordedunder three categories - unsafe act,unsafe condition and unsafe practice.In 2011-12, 278 safety observations

were made during the 18 day annualplant shutdown in April, 2011 and165 during the rest of the year. Outof these, 193 were classied as unsafeacts and 250 as unsafe conditions.Te management analyzed the causesof these incidents and appropriateactions were taken to prevent suchrecurrences in the future.

During shutdown maintenance,extensive safety trainings andsupervisions were conducted by associating experts. During thereporting year, personal protectionequipment (hand gloves, dust mask,ear plugs) was provided free to allcontract workers.

ENCOURAGING PROACTIVE S AFETY BEHAVIOR

Te safety reward system has beenreviewed and widened during thereporting year to further strengthenthe safety culture in the Company.

o improve safety work culture andbring reduction in injuries more andmore workers of associated contractors

were involved in safety promotionalactivities and training programmes.Tose with a better safety performancerecord were recognized and rewarded

at an award ceremony.

OTHER S AFETY INITIATIVES

During the reporting year, Chambalundertook various safety improvementinitiatives such as adding new safety

Visitors Safety Film

In the reporting year,Chambal made a specialSafety Film. This film is

screened for the benefit of all visitors before they enter

the plant premises.


61/8262

and emergency handling equipments,additional safety procedures, screening of Environment, Health and Safety (EHS) documentary for townshipresidents, pictorial booklet depicting dos and donts for bagging plantand re alarm system upgradation.

Additionally, we installed electrically-operated road barriers on rail tracksand cleared the wild grass in the plantarea to reduce re hazards.

As a special drive, the concept of Behavior Based Safety (BBS) wasintroduced in the bagging plant,

which is working satisfactorily throughselected BBS champions.

EMPLOYEE HEALTHCARE

We continuously monitor andupgrade our health and hygienestandards. Te work environmentis regularly monitored toprevent occupational hazards.Some of the key initiatives are an on-site medical centre, health awarenessprogrammes and regular assessment of employees health.

Health checks for employees working in hazardous environments are doneonce every six months. Te production

and process departments prepare a list of personnel who are exposedto occupational hazards like noise,urea dust and ammonia vapours.Te identied personnel undergorelevant medical screening depending on the nature of the exposure. If healthcheck results persistently demonstratedeviations, the employee is relocated tosome other area devoid of the hazardunder intimation to the respectivedepartment/ functional head.

In FY 2011-12, there were noreported cases of chronic obstructivepulmonary disease (COPD), noiseinduced hearing loss (NIHL),audiometry and spirometry abnormality. 555 employees and3244 contract workers underwenthealth checks in FY 2011-12.

All food handlers (in the staff canteensand kitchens of guest facilities) areexamined once every six months andare de-wormed and vaccinated againsttyphoid once every three years.

We regularly make our employeesaware about life style diseases suchas diabetes, hypertension andosteoarthiritis; encourage adoptionof preventive measures and providefacilities for treatment. Te annualmedical examination of employees hasbrought to light a marginal increasein stress related diseases like diabetes,hypertension, acid peptic and sleeprelated disorders. Hence, we plan toorganise stress management workshopsto train personnel in stress mitigation

and to maintain a work-life balance. We also carry out a medical examinationof all our employees working in nonhazardous area once a year and oncein six months for people working inhazardous areas at plant locations. For allother employees (working at locationsother than the plant) the frequency of medical examination is once intwo years for those below 45 years of age and once a year for those above45 years of age.

HEALTH , S AFETY , ENVIRONMENT & Q UALITY (HSEQ) A UDITS

At Chambal, teams of trained internalauditors regularly conduct HSEQ audits with special emphasis on healthand hygiene, house keeping, safety,environment and quality. HSEQ systems are periodically audited by various external agencies of repute inline with the management approachof continual improvement. Surprisevisits are conducted to plant andcanteen to ensure highest standard of housekeeping and hygiene. In 2011-12, ammonia storage safety systems

were upgraded based on a review by thedesigner and a risk based inspection isunder progress. o extend and improvethe safety culture among our marketing team, all our regional marketing offices

Doctor on Call

In 2011-12, Chambal tied-up

with two leading doctors of Delhi, to visit its corporateoffice once in a week.

The doctors, one of whom isa gynecologist provide free

medical consultation toall employees at the

corporate office.

Chambal iscommitted to

continuously reviewand upgrade its

health and hygienestandards. The work

environment isregularly monitored toprevent occupational

hazards.


62/8263

we

Securing the present and the future

Documents

Transcript of Securing the present and the future