Mar 31, 2023
1. During the year ended 31 March 2022, the company recorded an amount of C10,281 lakhs towards Impairment of its investment in its wholly owned subsidiary CFL Mauritius Limited as per âInd AS 38- Impairment of Assetsâ after considering the forecasts and long term outlook of the business of such subsidiary and its investments.
2. Sabero Europe B.V. has been liquidated with effect from 25 May 2022.
3. Andhra Pradesh Gas Power Corporation Limited (APGPCL) has closed its plant and laid off employees, pursuant to cancellation of allocation of natural gas during the year. The Company has accordingly fair valued its investment in APGPCL at Nil.
4. The Ordinary shares of Tunisian Indian Fertilisers S.A., Tunisia (TIFERT) held by the Company have been pledged to secure the obligations of TIFERT to their lenders, except 8,04,848 shares.
5. The Company holds 100% of the quotas and is the only partner in the Limited Liability Partnership.
6. Represents loan amounting C 1,609 Lakhs (2022: C 1,609 Lakhs) to TIFERT which was compulsorily convertible to equity shares. Based on the terms of conversion, the said loan was due for conversion in June 2022 (originally extended by 2 years from June 2020). The Company is in discussion with TIFERT to further extend this time period for conversion. The fair value of this loan has been considered as Nil as on March 31, 2023.
The credit period on sales of goods varies with seasons and business segments/markets and generally ranges between 30 to 180 days.
Before accepting any new customer, the Company has a credit evaluation system to assess the potential customer''s credit quality and to define credit limits for the customer. Credit limits attributed to customers are reviewed on an annual basis.
No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.
In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL") model for measurement and recognition of impairment loss on its trade receivables. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk factors and historical data of credit losses from various customers adjusted for forward looking estimates. Accordingly, the Company creates provision for past due receivables beyond 180 days ranging between 25%-100% after reckoning the underlying collaterals. Besisdes, based on the expected credit loss model the Company also provides upto 0.5% for receivables less than 180 days.
If the dividend has not been claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which remains unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called âUnpaid Dividend Account''. The unclaimed dividend lying in such account is required to be transferred to the Investor Education and Protection Fund (âIEPF''), administered by the Central Government after a period of seven years from the date of transfer to unpaid dividend account.
The company has transferred an amount of C 269 lakhs (31 March 2022 : C 201 lakhs) to IEPF during the current year. Margin money / deposit
Amounts in margin money/deposit accounts represents amounts deposited with certain government agencies.
Equity shares: The Company has one class of equity shares having a face value of C1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in the case of interim dividend.
16.4 As at 31 March 2023, E.I.D.-Parry (India) Limited (Parent Company) held 16,54,55,580 (2022: 16,54,55,580) equity shares of C1 each fully paid-up representing 56.27% (2022: 56.37% ) of the paid up capital. There are no other shareholders holding more than 5% of the issued capital.
As at 31 March 2023, balance number of shares reserved for issue under the ''ESOP 2007'' scheme is Nil (2022: 81,32,966) equity shares of C1 each and under the ''ESOP 2016'' scheme is 1,28,97,560 (2022: 1,34,14,900) equity shares of C1 each.
Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in Note 33.
16.6 There are no bonus shares issued and no shares were issued for consideration other than cash during the period of five years immediately preceeding the reporting date.
Cumulative redeemable preference shares: The Company has a class of cumulative redeemable preference shares having face value of C10 each with such rights, privileges and conditions respectively attached thereto as may be from time to time confirmed by the regulations of the company. Pursuant to the Scheme of Amalgamation, the cumulative redeemable preference shares carry cumulative dividend of 8% per annum in relation to capital paid upon them and are on original terms and conditions in which they were issued by erstwhile Liberty Phosphate Limited, the amalgamating company.
In respect of the year ended 31 March 2023, the Board at its meeting held on 02 February 2023 had approved payment of interim dividend of C6 per equity share (600% on face value of C1 per share). The total amount paid with respect to interim dividend is C17,640 Lakhs. The Board of Directors at their meeting held on 15 May 2023 have recommended a final dividend of C6 per equity share (600% on face value of C1 per share). The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting. The total estimated amount to be paid with respect to final dividend is C17,641 Lakhs. The total dividend is C12 per share (1200% on face value of C1 per share) for the year ended 31 March 2023.
In respect of the year ended 31 March 2022, the Board at its meeting held on 03 February 2022 had approved payment of interim dividend of C6 per equity share (600% on face value of C1 per share). The total amount paid with respect to interim dividend is C17,610 Lakhs. The Board of Directors at their meeting held on 28 April 2022 have recommended a final dividend of C6 per equity share (600% on face value of C1 per share). The proposed final dividend was approved by the shareholders at the Annual General Meeting. The total amount paid with respect to final dividend is C17,624 Lakhs. The total dividend is C12 per share (1200% on face value of C1 per share) for the year ended 31 March 2022.
In respect of the year ended 31 March 2021, the Board of Directors at their meeting held on 29 April 2021 have recommended a final dividend of C 6 per equity share (600% on face value of C1 per equity share). The proposed final dividend was approved by the shareholders at the Annual General Meeting. The total amount paid with respect to final dividend was C17,603 Lakhs.
i) There are no outstanding long-term borrowings as at 31 March 2023 and as at 31st March 2022.
ii) Secured loans repaybale on demand comprises cash credit balances secured by a pari-passu charge on current assets of the Company. Further, some of these are also secured by second charge on moveable fixed assets of the Company at an interest rates between 4.25% p.a to 8.60% p.a.
There is no breach of loan agreement
The information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and assessment of segment performance is based on types of goods and services. Accordingly, the Company''s reportable segments under Ind AS 108 are as follows:
1. Nutrient and other allied business
2. Crop protection
For the purposes of monitoring segment performance and allocating resources between segments:
1. All assets are allocated to reportable segments other than inter-corporate deposits, investments, cash and cash equivalents and derivative contracts.
2. All liabilities are allocated to reportable segments other than borrowings, defined benefit obligation and long-term employee benefits, derivative contracts, current and deferred tax liabilities.
The Company''s capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.
The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents, Bank deposits and inter-corporate deposits with financial institutions.
32.3 Financial risk management objectives
The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using financial instruments such as foreign currency forward contracts, option contracts, interest and currency swaps to hedge risk exposures and appropriate risk management policies as detailed below. The use of these financial instruments is governed by the Company''s policies, which outlines principles on foreign exchange risk, interest rate risk, credit risk and deployment of surplus funds.
The Company''s financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
⢠Foreign currency risk
⢠Interest rate risk
⢠Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.
32.4.1 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Nutrient and other allied business has foreign exchange exposure for its imports of raw materials, intermediates and traded goods.
2. Crop Protection segment has foreign exchange exposure on both exports of finished goods and imports of raw materials, intermediates and traded goods.
3. Foreign currency borrowings in the form of buyers credit, packing credit etc. are availed for meeting its funding requirements.
The Company has a forex policy in place whose objective is to mitigate foreign exchange risk by deploying the appropriate
hedging strategies through combination of various hedging instruments such as foreign currency forward contracts, options
contracts and has a dedicated forex desk to monitor the currency movement and respond swiftly to market situations. The
Company follows netting principle for managing the foreign exchange exposure for each operating segment.
There are no long-term borrowings outstanding as on 31 March 2023 and 31 March 2022.
Foreign currency forward contracts designated as hedging instruments in cash flow hedges of forecast sales in USD are measured at fair value through OCI. While the Company enters into other foreign exchange forward contracts to reduce the foreign exchange risk, these other contracts are not designated in hedge relationships and are measured at FVTPL.
The terms of the hedging instruments match the terms of the forecast transactions. As a result, no hedge ineffectiveness arise requiring recognition through profit or loss.
e. Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in US Dollar. The following table details the Company''s sensitivity to a C1 increase and decrease against the US Dollar. C1 is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a C1 change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by C1 against the US Dollar. For a C 1 weakening against the US Dollar, there would be a comparable impact on the profit or equity.
32.4.2 Interest rate risk management
The Company issues commercial papers, draws working capital demand loans, avails cash credit, foreign currency borrowings including buyers credit, Packing Credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease in case of foreign currency borrowings and 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest
rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.
If interest rate had been 10 basis points higher/ lower in case of foreign currency borrowings and 50 basis points higher/ lower in case of rupee borrowings and all other variables were held constant, the Company''s profit for the year ended 31 March 2023 would decrease/increase by C 2 lakhs (31 March 2022: C* lakhs)
32.4.3 Other price risks
The Company is exposed to equity price risks arising from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
a. Equity price sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 5% higher/lower other comprehensive income/equity for the year ended 31 March 2023 would increase/decrease by C 295 Lakhs (31 March 2022: C 730 lakhs) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant.
b. Commodity price risks
The Company''s operating activities require the ongoing purchase of rock phosphates, phosphoric acid, sulphur and murate of potash. All being international commodities are subject to price fluctuations on account of the change in the demand supply pattern and exchange rate fluctuations. The Company is not affected by the price volatility of the raw materials as government on a time to time basis, revises the subsidy rates payable to the fertilizer industry based on the market trend.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counterparties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets.
The credit risk on cash and bank balances, derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Note 32.8 sets out details of additional undrawn facilities that the Company has at its disposal to reduce liquidity risk.
# Included in Borrowing and interest theron are certain borrowings which are subject to variable interest rates. Amount included in the above maturity analysis assumes interest outflows based on the year end benchmark interest rates, the actual interest rates may differ based on the changes in the benchmark interest rates.
** Other financial liabilities include deposits received from customers amounting to C20,818 Lakhs (31 March 2022: C17,449 Lakhs). These deposits do not have a contractual re-payment term but are repayable on demand. Since, the Company does not have an unconditional right to defer the payment, these deposits have been classified as current balances. For including these amounts in the above mentioned maturity analysis, the Company has assumed that these deposits, including interest thereon, will be repayable at the end of the reporting period. The actual maturity period for the deposit amount and the interest thereon can differ based on the date on which these deposits are settled to the customers.
*** including non-current loans as these pertain to inter-corporate deposits placed with financial institution.
The Company has provided a sponsor guarantee for USD 41.1 million (proportionate to the shareholding of 15%) towards the borrowings of Tunisian Indian Fertilisers S.A. (TIFERT), a company based in Tunisia, manufacturing phosphoric acid. In March 2017, TIFERT has requested reschedulement of instalment due to the lenders and delayed the payment. The same was not agreed to by the Lenders and the acceleration notice was served on TIFERT by lenders on 28 March 2017. The loan instalment was immediately paid on 30 March 2017 by TIFERT. However, on 4 April 2017 the lenders followed up with call notice on shareholders towards guaranteed amount (Coromandel''s share USD 35.25 million outstanding as on 31 March 2017). The Company alongwith other shareholders of TIFERT are in discussion with the Lenders to resolve the matter with regard to liquidity situation and operational improvements of TIFERT and also to find a solution for meeting the future debt obligations of TIFERT.
Considering the discussions held with Lenders and operational improvement achieved by TIFERT during the year, the Company reasonably considers that TIFERT would be in a position to meet the debt obligations and it is unlikely that such an event of payment under guarantee amount will arise. TIFERT has paid the subsequent half-yearly instalments that were due as per the payment schedule. The sponsor guarantee was valid upto 31 March 2018. The Company''s obligation under this corporate guarantee if that amount is claimed by the counterparty to the guarantee is subject to a maximum of C 3,936 Lakhs (31 March 2022: C 7,194 Lakhs).
The Company has access to financing facilities of which C 2,39,809 Lakhs (as at 31 March 2022: C 3,51,822 Lakhs) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
1. In case of trade receivables, government subsidies receivables, cash and cash equivalents, loans, trade payables, borrowings and other financial assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term maturities of these instruments.
2. The fair values of the financial assets and financial liabilities included above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.
The Company recorded employee share based payments of C771 Lakhs (2022: C281 Lakhs) under âEmployee benefits expense''.
33.3 The Company in its meeting of the Board of Directors held on 22 March 2023 has approved the Employee Stock Option Plan 2023 which will replace ESOP 2016 Scheme.
b) The above outstanding options have been granted in various tranches and have a weighted average remaining life of 1.83 years (2022: 1.59 years). The exercise price of the outstanding options range from C319.65 to 969.45 (2022: C319.65 to C799.35 ). The weighted average share price during the year is C 939 (2022: C811).
c) Number of options exercisable at the end of the year are 6,34,700 (2022: 10,39,370).
d) The fair values of the option were determined using a Black Scholes'' model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 5-6 years.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Employee who has completed five years of service is entitled to specific benefit depending on the employee''s length of service and salary at retirement or relieving age. The fund has the form of trust and it is governed by the Board of Trustees which consists of employer and employee representatives. The Board of Trustees is responsible for the administration of plan assets.
The Board of Trustees reviews the level of funding and asset-liability matching strategy in the gratuity plan to keep the scheme adequately funded for settlement of obligations under the plan.
36. Contingent liabilities (to the extent not provided for) Claims against the Company not acknowledged as debt: |
||
As at 31 March 2023 |
As at 31 March 2022 |
|
In respect of matters under dispute: |
||
Excise duty |
322 |
322 |
Customs duty |
820 |
831 |
Sales tax |
1,119 |
1,203 |
Income tax |
2,451 |
553 |
Service tax |
265 |
292 |
Goods and Services Tax |
680 |
37 |
Others |
4,819 |
4,902 |
The amounts disclosed above represent our best estimate and the uncertainties are dependent on the outcome of the legal processes initiated by the Company or the claimant as the case may be.
37. Commitment |
||
a) Capital commitments |
||
As at |
As at |
|
31 March 2023 |
31 March 2022 |
|
Capital expenditure commitments |
^^^^10,133 |
19,805 |
38. Corporate social responsibility
As per Section 135 of the Companies Act, 2013 (âAct), a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The focus areas of Company''s CSR activities are Education and Health care & while also pursuing CSR activities for the benefit of community around its local areas of operations. The CSR activities of the Company are in line with the Schedule VII of the Act. A CSR committee has been formed by the Company as per the Act. The CSR Committee shall recommend the amount of expenditure to be incurred on the CSR activities to be undertaken by the Company as specified in Schedule VII of the Act, as amended from time to time.
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No expense has been recognised in the current or prior years for bad or doubtful debts in respect of the amounts owed by related parties.
a) Dividends paid to key management personnel during the year ended 31 March 2023: C74 Lakhs (2022: C 28 Lakhs).
b) Compensation of key management personnel of the Company:
46. The Code on Social Security, 2020 (âCode'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
47. During the year 2020-21, the Board of Directors had earlier approved the proposed Scheme of Amalgamation of Liberty Pesticides and Fertilizers Limited (LPFL) and Coromandel SQM (India) Private Limited (CSQM) (wholly owned subsidiaries) with the Company subject to approval of the Hon''ble National Company Law Tribunal, Hyderabad (NCLT) under Section 230 and 232 of the Companies Act 2013. Subsequent to 31 March 2022, the Hon''ble National Company Law Tribunal, Hyderabad (NCLT) has approved the Scheme of Amalgamation (âScheme'') of LPFL and CSQM on 26 April 2022, with the Company with effect from 01 April 2021, being the appointed date under the said Scheme.
The Company had accounted for this merger under the âPooling of interestsâ method for common control transactions as per the requirements of Ind AS 103 âBusiness Combinationsâ in the previous year. This merger did not have material impact on Standalone financial statements.
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
b) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
50. Previous period/year figures have been regrouped/reclassified, where necessary, to conform to the current period/year classification.
The financial statements were approved by the Board of Directors on 15 May 2023.
Mar 31, 2022
4. Company had carried out various merger/amalgamations, etc across various years. Pursuant to these actions, Company holds certain immovable properties wherein the title of the property has been conveyed/transferred to the Company pursuant to such scheme of amalgamation/arrangement and these are considered as valid title to the immovable property and no further actions such as name change/additional registrations are necessary.
1. The Board of Directors of the company at its meeting held on 29 April 2021 approved to invest in the equity share capital of its wholly owned subsidiary, Dare Ventures Limited (DVL) for the purpose of further investing in early stage to late- stage start-ups in AgTech and other sectors. Pursuant to this, the company has made an investment of ? 1,100 lakhs (74,93,188 equity shares) on 25 March 2022 (refer note 40).
Above transactions are in compliance with the provisions of Companies Act and not violative of the Prevention of MoneyLaundering Act, 2002 (15 of 2003).
2. During the year ended 31 March 2022, the company recorded an amount of ?10,281 lakhs towards Impairment of its investment in its wholly owned subsidiary CFL Mauritius Limited as per "Ind AS 38- Impairment of Assets" after considering the forecasts and long term outlook of the business of such subsidiary and its investments.
# The Ordinary shares of Tunisian Indian Fertilisers S.A., Tunisia (TIFERT) held by the Company have been pledged to secure the obligations of TIFERT to their lenders, except 8,04,848 shares.
** The Company holds 100% of the quotas and is the only partner in the Limited Liability Partnership.
*** Represents loan amounting ?1,609 Lakhs (2021: ?1,609 Lakhs) to TIFERT which was compulsorily convertible to equity shares at the end of three years from June 2017. During the previous year, the period has been extended for further 2 years.
The credit period on sales of goods varies with seasons and business segments/ markets and generally ranges between 30 to 180 days.
Before accepting any new customer, the Company has a credit evaluation system to assess the potential customer''s credit quality and to define credit limits for the customer. Credit limits attributed to customers are reviewed on an annual basis.
In accordance with Ind AS 109, the Company uses the expected credit loss ("ECLâ) model for measurement and recognition of impairment loss on its trade receivables. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk factors and historical data of credit losses from various customers adjusted for forward looking estimates.
If the dividend has not been claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which remains unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called "Unpaid Dividend Account". The unclaimed dividend lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from the date of transfer to unpaid dividend account.
The company had transferred an amount of ?201 lakhs ( 31 March 2021 : ?194 lakhs) to IEPF during the current year.
Bonus debenture redemption and interest
If the proceeds on maturity of debentures and interest thereon has not been claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount which remains unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called "Unpaid debenture account". The unclaimed amounts lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from the date of transfer to unpaid debenture account.
The unclaimed amounts lying in such account have been transferred to IEPF during the current year.
Amounts in margin money/deposit accounts represents amounts deposited with certain government agencies.
16.3 Rights, preferences and restriction relating to each class of share capital:
Equity shares: The Company has one class of equity shares having a face value of ?1 each . Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in the case of interim dividend.
16.4 As at 31 March 2022, E.I.D.-Parry (India) Limited (Parent Company) held 16,54,55,580 (2021: 16,54,55,580) equity shares of ?1 each fully paid-up representing 56.37%(2021: 56.40% ) of the paid up capital. There are no other shareholders holding more than 5 % of the issued capital.
16.5 Share options granted under the Company''s employee share option plan
As at 31 March 2022, balance number of shares reserved for issue under the ''ESOP 2007'' scheme is 81,32,966 (2021: 81,32,966) equity shares of ?1 each and under the ''ESOP 2016'' scheme is 1,34,14,900 (2021: 1,35,32,630 ) equity shares of ?1 each.
Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in Note 33.
16.6 There are no bonus shares issued and no shares were issued for consideration other than cash during the period of five years immediately preceding the reporting date.
Cumulative redeemable preference shares: The Company has a class of cumulative redeemable preference shares having face value of ?10 each with such rights, privileges and conditions respectively attached thereto as may be from time to time confirmed by the regulations of the company. Pursuant to the Scheme of Amalgamation, the cumulative redeemable preference shares carry cumulative dividend of 8% per annum in relation to capital paid upon them and are on original terms and conditions in which they were issued by erstwhile Liberty Phosphate Limited, the amalgamating company.
No such cumulative redeemable preference shares are issued and outstanding as of 31 March 2022 (2021: Nil).
Retained earnings represents the Company''s undistributed earnings after taxes. In respect of the current year ended 31 March 2022, the Board at its meeting held on 03 February 2022 had approved payment of interim dividend of ?6 per equity share (600% on face value of ?1 per share). The total amount paid with respect to interim dividend is ?17,610 Lakhs. The Board of Directors at their meeting held on 28 April 2022 have recommended a final dividend of ?6 per equity share (600% on face value of ?1 per share). The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting. The total estimated amount to be paid with respect to final dividend is ?17,610 Lakhs. The total dividend is ?12 per share (1200 % on face value of ?1 per share) for the year ended 31 March 2022.
In respect of the year ended 31 March 2021, the Board at its meeting held on 01 February 2021 had approved payment of interim dividend of ?6 per equity share (600% on face value of ?1 per equity share). The total amount paid with respect to interim dividend is ?17,595 lakhs. The Board of Directors at their meeting held on 29 April 2021 have recommended a final dividend of ?6 per equity share (600% on face value of ?1 per equity share). The proposed final dividend was approved by the shareholders at the Annual General Meeting. The total dividend was ?12 per equity share (1200% on face value of ?1 per equity share) for the year ended 31 March 2021. The total amount paid with respect to final dividend was ?17,602 Lakhs.
In respect of the year ended 31 March 2020, the Board of Directors at their meeting held on 26 May 2020 have recommended a final dividend of ?12 per equity share (1200% on face value of ?1 per equity share). The proposed final dividend was approved by the shareholders at the Annual General Meeting. The total amount paid with respect to final dividend was ?35,177 Lakhs.
18.1 Summary of borrowing arrangements
i) There are no outstanding long-term borrowings as at 31 March 2022 and as at 31st March 2021.
ii) Secured loans repayable on demand comprises cash credit balances secured by a pari-passu charge on current assets of the Company. Further, some of these are also secured by second charge on moveable fixed assets of the Company at an interest rates between 4.45% p.a to 6.9% p.a.
There is no breach of loan agreement
The information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and assessment of segment performance is based on types of goods and services. Accordingly, the Company''s reportable segments under Ind AS 108 are as follows:
1. Nutrient and other allied business
2. Crop protection
1. All assets are allocated to reportable segments other than inter-corporate deposits, investments, cash and cash equivalents and derivative contracts.
2. All liabilities are allocated to reportable segments other than borrowings, defined benefit obligation and long-term employee benefits, derivative contracts, current and deferred tax liabilities.
The accounting policies of the reportable segments are same as the Company''s accounting policies. Segment profit represents the profit before interest and tax earned by each segment without allocation of central administrative costs and other income. This is the measure reported to the CODM.
Transfer prices between operating segments are on arm''s length basis in a manner similar to transactions with third parties.
32. Financial instruments32.1 Capital management
The Company''s capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.
The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents , Bank deposits and inter-corporate deposits with financial institutions.
32.3 Financial risk management objectives
The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using financial instruments such as foreign currency forward contracts, option contracts, interest and currency swaps to hedge risk exposures and appropriate risk management policies as detailed below. The use of these financial instruments is governed by the Company''s policies, which outlines principles on foreign exchange risk, interest rate risk, credit risk and deployment of surplus funds.
The Company''s financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
⢠Foreign currency risk
⢠Interest rate risk
⢠Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.
32.4.1 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Nutrient and other allied business has foreign exchange exposure for its imports of raw materials, intermediates and traded goods.
2. Crop Protection segment has foreign exchange exposure on both exports of finished goods and imports of raw materials, intermediates and traded goods.
3. Foreign currency borrowings in the form of buyers credit, packing credit etc. are availed for meeting its funding requirements.
The Company has a forex policy in place whose objective is to mitigate foreign exchange risk by deploying the appropriate hedging strategies through combination of various hedging instruments such as foreign currency forward contracts, options contracts and has a dedicated forex desk to monitor the currency movement and respond swiftly to market situations. The Company follows netting principle for managing the foreign exchange exposure for each operating segment.
The forward contracts have been entered into to hedge the purchase of raw materials and stock-in-trade and the related buyer''s credit and in certain cases the foreign currency trade receivables.
*Includes USD 83.02 (millions) (31 March 2021 : 66.22 USD (millions)) Sell contracts outstanding under past performance facility as per Reserve Bank of India (RBI) Master Direction on Risk Management and Inter-Bank Dealings.
Foreign currency forward contracts designated as hedging instruments in cash flow hedges of forecast sales in USD are measured at fair value through OCI. While the Company enters into other foreign exchange forward contracts to reduce the foreign exchange risk, these other contracts are not designated in hedge relationships and are measured at FVTPL.
The terms of the hedging instruments match the terms of the forecast transactions. As a result, no hedge ineffectiveness arise requiring recognition through profit or loss.
e. Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in US Dollar. The following table details the Company''s sensitivity to a ?1 increase and decrease against the US Dollar. ?1 is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a ?1 change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by ?1 against the US Dollar. For a ?1 weakening against the US Dollar, there would be a comparable impact on the profit or equity.
32.4.2 Interest rate risk management
The Company issues commercial papers, draws working capital demand loans, avails cash credit, foreign currency borrowings including buyers credit, Packing Credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease in case of foreign currency borrowings and 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.
If interest rate had been 10 basis points higher/ lower in case of foreign currency borrowings and 50 basis points higher/ lower in case of rupee borrowings and all other variables were held constant, the Company''s profit for the year ended 31 March 2022 would decrease/ increase by ? 0.02 lakhs (31 March 2021: ? 0.61 lakhs)
32.4.3 Other price risks
The Company is exposed to equity price risks arising from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
a. Equity price sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 5% higher/lower other comprehensive income/ equity for the year ended 31 March 2022 would increase/ decrease by ? 730 Lakhs (31 March 2021:? 653 lakhs) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. In case of Government subsidy receivables, credit risk is nil.
#Included in Borrowing and interest theron are certain borrowings which are subject to variable interest rates. Amount included in the above maturity analysis assumes interest outflows based on the year end benchmark interest rates, the actual interest rates may differ based on the changes in the benchmark interest rates.
**Other financial liabilities include deposits received from customers amounting to 817,449 Lakhs (31 March 2021: 815,948 Lakhs). These deposits do not have a contractual re-payment term but are repayable on demand. Since, the Company does not have an unconditional right to defer the payment, these deposits have been classified as current balances. For including these amounts in the above mentioned maturity analysis, the Company has assumed that these deposits, including interest thereon, will be repayable at the end of the reporting period. The actual maturity period for the deposit amount and the interest thereon can differ based on the date on which these deposits are settled to the customers.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counterparties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets.
The credit risk on cash and bank balances, derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
32.6 Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Note 32.8 sets out details of additional undrawn facilities that the Company has at its disposal to reduce liquidity risk.
32.7 Financial guarantee contract
The Company has provided a sponsor guarantee for USD 41.1 million (proportionate to the shareholding of 15%) towards the borrowings of Tunisian Indian Fertilisers S.A. (TIFERT), a company based in Tunisia, manufacturing phosphoric acid. In March 2017, TIFERT has requested reschedulement of instalment due to the lenders and delayed the payment. The same was not agreed to by the Lenders and the acceleration notice was served on TIFERT by lenders on 28 March 2017. The loan instalment was immediately paid on 30 March 2017 by TIFERT. However, on 4 April 2017 the lenders followed up with call notice on shareholders towards guaranteed amount (Coromandel''s share USD 35.25 million outstanding as on 31 March 2017). The Company alongwith other shareholders of TIFERT are in discussion with the Lenders to resolve the matter with regard to liquidity situation and operational improvements of TIFERT and also to find a solution for meeting the future debt obligations of TIFERT.
Considering the discussions held with Lenders and operational improvement achieved by TIFERT during the year, the Company reasonably considers that TIFERT would be in a position to meet the debt obligations and it is unlikely that such an event of payment under guarantee amount will arise. TIFERT has paid the subsequent half-yearly instalments that were due as per the payment schedule. The sponsor guarantee was valid upto 31 March 2018. The Company''s obligation under this corporate guarantee if that amount is claimed by the counterparty to the guarantee is subject to a maximum of ? 7,194 Lakhs (31 March 2021: ? 10,299 Lakhs).
The Company has access to financing facilities of which ? 3,51,822 Lakhs (as at 31 March 2021: ? 3,52,253 Lakhs) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
1. In case of trade receivables, government subsidies receivables, cash and cash equivalents, loans, trade payables, borrowings and other financial assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term maturities of these instruments.
2. The fair values of the financial assets and financial liabilities included above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.
* In partial modification of the special resolution passed for establishing ESOP 2007, the shareholders in their meeting held on 23 July 2012 decided to approve the extension of the exercise period of options granted under the ESOP 2007 from three years to six years.
33.1 Employee Stock Option Scheme 2007 (''ESOP 2007 Scheme''):
a) Pursuant to the ESOP 2007 Scheme, the Company granted options which vest over a period of four years commencing from the respective dates of grant. Following are the number of options outstanding during the year:
b) The above outstanding options have been granted in various tranches and have a weighted average remaining life of nil years (2021: nil years). The exercise price of the outstanding options is Nil (2021: nil). The weighted average share price during the year is ? 811 (2021: ? 740).
c) Number of options exercisable at the end of the year Nil (2021: nil).
d) The fair values of the option with modified terms were determined using a Black Scholes'' model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 3-4 years.
b) The above outstanding options have been granted in various tranches and have a weighted average remaining life of 1.59 years (2021: 1.93 years). The exercise price of the outstanding options range from ? 319.65 to ? 799.35 (2021: ? 319.65 to ? 799.35 ). The weighted average share price during the year is ? 811 (2021: ? 740).
c) Number of options exercisable at the end of the year are 10,39,370 (2021: 9,68,110).
d) The fair values of the option were determined using a Black Scholes'' model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 5-6 years.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Employee who has completed five years of service is entitled to specific benefit depending on the employee''s length of service and salary at retirement or relieving age. The fund has the form of trust and it is governed by the Board of Trustees which consists of employer and employee representatives. The Board of Trustees is responsible for the administration of plan assets.
The Board of Trustees reviews the level of funding and asset-liability matching strategy in the gratuity plan to keep the scheme adequately funded for settlement of obligations under the plan.
Gratuity for employees is covered under a scheme of Life Insurance Corporation of India (LIC) which is basically a year-on-year cash accumulation plan. As part of the scheme the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance company, as part of the policy rules, makes payment of all gratuity settlements during the year subject to sufficiency of funds under the policy.
ii) Contributions to PF Trust:
Provident Fund Trust is exempted under Section 17 of The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. Conditions for the grant of exemption stipulate that the employer shall make good the deficiency, if any, in the interest rate declared by the Trust over the statutory limit.
The Company has obtained the actuarial valuation of interest rate obligation in respect of provident fund and having regards to the assets of the Fund and the return on the investments, the Company did not recognize any deficiency based on the actuary report obtained.
38 Corporate social responsibility
As per Section 135 of the Companies Act, 2013 (Act), a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The focus areas of Company''s CSR activities are Education and Health care & while also pursuing CSR activities for the benefit of community around its local areas of operations. The CSR activities of the Company are in line with the Schedule VII of the Act. A CSR committee has been formed by the Company as per the Act. The CSR Committee shall recommend the amount of expenditure to be incurred on the CSR activities to be undertaken by the Company as specified in Schedule VII of the Act, as amended from time to time.
a) Gross amount required to be spent by the company during the year is ? 2,812 Lakhs (31 March 2021-? 2,322 lakhs.)
The Company was unable to spend the allocated/budgeted amount on Ongoing Projects due to COVID-19 pandemic. The unspent CSR amount of ? 346 lakhs for the financial year 2021-22 will be transferred to unspent CSR Account on or before 30 April 2022 in accordance with provisions of the Companies Act, 2013 read with rules made thereunder.
46 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
On 01 February 2021, the Board of Directors had earlier approved the proposed Scheme of Amalgamation of Liberty Pesticides and Fertilizers Limited (LPFL) and Coromandel SQM (India) Private Limited (CSQM) with the Company subject to approval of the Hon''ble National Company Law Tribunal, Hyderabad (NCLT) under Section 230 and 232 of the Companies Act 2013. Subsequent to 31 March 2022, the Hon''ble National Company Law Tribunal, Hyderabad (NCLT) has approved the Scheme of Amalgamation (''Scheme'') of and Liberty Pesticides and Fertilizers Limited (LPFL) and Coromandel SQM (India) Private Limited (CSQM) (wholly owned subsidiaries) on 26 April 2022, with the Company with effect from 01 April 2021, being the appointed date under the said Scheme.
The Company has accounted for this merger under the "Pooling of interests" method for common control transactions as per the requirements of Ind AS 103 "Business Combinations". Accordingly, the company has recognised Gain on Bargain purchase of ? 266 Lakhs and Gain on re-measurement of previously held interest of ? 760 Lakhs under Other comprehensive income and Gain on Bargain purchase of ? 163 Lakhs in Capital reserve.
Further, in accordance with Ind AS 103 ''Business Combinations'', the Company has restated the figures for previous year presented in the Standalone financial statements. This merger did not have material impact on Standalone financial statements.
48 Other statutory information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
49 Previous period / year figures have been regrouped/reclassified, where necessary, to conform to the current period / year classification.
50 Approval of financial statements
The financial statements were approved by the Board of Directors on 28th April 2022.
Mar 31, 2021
Unclaimed dividend accounts
If the dividend has not been claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which remains unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called "Unpaid Dividend Accountâ. The unclaimed dividend lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from the date of declaration.
Bonus debenture redemption and interest
If the proceeds on maturity of debentures and interest thereon has not been claimed within 30 days from the date of its declaration, the Company is required to transfer the total amount of the dividend which remains unpaid or unclaimed, to a special account to be opened by the Company in a scheduled bank to be called "Unpaid debenture accountâ. The unclaimed amounts lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from the date of declaration.
Amounts in margin money/deposit accounts represents amounts deposited with certain government agencies.
16.3 Rights, preferences and restriction relating to each class of share capital:
Equity shares: The Company has one class of equity shares having a face value of ''1 each . Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in the case of interim dividend.
16.4 As at 31 March 2021, E.I.D.-Parry (India) Limited (Parent Company) held 16,54,55,580 (2020: 17,71,55,580) equity shares of ''1 each fully paid-up representing 56.40% (2020: 60.47%) of the paid up capital. There are no other shareholders holding more than 5 % of the issued capital.
16.5 Share options granted under the Company''s employee share option plan
As at 31 March 2021-, shares reserved for issue under the ''ESOP 2007'' scheme is 81,32,966 (2020: 81,35,116) equity shares of ''1 each and under the ''ESOP 2016'' scheme is 1,35,32,630 (2020: 1,39,55,410) equity shares of ''1 each.
Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in Note 33.
16.6 There are no bonus shares issued and no shares were issued for consideration other than cash during the period of five years immediately preceeding the reporting date.
Cumulative redeemable preference shares: The Company has a class of cumulative redeemable preference shares having face value of ''10 each with such rights, privileges and conditions respectively attached thereto as may be from time to time confirmed by the regulations of the company. Pursuant to the Scheme of Amalgamation, the cumulative redeemable preference shares carry cumulative dividend of 8% per annum in relation to capital paid upon them and are on original terms and conditions in which they were issued by erstwhile Liberty Phosphate Limited, the amalgamating company.
No such cumulative redeemable preference shares are issued and outstanding as of 31 March 2021 (2020: Nil).
In respect of the year ended 31 March 2021, the Board of Directors at their meeting held on 29 April 2021 have recommended a final dividend of ''6 per share (600% on face value of ''1 per share). The Board at its meeting held on 01 February 2021 had approved payment of interim dividend ''6 per equity share (600% on face value of ''1 per share). The total dividend is ''12 per share (1200% on face value of ''1 per share) for the year ended 31 March 2021. The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The total amount paid with respect to interim dividend is ''17,595 Lakhs. The total estimated amount to be paid with respect to final dividend is ''17,603 Lakhs.
In respect of the year ended 31 March 2020, the directors proposed that a final dividend of ''12 per share be paid on fully paid equity shares. which was approved by the shareholders at the Annual General Meeting. The total amount paid with respect to dividend is ''35,177 Lakhs.
In respect of the year ended 31 March 2019, the directors approved payment of interim dividend of ''3 per share and proposed that a final dividend of ''3.50 per share be paid on fully paid equity shares which was approved by the shareholders at the Annual General Meeting. The total amount paid with respect to interim dividend is ''10,577 Lakhs including dividend distribution tax of ''1,803 Lakhs and with respect to final dividend is ''12,343 Lakhs including dividend distribution tax of ''2,105 Lakhs.
18.1 Summary of borrowing arrangements
i) There are no outstanding long-term borrowings as of 31 March 2021 and as on 31 March 2020.
ii) Secured loans repayabale on demand comprises cash credit balances secured by a pari-passu charge on current assets of the Company. Further, some of these are also secured by second charge on moveable fixed assets of the Company.
iii) Secured short-term loans from banks comprises of working capital demand loans secured by a pari-passu charge on current assets of Company. Further, certain borrowings are secured by specific subsidy receivables and letter of comfort from Government of India under Special Banking Arrangement.
iv) Unsecured short term loans comprises of commercial paper and short term loans from banks.
v) Unsecured loans from related parties comprise of loan from a subsidiary, Liberty Pesticides and Fertilizers Limited.
There is no breach of loan agreement.
31.1 Products and services from which reportable segments derive their revenues
The information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and assessment of segment performance is based on types of goods and services. Accordingly, the Company''s reportable segments under Ind AS 108 are as follows:
For the purposes of monitoring segment performance and allocating resources between segments:
1. All assets are allocated to reportable segments other than inter-corporate deposits, investments, cash and cash equivalents and derivative contracts.
2. All liabilities are allocated to reportable segments other than borrowings, defined benefit obligation and long-term employee benefits, derivative contracts, current and deferred tax liabilities.
The Company''s capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.
The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents and inter-corporate deposits with financial institutions.
The Company''s financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
⢠Foreign currency risk
⢠Interest rate risk
⢠Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.
32.4.1 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Nutrient and other allied business has foreign exchange exposure for its imports of raw materials, intermediates and traded goods.
2. Crop Protection segment has foreign exchange exposure on both exports of finished goods and imports of raw materials, intermediates and traded goods.
3. Foreign currency borrowings in the form of buyers credit, packing credit etc. are availed for meeting its funding requirements.
The Company has a forex policy in place whose objective is to mitigate foreign exchange risk by deploying the appropriate hedging strategies through combination of various hedging instruments such as foreign currency forward contracts,
Foreign currency forward contracts designated as hedging instruments in cash flow hedges of forecast sales in USD are measured at fair value through OCI. While the Company enters into other foreign exchange forward contracts to reduce the foreign exchange risk, these other contracts are not designated in hedge relationships and are measured at FVTPL.
The terms of the hedging instruments match the terms of the forecast transactions. As a result, no hedge ineffectiveness arise requiring recognition through profit or loss.
e. Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in US Dollar. The following table details the Company''s sensitivity to a ''1 increase and decrease against the US Dollar. ''1 is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a ''1 change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by ''1 against the US Dollar. For a ''1 weakening against the US Dollar, there would be a comparable impact on the profit or equity.
32.4.2 Interest rate risk management
The Company issues commercial papers, draws working capital demand loans, avails cash credit, foreign currency borrowings including buyers credit, Packing Credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease in case of foreign currency borrowings and 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.
If interest rate had been 10 basis points higher/ lower in case of foreign currency borrowings and 50 basis points higher/ lower in case of rupee borrowings and all other variables were held constant, the Company''s profit for the year ended 31 March 2021 would decrease/ increase by ''1.09 lakhs (31 March 2020: '' 609 lakhs)
The Company is exposed to equity price risks arising from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
a. Equity price sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 5% higher/lower other comprehensive income/ equity for the year ended 31 March 2021 would increase/ decrease by '' 653 Lakhs (31 March 2020: ''651 lakhs) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counterparties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets.
The credit risk on cash and bank balances, derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Note 32.8 sets out details of additional undrawn facilities that the Company has at its disposal to reduce liquidity risk.
* Less than a lakh
# Included in Borrowing and interest theron are certain borrowings which are subject to variable interest rates. Amount included in the above maturity analysis assumes interest outflows based on the year end benchmark interest rates, the actual interest rates may differ based on the changes in the benchmark interest rates.
** Other financial liabilities include deposits received from customers amounting to ''15,948 Lakhs (31 March 2020: ''14,892 Lakhs). These deposits do not have a contractual re-payment term but are repayable on demand. Since, the Company does not have an unconditional right to defer the payment, these deposits have been classified as current balances. For including these amounts in the above mentioned maturity analysis, the Company has assumed that these deposits, including interest thereon, will be repayable at the end of the reporting period. The actual maturity period for the deposit amount and the interest thereon can differ based on the date on which these deposits are settled to the customers.
327 Financial guarantee contractThe Company has provided a sponsor guarantee for USD 41.1 million (proportionate to the shareholding of 15%) towards the borrowings of Tunisian Indian Fertilisers S.A. (TIFERT), a company based in Tunisia, manufacturing phosphoric acid. In March 2017, TIFERT has requested reschedulement of instalment due to the lenders and delayed the payment. The same was not agreed to by the Lenders and the acceleration notice was served on TIFERT by lenders on 28 March 2017. The loan instalment was immediately paid on 30 March 2017 by TIFERT. However, on 4 April 2017 the lenders followed up with call notice on shareholders towards guaranteed amount (Coromandel''s share USD 35.25 million outstanding as on 31 March 2017). The Company alongwith other shareholders of TIFERT are in discussion with the Lenders to resolve the matter with regard to liquidity situation and operational improvements of TIFERT and also to find a solution for meeting the future debt obligations of TIFERT.
Considering the discussions held with Lenders and operational improvement achieved by TIFERT during the year, the Company reasonably considers that TIFERT would be in a position to meet the debt obligations and it is unlikely that
such an event of payment under guarantee amount will arise. TIFERT has paid the subsequent half-yearly instalments that were due as per the payment schedule. The sponsor guarantee was valid upto 31 March 2018. The Company''s obligation under this corporate guarantee if that amount is claimed by the counterparty to the guarantee is subject to a maximum of ''10,299 Lakhs (31 March 2020: ''13,707 Lakhs).
The Company has access to financing facilities of which ''3,49,821 Lakhs (as at 31 March 2020: ''3,10,699 Lakhs) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
38 Corporate social responsibility
As per Section 135 of the Companies Act, 2013 (Act), a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The focus areas of Company''s CSR activities are Education and Health care & while also pursuing CSR activities for the benefit of community around its local areas of operations. The CSR activities of the Company are in line with the Schedule VII of the Act. A CSR committee has been formed by the Company as per the Act. The CSR Committee shall recommend the amount of expenditure to be incurred on the CSR activities to be undertaken by the Company as specified in Schedule VII of the Act, as amended from time to time.
a) Gross amount required to be spent by the company during the year is ''2,322 lakhs.
43 During the year, the Company has made political donation of '' Nil (2020: '' 413 Lakhs) to Triumph Electoral Trust.
44 During the previous year ended 31 March 2020, pursuant to the requirements of SEBI circular no SEBI/HO/DDHS/DDHS/ CIR/P/2019/115 dated 22 October 2019, the Company has listed commercial papers on a recognised stock exchange. There are no Commercial papers outstanding as on 31 March 2021
45 Based on and to the extent of information available with the Company under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the relevant particulars as at reporting date are furnished below:
46 The Board of Directors have approved the proposed Scheme of Amalgamation of Liberty Pesticides and Fertilizers Limited (LPFL) and Coromandel SQM (India) Private Limited (CSQM) with the Company subject to approval of the Hon''ble National Company Law Tribunal, Hyderabad (NCLT) under Section 230 and 232 of the Companies Act 2013. Upon approval of the Scheme by NCLT, the undertakings of LPFL and CSQM shall get transferred to and vested in the Company with the Appointed Date of 01 April 2021 or such other date as the NCLT may approve.
47 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
48 Approval of financial statements
The financial statements were approved by the Board of Directors on 29 April 2021.
Mar 31, 2019
35 Earnings per share
For the year ended 31 March 2019 |
For the year ended 31 March 2018 |
|
i) Profit after tax (? in Lakhs) [a] |
71,391 |
68,481 |
Basic |
||
ii) Weighted average number of equity shares of Rs 1/- each outstanding during [b] the year Dilution |
⢠29,24,23,474 |
29,21,00,265 |
iii) Effect of potential equity shares on employees stock options outstanding |
5,13,576 |
9,60,261 |
iv) Weighted average number of equity shares of Rs 1/- each outstanding during [c] the year Earnings Per Share (face value of Rs 1 /- each) |
⢠29,29,37,050 |
29,30,60,526 |
v) Basic - [a]/[b] - (Rs) |
24.41 |
23.44 |
vi) Diluted - [a]/[c] - (?) |
24.37 |
23.37 |
36 Contingent liabilities (to the extent not provided for) Claims against the Company not acknowledged as debt:
(Rs. in Lakhs)
As at 31 March 2019 |
As at 31 March 2018 |
|
In respect of matters under dispute: |
||
Excise duty |
449 |
602 |
Customs duty |
851 |
386 |
Sales tax |
1,448 |
1,522 |
Income tax |
2,122 |
1,791 |
Service tax |
251 |
245 |
Goods and Services Tax |
5 |
32 |
Others |
5,983 |
1,916 |
The amounts disclosed above represent our best estimate and the uncertainties are dependent on the outcome of the legal processes initiated by the Company or the claimant as the case may be.
37 Commitments
a) Capital commitments
(Rs. in Lakhs)
As at 31 March 2019 |
As at 31 March 2018 |
|
Capital expenditure commitments |
13,073 |
5,851 |
Commitment towards investments |
316 |
338 |
b) Other commitments
(i) Maximum obligation on long term lease of land - Rs 2,737 Lakhs (2018: Rs 2,742 Lakhs).
Standalone Notes
38 Leases
The Company has entered into certain operating lease agreements and an amount of Rs 5,788 Lakhs (2018: Rs 8,287 Lakhs) paid under such agreements has been charged to the Statement of Profit and Loss. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by such agreements.
39 Corporate social responsibility
Expenses incurred on Corporate Social Responsibility (CSR) programs under Section 135 of the 2013 Act are charged to the Statement of Profit and Loss under ''Other expenses'' (Note 30) Rs 1,380 Lakhs (2018: Rs 1,396 Lakhs) and under ''Employee benefits expense'' (Note 27) Rs 58 Lakhs (2018: Rs 43 Lakhs).
40 Research and development expenses incurred on the following heads have been accounted under the natural heads:
(Rs in Lakhs)
For the Year ended 31 March 2019 |
For the Year ended 31 March 2018 |
|
Salaries, wages and bonus |
787 |
548 |
Contribution to provident and other funds |
72 |
55 |
Consumption of stores and spare parts |
166 |
39 |
Power and fuel |
53 |
30 |
Repairs to machinery |
89 |
102 |
Miscellaneous expenses |
138 |
155 |
1,305 |
929 |
41 Related party disclosures
(A) Names of the related parties and their relationship:
(i) Details of subsidiaries, joint ventures and associates:
Names |
Nature of relationship |
Country of incorporation |
Percentage of holding as at |
|
31 March 2019 |
31 March 2018 |
|||
Liberty Pesticides and Fertilisers Limited (LPFL) |
Subsidiary |
India |
100 |
100 |
Sabero Organics America S.A. (SOAL) |
Subsidiary |
Brazil |
99.98 |
99.98 |
Sabero Australia Pty Ltd, Australia (Sabero Australia) |
Subsidiary |
Australia |
100 |
100 |
Sabero Europe B.V. (Sabero Europe) |
Subsidiary |
Netherlands |
100 |
100 |
Sabero Argentina S.A. (Sabero Argentina) |
Subsidiary |
Argentina |
95 |
95 |
Coromandel Agronegocios de Mexico, S.A de C.V. (Coromandel Mexico) |
Subsidiary |
Mexico |
100 |
100 |
Parry Chemicals Limited (PCL) |
Subsidiary |
India |
100 |
100 |
Dare Investments Limited (OIL) |
Subsidiary |
India |
100 |
100 |
CFL Mauritius Limited (CML) |
Subsidiary |
Mauritius |
100 |
100 |
Coromandel Brasil Limitada (CBL) |
Subsidiary |
Brazil |
100 |
100 |
Parry America, Inc. (PAI) |
Subsidiary |
USA |
100 |
100 |
Coromandel International (Nigeria) Limited (CINL) |
Subsidiary |
Nigeria |
99.99 |
- |
Sabero Organics Philippines Asia Inc. |
Associate |
Philippines |
40 |
40 |
Coromandel SQM (India) Pvt Limited (CSQM) |
Joint venture |
India |
50 |
50 |
Yanmar Coromandel Agrisolutions Private Limited (YCAS) |
Joint venture |
India |
40 |
|
(ii) Details of other related parties:
Names |
Nature of relationship |
E.I.D. -Parry (India) Limited |
Parent company |
Parry Infrastructure Company Private Limited (PICPL) |
Fellow subsidiary |
Parry Sugar Industries Limited (PSIL) |
Fellow subsidiary (Upto 25 April 2017) |
Parry Enterprises (India) Limited (PEIL) |
Associate of parent company |
Coromandel Provident Fund |
Employee benefit plan |
Coromandel Provident Fund No. 1 |
Employee benefit plan |
CFL Gratuity Fund |
Employee benefit plan |
Coromandel Gratuity Fund - 1 |
Employee benefit plan |
Coromandel Gratuity Fund - II |
Employee benefit plan |
Coromandel Management Staff Pension Fund |
Employee benefit plan |
Coromandel Superannuation Fund |
Employee benefit plan |
Coromandel Benevolent Fund |
Employee benefit plan |
Mr. Sameer Goel |
Key management personnel |
Mr. SSuresh |
Key management personnel of Parent company |
(B) Transactions during the year
(Rs in Lakhs)
For the Year ended 31 March 2019 |
For the Year ended 31 March 2018 |
|
i) Sale of finished goods/raw materials/services |
||
a) Joint venture - CSQM |
270 |
191 |
b) Subsidiary- PAI |
4,692 |
5,014 |
ii) Rent received |
||
a) Fellow subsidiary- PICPL |
95 |
95 |
b) Joint venture- CSQM |
16 |
16 |
c) Associate - PEIL |
7 |
7 |
iii) Expenses reimbursed by |
||
a) Joint venture - CSQM |
4 |
|
b) Subsidiary- PCL |
49 |
55 |
c) Joint venture - YCAS |
1 |
- |
d) Associate - PEIL |
1 |
1 |
iv) Purchase of finished goods and services |
||
a) Parent company |
604 |
1,868 |
b) Joint venture - CSQM |
3,718 |
3,078 |
c) Associate - PEIL |
1,467 |
|
d) Joint venture -YCAS |
* |
(Rs in Lakhs)
For the Year ended 31 March 2019 |
For the Year ended 31 March 2018 |
|
v) Commission on sales |
||
a) Subsidiary- PCL |
P29 |
40 |
b) Subsidiary- CBL |
169 |
166 |
c) Subsidiary - Coromandel Mexico |
179 |
96 |
d) Subsidiary- SOAL |
162 |
121 |
e) Subsidiary- Sabero Argentina |
20 |
_ |
f) Subsidiary- Sabero Australia |
17 |
12 |
g) Associate - Sabero Philippines |
10 |
10 |
vi) Expenses reimbursed to |
||
a) Parent company |
659 |
407 |
b) Subsidiary- LPFL |
4 |
|
c) Subsidiary- PAI |
||
vii) Interest received on Inter corporate deposit/Loan |
||
a) Subsidiary- OIL |
1 |
|
viii) Loan received |
||
a) Subsidiary- LPFL |
19 |
|
ix) Acquisition of business |
||
a) Parent company (Refer Note 42) |
33,000 |
|
x) Purchase of assets and spares |
||
a) Joint venture -YCAS |
28 |
257 |
xi) Dividend paid (including interim dividend payable) |
||
a) Parent company |
11,515 |
14,172 |
xii) Rent paid |
||
a) Parent company |
6 |
|
b) Subsidiary- PCL |
3 |
|
c) Joint venture - YCAS |
2 |
2 |
xiii) Interest paid on loans |
||
a) Subsidiary- LPFL |
17 |
|
xiv) Loan given |
||
a) Subsidiary - OIL |
_ |
|
xv) Deposit paid and received back |
||
a) Parent Company |
1 |
*less than a lakh
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No expense has been recognised in the current or prior years for bad or doubtful debts in respect of the amounts owed by related parties.
(C) Transactions with key management personnel
a) Dividends paid to directors during the year ended 31 March 2019 Rs 35 Lakhs (2018: Rs 23 Lakhs).
b) Compensation of key management personnel of the Company:
The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
For the Year ended31 March 2019 |
For the Year ended 31 March 2018 |
|
Short-term employee benefits |
484 |
406 |
Others* |
270 |
265 |
Total compensation |
754 |
671 |
* excludes Goods and Services Tax/ service tax
c) During the year, the Company has not granted any employee stock options to its key managerial personnel.
(D) Refer Note 34 for transactions with Employee benefit funds.
(E) Outstanding balances as at the year end
As at 31 March 2019 |
31 March 2018 |
|
a) Trade receivables/Loans and advances |
||
- Parent company |
325 |
91 |
-Subsidiary- PCL |
5 |
10 |
- Subsidiary - OIL |
13 |
11 |
-Subsidiary- PAI |
1,714 |
2,187 |
-Subsidiary- CINL |
2 |
- |
-Joint venture- CSQM |
132 |
32 |
-Associate - PEIL |
2 |
- |
- Associate - Sabero Philippines |
6 |
6 |
-Subsidiary- SOAL |
135 |
135 |
- Fellow subsidiary - PICPL |
98 |
22 |
b) Trade payables/ Other liabilities |
||
- Parent company |
358 |
38,315 |
-Joint venture- CSQM |
481 |
668 |
- Fellow subsidiary - PICPL |
1,076 |
1,106 |
-Subsidiary- LPFL |
248 |
237 |
- Joint venture - YCAS |
13 |
53 |
-Associate - PEIL |
135 |
35 |
42 During the current year, the Company acquired on a slump sale basis with effect from 1 April 2018, the assets and liabilities of Bio Business of E.I.D. Parry (India) Limited and its subsidiary Parry America, Inc with effect from 19 April 2018. The Company accounted for the business combination in accordance with the requirements of Appendix C of Ind AS 103 ''Business Combinations'' which lays down the principles in respect of accounting for business combinations of entities or businesses under common control. As required by the Standard, pooling of interests method has been considered for common control business combination and accordingly, the assets and liabilities are reflected in the books of the Company at their respective carrying amounts. Considering the requirement of Ind AS 103- ''Business Combination'', the accounting for the transaction has been given effect retrospectively by the company. Accordingly, the financial statements for the corresponding period 2017-18 have been restated to give effect of the above scheme.
The Bio-Pesticides business is engaged in the manufacture and marketing of Neem based Azadirachtin Technical and Formulations, Plant extract based Bio-stimulants, Micronutrients, Microbials, Fungicides etc. and has brands that are well established in India and Globally.
Parry America, Inc, a 100% subsidiary headquartered in US sources Azadirachtin technical from Bio-Pesticides business in India, formulates and markets the products in North and South America, Australia and Japan.
Details of the summarized values of assets and liabilities of Bio-Pesticides business as acquired and the treatment of the difference between the net assets acquired and the consideration paid is as under:
(Amount in Rs lakhs)
As of 1 April, 2017 |
|
Propertyplant and equipment |
1,563 |
Capital work-in-progress |
15 |
Other Intangible assets |
2 |
Investments* |
24 |
Other non-current assets |
5 |
Deferred tax asset (net) |
359 |
Cash and bank balances |
120 |
Inventories |
3,126 |
Trade receivables |
4,996 |
Other current assets |
580 |
Total assets (A) |
10,790 |
Other non-current liabilities |
101 |
Trade payables |
2125 |
Other current liabilities |
32 |
Total liabilities (B) |
2,258 |
Net assets acquired (C) = (A) - (B) |
8,532 |
Less: Distributions made during the period 1 April 2017 till 31 March 2018 (D) |
2,564 |
Less: Consideration paid (E) |
33,000 |
Balance adjusted against General reserve (F) = (C) - (D) - (E) |
(27,032) |
* Shares of Parry America, Inc. acquired.
43 Disclosure as per Regulation 34(3) and 53(f) of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015:
(Rs in Lakhs)
Loans and advances in the nature of loans to subsidiaries:
Relationship |
As at 1 March 2019 |
Maximum balance outstanding during the year |
|
Dare Investments Limited (OIL) (Refer note b) |
Subsidiary |
11 |
11 |
(10) |
(10) |
Notes:
a. Figures in bracket relate to previous year
b. The loan is repayable on demand and carries interest. Section 186 of the 2013 Act is not applicable as OIL is wholly owned subsidiary of the Company
(Rs in Lakhs)
44 Payments to Auditors
For the Year ended 31 March 2019 |
For the Year ended 31 March 2018 |
|
Audit fees |
65 |
65 |
Tax audit fees |
15 |
15 |
Limited reviews |
33 |
|
Certifications |
70 |
70 |
Other services |
- |
|
Reimbursement of expenses |
1 |
|
Total |
186 |
184 |
Note: Amounts given above excludes Goods and Services Tax/ service tax
45 During the year, the Company has made political donation of Rs 300 Lakhs (2018: Nil) to Triumph Electoral Trust.
46 Based on and to the extent of information available with the Company under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the relevant particulars as at reporting date are furnished below:
(Rs in Lakhs)
SI. No. |
Particulars |
As at 31 March 2019 |
As at 31 March 2018 |
(i) |
Principal amount due to suppliers under MSMED Act, as at the end of the year |
1261 |
651 |
(ii) |
Interest accrued and due to suppliers under MSMED Act on the above amount as at the end of the year |
||
(iii) |
Payment made to suppliers (other than interest) beyond the appointed day, during the year |
||
(iv) |
Interest paid to suppliers under MSMED Act (other than Section 16) |
||
(v) |
Interest paid to suppliers under MSMED Act (Section 16) |
|
|
(vi) |
Interest due and payable to suppliers under MSMED Act, for payments already made |
||
(vii) |
Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act (ii) (vi) |
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
47 Exceptional item
a) During the year ended 31 March 2019, the Company has settled a customer claim for damages arising under an international supply agreement in respect of one of its Crop Protection products, and costs related thereto, including incidental legal costs estimated at Rs 1,990 Lakhs has been disclosed as an Exceptional item. The Company is pursuing with its insurers for reimbursement of this claim.
b) On 28 January 2019 a fire accident occurred at the product godown in one of the Company''s manufacturing unit at Sarigam, Gujarat. The damage caused to the inventories and other assets on account of this fire accident together with costs related thereto, net of insurance claim receivable, estimated at Rs 395 Lakhs has been disclosed as an Exceptional item. The Company is pursuing with its insurers for reimbursement of this claim.
48 Approval of financial statements
The financial statements were approved by the Board of Directors on 23 April 2019.
For and on behalf of the Board of Directors |
|
Sameer Goel |
M. M. Murugappan |
Managing Director |
Chairman |
Jayashree Satagopan |
P. Varadarajan |
Chief Financial Officer |
Company Secretary |
Place: Secunderabad |
|
Date: 23 April 2019 |
Mar 31, 2018
16.4 As at 31 March 2018, E.I.D Parry (India) Limited (Parent Company) held 17,71,55,580 (2017: 17,71,55,580) equity shares of Rs, 1 each fully paid-up representing 60.59% (2017: 60.74%) of the paid up capital. ICICI Prudential Life Insurance Company Limited held 1,36,65,482 (2017: 1,47,30,079) equity shares of Rs,1 each fully paid-up representing 4.67% (2017: 5.05%). There are no other shareholders holding more than 5 % of the issued capital.
16.5 Share options granted under the Company''s employee share option plan
As at 31 March 2018, shares reserved for issue under the ''ESOP 2007'' scheme is 81,85,066 (2017: 87,94,148) equity shares of Rs,1 each and under the ''ESOP 2016'' scheme is 1,44,75,800 (2017: 1,45,81,000) equity shares of Rs,1 each.
Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in Note 33.
16.6 Details of bonus shares issued, shares issued for consideration other than cash during the period of five years immediately preceding the reporting date
During the year ended 31 March 2015:
(a) 25,74,193 equity shares of '' 1 each fully paid-up were allotted to shareholders of erstwhile Liberty Phosphate Limited (LPL) in the proportion of 7 equity shares of '' 1 each of the Company for every 8 equity shares of ''10 each held in the LPL pursuant to the Scheme of Amalgamation between LPL and the Company.
(b) 53,09,210 equity shares of ''1 each fully paid-up were allotted to shareholders of erstwhile Sabero Organics Gujarat Limited (Sabero) in the proportion of 5 equity shares of '' 1 each of the Company for every 8 equity shares of '' 10 each held in Sabero pursuant to the Scheme of Amalgamation between Sabero and the Company.
Cumulative redeemable preference shares: The Company has a class of cumulative redeemable preference shares having face value of ''10 each with such rights, privileges and conditions respectively attached thereto as may be from time to time confirmed by the regulations of the company. Pursuant to the Scheme of Amalgamation, the cumulative redeemable preference shares carry cumulative dividend of 8% per annum in relation to capital paid upon them and are on original terms and conditions in which they were issued by erstwhile Liberty Phosphate Limited, the amalgamating company.
No such cumulative redeemable preference shares are issued and outstanding as of 31 March 2018 (2017: Nil).
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
Retained earnings represents the Company''s undistributed earnings after taxes.
In respect of the year ended 31 March 2018, the directors approved payment of interim dividend of ''3 per share and proposed that a final dividend of ''3.50 per share be paid on fully paid equity shares. The proposed final equity dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The total estimated equity dividend to be paid with respect to interim dividend is Rs,10,557 Lakhs including dividend distribution tax of Rs,1,785 Lakhs and with respect to final dividend is Rs,12,317 Lakhs including dividend distribution tax of Rs, 2,084 Lakhs.
In July 2017, a dividend of Rs, 5 per share amounting total dividend of Rs,17,576 lakhs including dividend distribution tax of Rs, 2,973 lakhs was paid to holders of fully paid equity shares. In July 2016, a dividend of Rs, 4 per share amounting total dividend Rs, 14,030 lakhs including dividend distribution tax of Rs,2,374 lakhs was paid to holders of fully paid equity shares.
Capital redemption reserve has been created pursuant to the requirements of the Act under which the Company is required to transfer certain amounts on redemption of the preference shares. The Company has redeemed the underlying preference shares in the earlier years. The capital redemption reserve can be utilised for issue of bonus shares.
Securities premium reserve represents the amount received in excess of the face value of the equity shares. The utilisation of the securities premium reserve is governed by the Section 52 of the Act.
This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed of.
This reserve represents the actuarial gain/(loss) recognized on the defined benefit plan and will not be transferred to retained earnings.
18.1 Summary of borrowing arrangements
i) Secured loan repayable on demand comprises cash credit balances secured by a pari-passu charge on current assets of the Company. Further, certain loans are secured by second charge on moveable fixed assets of the Company.
ii) Secured short-term borrowings comprises commercial papers and working capital demand loan. Commercial paper is secured by a pari-passu charge on current assets of the Company. Working capital demand loan is secured by specific subsidy receivables and letter of comfort from Government of India.
iii) Unsecured loans repayable on demand comprises of buyers credit denominated in foreign currency and unsecured shortterm loans comprise of commercial paper, short-term loans and foreign currency loans from banks.
iv) Unsecured loans from related parties comprise of loan from a subsidiary, Liberty Pesticides and Fertilizers Limited.
v) Amount payable on securitisation of financial assets is secured by way of charge over certain trade receivables.
18.2 Breach of loan agreement
There is no breach of loan agreement
32.1 Capital management
The Company''s capital management objective is to maximise the total shareholder return by optimizing cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.
The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents and inter-corporate deposits with financial institutions.
The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimize the effects of these risks by using financial instruments such as foreign currency forward contracts, option contracts, interest and currency swaps to hedge risk exposures and appropriate risk management policies as detailed below. The use of these financial instruments is governed by the Company''s policies, which outlines principles on foreign exchange risk, interest rate risk, credit risk and deployment of surplus funds.
32.4 Market risk
The Company''s financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
- Foreign currency risk
- Interest rate risk
- Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.
32.4.1 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Nutrient and other allied business has foreign exchange exposure for its imports of raw materials, intermediates and traded goods.
2. Crop Protection segment has foreign exchange exposure on both exports of finished goods and imports of raw materials, intermediates and traded goods.
3. Foreign currency borrowings in the form of external commercial borrowings, buyers credit, Foreign Currency Non-Repatriable (B) loans (FCNRB), packing credit etc. availed for meeting its funding requirements.
The Company has a forex policy in place whose objective is to mitigate foreign exchange risk by deploying the appropriate hedging strategies through combination of various hedging instruments such as foreign currency forward contracts, options contracts and has a dedicated forex desk to monitor the currency movement and respond swiftly to market situations. The Company follows netting principle for managing the foreign exchange exposure for each operating segment.
There are no long-term borrowings outstanding as on 31 March 2018 and 31 March 2017.
The forward and option contracts have been entered into to hedge the foreign currency risk on purchase of raw materials, stock-in-trade and the related buyer''s credit and in certain cases the foreign currency term loan and trade receivables.
32.4.2 Interest rate risk management
The Company issues commercial papers, draws working capital demand loans, avails cash credit, foreign currency borrowings including buyers credit, Foreign Currency Non-Repatriable (B) loans (FCNRB), Packing Credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease in case of foreign currency borrowings and 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.
If interest rate had been 10 basis points higher/ lower in case of foreign currency borrowings and 50 basis points higher/ lower in case of rupee borrowings and all other variables were held constant, the Company''s profit for the year ended 31 March 2018 would decrease/ increase by Rs,762 lakhs (31 March 2017: Rs, 545 lakhs)
32.4.3 Other price risks
The Company is exposed to equity price risks arising from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
a. Equity price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 5% higher/lower other comprehensive income/ equity for the year ended 31 March 2018 would increase/ decrease by Rs, 406 Lakhs (Rs, 582 Lakhs for the year ended 31 March 2017) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant.
32.5 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counterparties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets.
The credit risk on cash and bank balances, derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
* Included in Borrowing and interest throne are certain borrowings which are subject to variable interest rates. Amount included in the above maturity analysis assumes interest outflows based on the year end benchmark interest rates, the actual interest rates may differ based on the changes in the benchmark interest rates.
** Other financial liabilities include deposits received from customers amounting to Rs, 11,462 Lakhs (31 March 2017: Rs, 10,293 Lakhs). These deposits do not have a contractual re-payment term but are repayable on demand. Since, the Company does not have an unconditional right to defer the payment, these deposits have been classified as current balances. For including these amounts in the above mentioned maturity analysis, the Company has assumed that these deposits, including interest thereon, will be repayable at the end of the reporting period. The actual maturity period for the deposit amount and the interest thereon can differ based on the date on which these deposits are settled to the customers.
32.7 Financial guarantee contract
The Company has provided a sponsor guarantee for USD 41.1 million (proportionate to the shareholding of 15%) towards the borrowings of Tunisian Indian Fertilisers S.A. (TIFERT), a company based in Tunisia, manufacturing phosphoric acid. In March 2017, TIFERT has requested reschedulement of installment due to the lenders and delayed the payment. The same was not agreed to by the Lenders and the acceleration notice was served on TIFERT by lenders on 28 March, 2017. The loan installment was immediately paid on 30 March, 2017 by TIFERT however, on 4 April 2017 the lenders followed up with call notice on shareholders towards guaranteed amount (Coromandel''s share USD 35.25 million outstanding as on 31 March, 2017). The Company along with other shareholders of TIFERT are in discussion with the Lenders to resolve the matter with regard to liquidity situation and operational improvements of TIFERT and also to find a solution for meeting the future debt obligations of TIFERT.
32.8 Financing facilities
The Company has access to financing facilities of which Rs,1,23,626 Lakhs (as at 31 March, 2017: Rs, 1,79,972 Lakhs) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
32.9 Fair value measurements
Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
*positive value denotes financial asset (net) and negative value denotes financial liability (net) Notes:
1. There were no transfers between Level 1 and 2 in the period.
2. The Level 1 financial instruments are measured using quotes in active market.
c) Number of options exercisable at the end of the year 52,100 (2017: 6,61,182).
d) The fair values of the option with modified terms were determined using a Black Scholes'' model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 3-4 years.
Following assumptions were used for calculation of fair value of grants:
33.2 Employee Stock Option Scheme 2016 (''ESOP 2016 Scheme''):
a) Pursuant to the ESOP 2016 Scheme, the Company granted options which vest over a period of four years commencing from the respective dates of grant. Following are the number of options outstanding during the year:
* the weighted average fair value of options granted during the year is Rs, 207.85 (2017: Rs, 118.53)
b) The above outstanding options have been granted in various tranches and have a weighted average remaining life of 4.09 years (2017: 5.10 years). The exercise price of the outstanding options range from Rs, 319.65 to Rs, 529.40 (2017: Rs, 319.65). The weighted average share price during the year is Rs, 460 (2017: Rs, 263).
c) Number of options exercisable at the end of the year 3,11,740 (2017: Nil).
d) The fair values of the option were determined using a Black Scholes'' model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 5-6 years.
33.3 Share based payments
The Company recorded employee share based payments of Rs, 863 lakhs (2017: Rs, 169 lakhs) under ''Employee benefits expense''.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Employee who has completed five years of service is entitled to specific benefit depending on the employee''s length of service and salary at retirement or relieving age. The fund has the form of trust and it is governed by the Board of Trustees which consists of employer and employee representatives. The Board of Trustees is responsible for the administration of plan assets.
The Board of Trustees reviews the level of funding and asset-liability matching strategy in the gratuity plan to keep the scheme adequately funded for settlement of obligations under the plan.
Gratuity for employees is covered under a scheme of Life Insurance Corporation of India (LIC) which is basically a year-on-year cash accumulation plan. As part of the scheme the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance company, as part of the policy rules, makes payment of all gratuity settlements during the year subject to sufficiency of funds under the policy.
The amounts disclosed above represent our best estimate and the uncertainties are dependent on the outcome of the legal processes initiated by the Company or the claimant as the case may be.
b) The Company has received a Product Liability claim from a customer in respect of contamination in the product exported during the year. The amount of claim is not mentioned in the claim document. Discussions have been initiated with the customer to determined the amount and consequently no provision towards the said claim has been made as at Balance Sheet date. The Company carries product liability insurance and has intimated the insurance company of receipt of such claim.
Also refer Note 42 on acquisition of the Bio Pesticides Business and Parry America Inc., USA
b) Other commitments
(i) Maximum obligation on long term lease of land - Rs,2,742 lakhs (2017: Rs,1,343 lakhs).
(ii) Details of other related parties
42 The Board of Directors at their meeting held on 22 December 2017 has approved acquisition of the Bio Pesticides Business of E.I.D Parry (India) Limited on a going concern basis by way of a slump sale for a lump sum consideration of Rs,30,261 lakhs subject to adjustment for working capital as on the Closing Date and acquisition of shares held by E.I.D Parry (India) Limited in Parry America Inc., USA for a consideration of Rs,3,540 lakhs with effect from 1 April 2018 or such other date as may be agreed to by the Board (''Closing Date''). The shareholders have approved these transactions through postal ballot/e-voting and agreements have been signed to give effect to the same.
43 Disclosure as per Regulation 34(3) and 53(f) of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015:
Notes:
a. Figures in bracket relate to previous year
b. The loan is repayable on demand and carries interest. Section 186 of the 2013 Act is not applicable as DIL is wholly owned subsidiary of the Company
Note: Amounts given above excludes Goods and Services Tax/ service tax
45 During the year, the Company has made political donation of '' Nil (2017: '' 100 lakhs to Triumph Electoral Trust).
46 Based on and to the extent of information available with the Company under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the relevant particulars as at reporting date are furnished below:
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
47 Approval of financial statements
The financial statements were approved by the Board of Directors on 24 April 2018.
Mar 31, 2017
1. Financial instruments
2 Capital management
The Companyâs capital management objective is to maximize the total shareholder return by optimizing cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.
The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents and inter-corporate deposits with financial institutions.
3 Market risk
The Company''s financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
- Foreign currency risk
- Interest rate risk
- Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.
4 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Nutrient and other allied business has foreign exchange exposure for its imports of raw materials, intermediates and traded goods.
2. Crop Protection segment has foreign exchange exposure on both exports of finished goods and imports of raw materials, intermediates and traded goods.
3. Foreign currency borrowings in the form of external commercial borrowings, buyers credit, Foreign Currency Non-Reparable (B) loans (FCNRB), packing credit etc. availed for meeting its funding requirements.
The Company has a forex policy in place whose objective is to mitigate foreign exchange risk by deploying the appropriate hedging strategies through combination of various hedging instruments such as foreign currency forward contracts, options contracts and has a dedicated forex desk to monitor the currency movement and respond swiftly to market situations. The Company follows netting principle for managing the foreign exchange exposure for each operating segment.
The Company had entered into the swap contracts to hedge the currency risks on the external commercial borrowings. There are no long-term borrowings outstanding as on 31 March 2017.
d. Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in US Dollar. The following table details the Company''s sensitivity to a ''1 increase and decrease against the US Dollar. ''1 is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a ''1 change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 1 against the US Dollar. For a ''1 weakening against the US Dollar, there would be a comparable impact on the profit or equity.
5 Interest rate risk management
The Company issues commercial papers, draws working capital demand loans, avails cash credit, foreign currency borrowings including buyers credit, Foreign Currency Non-Repatriable (B) loans (FCNRB), Packing Credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
a. Interest rate swap contract
The Company had entered into the swap contracts to hedge the interest rate risks on the external commercial borrowings. Using interest rate swap, Company agrees to exchange floating interest rate in USD to INR fixed rate on agreed notional principal amounts. Such contracts enable the company to mitigate the interest rate risk. Refer details of the principal and interest rate swaps under Note 32.4.1(b). There are no long-term borrowings outstanding as on 31 March 2017.
b. Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 10 basis points increase or decrease in case of foreign currency borrowings and 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.
If interest rate had been 10 basis points higher/ lower in case of foreign currency borrowings and 50 basis points higher/ lower in case of rupee borrowings and all other variables were held constant, the Company''s profit for the year ended 31 March 2017 would decrease/ increase by Rs,545 lakhs (31 March 2016: Rs,570 lakhs)
6 Other price risks
The Company is exposed to equity price risks arising from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
a. Equity price sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 5% higher/lower other comprehensive income/ equity for the year ended 31 March 2017 would increase/ decrease by Rs,582 Lakhs (Rs,705 Lakhs for the year ended 31 March 2016) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant.
7 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counterparties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets.
The credit risk on cash and bank balances, derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
Included in Borrowing and interest throne are certain borrowings which are subject to variable interest rates. Amount included in the above maturity analysis assumes interest outflows based on the year end benchmark interest rates, the actual interest rates may differ based on the changes in the benchmark interest rates.
**Other financial liabilities include deposits received from customers amounting to Rs, 10,293 Lakhs (31 March 2016: Rs, 9,810 Lakhs; 1 April 2015: Rs, 9,413 Lakhs). These deposits do not have a contractual re-payment term but are repayable on demand. Since, the Company does not have an unconditional right to defer the payment, these deposits have been classified as current balances. For including these amounts in the above mentioned maturity analysis, the Company has assumed that these deposits, including interest thereon, will be repayable at the end of the reporting period. The actual maturity period for the deposit amount and the interest thereon can differ based on the date on which these deposits are settled to the customers.
8 Financial guarantee contract
The Company has provided a sponsor guarantee for USD 41.1 million (proportionate to the shareholding of 15%) towards the borrowings of Tunisian Indian Fertilizers S.A. (TIFERT), a company based in Tunisia, manufacturing phosphoric acid. In March 2017, TIFERT has requested reschedulement of installment due to the lenders and delayed the payment. The same was not agreed to by the Lenders and the the acceleration notice was served on TIFERT by lenders on 28 March 2017. The loan installment was immediately paid on 30 March 2017 by TIFERT however, on 4 April 2017 the lenders followed up with call notice on shareholders towards guaranteed amount (Coromandel''s share USD 35.25 million outstanding as on date). The Company along with other shareholders of TIFERT are in discussion with the Lenders to resolve the matter with regard to liquidity situation and operational improvements of TIFERT and also to find a solution for meeting the future debt obligations of TIFERT.
Based on communication exchanged with Lenders and operational improvement initiatives taken by TIFERT, the Company reasonably considers that TIFERT would be in a position to meet the debt obligations and it is unlikely that such an event of payment under guarantee amount will arise. The Company''s obligation under this financial guarantee if that amount is claimed by the counterparty to the guarantee is subject to a maximum of Rs,22,861 Lakhs (31 March 2016: Rs,27,23 3 Lakhs; 1 April 2015: Rs,32,346 Lakhs). Carrying amount of the financial guarantee contract in the books is as under:
9 Financing facilities
The Company has access to financing facilities of which Rs,1,79,972 Lakhs (as at 31 March 2016: Rs,91,275 Lakhs; as at 1 April 2015: Rs,96,660 Lakhs) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
10 Fair value measurements
Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
positive value denotes financial asset (net) and negative value denotes financial liability (net) Notes:
1. There were no transfers between Level 1 and 2 in the period.
2. The Level 1 financial instruments are measured using quotes in active market
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
11. Transition to Ind-AS
The effect of the Company''s transition to Ind AS is summarized as follows:
(i) Transition election
(ii) Reconciliation of equity as previously reported under Indian GAAP to Ind-AS
(iii) Reconciliation of profit or loss as previously reported under Indian GAAP to Ind-AS
(iv) Reconciliation of other comprehensive income as previously reported under Indian GAAP to Ind-AS
(v) Adjustments to the statement of cash flows
Notes:
1. In accordance with Ind-AS transitional provisions, Ind AS 102 Share-based Payment has not been applied to employee stock options that have vested before the transition date.
2. In accordance with Ind-AS transitional provisions, the Company opted to consider previous GAAP carrying value of investments as deemed cost on transition date for investments in subsidiaries, joint ventures and associates in separate financial statement.
3. The Company has designated investment in following equity investment at FVTOCI on the basis of facts and circumstances that existed at the transition date:
- Tunisian Indian Fertilizers S.A.
- Nandesari Environment Control Limited
- Ranar Agrochem Limited (formerly Prathyusha Chemicals and Fertilizers Limited)
- Indian Potash Limited
- Foskor (Pty) Limited
- Murugappa Management Services Limited
- Bharuch Enviro Infrastructure Limited
- Narmada Clean Tech
- A.P. Gas Power Corporation Limited
4. The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after
1 April 2015 (the transition date).
5. The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to business combinations that occurred before the date of transition.
Notes:
i. Under Ind AS, derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently premeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately. Under Indian GAAP, foreign exchange forward contracts were restated and premium or discount associated with such instruments were recorded as exchange differences over the period of the contract. In respect of currency options/ swap contracts outstanding as at the Balance Sheet date were marked to market and net loss was charged to profit or loss.
ii. Under Indian GAAP, dividends on equity shares recommended by the Board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under Ind AS, such dividends along with the dividend distribution tax thereon are recognized as a liability when declared/ approved by the members in a general meeting.
iii. Under Indian GAAP, transaction costs incurred in connection with borrowings are charged upfront to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.
iv. Under Indian GAAP, long-term financial liabilities such as interest free deposit received on lease of land were recognized at the contractual amount and were not discounted. Under Ind AS, where the effect of time value of money is material, the amount of liability should be recognized at the present value of amount expected to settle the liability. These liabilities are subsequently measured at amortized cost using the effective interest method.
v. Under Indian GAAP, the Company accounted for long-term strategic investments in unquoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Company has designated such investments as FVTOCI investments. Ind AS requires FVTOCI investments to be measured at fair value with subsequent changes to be recognized in a separate component of equity. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognized as a separate component of equity, in the FVTOCI reserve, net of related deferred taxes.
vi. Under Indian GAAP, the Company accounted for certain investments in quoted equity shares as investment measured at lower of cost and fair value. Under Ind AS, the Company has designated such investments as FVTPL.
vii. Under Ind-AS, cash discounts are considered part of the overall consideration receivable and is recognized on an estimated basis at the time of sales. Under Indian GAAP cash discounts are recognized at the time of collection from debtors.
viii. As per the transitional provisions prescribed in Schedule II to the Act, the Company had fully depreciated the carrying value of components, net of residual value, where the remaining life of the component was determined to be Nil as on the date of transition (1 April 2015) and has adjusted an amount of Rs,531 lakhs (net of deferred tax of Rs,279 lakhs) against the opening retained earnings.
ix. Under Ind AS, financial guarantee contracts are accounted as financial liabilities and measured at fair value at inception and subsequently measured at the higher of the amortised value or the obligation amount in case it is probable that the guarantee amount is payable. Accordingly, Rs,219 lakhs as at 31 March 2016 (2015: Rs,70 lakhs) has been recognized as a liability with a corresponding charge to profit or loss. The consequential tax effect has also been recognized. Under Indian GAAP, guarantee issued were not recognized in the Balance Sheet unless it is probable that the guarantee amount is payable.
x. Under Indian GAAP, the Company recognized expense for the share based payment plan as per the intrinsic value method. Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognized over the vesting period. Share options granted before and still vesting at 1 April 2015 have been recognized as a separate component of equity in share based payment reserve against retained earnings at 1 April 2015.
xi. The Company recognises costs related to its post-employment defined benefit plan on an actuarial basis both under Indian GAAP and Ind AS. Under Indian GAAP, the entire cost including actuarial gains and losses are charged to profit or loss. Under Ind AS, remeasurements are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI.
xii. Consequential deferred tax on all the above adjustments.
12. Approval of financial statements
The financial statements were approved for issue by the Board of Directors on 28 April 2017.
Mar 31, 2015
(i) Rights, preferences and restrictions relating to each class of
share capital:
Equity shares: The Company has one class of equity shares having a face
value of Rs. 1/- each. Each shareholder is eligible for one vote per
share held. The dividend proposed by the Board of Directors is subject
to the approval of the Shareholders in the ensuing Annual General
Meeting, except in the case of interim dividend. Cumulative redeemable
preference shares: The Company has a class of cumulative redeemable
preference shares having face value of Rs. 10/- each with such rights,
privileges and conditions respectively attached thereto as may be from
time to time confirmed by the regulations of the Company. Pursuant to
the Scheme of Amalgamation, the cumulative redeemable preference shares
carry cumulative dividend of 8% per annum in relation to capital paid
upon them and are on original terms and conditions in which they were
issued by erstwhile Liberty Phosphate Limited, the amalgamating
company.
(iii) As at 31 March 2015, E.i.D Parry (india) Limited (Holding
Company) held 17,71,55,580 (2014: 17,71,55,580) equity shares of Rs. 1/-
each fully paid-up representing 60.83% (2014: 62.56%) of the paid-up
capital. There are no other shareholders holding more than 5% of the
issued capital.
(iv) As at 31 March 2015, shares reserved for issue under the ''ESOP
2007'' scheme is 92,12,918 (2014: 93,98,050) equity shares of Rs. 1/- each
(refer Note 27).
(v) Details of bonus shares issued, shares issued for consideration
other than cash during the period of five years immediately preceeding
the reporting date:
During the year ended 31 March 2015:
(a) 25,74,193 equity shares of Rs. 1/- each fully paid-up were allotted
to the shareholders of erstwhile Liberty Phosphate Limited (LPL) in the
proportion of 7 equity shares of Rs. 1/- each in the Company for every 8
equity shares of Rs. 10/- each held in LPL pursuant to the Scheme of
Amalgamation between LPL and the Company.
(b) 53,09,210 equity shares of Rs. 1/- each fully paid-up were allotted
to the shareholders of erstwhile Sabero Organics Gujarat Limited
(Sabero) in the proportion of 5 equity shares of Rs. 1/- each in the
Company for every 8 equity shares of Rs. 10/- each held in Sabero
pursuant to the Scheme of Amalgamation between Sabero and the Company
(Refer Note 26).
2. Amalgamation of Sabero Organics Gujarat Limited ("Sabero")
The Board of Directors of the Company and its subsidiary, Sabero
Organics Gujarat Limited ("Sabero"), in their meetings held on 24
January 2014 approved a Scheme of Amalgamation under Sections 391 and
394 of the Companies Act, 1956 (''the Scheme'') for amalgamation of
Sabero with the Company. Sabero was engaged in the manufacture and sale
of Crop Protection Chemicals.
Pursuant to the Scheme sanctioned by the Hon''ble High Court of
Judicature at Hyderabad for the State of Telangana and the State of
Andhra Pradesh and by the Hon''ble High Court of Judicature of Gujarat
vide their respective orders, the entire business undertaking of Sabero
including all assets and properties, debts, liabilities and duties and
obligations have been transferred to and vested in the Company, with
effect from 1 April 2014 (the Appointed Date as per the Scheme). The
certified copies of the aforesaid High Court Orders have been filed
with the Ministry of Corporate Affairs on 24 November 2014 and 31
December 2014 and consequently, the Scheme has been given effect to in
these financial statements.
in terms of the Scheme, the Company has allotted 53,09,210 equity
shares of Rs.1 each as fully paid up to the shareholders of Sabero in the
proportion of 5 equity shares of Rs.1 each in the Company for every 8
equity shares of Rs.10 each held in Sabero. The equity shares held by the
Company in Sabero totaling 2,53,56,361 have been extinguished and
anulled.
The amalgamation has been accounted under the ''Pooling of interests
method'' as prescribed under Accounting Standard 14 ''Accounting for
Amalgamations'' (AS 14). Accordingly, the assets, liabilities and
reserves of Sabero as at 1 April 2014 have been taken over at their
book values (after making adjustments for adoption of uniform
accounting policies) and in the same form.
Details of the summarized values of assets and liabilities of Sabero as
acquired pursuant to the Scheme and the treatment of the difference
between the net assets acquired and cost of investments of the Company
together with the shares issued to the shareholders of Sabero are as
under:
3. Employee Stock Option Plan - ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on 24 July 2007, the Company had established an ''Employee Stock Option
Scheme 2007'' (''ESOP 2007'' or ''the Scheme'') to be administered by the
Remuneration and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 1,27,85,976 equity shares of
Rs.1/- each have been reserved to be issued to the eligible employees,
with each option conferring a right upon the employee to apply for one
equity share. The options granted under the Scheme would vest not less
than one year and not more than five years from the date of grant of
the options. The options granted to the employees would be capable of
being exercised within a period of three years from the date of
vesting. in partial modification of the special resolution passed for
establishing ESOP 2007, the shareholders in their meeting held on 23
July 2012 decided to approve the extension of the exercise period of
options granted under the ESOP 2007 from three years to six years.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Remuneration and Nomination Committee resolution approving the grant.
d) Pursuant to the Scheme, the Company granted options which vest over
a period of four years commencing from the respective dates of grant.
The exercise price being equal to the closing market price prevailing
on the date prior to the date of grant, there is no deferred
compensation cost to be accrued in this regard.
f) The above outstanding options have been granted in various tranches,
at exercise price being equal to the closing market price prevailing on
the date prior to the date of grant. The outstanding options have a
weighted average remaining life of 1.39 years (2014: 1.55 years).
g) Number of options exercisable at the end of the year 11,40,168
(2014: 18,09,036).
4. Contingent liabilities (to the extent not provided for)
a) Guarantees:
The Company has provided a guarantee towards the borrowing of Tunisian
indian Fertilisers S.A., (TiFERT), Company''s venture in Tunisia, up to
Rs.32346 lakhs (2014: Rs.31009 lakhs).
b) Claims against the Company not acknowledged as debt: (Rs. in Lakhs)
As at As at
31 March 2015 31 March 2014
In respect of matters under dispute:
Excise duty 7491 11780
Customs duty 372 372
Sales tax 1291 410
income tax 838 222
Service tax 161 -
Others 1167 1744
The amounts shown in the item (a) represent guarantees given in the
normal course of business and not expected to result in any loss to the
Company on the basis of the beneficiaries fulfilling their obligations
as they arise. The amounts in item (b) represent best estimate and the
uncertainties are dependent on the outcome of the legal processes
initiated by the Company or the claimant as the case may be.
5. Segment reporting
a) Business segment
The Company has considered business segment as the primary segment for
disclosure. The Company is primarily engaged in the manufacture and
trading of Farm inputs, which in the context of Accounting Standard 17
"Segment Reporting" is considered the only business segment.
b) Geographical segment
The Company sells its products mainly within india where the conditions
prevailing are uniform. Since the sales outside india are below the
threshold limit, no separate geographical segment disclosure is
considered necessary.
6. Leases
The Company has entered into certain operating lease agreements and an
amount of Rs.2299 lakhs (2014: Rs.1615 lakhs) paid under such agreements
has been charged to the Statement of Profit and Loss. These leases are
generally not non-cancellable and are renewable by mutual consent on
mutually agreed terms. There are no restrictions imposed by such
agreements.
7. Corporate Social Responsibility
Expenses incurred on Corporate Social Responsibility (CSR) programs
under Section 135 of the 2013 Act are charged to the Statement of
Profit and Loss under ''Other expenses'' (Note 25) Rs.1001 lakhs and under
''Employee benefits expense'' (Note 23) Rs.27 lakhs.
b. Defined contribution plans
in respect of the defined contribution plans, an amount of Rs.1425 lakhs
(2014: Rs.1262 lakhs) has been recognised as an expense in the Statement
of Profit and Loss during the year.
8. The Company has recognised subsidy income as per the prevalent
Nutrient Based Subsidy (NBS) Policy announced by Government of india.
Such income is included in "Government Subsidies" in the Statement of
Profit and Loss. The subsidy income for the year includes Rs.Nil (2014:
Rs.3488 lakhs) relating to earlier years comprising of freight subsidy
income consequent to the final notification by the Government.
9. Exceptional item:
a. in October 2014, the ''Hudhud'' cyclone impacted the Company''s
operations at Vishakapatnam. The Company has filed the claim (including
for loss of profits) with the insurance Company, survey of which is
under progress. The Company has set up a receivable based on its
current best estimates and reasonable certainty, which is equivalent to
the losses (including for inventories, repairs to fixed assets to the
extent incurred, etc.) and, the net loss of Rs.Nil has been disclosed as
Exceptional item. On grounds of prudence, the loss of profits claim
has not been recognised as income.
b. in the current year, also includes interest expense of Rs.394 lakhs on
enhanced compensation payable pursuant to the Court Order on land
acquired by the Company in the earlier years.
c. in the previous year Rs.1261 lakhs represents interest demand in
respect of disputed taxes relating to earlier years.
9. During the year ended 31 March 2012, the Members of the Company
pursuant to the provisions of Section 293(1)(a) of the 1956 Act
approved the transfer/assigning of the lease rights on the land located
at Navi Mumbai to prospective buyers. As at 31 March 2015, the Company
is in the process of identifying potential buyers.
10. Interests in joint ventures
a) Pursuant to the joint venture agreement entered into by the Company
with Yanmar Co. Ltd and Mitsui & Co. (Asia Pacific) Pte. Ltd, a joint
venture Company, Yanmar Coromandel Agrisolutions Private Limited
(YCAS), was incorporated on 14 July 2014 to engage in the business of
manufacture, sales and after-sales service of agricultural machinery.
in terms of the aforesaid agreement, capital contributions have been
made into YCAS and it commenced commercial operations during the year.
b) Exchange difference in respect of forward exchange contracts to be
recognised in the Statement of Profit and Loss in the subsequent
accounting period is Rs. 2197 lakhs debit (2014: Rs. 2744 lakhs debit).
c) As on 31 March 2015, the Company has foreign currency borrowing of
US$ 46.67 million (2014: US$ 73.33 million). The Company entered into
principal and interest rate swaps amounting US$ 46.67 million (2014:
US$ 73.33 million) to hedge the foreign currency and interest rate
risks thereon. The Company has marked to market the foreign currency
borrowings and the corresponding swap contracts and the net exchange
differences arising thereon have been recognised in the Statement of
Profit and Loss.
d) During the year, pursuant to the notification of Schedule ii to the
Companies Act, 2013, with effect from 1 April 2014, the Company has
revised the estimated useful life of certain assets to align the useful
life with those specified in Schedule ii. Pursuant to the transitional
provisions prescribed in Schedule ii to the Companies Act, 2013, the
Company has fully depreciated the carrying value of assets, net of
residual value, where the remaining useful life of the asset was
determined to be Nil as on 1 April 2014 and has adjusted an amount of Rs.
729 lakhs (net of deferred tax of Rs. 375 lakhs) against the opening
Surplus in the Statement of Profit and Loss under Reserves and Surplus.
Consequent to the change in the useful life of the assets, the impact
on the depreciation expense for the year is not material.
11. Previous year figures have been recast/ reclassified wherever
necessary to correspond with the current year''s classification/
disclosures.
Mar 31, 2014
1. Acquisition and Amalgamation of Liberty Phosphate Limited and
Liberty Urvarak Limited
(i) Acquisition
During the previous year, consequent to the share purchase agreement
entered into by the Company with the erstwhile promoters of Liberty
Phosphate Limited (LPL), the Company on 7 March 2013 acquired 70,19,406
equity shares (representing 48.62%) from the erstwhile promoters of LPL
at a price of Rs.241/- per share. Effective 7 March 2013, the Board of
Directors of LPL was reconstituted and LPL became a subsidiary of the
Company. Further, in accordance with the share purchase agreement
entered into during the previous year by the Company with the
shareholders of Liberty Urvarak Limited (LUL), the Company acquired
29,97,552 (100%) equity shares of LUL for a consideration of Rs.7800
lakhs thereby making LUL a wholly owned subsidiary of the Company. LUL
held 5% of the voting share capital of LPL.
On receipt of necessary approvals from SEBI and in accordance with the
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
2011, the Company has during the current year, acquired 37,53,933
equity shares (26% of the equity share capital) of LPL at a price of
Rs.241/- per share in the Open offer made to the public shareholders of
LPL. With this acquisition, the Company held 1,14,96,267 equity shares
representing 79.62% of the equity share capital of LPL, including
7,22,928 shares (5%) held by Liberty Urvarak Ltd., a wholly owned
subsidiary of the Company.
(ii) Amalgamation
LPL and LUL are engaged in the business of manufacture and sale of
fertilisers predominantly, Single Super Phosphate (SSP).
During the year, the Board of Directors of the Company, LPL and LUL in
their respective meetings held on 28 September 2013 approved a Scheme
of Amalgamation under Sections 391 and 394 of the Companies Act, 1956
(''the Scheme'') for amalgamation of LPL and LUL with the Company.
Pursuant to the Scheme sanctioned by the Hon''ble High Court of
Judicature of Andhra Pradesh (''AP'') vide its order dated 7 April 2014
and by the Hon''ble High Court of Judicature of Gujarat vide its order
dated 24 April 2014, the entire business undertaking of LPL and LUL
including all assets and properties, debts, liabilities and duties and
obligations have been transferred to and vested in the Company,
retrospectively with effect from 1 April 2013 (the Appointed Date as
per the Scheme). The certifi ed copies of the aforesaid High Court
Orders have been fi led with the respective Registrar of Companies and
the Scheme has been given effect to in these fi nancial statements.
In terms of the Scheme, on the record date to be fi xed, the Company is
required to allot 25,74,193 equity shares of Rs.1 each as fully paid up
to the public shareholders of LPL in the proportion of 7 equity shares
of Rs.1 each in the Company for every 8 equity shares of Rs.10 each
held in LPL. LUL being a wholly-owned subsidiary of the Company, no
equity shares will be issued. The equity shares held by the Company in
LPL totaling 1,14,96,267 and LUL totaling 29,97,552 shall accordingly
get extinguished and annulled.
Further, in terms of the Scheme, the Company was required to allot 8%
Cumulative Redeemable Preference Shares (''CRPS'') of Rs.10/- each to
every preference shareholder of LPL in proportion of 1 preference share
of Rs.10/- each of the Company for every 1 preference share of Rs.10/-
each in LPL and on sanction of the Scheme, the Authorised share capital
of the Company automatically stands increased. The Board of Directors
of LPL in their meeting held on 21 January 2014 decided for early
redemption of CRPS as per its terms.
The amalgamation has been accounted under the ''Pooling of interests
method'' as prescribed under Accounting Standard 14 ''Accounting for
Amalgamations'' (AS 14). Accordingly, the assets, liabilities and
reserves of LPL and LUL as at 1 April 2013 have been taken over at
their book values (after making adjustments for adoption of uniform
accounting policies) and in the same form.
Details of the summarized values of assets and liabilities of LPL and
LUL as acquired pursuant to the Scheme and the treatment of the
difference between the net assets acquired and cost of investments of
the Company together with the shares issued to the shareholders of LPL
are as under:
2. Acquisition of business undertaking of Tungabhadra Fertilisers and
Chemicals Company Limited on slump sale basis
During the year, the Company entered into a Business Transfer Agreement
(''BTA'') and acquired the Business undertaking of M/s. Tungabhadra
Fertilisers and Chemicals Company Limited (TFCCL), as a going concern
on a slump sale basis for a consideration of Rs.1163 lakhs.
3. Merger of Sabero Organics Gujarat Limited ("Sabero")
The Board of Directors of the Company and its subsidiary, Sabero
Organics Gujarat Limited ("Sabero"), in their meetings held on 24
January 2014 approved a Scheme of Amalgamation under Sections 391 and
394 of the Companies Act, 1956 (''the Scheme'') for amalgamation of
Sabero with the Company subject to the approvals of the stock
exchanges, the respective shareholders and creditors, the concerned
High Courts and other regulators. The Company has received their
no-objection to the Scheme from the stock exchanges and has fi led
application before the concerned High Courts for convening the
shareholders and creditors meetings.
As per the Scheme, the Appointed/ Transfer date for amalgamation is 1
April 2014 and on the Record Date to be fi xed after receipt of all
approvals, the public shareholders of Sabero shall be issued 5 equity
shares of Rs. 1 each in the Company for every 8 equity shares of Rs.10
each held in Sabero. The shares held by the Company in Sabero shall
accordingly get extinguished.
4. Employee Stock Option Plan  ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on 24 July 2007, the Company had established an ''Employee Stock Option
Scheme 2007'' (''ESOP 2007'' or ''the Scheme'') to be administered by the
Remuneration and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 1,27,85,976 equity shares of
Rs.1/- each have been reserved to be issued to the eligible employees,
with each option conferring a right upon the employee to apply for one
equity share. The options granted under the Scheme would vest not less
than one year and not more than fi ve years from the date of grant of
the options. The options granted to the employees would be capable of
being exercised within a period of three years from the date of
vesting. In partial modifi cation of the special resolution passed
establishing ESOP 2007, the shareholders decided in their meeting held
on 23 July 2012 to approve the extending of the exercise period of
options granted under the ESOP 2007 from three years to six years.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Remuneration and Nomination Committee resolution approving the grant.
d) Pursuant to the Scheme, the Company granted options which vest over
a period of four years commencing from the respective dates of grant.
The exercise price being equal to the closing market price prevailing
on the date prior to the date of grant, there is no deferred
compensation cost to be accrued in this regard.
e) The following are the number of options outstanding during the year:
f) The above outstanding options have been granted in various tranches,
at exercise price being equal to the closing market price prevailing on
the date prior to the date of grant. The outstanding options have a
weighted average remaining life of 1.55 years (2013: 2.24 years).
g) Number of options exercisable at the end of the year 18,09,036
(2013: 15,20,110).
h) In accordance with the requirements of SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the
Guidance Note on "Accounting for Employee Share Based Payments" issued
by the ICAI, had the compensation cost for the employee stock option
plan been recognised based on the fair value at the date of grant in
accordance with the Black Scholes'' model, the proforma amounts of the
Company''s Net Profi t and Earnings Per Share would have been as
follows:
5. Contingent liabilities (to the extent not provided for)
a) Guarantees:
(i) The Company has provided guarantee to third parties on behalf of
its subsidiary CFL Mauritius Limited  Rs.Nil (2013: Rs.7168 lakhs) in
respect of which the contingent liability is Rs.Nil (2013: Rs.1098
lakhs).
(ii) The Company has provided a guarantee towards the borrowing of
Tunisian Indian Fertilisers S.A., (TIFERT), Company''s venture in
Tunisia, up to Rs.31009 lakhs (2013: Rs.28100 lakhs).
b) Other commitments
(i) During the previous and in the current year, the Company issued
comfort letters to certain banks who have lent to Sabero Organics
Gujarat Limited ("Sabero") a subsidiary, in terms of which the Company
has undertaken that it shall not reduce its shareholding in the
subsidiary below 51%. In connection with the credit rating for the
Commercial Paper programme of Sabero, the Company has issued a similar
comfort letter (which also includes the assurance of making funds
available, if required, to Sabero to enable it to meet its obligation
under the aforesaid programme).
(ii) Maximum obligation on long term lease of land - Rs.167 lakhs
(2013: Rs.174 lakhs).
6. Segment reporting
a) Business segment
The Company has considered business segment as the primary segment for
disclosure. The Company is primarily engaged in the manufacture and
trading of Farm Inputs, which in the context of Accounting Standard 17
"Segment Reporting" is considered the only business segment.
b) Geographical segment
The Company sells its products mainly within India where the conditions
prevailing are uniform. Since the sales outside India are below the
threshold limit, no separate geographical segment disclosure is
considered necessary.
7. Leases
The Company has entered into certain operating lease agreements and an
amount of Rs.1615 lakhs (2013: Rs.1480 lakhs) paid under such
agreements has been charged to the Statement of Profi t and Loss. These
leases are generally not non-cancellable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
such agreements.
8. Capitalisation of expenditure
Expenses disclosed under the respective notes are net of the following
amounts capitalized by the Company under Capital work-in-progress/ fi
xed assets:
9. The Company has recognised subsidy income as per the prevalent
Nutrient Based Subsidy (NBS) Policy announced by Government of India.
Such income is included in "Government Subsidies" in the Statement of
Profi t and Loss. The subsidy income for the year includes Rs.3488
lakhs (2013: Rs.10884 lakhs) relating to earlier years comprising of
freight subsidy income consequent to the fi nal notifi cation by the
Government. In respect of previous year, it also includes subsidy
income relating to opening inventories as at 1 April 2011 based on the
communication issued by the Department of Fertilisers vide letter dated
22 August 2012 with respect to the earlier Offi ce Memorandum dated 11
July 2011.
10. Exceptional item of Rs.1261 lakhs (2013: Rs.Nil) represents
interest demand in respect of disputed taxes relating to earlier years.
11. During the year ended 31 March 2012, the Members of the Company
pursuant to the provisions of Section 293(1)(a) of the 1956 Act
approved the transfer/assigning of the lease rights on the land located
at Navi Mumbai to prospective buyers. As at 31 March 2014, the Company
is in the process of identifying potential buyers.
12. During the previous year, the Company had issued and allotted
28,28,17,658 9% Unsecured Redeemable Non-convertible Fully Paid Bonus
Debentures of Rs.15 each for every equity share, aggregating Rs.42423
lakhs to the shareholders by appropriating the General Reserve through
a Scheme of Arrangement (Scheme) approved by Hon''ble High Court of
Andhra Pradesh and other relevant authorities. Further, in terms of the
accounting treatment set out in the Scheme, dividend distribution tax
paid on the aforesaid Debentures aggregating Rs.6882 lakhs was also
transferred from the General Reserve. The Company had also created a
debenture redemption reserve amounting to Rs.2553 lakhs as per the
requirements of the Act and in accordance with the clarifi cations
given by the Ministry of Corporate Affairs.
The aforesaid debentures were redeemable at par over three years
commencing from 23 July 2014 (Rs.5/- each year). Further, as per the
terms of the Scheme, the Company also had a right to prepay the entire
amount of debentures by giving prior notice to the debenture holders.
During the current year, the Board authorized Committee of Directors of
the Company, in its meeting has exercised the option to prepay the
debentures and approved early redemption. Accordingly, the said
debentures were redeemed at par during the year and the amounts due
including interest accrued have been transferred to earmarked bank
accounts. Consequently, the debenture redemption reserve of Rs.2553
lakhs created in the previous year has been transferred to the Surplus
in Statement of Profi t and Loss in the current year.
13. Interests in joint ventures
a) During the year, the Company''s venture in Tunisia [the Tunisian
Indian Fertiliser S.A. (TIFERT)], has commissioned the phosphoric acid
plant and commenced production. Pursuant to the shareholders'' agreement
in relation to TIFERT, the day to day operations have been assumed by
the Tunisian Partners and the Company has accordingly discontinued
proportionate consolidation under Accounting Standard 27 - "Financial
Reporting of Interests in Joint Ventures" and is treating its
investment in TIFERT under AS 13 - "Accounting for Investments".
14. Previous year fi gures have been recast/ reclassifi ed wherever
necessary to correspond with the current year''s classifi cation/
disclosures.
Mar 31, 2013
1. Acquisition of Liberty Phosphate Limited ("LPL") and Liberty
Urvarak Limited ("LUL")
a) Liberty Phosphate Limited :
Consequent to the share purchase agreement entered into by the Company
on 24 January 2013 with the erstwhile promoters of Liberty Phosphate
Limited (LPL), the Company on 7 March 2013 acquired 70,19,406 equity
shares (representing 48.62%) from the erstwhile promoters of LPL at a
price of Rs.241/- per share and the Board of Directors of LPL was
reconstituted and effective 7 March 2013, LPL became a subsidiary of
the Company. The Company also made a detailed public announcement to
acquire upto 37,53,933 equity shares (26% of the equity share capital)
of LPL at a price of Rs.241/- per share through an open offer from the
shareholders in accordance with the SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011. Accordingly, the total Open
offer consideration aggregating Rs.9047 lakhs has been deposited by the
Company in an escrow account. The draft letter of offer has been filed
with SEBI and approval is awaited.
b) Liberty Urvarak Limited :
Consequent to the share purchase agreement entered into by the Company
on 24 January 2013 with the shareholders of Liberty Urvarak Limited
(LUL), the Company acquired 29,97,552 (100%) equity shares of LUL for a
consideration of Rs.7800 lakhs thereby making LUL a wholly owned
subsidiary of the Company. LUL holds 5% of the voting share capital of
LPL and by virtue of acquiring the controlling stakes (100%) in LUL,
the Company along with LUL holds 77,42,334 (53.62%) equity shares of
LPL.
c) Business undertaking of Tungabhadra Fertilisers and Chemicals
Company Limited :
The Board of the Company has also approved the acquisition of Business
undertaking of M/s. Tungabhadra Fertilisers and Chemicals Company
Limited (TFCCL), as a going concern on a slump sale basis, which is
pending.
2. Acquisition of Sabero Organics Gujarat Limited ("Sabero") during
year ended 31 March 2012
a) Pursuant to the approval from Securities and Exchange Board of India
(SEBI) for the Open Offer under SEBI (Substantial Acquisition of Shares
and Takeover) Regulations, 1997, the Company had acquired 1,05,00,000
(31%) equity shares of Sabero Organics Gujarat Limited (Sabero) at a
price of Rs.160/- per share. Further, pursuant to the Share Purchase
Agreement entered into with the erstwhile promoters of Sabero, the
Company completed the acquisition of 1,42,98,112 (42.22%) equity shares
of Sabero and effective 17 December 2011 Sabero became a subsidiary of
the Company.
b) Non-compete fee aggregating Rs.3553 lakhs paid to the erstwhile
Indian promoters of Sabero as per the Share Purchase Agreement has been
disclosed as an Exceptional Item for the year ended 31 March 2012.
3. Employee Stock Option Plan - ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on 24 July 2007, the Company had established an ''Employee Stock Option
Scheme 2007'' (''ESOP 2007'' or ''the Scheme'') to be administered by the
Remuneration and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 1,27,85,976 equity shares of
Rs.1/- each have been reserved to be issued to the eligible employees,
with each option conferring a right upon the employee to apply for one
equity share. The options granted under the Scheme would vest not less
than one year and not more than five years from the date of grant of
the options. The options granted to the employees would be capable of
being exercised within a period of three years from the date of
vesting. In partial modification of the special resolution passed
establishing ESOP 2007, the shareholders decided in their meeting held
on 23 July 2012 to approve the extending of the exercise period of
options granted under the ESOP 2007 from three years to six years.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Remuneration and Nomination Committee resolution approving the grant.
d) Pursuant to the Scheme, the Company granted options which vest over
a period of four years commencing from the respective dates of grant.
The exercise price being equal to the closing market price prevailing
on the date prior to the date of grant, there is no deferred
compensation cost to be accrued in this regard.
e) The following are the number of options outstanding during the year:
4. Contingent liabilities (to the extent not provided for)
a) Guarantees:
(i) The Company has provided guarantee to third parties on behalf of
its subsidiary CFL Mauritius Limited - Rs.7168 lakhs (2012: Rs.6716
lakhs) in respect of which the contingent liability is Rs.1098 lakhs
(2012: Rs.2035 lakhs).
(ii) The Company has provided a guarantee towards the borrowing of
Tunisian Indian Fertilisers S.A., Tunisia (TIFERT), a joint venture
company, up to Rs.28100 lakhs (2012: Rs.26330 lakhs) in respect of
which the contingent liability is Rs.25191 lakhs (2012: Rs.23887
lakhs).
b) Claims against the Company not acknowledged as debt: (Rs. in Lakhs)
As at As at
31 March 2013 31 March 2012
In respect of matters under dispute:
Excise duty 1501 262
Sales tax 185 78
Income tax - 253
Others 1661 1344
The amounts shown in the item (a) represent guarantees given in the
normal course of business and not expected to result in any loss to the
Company on the basis of the beneficiaries fulfilling their obligations
as they arise. The amounts in item (b) represent best estimate and the
uncertainties are dependent on the outcome of the legal processes
initiated by the Company or the claimant as the case may be.
5. Segment reporting
a) Business segment
The Company has considered business segment as the primary segment for
disclosure. The Company is primarily engaged in the manufacture and
trading of Farm Inputs, which in the context of Accounting Standard 17
"Segment Reporting" is considered the only business segment.
b) Geographical segment
The Company sells its products mainly within India where the conditions
prevailing are uniform. Since the sales outside India are below the
threshold limit, no separate geographical segment disclosure is
considered necessary.
6. Leases
The Company has entered into certain operating lease agreements and an
amount of Rs.1480 lakhs (2012: Rs.1233 lakhs) paid under such
agreements has been charged to the Statement of Profit and Loss. These
leases are generally not non-cancellable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
such agreements.
7. The Company has recognised subsidy income as per the prevalent
Nutrient Based Subsidy (NBS) Policy announced by Government of India.
Such income is included in "Government Subsidies" in the Statement of
Profit and Loss. The subsidy income for the year includes Rs.10884
lakhs(2012: Rs.4612 lakhs) relating to earlier years comprising of
freight subsidy income consequent to the final notification by the
Government and subsidy income on opening inventories as at 1 April 2011
based on the communication issued by the Department of Fertilisers vide
letter dated 22 August 2012 with respect to the earlier Office
Memorandum dated 11 July 2011.
8. Consequent to the sale of the Government of India Special Bonds
during the year ended 31 March 2012 and receipt of losses claimed from
the Government of India, the Company accounted for the loss of Rs.5275
lakhs and the same is included under ''Other expenses'' (Refer Note 25).
The provision toward mark to market loss made earlier on such bonds
amounting to Rs.6889 lakhs has been reversed and is presented as ''Other
operating revenue'' (Refer Note 20).
9. During the year ended 31 March 2012, the Members of the Company
pursuant to the provisions of Section 293(1)(a) of the Act approved the
transfer/assigning of the lease rights on the land located at Navi
Mumbai to prospective buyers. As at 31 March 2013, the Company is in
the process of identifying potential buyers.
10. During the year, the Company has issued and allotted 28,28,17,658
9% Unsecured Redeemable Non-convertible Fully Paid Bonus Debentures of
Rs.15 each for every equity share, aggregating Rs.42423 lakhs to the
shareholders by appropriating the General Reserve through a Scheme of
Arrangement (Scheme) approved by Hon''ble High Court of Andhra Pradesh
and other relevant authorities. Further, in terms of the accounting
treatment set out in the Scheme, dividend distribution tax paid on the
aforesaid Debentures aggregating Rs.6882 lakhs was also transferred
from the General Reserve. The Company has also created a debenture
redemption reserve amounting to Rs.2553 lakhs as per the requirements
of the Act and in accordance with the clarifications given by the
Ministry of Corporate Affairs.
11. Interests in joint ventures
The proportionate share of assets, liabilities, income and expenditure
of jointly controlled entities, Coromandel Getax Phosphates Pte Ltd
(Coromandel Getax), Coromandel SQM (India) Private Limited (Coromandel
SQM) and Tunisian Indian Fertilisers SA (TIFERT) are given below:
Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identified on the basis of information collected
by the Management. This has been relied upon by the auditors.
b) Exchange difference in respect of forward exchange contracts to be
recognised in the Statement of Profit and Loss in the subsequent
accounting period is Rs.4686 lakhs debit (2012: Rs.1969 lakhs debit).
c) As on 31 March 2013, the Company has foreign currency borrowing of
US$ 80 million (2012:US$70 million). The Company has entered into
principal and interest rate swaps amounting US$80 million (2012: US$ 70
million) to hedge the foreign currency and interest rate risks thereon.
The Company has marked to market the foreign currency borrowings and
the corresponding swap contracts and the net exchange differences
arising thereon have been recognised in the Statement of Profit and
Loss.
12. Previous year figures have been recast/ reclassified wherever
necessary to correspond with the current year''s classification/
disclosures.
Mar 31, 2012
1. Acquisition of Sabero Organics Gujarat Limited ("Sabero")
a) During the year, the Company pursuant to the approval from
Securities and Exchange Board of India (SEBI) for the Open Offer under
SEBI (Substantial Acquisition of Shares and Takeover) Regulations,
1997, acquired 1,05,00,000 (31%) equity shares of Sabero Organics
Gujarat Limited (Sabero) at a price of Rs.160/- per share. Further,
pursuant to the Share Purchase Agreement entered into with the
erstwhile promoters of Sabero, the Company completed the acquisition of
1,42,98,112 (42.22%) equity shares of Sabero. The Company along with
its wholly owned subsidiary (Parry Chemicals Ltd.,) holds 74.57% of the
equity share capital of Sabero and effective 17 December 2011 Sabero
became a subsidiary of the Company.
b) Non-compete fee aggregating Rs.3553 lakhs paid to the erstwhile Indian
promoters of Sabero as per the Share Purchase Agreement has been
disclosed as an Exceptional Item.
2. Amalgamation of Pasura Bio-Tech Private Limited with the Company
during year ended 31 March 2011
a) Pursuant to the Scheme of Amalgamation ('the Scheme') of the
erstwhile Pasura Bio-Tech Private Limited ('PBPL') with the Company, as
approved by the Hon'ble High Court of Judicature of Andhra Pradesh on
21 February 2011, the entire business and undertaking of PBPL including
all assets, liabilities, duties and obligations were transferred to and
vested in the Company with effect from 1 April 2010. PBPL was engaged
in the business of manufacture and sale of Pesticides formulations.
b) The Amalgamation was accounted for under the 'Pooling of interests'
method as prescribed by Accounting Standard 14, "Accounting for
Amalgamations".
c) In accordance with the Scheme, 8,18,475 equity shares of Rs.10/- each
held by the Company in the equity share capital of PBPL stand
cancelled. The difference of Rs.161 lakhs between assets, liabilities,
statutory reserves of PBPL and the carrying value of investments being
cancelled, has been adjusted against the general reserve of the
Company.
3. Employee Stock Option Plan - ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on July 24, 2007, the Company had established an 'Employee Stock Option
Scheme 2007' ('ESOP 2007' or 'the Scheme') to be administered by the
Remuneration and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 1,27,85,976 equity shares of
Rs.1/- each have been reserved to be issued to the eligible employees,
with each option conferring a right upon the employee to apply for one
equity share. The options granted under the Scheme would vest not less
than one year and not more than five years from the date of grant of
the options. The options granted to the employees would be capable of
being exercised within a period of three years from the date of
vesting.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Remuneration and Nomination Committee resolution approving the grant.
d) Pursuant to the Scheme, the Company granted options which vest over
a period of four years commencing from the respective dates of grant.
The exercise price being equal to the closing market price prevailing
on the date prior to the date of grant, there is no deferred
compensation cost to be accrued in this regard.
f) The above outstanding options have been granted in various tranches,
at exercise price being equal to the closing market price prevailing on
the date prior to the date of grant. The outstanding options have a
weighted average remaining life of 1.70 years (2011: 2.00 years).
g) Number of options exercisable at the end of the year 14,86,290
(2011: 9,83,616).
4. Contingent liabilities (to the extent not provided for)
a) Guarantees :
(i) The Company has provided guarantee to third parties on behalf of
its subsidiary CFL Mauritius Limited - Rs.6716 lakhs (2011: Rs.5887 lakhs)
in respect of which the contingent liability is Rs.2035 lakhs (2011:
Rs.2719 lakhs).
(ii) The Company has provided a guarantee towards the borrowing of
Tunisian Indian Fertilisers S.A., Tunisia (TIFERT), a joint venture
company, up to Rs.26330 lakhs (2011: Rs.23080 lakhs) in respect of which
the contingent liability is Rs.23887 lakhs (2011: Rs.16419 lakhs).
5. Commitments
b) Other commitments
(i) During the year, the Company issued comfort letters to certain
banks who have lent to Sabero Organics Gujarat Limited, a subsidiary,
in terms of which the Company has undertaken that it shall not reduce
its shareholding in the subsidiary below 51%.
(ii) Maximum obligation on long term lease of land - Rs.273 lakhs (2011:
Rs.371 lakhs)
(iii) In respect of long term agreement to purchase Natural Gas, the
Company has a 'Take or Pay Obligation" over the period of such
agreement.
(iv) The Company has entered into long term agreements with various
utilities service providers viz., electricity, water etc., and has
commitments towards "minimum charges /minimum consumption".
6. Segment reporting
a) Business segment
The Company has considered business segment as the primary segment for
disclosure. The Company is primarily engaged in the manufacture and
trading of Farm Inputs, which in the context of Accounting Standard 17
"Segment Reporting" is considered the only business segment. In respect
of retail business of the company, since this is not material,
disclosure of business segment information is not considered necessary
at this stage.
b) Geographical segment
The Company sells its products mainly within India where the conditions
prevailing are uniform. Since the sales outside India are below the
threshold limit, no separate geographical segment disclosure is
considered necessary.
7. Leases
The Company has entered into certain operating lease agreements and an
amount of Rs.1233 lakhs (2011: Rs.1166 lakhs) paid under such agreements
has been charged to the Statement of Profit and Loss. These leases are
generally not non-cancellable and are renewable by mutual consent on
mutually agreed terms. There are no restrictions imposed by such
agreements.
8. The Company has recognised subsidy income for the current year as
per the prevalent Nutrient Based Subsidy (NBS) Policy announced by
Government of India, effective 1 April 2011. Such income is included in
"Government Subsidies" in the Statement of Profit and Loss. The subsidy
income for the year includes Rs.4612 lakhs (2011: Rs.22652 lakhs) relating
to earlier years, following announcement/ determination of the same by
Government. Further, in respect of the Office Memorandum dated 11 July
2011 issued by the Department of Fertilisers with regard to the
recognition of subsidy income on the opening inventories as at 1 April
2011, the Company has recognised subsidy income based on estimates and
the legal opinion obtained in this regard.
9. Consequent to the sale during the year of the remaining quantum of
the Government of India Special Bonds and receipt of losses claimed
form the Government of India, the Company accounted for the loss of
Rs.5275 lakhs for the year ended 31 March 2012 (2011: Rs.3718 lakhs) and
the same is included under other expenses (Refer Note 25). The
provision towards mark to market loss made earlier on such bonds
amounting to Rs.6889 lakhs (2011: Rs.6889 lakhs) has been reversed and is
presented as 'Other operating revenue' (Refer Note 20).
10. During the year, the Members of the Company pursuant to the
provisions of Section 293(1)(a) of the Act approved the transfer/
assigning of the lease rights on the land located at Navi Mumbai to
prospective buyers. As at 31 March 2012, the Company is in the process
of identifying potential buyers.
11. The Company has obtained approvalsfrom the shareholders and the
stock exchanges, for issue of one 9% Unsecured Redeemable Non-
convertible Fully Paid Bonus Debenture of Rs.15 each for every equity
share by appropriating the General Reserve through a Scheme of
Arrangement ('Scheme'). The Company has filed the Scheme in the Hon'ble
High Court of Andhra Pradesh and is awaiting its approval.
12. Other matters
a) Based on the information available with the Company, there are no
dues/interest outstanding to micro and small enterprises, as defined
under the MSMED Act, 2006, as at 31 March 2012 (2011: Nil).
b) Exchange difference in respect of forward exchange contracts to be
recognised in the Statement of Profit and Loss in the subsequent
accounting period is Rs.1969 lakhs debit (2011: Rs.1200 lakhs debit).
c) As on 31 March 2012, the Company has foreign currency borrowing of
US$ 70 million (2011:US$30.50million). The Company has entered into
principal and interest rate swaps amounting US$ 70 million (2011: US$
45 million) to hedge the foreign currency and interest rate risks
thereon. The Company has marked to market the foreign currency
borrowings and the corresponding swap contracts and the net exchange
differences arising thereon have been recognised in the Statement of
Profit and Loss.
13. The revised Schedule VI notified under the Act has become
applicable effective from 1 April 2011 for preparation and presentation
of financial statements. The Company has presented the previous year
figures to conform to current year's classification in accordance with
the requirements of the aforesaid notified Schedule VI. Accordingly,
the audited financial statements of the year ended 31 March 2011 were
reclassified/ regrouped/ represented and some information additionally
disclosed where relevant and some other information redundant in the
current context has not been presented.
Mar 31, 2010
I. Segment Reporting
a) Business Segment
The Company has considered business segment as the primary segment for
disclosure. The Company is primarily engaged in the manufacture and
trading of Farm Inputs, which in the context of Accounting Standard 17
issued by the Institute of Chartered Accountants of India is considered
the only business segment. In respect of retail business of the
Company, since this is not material, disclosure of business segment
information is not considered necessary at this stage.
b) Geographical Segment
The Company sells its products mainly within India where the conditions
prevailing are uniform. Since the sales outside India are below the
threshold limit, no separate geographical segment disclosure is
considered necessary.
II. During the year, the Company has changed its name from Coromandel
Fertilisers Limited to Coromandel International Limited. The fresh
certificate of incorporation dated September 23, 2009 has been received
from the Registrar of Companies, Andhra Pradesh.
III. Investments
a) The Company has formed a 50:50 joint venture, Coromandel SQM India
Private Limited in India. The Company has invested Rs. 199.73 Lakhs
towards 1,997,300 equity shares of Rs.10 each in the Equity Share
Capital of Coromandel SQM India Private Limited.
IV. Leases
The Company has entered into certain operating lease agreements and an
amount of Rs. 1,409.68 Lakhs (2009: Rs.833.94 Lakhs) paid under such
agreements has been charged to the Profit and Loss Account. These
agreements are cancelable in nature.
V. The Government of India grants price concession on sale of
fertilizers and income from such concession is shown under "Government
Subsidies" in the Profit and Loss Account. The subsidy income for the
year includes Rs. 264,712.00 Lakhs [including deferred subsidy income
relating to earlier periods of Rs. 23,61 7.00 Lakhs (corresponding
income tax has been charged to the Profit and Loss Account -
Rs.8,027.00 Lakhs)] being income accrued/recognized based on the
managements understanding of the prevalent subsidy scheme for the
period for which notification has been issued and based on management
estimates for the remaining period. Necessary adjustments to such
estimates will be made on announcement of final
notification/determination.
VI. Other Matters
a) Based on the information available with the Company, there are no
dues/interest outstanding to Small and Micro Enterprises as at March
31, 2010.
b) Sales are net of discounts, other than usual trade discounts, Rs.
5,804.59 Lakhs (2009: Rs. 4,406.74 Lakhs).
c) The net difference in foreign exchange (i.e., difference between the
spot rate on the dates of the transactions and the actual rate at which
the transactions are settled/appropriate rates applicable at the year
end) credited to the respective heads of account in the Profit and Loss
Account is Rs. 8,915.14 Lakhs (2009: Rs. 36,922.30 Lakhs debit).
d) Exchange difference in respect of forward exchange contracts to be
recognised in the Profit and Loss Account in the subsequent accounting
period is Rs. 153.03 Lakhs debit (2009: Rs. 285.23 Lakhs debit).
e) Research and Development expenses included under Schedule 14 - Rs.
478.91 Lakhs (2009: Rs. 197.66 Lakhs).
f) Land - Lease deed in respect of land admeasuring 9.80 acres taken on
lease from Visakhapatnam Port Trust by the erstwhile GFCL, is pending
execution.
g) The Ordinary shares of Tunisian Indian Fertilisers S.A., Tunisia
(TIFERT) held by the Company and included under Investments (Schedule
6) have been pledged to secure the obligations of TIFERT to their
lenders.
h) During the year ended March 31, 2009, the Company had accounted for
Rs. 15,859.41 Lakhs received from Foskor (Pty) Limited, South Africa
(Foskor) towards services rendered as per the terms of the Business
Assistance Agreement entered into with Foskor in 2005.
i) During the year, the Company has made political donations of Rs.
25.00 Lakhs to Telugu Desam Party and Rs 15.00 Lakhs to Pra|arajyam
Party (2009: Rs. 50.00 Lakhs to Andhra Pradesh Congress Committee).
j) Provisions - Others represents provisions made by the management
towards certain disputed tax matters in earlier years. Based on
further developments, the Company has reversed these provisions in the
books of account. The following are the details of such provision:
VII. Previous years figures have been regrouped/reclassified wherever
necessary to conform to the classification adopted for the current year.
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