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Notes to Accounts of Coromandel International Ltd.

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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