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Directors Report of EID Parry (India) Ltd.

Mar 31, 2018

Dear Shareholders,

The Directors have pleasure in presenting the Forty Third Annual Report together with the audited financial statements for the year ended March 31, 2018.

FINANCIAL PERFORMANCE

Rs. in Crore

Particulars	Standalone		Consolidated
Particulars	2017-18	2016-17	2017-18	2016-17
Revenue from operations	2079.83	2476.75	15437.58	14667.11
Gross Revenue	2281.69	2631.21	15610.99	14825.70
Profit Before Interest and Depreciation (EBITDA)	305.21	508.67	1454.96	1584.96
Depreciation	114.46	112.11	251.30	248.04
Profit Before Interest and Tax (EBIT)	190.75	396.56	1203.66	1336.92
Finance Charges	112.90	139.91	335.51	417.32
Net Profit Before Tax	77.85	256.65	868.15	919.60
Tax Expenses	(23.16)	(26.96)	350.72	211.35
Net Profit After tax before minority interest	101.01	283.61	517.43	708.25
Minority Interest			261.61	187.44
Net profit After Tax and minority interest	101.01	283.61	255.82	520.81
Balance of Profit brought forward	332.49	85.90	75.20	(381.26)
Transfer from Debenture Redemption Reserve (Net)	(8.33)	33.33	(8.33)	19.17
Balance Available for appropriation	425.17	402.84	322.69	158.72

Note: The above standalone financial performance is inclusive of continuing and discontinuing operations.

Dividend and Reserves

Based on the Companyâs performance, the Directors recommend for approval of the members, a dividend of Rs.3/- per share for the year ended March 31, 2018. The final dividend on equity shares, if approved by the members, would involve a cash outflow of Rs.53.10 crore.

The Company has not transferred any amount to the reserves for the year ended March 31, 2018.

Share Capital

The Paid up Equity Share Capital of the Company as on March 31, 2018 was Rs.17.70 Crore. During the year under review, the Company allotted 49,222 equity shares on exercise of stock options under the ESOP Scheme, 2007. The Company also allotted 10,74,861 Equity Shares to the shareholders of Parrys Sugar Industries Limited (PSIL), consequent to merger of PSIL with the Company.

Consolidated Operations

Consolidated Revenue from operations of your Company for the year was Rs.15,438 Crore, as against Rs.14,667 Crore in the previous year. Overall expenses for the year was Rs.14,656 Crore as against Rs.13,906 Crore in the previous year. Operating Profit (EBITDA) was Rs.1,455 Crore as against Rs.1,585 Crore in the previous year. Profit after Tax and minority interest for the year was Rs.256 Crore, as against Rs.521 Crore in the previous year.

Standalone Operations

Standalone Revenue from operations of your Company for the year was Rs.2,080 Crore as against Rs.2,477 Crore in the previous year. Operating Profit (EBITDA) was Rs.305 Crore, as against Rs.509 Crore in the previous year. Profit after Tax for the year was at Rs.101 Crore as against Rs.284 Crore in the previous year. One of the prime focus areas of the Company has been to reduce debt, which is important to improve the Companyâs risk profile and increase sustained earnings. The Companyâs total long term borrowings, which was Rs.762 Crore as of March 31, 2017 reduced to Rs.586 Crore as of March 31, 2018. This coupled with overall debt management enabled the Company to reduce finance charges to Rs.113 Crore as compared to Rs.140 Crore in the previous year.

The subdued performance of the Company was largely on account of lower sugar selling prices, which have been on a downward spiral since April 2017 after a significant high in 2016-17. Further, during the year, the Company settled the cane price disputes pertaining to the sugar season 2013-14 to 2016-17 in Tamil Nadu by paying Rs.87 Crore over and above the statutory dues to the farmers. Though statutorily not liable, the Company made these payments as a gesture of goodwill to secure cane supply and maintain enduring relationship with them. This additional payout came at a time when the sugar price had already taken a toll caused by huge domestic and international surplus. Despite the various setbacks mentioned above, the Company could achieve an EBIDTA of Rs.305 Crore due to a slew of initiatives in its areas of operations including optimum efficiency in consuming steam, power and reducing the downtime. The Company ensured that it utilised its distilleries to the maximum capacity by procuring molasses from both domestic and overseas sources as Tamilnadu ran short of molasses due to very low cane availability. The Company also participated in the raw sugar import program as allowed by the Government of India which helped the Company to sweat its assets during the off season, which otherwise would have remained idle.

The Companyâs on-going programme of systematic disposal of surplus non-performing assets, continuous thrust on cost control, rigorous cost restructuring exercises and focus on efficiency improvements have favorably impacted the profits. Despite the extremely challenging operating environment, your Company delivered a reasonable performance against the backdrop of high cane cost, sluggish sugar price and lower cane availability. This demonstrates the resilience of your Companyâs strong portfolio of sales mix, superior execution of competitive strategies, relentless focus on value creation and deep consumer insights. The Company is well positioned to establish itself as the most trusted sugar producer in the Indian market with continued focus on strong farmer relationship, product quality, R&D and operational excellence across the value chain.

BUSINESS OVERVIEW

Sugar

Improved sugarcane availability is one of the important parameters for sustained growth and profitability of the sugar business. For the year 2017-18, the sugarcane availability in the State of Tamil Nadu (TN) was low, due to widespread drought affecting a majority section of the command area. The Cane area in TN has seen a massive decline during the last few years caused by deficit rain and farmers shifting to other competing crops. This has adversely affected the Companyâs TN operations, where most of its plant capacity remained idle for a larger part of the year. The lower sugarcane crush in TN was further compounded by lower recovery in Nellikuppam due to varied climatic conditions. During the year under review, the cane crushed by the plants in TN was 12.30 LMT as against 24.61 LMT in the previous year. The average daily crush rate at 8819 TCD was lower than the average actual crushing rate of 14291 TCD achieved in the previous year. The average recovery was at 8.27% in the current year as against 8.89% in the previous year.

With respect to Karnataka units, the cane crushed was higher at 19.80 LMT as compared to 15.07 LMT in the previous year, which was as per expectations. The average crushing days increased from 102 to 128 and the average recovery was at 11.25 % as against 10.75% in the previous year. The threat of illegal cane poaching which affected the companyâs performance in the previous year was mitigated to a larger extent this year due to various proactive measures initiated at the ground level. The availability of harvesting and transportation labour was also a major issue this year in Karnataka as well as in TN and Andhra Pradesh (AP) due to the excess cane production in Maharashtra. The Companyâs efforts in employing mechanical harvesters paid dividends as farmers adapted themselves to the mechanised harvesting in an effective manner. The deployment of mechanical harvesters is proposed to be increased progressively to cover a large part of the area as shortage of harvesting labour is going to be the order of the day.

With respect to the AP unit, the cane crushed was at 4.62 LMT as compared to 4.76 LMT in the previous year. The average recovery was at 9.55% as against 9.67% in the previous year.

The overall cane crushed by the Company as a whole, came down to 36.72 LMT as against 44.44 LMT in the previous year. The average sugar recovery went up from 9.61% in the previous year to 10.04% in the current year.

The sustained availability of cane being a major concern, a number of initiatives are being taken up by the Company including cooperative farming, providing resources for drip and micro irrigation and facilitating the clean seed programme directly and through agencies/ agri service providers etc. As a part of farmer centric and inclusive strategy, the Company operates soil testing labs which provide âsoil health cardsâ to farmer for improving soil health and fertility. These initiatives will help in increasing the yield per acre which in turn will increase the income per acre to the farmer. To have connection with the farmers throughout the life cycle of Cane crop, a Farmer Connect App has been launched in TN and the same will be rolled out in AP and Karnataka in the coming years. By this, the cane and extension team will be in regular touch with the farmers during the life cycle of the crop and assist the farmers immediately as and when the need arises.

The Company is also working closely with the Government on a number of subsidy schemes to promote drip irrigation, like Sustainable Sugarcane Initiative (SSI). The company has embarked on a program of ensuring clean seed for planting. In TN and AP, the 3-Tier Nursery programme has been strengthened and varietal purities are being improved through quality seed sourcing from Breeding Institutes and Companyâs own tissue culture seedling production centres. In TN, 168 shade nets have been installed through Govt SSI schemes through which the Company is promoting Pro Tray seedlings for quality cane, better yield and reduction in cost of cultivation. All these activities will pave the way for recovery improvement and ensure sustained sugarcane availability.

Sugarcane Price

For the Sugar Season 2017-18, the Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, fixed the Fair & Remunerative Price (FRP) for sugarcane at Rs.255/quintal for a basic recovery of 9.5% and a premium of Rs.2.68 for every 0.1% increase in the recovery rate, as recommended by the Commission of Agricultural Costs and Prices (CACP). The annual increase of FRP by the government is more than the increase in the Minimum Support Price (MSP) of most other crops like wheat and paddy. The progressive increase of FRP during the last several years has severely affected the industry. Internationally, India is the most âexpensiveâ producer of cane. While the MSP of wheat/paddy went up by around 47% over eight years, the sugarcane price went up by almost 97% in the past nine years. Sugarcane farmers are thus beneficiaries of better return than the grain growers. The FRP is not effectively linked to the market prices of sugar and in most of the years, the sugar mills have suffered losses due to poor realisation from the market.

All India Sugar Production and Government Policies

The four prime stakeholders of the Indian sugar business are farmers, sugar mills, consumers and the Government. Despite the sugar industry being deregulated since 2013, the Government continues to be the most dominant force of intervention amongst the stakeholders. The only policy of sugar is to have âpolicy of changeâ triggered by market volatility and pressures exerted by other constituents. The Government of India has been very dynamic in pursuing policies consistent with the requirements of the sugar market to avoid shocks to the millers and farmers. The Industry is also expected to respond in equal measure by ensuring prompt payments to farmers.

The previous Sugar season 2016-17 started with an opening balance of 77 LMT and a lower season production of 203 LMT due to drought in the Southern and Western States. There was pressure on the Government to import large quantity of sugar, on the premise that the stocks would be critically low at the start of the 2017-18 sugar season and sugar prices would rise to unprecedented levels. Interactions by ISMA with the Government, helped to convince the Government that only a small quantity of imports was required to ensure sufficient sugar stocks till the start of the 2017-18 season.

The Government, on concerns of regional deficits, allowed 5 LMT of imports in April 2017 after confirmation of the actual sugar production in the season. Further, instead of allowing the 5 LMT of imports to come through any port, after assessing regional shortage, 3 LMT was allowed to be imported through the ports in South India, 1.5 LMT in the Western region and 0.50 LMT through the Eastern Region.

Government imposed a stock limit on mills such that no mill can keep more than 21% of its total sugar availability of 2016-17 at the end of September 2017 and not more than 8% at the end of October 2017. The Government also continued the stock holding limit on traders allowing a dealer or trader in East and North-East India to store up to 1,000 MT of sugar and 500 MT elsewhere in the country.

This conscious and well calculated decision of the Government was aimed at ensuring that the supply of sugar to the market was steady and domestic prices were stable for the consumers and the sugar mills were able to cover their costs and pay cane price to the farmers on time.

However, with the commencement of the sugar season 2017-18, prices started dropping due to anticipated huge supply of sugar. Hence, the Govt mandated stock holding limit for Sugar mills at 83% of January â18 closing stock and 86% of February â18 closing stocks. This imposition of the stock limit was to regulate the supply of sugar in order to hold the sugar price at a sustainable level.

The apex body, Indian Sugar Mills Association (ISMA), revised its forecast for the countryâs production at 315-320 LMT for the 2017-18 season as against its original estimate of 255 LMT. With 40 LMT of carryover stock from the previous year, the overall surplus at the end of the sugar season 2017-18 was expected to jump to 95-100 LMT. The all India sugar production upto March, 31 2018 reached 281.82 LMT, as against 188.8 LMT in the previous year for the same period. Due to this unexpected surplus sugar availability, domestic ex-mill prices crashed (Refer Chart 1).

In order to move the surplus stocks out of the country and thereby improve prices, the Government in March 2018 announced an Minimum Indicative Export Quota of 20 LMT for exports. However, due to depressed world sugar market, the scheme did not achieve its intended objective. The lower realization from domestic sales as well as depressed global sugar market, made it extremely difficult for the mills to generate sufficient funds for payment of cane price to the farmers in time.

It will be next to impossible for the mills to handle the surplus without the necessary support of the government to industry in the form of some subsidies or incentives. It is high time the Government came out with a long term viable policy to manage this situation impacting the industry. The Government needs to holistically address the issue of unrealistic sugar cane pricing which is currently not linked to the market price of sugar.

Manufacturing Operations

The Company has always been on the forefront of achieving manufacturing excellence and driving cost optimisation across the value chain. The Company believes that this is the only way it can insulate itself from the volatility in the prices of sugar and sugarcane, which are beyond its control and are significantly affecting its operations. The TPM initiative at the Companyâs units, which was launched few years back has helped the Company to achieve manufacturing excellence, operational safety and higher level of ownership by employees. The better efficiencies on steam, energy and chemicals consumption besides reduction of total losses, have helped in ensuring that the costs remain under control. Safety has been on top of the agenda across all the factories. Some of the areas covered under the Safety program include launch of TPM Safety Pillar, safety patrol walk by the Plant management team, safety review, display of signage, PPE usage, etc for ensuring safety and accident prevention.

Nellikuppam sugar factory is the first sugar factory in Tamil Nadu to move in the direction of achieving Zero Liquid Discharge (ZLD) for the sugar units. The Company also enhanced the refining capacity of the Unit from 170 MT to 190 MT. The Company has been trying to gradually increase the capacity of Karnataka plants over the past few years. In line with this, the units at Haliyal and Bagalkot have increased their capacity from 7000 TCD to 7500 TCD and from 5400 to 5800 TCD respectively with minimal capital expenditure. The capacity of the Ramdurg, a leased unit has been increased from 4000 tCd to 5000 TCD by the Lessor, Shri Dhanalaxmi Sahakari Sakkare Karkhane Niyamit.

In AP the performance of the Sankili Unit was moderate due to lower availability of Cane. The Sankili Unitâs capacity was expanded from 4200 TCD to 4600 TCD.

Sales and Marketing

The Companyâs overall strategy is to de-risk the sugar business from the vagaries of the cyclicality of the industry by way of value addition and de-commoditization. The Company is working towards creating a differentiation in all aspects of its product and processes to sustain the competitive advantage and to counter the continuous risk of cyclicality in sugar prices and rising cane costs. The Company has been continuously working towards optimising its sales mix with increased sales to institutional segments and retail segments. The Company has to its credit a number of certifications and approvals from competent authorities regarding food safety, quality and sustainability, which are being leveraged strategically with the institutional segments. The Company has been successful in establishing a long term and fruitful relationship with its customers and has been selected as preferred supplier by several MNCâs including GSK, Pepsi, Abbott, etc, due to the consistency in quality and adoption of best practices.

The Company believes that its commitment to quality and the power of its strong and trusted brand âParryâ, which has been recognised and valued across segments of the market and customers over the years, will bear fruit. âAmritâ, the Companyâs retail brand of brown sugar, has been well accepted by the customers.

Research & Extension Services

The companyâs state of the art R&D for the Sugar business was established 25 years back with the core purpose of enriching and energising lives by creating value added products from agriculture. The Company is a leader and is one of the few select Sugar Companies in India to have an integrated R&D program for its farmers which is recognized by the Department of Scientific and Industrial Research (DSIR), Ministry of Science & Technology, Government of India. Since sugarcane as a raw material is grown across three states of the country, spanning diverse agro-climatic conditions, research emphasis and approaches vary and are largely location oriented. The Company has established a strong research infrastructure, with a pioneering vision to improve the yield and reduce costs to farmer and also to improve quality of sugarcane and thereby improving factory efficiencies. The R&D technologies are disseminated to the farmers through an exclusive extension function and novel technology transfer tools like mobile village theatres and method demonstrations.

Quality

The Companyâs processes and products are Customer Centric. Two of the Companyâs units are FSSC 22000 Certified and many other plants are qualified in ISOâs Quality Management System. The refinery unit of the Company at Nellikuppam has several Pharmacopoeia accreditations such as Indian, US, British and Japanese thereby enabling it to cater to the stringent needs of several leading Pharma company requirements for Drug Manufacturing. Also the Company supplies its Quality Sugar to many institutional Customers. The Company has won CIIâs Commendation Certification Award for Food Safety 2017 as âStrong Commitment to Food Safetyâ, a milestone in the Sugar Industry. Three of the Companyâs units are Bonsucro Certified so as to address the global requirements of Sustainable agriculture.

Bio Pesticides

During the year, the Bio Pesticides Division of the Company registered a revenue of Rs.138 Crore as against Rs.122 Crore in the previous year. PBIT for the year was at Rs.30.02 Crore as against Rs.14.70 Crore during the previous year. Parry America Inc, a wholly owned subsidiary of the Company, registered sales of USD 10 Mn, achieving a growth of 18% over previous year. On a consolidated basis the Bio-Pesticides Business registered a revenue of Rs.152 Crore in 2017-18 as compared to Rs.123 Crore in the previous year.

During the year, the Company successfully procured the highest ever volume of raw neem seeds, from Tamil Nadu, Karnataka & Andhra Pradesh. Due to improved seed arrivals, the procurement prices were fairly maintained. The export as well as the domestic markets responded well for the marginal improvement in selling price. which coupled with effective cost control helped the business to achieve the planned operating profits. The business however continued with its de-risking measures over short term and long term horizon, in raw material procurement.

Parryâs AzadirachtinÂ®, with the highest purity and best stability, continued to command a premium and maintain its leadership position both in the agriculture and indoor garden segments. As a critical part of the future ready strategy for growth, work is in progress to foray into the âMicrobial segmentâ. The Company has undertaken a detailed study across the globe, on major crop pest problems and identified the critical ones for which it would work to identify patentable microbial solutions. The bio pesticides business with its eco-friendly products that are safe to farmers and consumers envisages to offer assured and sustainable crop protection solution for the global clients.

The bio pesticides market is driven by factors such as pest resistance to chemicals, Integrated Pest Management (IPM), growth in demand for organic food, heavy crop loss due to pest attacks, lower cost of raw materials, and faster regulatory approval. North America is expected to dominate the bio pesticides market owing to its highly streamlined product registration process, which makes it easier for most private companies to launch their products. Bio pesticides are expected to be a potential substitute for synthetic pesticides in Europe due to the stringent regulations on chemical usage and maximum residue limit. The impending ban on neonicotinoids is expected to drive the growth of the European bio pesticides market.

Nutraceuticals

During the year the Nutraceuticals Division of the Company achieved a revenue from operations of Rs.68 crore as against Rs.71 crore during the previous year. PBIT for the year was at Rs.8 Crore as against Rs.11 Crore during the previous year. The overseas wholly owned subsidiary, US Nutraceuticals LLC achieved sales of US$ 22.7 MN against US$ 23.8 MN of previous year. On a consolidated basis, the division registered a revenue of Rs.216 Crore in 2017-18 as compared to Rs.228 Crore in the previous year.

During the year, overall sales volume of premium Organic Spirulina increased by 10% over previous year mainly due to improved sales volume in European market where premium quality continues to be valued. Further, the business launched Spirulina Granules under different flavours and other value added formulation products. Implementation of TPM and CGMP resulted in improved product quality and productivity. The business has made investments to improve the productivity of Organic Chlorella cultivation and downstream processes, which would enable the scaling up of Chlorella volumes in the coming years.

During the year, the Company established a state of art laboratory facility to ensure good laboratory practices as per regulatory requirements. As part of its clean label program, the Company has enrolled for Non GMO (Genetically Modified Organisms) verification program from Food Chain ID. The Company has obtained Non GMO certificate for its Organic Spirulina and Chlorella products (both powder and tablets) and the Company could use the Non GMO logo in its product labels. As the global health markets are maturing up to micro-algal sources for nutrition, the company stands to gain a major place in the industry that exemplifies clean and sustainable methods of cultivation and eco-friendly discharges from its facilities.

CORPORATE DEVELOPMENTS

Joint Venture with Synthite Industries Ltd

During the year, in line with its vision to grow the Nutraceuticals business through value-added Algae products, the Company entered into a 50:50 Joint Venture (JV) with Synthite Industries Ltd, Cochin, India, to produce Phycocyanin, a natural blue pigment extracted from Spirulina. Phycocyanin is a complex of light-harvesting proteins, extracted from Spirulina which has a characteristic deep blue colour. Phycocyanin offers excellent stability and flexibility for application in a variety of food and beverages and is approved by all major regulatory bodies in USA, EU, Japan and South Korea as food colour. The JV will leverage on Parry Nutraâs Spirulina cultivation strengths and Synthiteâs extraction capabilities making it a good strategic fit for both the partners.

Sale of Bio Pesticides Division

During the year, the shareholders, based on the recommendation of the Board of Directors, approved the sale and transfer of the Bio Pesticides Business together with all its employees as well as assets and liabilities including all concerned licences, permits, consents and approvals whatsoever comprising of manufacturing, marketing and trading in Bio Pesticides Products (âBio Pesticides Business), as a âgoing concernâ and by way of a slump sale to its subsidiary Company Coromandel International Ltd (CIL), with effect from April 1, 2018. The sale of the entire share holding in the wholly owned subsidiary, Parry Amercia Inc to CIL was also approved. This would complement CILs crop protection business. CILs extensive marketing network and experience would enable this business to grow faster. The sale proceeds realized by the Company would help the Company to reduce its debt, which would improve its debt equity ratio

AWARDS & RECOGNITIONS

During the year, the Company received the following awards:

- âCommitment to Engagementâ award from Aon Hewitt in May 2017.

- Nellikuppam Unit - second prize in Best Industrial Relations Category for the period 2008-2014 from Honâble. Labour Minister. TN govt. for sustaining cordial industrial relations climate in July 2017.

- âChennai Best Employer Award 2017â from Employer Branding Institute India in Dec 2017.

- ET Nowâs Best Corporate Social Responsibilities Practices Award during Feb 2018.

- Indiaâs Best Sugar Manufacturing Company of the year 2017 Award by International Brand Consulting Corporation, USA.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Following were the changes in the composition of the Board:

- Mr. M.B.N. Rao Independent Director resigned from the Board on February 27, 2018.

The Board wishes to place on record its appreciation for the valuable contribution made by Mr.Anand Narain Bhatia, Mr.V.Ramesh, Mr.A.Vellayan and Mr.M.B.N. Rao during their tenure as Members of the Board and Board Committees.

Mr. S. Suresh was appointed as the Managing Director of the Company for a period of five years w.e.f August 1, 2017 which was approved by the shareholders at the Annual General Meeting held on August 4, 2017.

Mr. Ramesh K B Menon and Mr.M.M.Venkatachalam joined the Board as non-executive non independent Directors on November 8, 2017 and February 7, 2018 respectively. Mr. C. K. Ranganathan and Mr. Ajay B Baliga joined the Board as Independent Directors on November 8, 2017 and May 9, 2018 respectively.

Consequent to the retirement of Mr.A.Vellayan, the Board elected Mr.V.Ravichandran as Chairman with effect from February 8, 2018.

In accordance with the provisions of Section 161 of the Companies Act, 2013, Mr. Ramesh K. B. Menon, Mr.M.M.Venkatachalam, Mr. C. K. Ranganathan and Mr. Ajay B Baliga hold office up to the date of the ensuing Annual General Meeting. The Company has received letters proposing their appointment as directors at the ensuing Annual General Meeting of the Company.

As per the provisions of Section 152 of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. V. Ravichandran, Director retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for reappointment and the requisite details in this connection is contained in the notice convening the meeting and the Corporate Governance Report.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and also comply with Regulations 16 & 25 of the SEBI (lODR) Regulations, 2015.

Mr. S.Suresh, Managing Director, Mr.V.Suri, Chief Financial Officer and Ms. G.Jalaja, Company Secretary are the Key Managerial Personnel of the Company as per Section 203 of the Companies Act, 2013.

Number of Meetings of the Board

Seven Meetings of the Board of Directors were held during the year, the details of which are given in the Corporate Governance Report.

Board Evaluation

In accordance with the Companies Act, 2013 and SEBI (LODR) Regulations, the Board has carried out an evaluation of its own performance, the performance of Committees of the Board and also the directors individually. The manner in which the evaluation was carried out and the process adopted has been given in the Corporate Governance Report.

Policy on Directorsâ Appointment and Remuneration and Other Details

The Board has on the recommendation of the NRC framed a policy for selection and appointment of Directors, Senior Management and their remuneration and also framed the criteria for determining qualifications, positive attributes and independence of directors. The Remuneration Policy and criteria for Board nominations are available on the Companyâs website at http://www.eidparry.com/investors/ Policies-Codes.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) of the Companies Act, 2013, your Directors to the best of their knowledge, belief and according to information and explanations obtained from the management, confirm that:

- In the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

- they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

- they have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively and Company by the shareholders at the 42nd Annual General Meeting held on August 4, 2017 to hold office up to the conclusion of the 47th Annual General Meeting.

Cost Auditors

As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Companyâs cost records are subject to Cost Audit.

The Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Narasimha Murthy & Co, Cost Accountants, as the Cost Auditors to audit the cost accounting records maintained by the Company for the financial year 2018-19 on a remuneration of Rs.8,50,000/- plus applicable tax and reimbursement of out of pocket expenses. A resolution seeking membersâ ratification for the remuneration payable to the Cost Auditor forms part of the notice convening the Annual General Meeting.

The cost audit report of the earlier Cost Auditor M/s. Geeyes & Co for the financial year 2016-17 was filed with the Ministry of Corporate Affairs on 8th September 2017. The cost audit report for the financial year 2017-18 would be filed with the Ministry of Corporate Affairs on or before September 30, 2018 as per the provisions of the Companies Act, 2013.

Secretarial Auditors

The Board appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, Chennai as the Secretarial Auditors to undertake the Secretarial Audit of the Company for the year 2017-18. The Report of the Secretarial Auditors is provided in Annexure-B to this Report.

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory / Secretarial Auditors in their respective reports.

The Statutory Auditors have not reported any incident of fraud during the year under review to the Audit Committee of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

EID Parryâs CSR initiatives primarily focus on improving the quality of life of the communities where it operates, through socio welfare initiatives.The various CSR initiatives undertaken by the Company during the last financial year include the following:

- Healthcare

The Company pursues a well managed Health Care programme across its units, providing medical amenities for people living in neighbouring villages. âHospital on Wheelsâ, a well equipped mobile unit with diagnostic and medical intervention amenities makes emergency care possible for people living in remote areas. In addition, mobile medical units cater to the needs of the elderly in the cane growing villages around the Plants.

In addition to the comprehensive health and medical care programmes for employees, across the different Plants free pulse polio camps for the children of labourers and medical camps offering health checkups and free medicines are conducted regularly for cane growers, harvesting and transport labourers.

- Education

As an important part of its CSR programmes, E.I.D Parry promotes education in the neighbouring villages near its units. Besides contributing to infrastructure building and facility upgradation at schools, the Company provides educational assistance to cane growers children and participates in their developmental needs. Baby care centres, mid-day meals for Balawadi school children of labourers, training programmes for employeesâ children are few of the ongoing initiatives.

- Community Welfare

E.I.D Parry has always played a key role in extending relief support to villagers during natural calamities and helping the Government in its disaster management initiatives. Drought relief measures were extended to farmers in Tamil Nadu, Karnataka and Andhra Pradesh, to mitigate crop loss. Community development works were also undertaken in the villages in and around the units. As part of its community welfare programmes the Company undertook the desilting of Ponds and Canals, to augment the water supply to villages and schools. Tree Planting across schools and neighbourhoods were conducted as part of the Green Environment initiatives.

The Company has constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee has formulated and recommended to the Board a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy can be accessed on the Companyâs website at www.eidparry. com.

As per the provisions of the Companies Act, 2013, the Company was required to spend Rs.13.20 Lakh towards CSR activities for the year 2017-18. However, the Company has been actively involved in various CSR activities and an amount of Rs.123.46 Lakh was spent during the year. The Annual Report on CSR activities is given in Annexure-C to this Report.

During the year, the Company has bagged the National CSR award under the category of âBest Overall Excellence in CSRâ in National CSR Leadership Congress & Awards 2016.

RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered into by the Company during the financial year with the related parties were on armâs length basis and were in the ordinary course of business. As the sale of Bio Pesticides business to Coromandel International Ltd (CIL), a related party transaction was not in the ordinary course of business, the Company has obtained the approval of shareholders. There were no materially significant related party transactions with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee for their review on a quarterly basis. The policy on Related Party Transactions as approved by the Board is available at the web link: http://www.eidparry.com/ investors/Policies-Codes.

EMPLOYEE STOCK OPTION SCHEME

The Company has introduced Employee Stock Options Scheme, 2016 during the year 2016-17 as approved by the shareholders. The details of the Options granted upto March 31, 2018 and other disclosures as required under SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the Companyâs website at www.eidparry.com.

The Company has received a certificate from the Statutory Auditors of the Company that the above referred Scheme had been implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the resolutions passed by the Members in this regard.

CORPORATE GOVERNANCE

The report on corporate governance along with certificate from a practicing Company Secretary as required under the SEBI (LODR) Regulations is annexed to this Report. The report also contains the details required to be provided on the board evaluation, remuneration policy, implementation of risk management policy, whistle-blower policy / vigil mechanism etc.

The Managing Director and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Regulation 17(8) read with Schedule II of Part B of the SEBI (LODR) Regulations.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further according to the Rules, the shares in respect of which dividend has not been encashed by the shareholders for seven consecutive years or more is also required to be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends as well as the corresponding shares as per the requirements of the IEPF rules, details of which are provided on our website, at http://www.eidparry.com/Unpaid-Unclaimed-Dividend.

During the year, the Company has transferred an amount of Rs.22,51,264/- being the unclaimed dividend for the year 2009-10 to the Investor Education and Protection Fund established by the Central Government. The Company has also transferred 689002 shares in respect of which dividend has not been paid or claimed for seven consecutive years or more as enunciated under Section 124 (6) of the Companies Act, 2013.

DISCLOSURES Audit Committee

The Audit Committee comprises of Mr. V. Manickam, Independent Director as the Chairman, Mr. C. K. Ranganathan, Independent Director, Dr. (Ms) Rca Godbole, Independent Director and Mr.M.M.Venkatachalam, Non- Executive Non- Independent Director as Members.

CSR Committee

The CSR Committee comprises of Mr. V. Manickam, Independent Director, as the Chairman and Mr. V .Ravichandran, Non-Executive Non Independent Director and Mr. S. Suresh, Managing Director as members.

Vigil Mechanism & Whistle Blower Policy

The Company has a Vigil Mechanism for directors and employees to report genuine concerns and grievances and provides necessary safeguards against victimisation of employees and directors.

The Audit Committee reviews on a quarterly basis the functioning of the Whistle Blower and vigil mechanism. The Vigil Mechanism and Whistle Blower Policy have been posted on the Companyâs website at www.eidparry. com and the details of the same are given in the Corporate Governance Report.

Business Responsibility Report (BRR)

The SEBI (LODR) Regulations mandate the inclusion of the BRR as part of the Annual Report for top 500 listed entities based on market capitalisation. In compliance with the SEBI (LODR) Regulations, the BRR forms part of this Annual Report.

Dividend Distribution Policy

Pursuant to Regulation 43A of Listing Regulations, the top 500 listed Companies shall formulate a Dividend Distribution Policy. The Companyâs Dividend Distribution Policy as approved by the Board is available on the Companyâs website at www.eidparry.com/investors/Policies-Codes.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars relating to conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo as required to be disclosed under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - D to this Report.

Loans, Guarantees and Investments

There were no loans and advances in the nature of loans to associate companies as well as to firms/ companies in which Directors are interested during the financial year 2017-18.

During the financial year, the Company had given guarantees and made investments in subsidiaries/Joint venture within the limits as prescribed under Sections 185 and 186 of the Companies Act, 2013. Details of Guarantees and investments are given in Annexure - E to this Report.

Particulars of Employees and Related Disclosures

The information required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Boardâs Report for the year ended March 31, 2018 are given in Annexure - F to this Report.

Extract of Annual Return

The extract of the Annual Return of the Company in Form MGT-9 is given in Annexure - G to this Report.

Compliance of Secretarial Standard

The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government as required under Section 118(10) of the Companies Act, 2013.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this Report.

The Managing Director of the Company does not receive any remuneration or commission from any of its subsidiaries.

No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Companyâs operations in future.

ACKNOWLEDGEMENT

The Board places on record, its appreciation for the cooperation and support received from investors, customers, farmers, suppliers, employees, government authorities, banks and other business associates.

On behalf of the Board

Place : Chennai V.Ravichandran

Date : May 9, 2018 Chairman

Mar 31, 2017

BOARDâS REPORT

TO THE MEMBERS OF E.I.D.-PARRY (INDIA) LIMITED

Dear Shareholders,

The Directors have pleasure in presenting the Forty Second Annual Report together with the audited financial statements for the year ended March 31, 2017.

FINANCIAL PERFORMANCE

Rs, in Crore

Particulars	Standalone		Consolidated
Particulars	2016-17	2015-16	2016-17	2015-16
Gross Revenue	2631.21	2785.59	14825.70	15753.21
Profit Before Interest and Depreciation (EBITDA)	508.67	157.51	1584.96	1019.70
Depreciation	112.11	112.00	248.04	249.61
Profit Before Interest and Tax (EBIT)	396.56	45.51	1336.92	770.09
Finance Charges	139.91	167.10	417.32	451.20
Net Profit Before Tax	256.65	(121.59)	919.60	318.89
Tax - Expenses	(26.96)	(29.48)	211.35	143.67
Net Profit After Tax before minority interest	283.61	(92.11)	708.25	175.22
Minority Interest	-	-	187.44	140.71
Net Profit After Tax after minority interest	283.61	(92.11)	520.81	34.51
Balance of profit brought forward	85.90	155.59	(381.26)	(240.35)
Transfer from Debenture Redemption Reserve (Net)	33.33	40.00	19.17	40.00
Balance available for appropriation	402.84	103.48	158.72	(165.84)

Indian Accounting Standards (IND AS)

The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazette dated February 16, 2015 notified the Indian Accounting Standards (Ind AS) applicable to certain classes of Companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. Ind AS is applicable for the Company from April 1, 2016, with a transition date of April 1, 2015 and IGAAP as the previous GAAP

The following are the areas which had an impact on account of transition to Ind AS :

- Business combination including recording of intangibles and deferred taxes and accounting for common control transactions

- Fair valuation of certain financial instruments

- Employee costs pertaining to defined benefit obligations

- Discounting of certain long-term liabilities

- Share based payments

The reconciliation and description of the effect of the transition from IGAAP to IND AS have been provided in Note 55 & 54 in the notes to accounts in the standalone and consolidated financial statements respectively.

Consolidated Operations

Consolidated Revenue of your Company for the year was Rs, 14,826 Crore 5.88% lower than Rs, 15,753 Crore in the previous year. Overall expenses for the year was Rs, 13,906 Crore as against Rs, 15,458 Crore in the previous year. Operating Profit (EBITDA) was Rs, 1,585 Crore as against Rs, 1,020 Crore in the previous year. Profit after Tax and minority interest for the year at Rs, 521 Crore, was Rs, 486 Crore higher over Rs, 35 Crore in the previous year.

Standalone Operations

Standalone Revenue of your Company for the year was Rs, 2,631 Crore, 5.56% lower than Rs, 2,786 Crore in the previous year. Operating Profit (EBITDA) was Rs, 509 Crore, as against Rs, 158 Crore in the previous year. Profit after Tax (excluding exceptional item) for the year was at Rs, 284 Crore as against loss after tax of Rs, 92 Crore for the previous year. Reduction of total debt is important to improve the Companyâs risk profile and increase sustained earnings. Total debt was reduced from Rs, 1,319 Crore as of March 2016 to Rs, 943 Crore in March 2017. This enabled the Company to reduce interest/finance charges to Rs, 140 Crore as compared to Rs, 167 Crore in the previous year.

Sugar

The improved performance of the Company was largely on account of better sugar prices, which have been on an upswing since August 2016, after touching all time lows in the previous two years. More than 90% of the Companyâs revenue comes from the sugar business and hence the sugar prices play a predominant role in determining the profitability of the Company. Higher profitability has been achieved notwithstanding lower cane crushed, lower sugar produced and sold as compared to the previous year, due to better sugar prices and a host of other initiatives taken by the Company to improve profitability.

Product Differentiation

In terms of sales and marketing, the Company has focused on product differentiation and value addition to the customer to improve realizations. The Company is one of South Indiaâs leading suppliers of sugar to the Institutional segment. Currently the Company services varied sectors such as carbonated drinks, beverages, juices, confectionery, dairy, biscuits, ice creams, ketchups and Indian sweets across 15 States. The Company is also focussed on supplying sugar to the Pharma Industry which requires customized sugar to meet their specific product requirements. The Company has recently commenced sale of Bonsucro certified sugar, produced from sustainable sugarcane. Over 40% of Companyâs sugar volumes have been sold to the Institutional segment. The Companyâs retail product Amrit, a 100% original cane sugar product, with about ten times the nutrients as compared to normal sugar, is growing and is being extended to more towns in South India.

Manufacturing Excellence

The focus of the Company has been on driving cost optimization across the entire conversion cost chain. Improvements in daily crush rate, better efficiencies on steam, energy and chemicals consumption besides reduction of total losses have all helped in maintaining and improving profitability. The ongoing TPM initiative at the Companyâs two Units will enable the Company to achieve Manufacturing Excellence in all its operations over the next few years. Safety has been on top of the agenda across all the Factories. Some of the areas covered under the Safety program include Standard Operating Procedure and work instructions for critical jobs such as working at heights, hot work, confined space entry and electrical work; more safety visuals and safety patrols; improved 1S & 2S; rigour in implementation of safety permit system and development of accident matrix with corrective actions. Sustainability initiatives implemented during the year include Zero Water Drawal from ground, river or canal; online monitoring of emission and effluent parameters; production of Potash fertiliser as part of âWaste to Wealthâ initiative and conversion of Bio Methanated Distillery spent wash to Potash rich powder, to name a few. The technology of bagasse dryer system using flue gas for reducing the bagasse moisture has been perfected. Turbines at Nellikuppam and Haliyal were overhauled with specific focus on improving specific steam consumption. New concept such as Saturated Steam Turbine was commissioned at one plant. The Sankili Plant at Andhra Pradesh also commenced trial production of Ethanol from Sweet Sorghum grown by the farmers within the command area. The Nellikuppam refinery was upgraded to meet stringent pharma standards of production. The Companyâs Distillery at Nellikuppam is amongst the first in India to be given the permission to run for 350 days with a zero liquid discharge system in place. Continued improvements in quality and food safety of the products, across all the locations, have been another area of focus.

Sugarcane

Although the Company has benefited from improving sugar prices in the wake of lower sugar production, the sugarcane availability was a major concern for the year. Improved sugarcane availability is important for sustaining and growing the profitability of the sugar business. The lower sugarcane crush in Tamil Nadu was mainly on account of lower yield due to a very serious drought. Tamil Nadu, across many of its Districts, witnessed the lowest rainfall in 2016 in the last hundred years. The problems were further exacerbated due to non availability of water for irrigation from the Cauvery river. During the year under review, the cane crushed by the Tamil Nadu Plants was at 24.61 LMT as against 23.46 LMT in the previous year. The daily crush rate at 14291 TCD was better than the actual of 13340 TCD achieved in the previous year. The average recovery was at 8.89 % as against 9.14% in the previous year. The situation in AP was no different with much lower rainfall in

2016. In Karnataka too, the Company crushed less cane than the previous year due to lower yield because of a poor South West monsoon, combined with farmers diverting cane due to fear of perishables, if not harvested in time. In Karnataka / Andhra Pradesh, the overall cane crush came down from 32.43 LMT in the previous year to 19.83 LMT in the current year. While the average crush rates were maintained at about the previous yearâs levels, the number of crush days came down from 188 to 102, in Karnataka. The average recovery was at 10.75 % & 9.67 % in Karnataka & Andhra Pradesh as against 11.53 % & 9.37 % in the previous year respectively. During the year, the Sugar Units of the Company in Karnataka commenced operations earlier to ensure maximum crushing during the season but unauthorized cane poaching in the light of restricted cane availability, led to the Company losing cane to competition. This combined with lower yield resulted in early closure of the season.

The Company has launched a number of initiatives like cooperative farming, providing resources for drip and micro irrigation besides partnering the farmers through various activities such as trash shredding and mulching, foliar application of potash, supply of seed through a three tier nursery programme, intercropping, wider row spacing, gap filling, desalting of ponds, new varietal trials, release of bio control agents, mechanization of agronomy practices, training programmes, village meetings, improved farmer connect, etc. to improve yield, reduce cost of cultivation and thereby improve the economic wellbeing of the farmers.

For the Sugar Season 2016-17, the Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, fixed the sugarcane Fair & Remunerative Price (FRP) at Rs,230/quintal for a basic recovery of 9.5% and a premium of Rs,2.42 for every 0.1% increase in the recovery rate, as recommended by the Commission of Agricultural Costs and Prices (CACP). The Company has paid cane prices higher than FRP across all the three States. The Company is committed to provide a fair share of its revenue to the farmers. While the link between the revenue and the sugarcane price has been made possible in sugar season 2016-17, due to improved sugar prices, it is important and in the interest of both the farmers and mills that this umbilical link between the revenue and the sugarcane price is established and maintained going forward. The Central Government must continue the policy of a price stabilisation fund, which was in place with cess being collected on sale of sugar from February 1, 2016. This will ensure that the farmer gets a minimum price protection by way of FRP a bonus by way of Revenue Sharing Formula when sugar prices are higher and payment of FRP including contributions from the price stabilisation fund, when sugar prices are lower. Unarguably, this is the only way in which cane price arrears can be avoided in a cyclical industry like sugar during downtimes.

All India Sugar Production and Government Policies

The Sugar Industry has witnessed challenging times with volatile sugar prices over the two previous sugar seasons, ending sugar season 2015-16. This was mainly because sugar production on an all India basis continued to outstrip sugar consumption levels over previous five consecutive sugar seasons. With mounting stocks, the sugar prices started declining from May, 2015. However, the situation changed in sugar season 2016-17 with Indian sugar production estimated at 20.3 million tonnes and over all consumption at about 24 million tonnes. The decline in sugar production in 2016-17 can be primarily attributed to drought and consequently, lower sugarcane in the States of Maharashtra and Karnataka. The Government at the Centre has played a key role in turnaround of the fortunes of the Sugar Industry. It swiftly responded and introduced various actions and measures to alleviate the problems of mounting cane arrears and poor financial performance of the sugar mills. In the previous year, the Government introduced measures like soft loan schemes, production subsidy, mandatory export and Ethanol blending programmes to improve the profitability of the sugar mills and speed up cane payments to the farmers. Once the sugar prices improved to the desired levels, the Government reacted promptly with imposition of stock holding limits at the trader level and mill level, withdrew production subsidy, imposed export duty and withdrew the excise benefit on ethanol supply for blending. It also brought in changes in metrology rules and empowered itself to fix the retail prices of essential commodities. The Government of Karnataka also pitched in by waiving purchase tax on sugarcane in the financial year 2016-17, provided the Mills cleared their cane arrears of previous years by June

30, 2017 and also undertook to pay a part of the disputed cane price pertaining to SY 2013-14.

During the year, the Bio Pesticides division of the Company was severely impacted by significant increase in neem seeds price from previous year levels due to season failure across southern India combined with increased competition. This unprecedented price increase has adversely impacted the profitability resulting in 45% drop in operating profits in spite of 22% growth in revenue over previous year. To mitigate the risks relating to the seeds availability, the business has taken measures over short term and long term horizon. The Company expects that these measures would bring stability in the operations of the business. Parryâs Azadirachtin, with the highest purity and best stability, continued to command a premium and maintain its leadership position both in the agriculture and indoor garden segments. As a critical part of the future ready strategy for growth, work is in progress to foray into the âMicrobial segmentâ. The Company has undertaken a detailed study across the globe, on major crop pest problems and identified the critical ones for which it would work to identify patentable microbial solutions. Major factors such as toxicity, safety to users and consumers, eco friendliness, sustained and assured protection, low/no pre-harvest interval etc., are the objectives that Parryâs Bio Products division envisages to achieve through its vision of being a Global Bio Products Business offering Organic solutions for Sustainable Crop Protection and Growth.

Nutraceuticals

During the year, overall sales of premium Organic Spirulina increased by 22% over previous year mainly due to improved sales in European market where premium quality continues to be valued. Spirulina production from the new Greenfield unit established at Saveriarpuram, Tamilnadu had commenced during Q4 of previous year and stabilised well during the year. The Nutraceuticals Division had made investments during the year to stabilize the Chlorella production process by achieving 20 MT production. Further investments are committed for process improvements and scale up of Chlorella volumes in the next financial year. The division has received the U.S. Food and Drug Administration (US-FDA) approval for its Oonaiyur facility for organic microalgae cultivation and processing. It is a testament to the Companyâs on-going commitment to maintaining superior quality systems. This approval will further enhance the Companyâs reputation as a leader in micro-algal technology. During the current year, Parryâs Spirulina received R.A.W and C.L.E.A.N certification from Integrated systems, USA.

Alimtec SA, Chile which was acquired by the company in 2014 is shaping well and recorded 64% growth in production volumes during the year. Further, the business has invested in a window dryer during the year to improve the production quality. We expect this investment to yield desired results in Alimtecâs performance during the next financial year.

US Nutraceuticals LLC, our USA based subsidiary has achieved a sales of USD 23.8 MN during the current year against USD 25.8 MN of previous year. Sales of formulation products has shown a degrowth of 24% over previous year. The company has been investing in clinical trials for developing new formulations. We expect these investments would improve the Companyâs performance in the next financial year.

Dividend And Reserves

During the year, the Company paid an interim dividend of Rs,4/- (400%) per equity share of Rs,1/- each in March, 2017.

The company has not transferred any amount to the reserves for the year ended March 31, 2017.

Amalgamation of Subsidiary

The Scheme of Amalgamation of Parrys Sugar Industries Limited, a subsidiary with the Company was approved by the NCLT, Chennai Bench on April 21, 2017. Similarly the Petition of Parrys Sugar Industries Limited was approved by the NCLT, Bengaluru Bench vide its Order dated April 21, 2017. Consequent to filing of the certified order copies along with the Scheme with the respective Registrar of Companies on April 25, 2017, the Scheme became effective from April 25, 2017 with appointed date of April 1, 2016.

Share Capital

The Paid up Equity Share Capital of the Company as on March 31, 2017 was Rs,17.59 Crore. During the year under review, the Company allotted 56,014 equity shares on exercise of stock options under ESOP Scheme, 2007.

Consequent to the Scheme of amalgamation of Parrys Sugar Industries Limited (PSIL) with the Company becoming effective, the share capital will increase to Rs,17.69 Crore after allotment of shares to the shareholders of PSIL in accordance with the said Scheme.

Subsidiary Companies

There has been no change in the nature of business of the subsidiaries during the year under review. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its Subsidiary Companies, which is forming part of the Annual Report. A statement containing the salient features of the financial statements of the Subsidiary Companies, Joint ventures and Associates are given in Annexure-A to this Report.

In accordance with the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company containing standalone and consolidated financial statements has been placed on the website of the Company, www.eidparry.com. Further, the audited accounts of the Subsidiary Companies and the related detailed information have also been placed on the website of the Company www.eidparry.com. The annual accounts of the Subsidiary Companies will also be available for inspection by any shareholder/debenture trustees at the Registered office of the Company and of the Subsidiary Companies concerned during working hours upto the date of the Annual General Meeting. A copy of annual accounts of subsidiaries will be made available to shareholders seeking such information at any point of time.

Performance of Business Segment Sugar

During the year, the sugarcane crush dropped from 55.90 LMT in the previous year to 44.44 LMT in 2016-17. The overall recovery also dropped from 10.30 % in 15-16 to 9.61 % in 2016-17, largely because of lower sugarcane crushed in Karnataka. Lower sugarcane crushed as stated, is largely on account of drought conditions leading to lower yield across all the three Southern States of Tamil Nadu, Karnataka and Andhra Pradesh and diversion of cane to competition in Karnataka. Consequently the sugar production was lower at 4.33 LMT this year. The Company sold 4.78 LMT during the year. The Company however maintained the sales to Institutions at about the same volumes as in the previous year, while improving on the retail volumes. The average realization of sugar was up from Rs,24.80 /Kg. in 2015-16 to Rs,34.30 /Kg. in 2016-17. The higher sugar prices along with focus on product differentiation and Manufacturing Excellence programmes resulted in improved profitability of this segment.

Power

The Cogen Units in TN generated 3,006 Lakh Units as against 3,284 Lakh Units of the previous year. With the overall power situation improving dramatically this year and with inter-connection of grids, power tariff rates dropped and the Company entered into a short term power supply arrangement with the Tamilnadu Government Electricity Utilities in December 2016.

The Karnataka and Andhra Pradesh Units generated 2,533 Lakh Units as against 3,237 Lakh Units in the previous year. Along with the other Mills of the Karnataka Sugar Industry, a five year Power Purchase Agreement was entered into by the Bagalkot and Haliyal units with the Karnataka Government Electricity Utilities in January 2017.

Distillery

With own and bought-out molasses, the two Distilleries in Tamilnadu ran for over 330 days on an average and recorded highest production to-date of distillery products. The Company produced 708 LL of Alcohol during the year as against 657 LL of Alcohol during the previous year, an increase of over 8%. The Company completed the process of expansion of its Ethyl Neutral Alcohol production facility from 30 KLPD to 75 KLPD at Nellikuppam. The Company supplied over 5% of Ethanol used by the Oil Marketing Companies in South India for blending with petrol in 2016-17. Consequent to higher production / sales volumes and improved realizations of the distillery products, the division registered an increase in both revenue and operating profits during the year 2016-17.

The Bio-Pesticides Division registered a revenue of Rs,122 Crore as compared to Rs,100 Crore in the previous year, accounting for 5% of the Companyâs revenue. The sale of Aza Products registered a growth of 15% over 2015-16. Export sale of Neemazal Technical registered a growth of 17% over 2015-16. USA accounted for 63% of Export sales, while Europe and Asia accounted for 33% and 4% respectively. Domestic sales registered a growth of 22% over

2015-16 enabled by growth of Aza & Non Aza products by 10% & 31% respectively. PBIT for the year was at Rs,14.7 Crore against Rs,26.73 Crore in 2015-16. Parry America Inc, wholly owned subsidiary of the Company, registered sales of Rs,57 Crore with 12% growth over previous year. On a consolidated basis the Bio-Pesticides Business registered a revenue of Rs,123 Crore in 2016-17 as compared to Rs,107 Crore in the previous year, registering 22% growth over previous year.

Nutraceuticals

The Nutraceuticals Divisionâs standalone revenue was at Rs,71 Crore in 2016-17 as compared to Rs,77 Crore of previous year representing 3% of the Companyâs revenue. About 84% of this represents exports. US Nutraceuticals LLC registered sales of Rs,163 Crore which represents a degrowth of 6% over the previous year. Alimtec SA registered sales of Rs,11 Crore as compared to Rs,4 Crore in the previous year. On a consolidated basis the Nutraceutical Business registered revenue of Rs,228 Crore as compared to Rs,240 Crore in the previous year.

A detailed analysis on the business segments is included in the âManagement Discussion and Analysisâ Report, which forms part of this Report.

Awards & Recognitions

During the year, the Company was selected in 2016 as the best performing Company and winner in the sugar sector by Dun & Bradstreet, for the second year in running. Dun & Bradstreet has endeavoured to provide the top Indian Companies a global platform through its publication of Indiaâs top 500 Companies to recognise exemplary performance in the Corporate World. Further, the Company received a special recognition at the National level in May 2017 for its âCommitment to Engagementâ as part of the Aon Best Employers India 2017.

At the National level Energy Conservation Contest organized by the Confederation of Indian Industry, the Companyâs Nellikuppam factory was certified as an âExcellent Energy Efficient Unitâ and Pudukottai factory was certified as an âEnergy Efficient Unitâ. Both Nellikuppam and Pudukottai Units received this award for the second and third time respectively in the last four years. The Pudukottai Unit also received first prize for Jishu Hozen activities at the National Level TPM Circle Competition.

The Nellikuppam factory received an Award for âBest Overall Performance of the Sugar Millâ from a Sugar Manual Magazine and

Haliyal Cogen Plant was awarded as the âBest Safe Power Boilerâ in Karnataka State by the Government of Karnataka. Further, the Plants at Nellikuppam, Sivaganga, Sankili, Haliyal and Bagalkot won 10 Awards from South India Sugarcane and Sugar Technologies Association (SISSTA) under the heads of âBest Distilleryâ, âBest Technical Efficiencyâ âBest Sugarcane Developmentâ, âBest Cogenerationâ and âBest By-productsâ .

Directorsâ Responsibility Statement

Pursuant to the provisions contained in Section 134(3) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the management, confirm that:

- In the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed and there are no material departures from the same;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that-date;

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The Directors have prepared the annual accounts on a going concern basis;

- The Directors have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively and

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Directors And Key Managerial Personnel

Mr. S.Suresh was appointed as Deputy Managing Director of the Company for a period of three years as approved by the members on August 5, 2016.

Mr. V.Ramesh was re-appointed as Managing Director of the Company for a period of one year with effect from January 30, 2017 as approved by the members by way of postal ballot on January 23,

2017.

Mr. Anand Narain Bhatia, independent Director, who was appointed on July 30, 2014 for a period of three years would be retiring on July 29, 2017.

The Board of Directors accepted the request of Mr. V.Ramesh, Managing Director seeking early retirement and accordingly Mr. V.Ramesh would be retiring from the position of Managing Director as well as Director of the Company on the close of the business hours of July 31, 2017.

Consequent to the early retirement of Mr. V. Ramesh as the Managing Director w.e.f July 31, 2017, the Board at their meeting held on May 18, 2017, on the recommendation of the Nomination & Remuneration committee (NRC) appointed Mr. S.Suresh, the Deputy Managing Director as the Managing Director of the Company for a Period of five years w.e.f August 1, 2017. His appointment will be subject to the approval of the shareholders at the ensuing Annual General Meeting.

The Board wishes to place on record its appreciation for the valuable contribution made by Mr Anand Narain Bhatia and Mr V Ramesh during their tenure as Independent Director and Managing Director respectively.

As per the provisions of section 152 of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. V.Ravichandran, Director retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for reappointment and the requisite details in this connection is contained in the notice convening the meeting and the Corporate Governance Report.

Mr. V.Ramesh, Managing Director, Mr. S.Suresh, Deputy Managing Director, Mr. VSuri, Chief Financial Officer and Ms. G.Jalaja, Company Secretary are the Key Managerial Personnel of the Company as per section 203 of the Companies Act, 2013.

Number of Meetings of the Board

Nine Meetings of the Board of Directors were held during the year, the details of which are given in the Corporate Governance Report.

Board Evaluation

In accordance with the Companies Act, 2013 and Listing Regulations, the Board has carried out evaluation of its own performance, the performance of Committees of the Board and also the directors individually. The manner in which the evaluation was carried out and the process adopted has been given in the Corporate Governance Report.

Policy on Directorsâ Appointment and Remuneration and Other Details

Auditors And Auditorsâ Report Statutory Auditors

M/s. Deloitte, Haskins & Sells, Chartered Accountants, (FR No.008072S) Chennai were appointed as Statutory Auditors of the Company by the shareholders at the 39^th Annual General Meeting held on July 30, 2014 to hold office upto the conclusion of the ensuing 42nd Annual General Meeting.

The Board of Directors have recommended the appointment of M/s Price Waterhouse, Chartered Accountants, LLP (Firm Registration No. 012754N/N500016) as Statutory Auditors of the Company in place of M/s. Deloitte, Haskins & Sells, Chartered Accountants, for a term of five years from the conclusion of 42^nd Annual General Meeting till the conclusion of 47^th Annual General Meeting for the approval of the shareholders of the Company based on the recommendation of the Audit Committee. Written consent of the proposed auditors together with a certificate that the appointment, if made, shall be in accordance with the provisions of section 139(1) of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 has been received

Cost Auditors

As per the requirement of the Central Government and pursuant to section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Companyâs cost records are subject to Cost Audit.

The Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Narasimha Murthy & Co, Cost Accountants, as the Cost Auditors to audit the cost accounting records maintained by the Company for the financial year 2017-18 on a remuneration of '' 10,10,000/- plus applicable tax and reimbursement of out of pocket expenses. A resolution seeking membersâ ratification for the remuneration payable to the Cost Auditor forms part of the notice convening the Annual General Meeting.

The cost audit report of the earlier Cost Auditor M/s. Geeyes & Co for the financial year 2015-16 was filed with the Ministry of Corporate Affairs on September 1, 2016. The cost audit report of M/s. Geeyes & Co for the financial year 2016-17 would be filed with the Ministry of Corporate Affairs on or before September 30, 2017 as per the provisions of the Companies Act, 2013.

Secretarial Auditors

The Board appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, Chennai as the Secretarial Auditors to undertake the Secretarial Audit of the Company for the year 2016-17. The Report of the Secretarial Auditors is provided in Annexure-B to this Report.

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory / Secretarial Auditors in their respective reports. The Statutory Auditors have not reported any incident of fraud during the year under review to the Audit Committee of the Company.

Internal Financial Control

The Company has adequate Internal Controls with proper checks and balances to ensure that transactions are properly authorized, recorded and reported apart from safeguarding its assets. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budgets on an ongoing basis.

The Companyâs Internal Audit division reviews the controls across the key processes and submits reports periodically to the Management and significant observations are also presented to the Audit Committee for review. There is also a follow up mechanism to monitor implementation of the various recommendations.

Risks, Concerns and Threats

The Company has a Risk Management Committee. As per Regulation 21 of the Listing Regulations, constitution of Risk Management Committee is not mandatory for the Company.

The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boardâs Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels, including documentation and reporting. The Company has formulated a Risk Management Policy.

Corporate Social Responsibility (CSR)

The Company is known for its tradition of philanthropy and community service. As part of its initiative under âCorporate Social Responsibilityâ drive, the Company has undertaken activities in the field of Education and Healthcare besides other CSR activities for the benefit of community in and around its local areas of operations. The Company is committed to identifying and supporting programmes aimed at:

- Empowerment of the disadvantaged sections of the society through education, access to and awareness about financial services and the like;

- Provision of access to basic necessities like healthcare, drinking water & sanitation and the like to underprivileged;

- Work towards eradicating hunger and poverty, through livelihood generation and skill development;

- Supporting environmental and ecological balance through a forestation, soil conservation, rain water harvesting, conservation of flora & fauna, and similar programmes;

- Promotion of sports through training of sports persons;

- Undertake rural development projects;

The Company has constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Companyâs website at www.eidparry. com.

As per the provisions of the Companies Act, 2013, the Company was not required to spend any amount towards CSR activities for the year 2016-17. However, the Company has been actively involved in various CSR activities and an amount of '' 88.04 Lakh was spent during the year. The Annual Report on CSR activities is given in Annexure-C to this Report.

During the year, the Company has bagged the National CSR award under the category of âBest Overall Excellence in CSRâ in National CSR Leadership Congress & Awards 2016.

Related Party Transactions

All contracts / arrangements / transactions entered into during the financial year with the related parties were on armâs length basis and were in the ordinary course of business. There were no materially significant related party transactions with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

Employee Stock Option Scheme

The Company has introduced Employee Stock Options scheme,2016 during the year 2016-17 as approved by the shareholders. The details of the Options granted up to March 31, 2017 and other disclosures as required under SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the Companyâs website at www.eidparry.com.

The Company has received a certificate from the Statutory Auditors of the Company that the Scheme had been implemented in accordance with the Securities and Exchange Board of India (Share Based

Employee Benefits) Regulations, 2014 and the resolutions passed by the Members in this regard.

Corporate Governance

The report on corporate governance along with a certificate from the Statutory Auditors as required under the Listing Regulations is annexed to this Report. The report also contains the details required to be provided on the board evaluation, remuneration policy, implementation of a risk management policy, whistleblower policy / vigil mechanism etc.

In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis forms part of this Report.

Transfer to the Investor Education and Protection Fund

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further according to the Rules, the shares in respect of which dividend has not been encased by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends. Further, the corresponding shares will be transferred as per the requirements of the IEPF rules, details of which are provided on our website, at http:// www.eidparry.com/ investor/Unpaid-Unclaimed-Dividend.

During the year, the Company has transferred an amount of '' 1,07,39,159/- being the unclaimed dividend for the year 2008-09 (Interim and final) and 2009-10 (Interim) to the Investor Education and Protection Fund established by the Central Government.

Adoption of new Articles of Association

The Ministry of Corporate Affairs (MCA) notified most of the sections of the Companies Act, 2013 (âthe Actâ) which replace the provisions of the Companies Act, 1956. The MCA also notified the rules pertaining to the further notified sections. In order to bring the Articles of Association (AOA) of the Company in line with the provisions of the Act, the Company recommended that the members adopt a comprehensive new set of the Articles of Association of the Company (ânew articlesâ) in substitution of the existing AOA. The resolution to adopt the new articles was passed by the requisite majority by the members of the Company through a Postal Ballot and the result was announced on January 23, 2017. The new articles are available on the website of the Company. (http://www.eidparry.com/investors/AOA-MOA)

Disclosures Audit Committee

The Audit Committee comprises of Independent Directors namely Mr. M.B.N.Rao as the Chairman and Mr. Anand Narain Bhatia, Mr. V.Manickam and Dr. (Ms) Rca Godbole as Members.

CSR Committee

The CSR Committee comprises of Mr. V.Manickam, Independent Director as the Chairman and Mr. V.Ravichandran, Non-Executive Non Independent Director and Mr. V.Ramesh, Managing Director as members.

Vigil Mechanism & Whistle Blower Policy

The Company has a Vigil Mechanism for directors and employees to report genuine concerns and grievances and provides necessary safeguards against victimisation of employees and directors.

Business Responsibility Report (BRR)

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for top 500 listed entities based on market capitalization. In compliance with the Listing Regulations, the BRR forms part of this Annual Report.

Dividend Distribution Policy

Pursuant to Regulation 43A of the Listing Regulations, the top 500 listed Companies shall formulate a Dividend Distribution Policy. Accordingly the policy was adopted by the board at its meeting held on February 07, 2017 to determine the distribution of dividend to its shareholders and / or retaining the profits earned by the company. The policy is available on the Companyâs website at www.eidparry.com/investors/Policies-Codes.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Loans, Guarantees And Investments

There were no loans and advances in the nature of loans to associate companies as well as to firms/ companies in which Directors are interested during the financial year 2016-17.

During the financial year, the Company had given guarantees and made investments in subsidiaries within the limits as prescribed under Sections 185 and 186 of the Companies Act, 2013. Details of loans, guarantees and investments are given in Annexure- E to this Report.

Credit Rating

During the year, rating agency CRISIL has reaffirmed its credit rating to the Companyâs Long term Bank facilities and Debt Programmes to âCRISIL A / Stableâ and the âCRISIL A1 â rating for its short term borrowing.

Particulars of Employees and Related Disclosures

Extract of Annual Return

The extract of the Annual Return of the Company in Form MGT-9 is given in Annexure - G to this Report.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this Report.

The Managing Director and the Deputy Managing Director of the Company do not receive any remuneration or commission from any of its subsidiaries. No significant or material orders were passed by the Regulators or Courts or Tribunals, which impact the going concern status and Companyâs operations in future.

Acknowledgement

On behalf of the Board

Place : Chennai A. Vellayan

Date : May 18, 2017 Chairman

Mar 31, 2014

The Directors have pleasure in presenting their report together with the audited accounts for the financial year ended 31st March, 2014.

The performance highlights of the company for the year are summarised below:

FINANCIAL RESULTS

Rs. in lakh

Particulars 2013-14 2012-13

Total Income 1,94,319 2,09,978

Profit Before Interest, Depreciation and Tax 26,237 60,562

Less : Interest 19,616 13,668

Depreciation 9,731 10,787

Profit Before Tax (3,110) 36,107

Less: Provision for Tax :

- Current - 839

- MAT Credit entitlement - (839)

- Deferred (5,763) 2,936

Profit After Tax 2,653 33,171

Add : Surplus brought forward 24,456 37,966

Amount available for Appropriation 27,019 71,137

APPROPRIATIONS

Transfer to General Reserve - 35,000

Transfer to Debenture Redemption Reserve 2,653 1,250

Dividend on Equity Capital :

Interim dividend paid - 10,431

Dividend Distribution Tax (Net) - -

Surplus carried to Balance Sheet 24,456 24,456

PERFORMANCE

During the year, the Company recorded a revenue of Rs. 1,94,319 lakh as compared to Rs. 2,09,978 Lakh in the previous year 2012-13 The Earnings before Interest, Depreciation, Tax and Amortization for the year was Rs. 26,237 Lakh representing 14% of total sales as against previous year''s Rs. 60,562 Lakh. Performance of sugar by-product division namely distillery and power have contributed towards EBIDTA during the year.

During the year, the performance of the Company was adversely affected primarily due to the prevailing low market price of sugar and the higher cane price that the Company had to pay for procuring cane from the farmers. Further, the units in Tami Nadu was impacted by a third consecutive year of drought severely affecting the cane availability. In Karnataka there was a delay in commencement of the normal crushing operations due to the impasse caused by the hike in cane prices announced by the Karnataka Government and the millers'' dissent on this issue. All this had a combined effect resulting in reduction of the total cane crushing for the year as compared to that of the previous year

Over the last three seasons from 2010-11 to 2012-13, the average sugarcane prices paid by mills has increased at around 14% CAGR whereas the increase in sugar prices has been a mere 2.6%. The increase in sugar prices has not kept pace with the increase in cane prices over the last few years. The steep rise in sugar cane procurement costs which accounts for about 70% of total operation costs is expected to significantly impact the profitability of sugar mills. For the SS 2013-14, the Central Government has announced a 23.5% hike in the minimum price payable for sugarcane through the Fair and Remunerative Price (F&RP) mechanism. However the increase in market prices of sugar has been minimal. Although the decontrol of sugar distribution and the impetus given to blending ethanol with petrol have given some relief to the sugar mills, the issue of sugarcane pricing still remains largely unresolved. Linking sugar cane prices to the prices of end-products is critical for safe guarding long-term financial health and sustenance of the industry. This will also help to reduce the extent of volatility in sugar production.

The major areas of focus for the Company are consolidation of operations, reducing costs and conserving cash. Due to high stress on profitability, several cost reduction measures have been put in place by the Company to improve the bottom line. The other measures are to work towards improving the yield, increasing the cane cultivation in the command area and further improving the operating efficiency. The Company proposes to take a slew of measures in this direction, so as to face the challenge of low sugar price and threat of continuous increase in cane price.

BUSINESS SEGMENTS

SUGAR

During the year, the Company crushed 47.52 Lakh MT of sugar cane as against 65.18 Lakh MT crushed in the previous year. The units in Tamilnadu & Puducherry have crushed a total quantity of 30.72 Lakh MT vs. 53.24 Lakh MT in the previous year. This drop was mainly on account of poor weather conditions in our key crushing areas. The recovery of sugar from sugar cane was at 9.84% as against 9.23% in the previous year.

The company sold 4,16,947 MT of Sugar as against 4,95,218 MT during the previous year.

POWER

The power generation during the year was lower primarily due to lower cane availability. While most of the power generated was continued to be used captively to run the plants, the surplus power was sold to Tamilnadu Electricity Board and other merchant power purchasers.

Power generation was at 4,259 Lakh Units as compared to 6,534 Lakh Units in the previous year. The company exported 2,497 Lakh Units of power during the year as against 4,100 Lakh Units in the previous year.

DISTILLERY

During the year, Industrial Alcohol/ENA production was lower at 593 Lakh Litres as compared to 654 Lakh Litres during the previous year. The Industrial Alcohol/ENA sales was at 598 Lakh Litres as compared to 642 Lakh Litres during the previous year.

BIO PRODUCTS

Bio Pesticides

The Bio-Pesticides Division registered revenue of Rs. 9,716 lakh in 2013-14 as compared to Rs. 7,321 lakh of previous year and accounting for 5% of the Company''s Revenue. The sale of Neemazal registered a growth of 43% over 2012-13. Export sale of Neemazal technical registered a growth of 22% over 2012-13 with US accounting for 64% of the sale followed by Europe at 34% and Asian markets at 2%. Domestic sale of Neemazal and Abda range of products along with micronutrients and adjuvants registered a growth of 44% over 2012-13. PBIT for the year was higher at Rs. 2,276 lakh against Rs. 1,557 lakh in 2012-13. Production of Technical Aza was 15,221 Kgs, the highest ever in a year.

Nutraceuticals

The Nutraceuticals Division''s turnover was Rs. 6,930 lakh for the year ended 31st March, 2014 representing 4% of the Company''s Revenue. About 80% of this represents exports.

Premium Organic Spirulina continues to outperform competition in its segment and sales during the year had grown at 32% over the previous year. With the stabilized Astaxanthin production process, the sales of Astaxanthin in the form of Oleoresin grew by 159% over 2012-13. The Company has exited from OTC / OTX product range during the year to focus on its core ingredients business.

Detailed analysis of the business segments is provided in the Management and Discussion analysis.

ACQUISITION OF ALIMTEC S.A

In April 2014, the Company has acquired 100% stake in Alimtec S.A., Chile, part of the Bayer Group. The acquisition is by way of purchase of the stake from Bayer Finance and Portfolio Management S.A., and Nunhems Chile S.A., subsidiaries of Bayer AG. With this acquisition, the Company would ensure reliable sourcing of Astaxanthin for its subsidiary, US Nutraceuticals LLC (Valensa). With Valensa''s strength in developing Astaxanthin based formulations, this acquisition will culminate in Value Creation for the Nutraceuticals business. The entire production of Alimtec will be used by Valensa for its Astaxanthin products catering to USA & Europe Markets.

DIVIDEND

Due to adverse performance of the Company, the Board has not recommended any dividend for the year ended March 31, 2014.

SCHEME OF ARRANGEMENT - MERGER OF SADASHIVA SUGARS LIMITED WITH E.I.D.-PARRY (INDIA) LIMITED

Pursuant to the order of the High Court of Karnataka, the merger of Sadashiva Sugars Limited, a wholly owned subsdiary, with E.I.D.- Parry (India) Ltd. with appointed date of 1st April, 2013 has been completed on 8th May, 2014. Sadashiva Sugars Limited is having a Sugar Plant along with cogeneration in the Bagalkot District of Karnataka

EMPLOYEE STOCK OPTION SCHEME

Under the ''Employee Stock Option Scheme'' (''the Scheme'') of the Company and based on the approval of the shareholders at the Annual General Meeting held on 26th July, 2007 and subsequent amendments thereof, no options were granted during the year ended 31st March, 2014. The details of the Options granted up to 31st March, 2014 and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure to this Report.

The Company''s Statutory Auditors, M/s.Deloitte Haskins & Sells, have certified that the Scheme had been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions passed by the Members in this regard.

CREDIT RATING

During the year, rating agency CRISIL has assigned Long term Debt rating of "CRISIL AA-" (Stable) and reaffirmed "CRISIL A1 " rating for its short term borrowing.

SOCIAL RESPONSIBILITY

The Company undertook a wide range of initiatives for the livelihood enhancement and for health and hygiene awareness in the rural community in which it operates. The Company also worked towards the preservation of environment through various water and social conservation programs.

Towards utilising the scarce water resource, the Company promoted micro irrigation systems like Drip, Sprinklers and Group Lift Irrigation programs.

SUBSIDIARY COMPANIES

Coromandel International Limited

The Company achieved a revenue of Rs. 10,11,397 Lakh for the year ended 31st March, 2014 and the profit after tax was Rs. 36,494 Lakh. The Company''s Board had recommended a dividend of Rs. 4.5/- per share (450%) for the year ended 31st March, 2014.

Parrys Sugar Industries Limited

The Company recorded revenues of Rs. 17,253 Lakh for the 12 months period ended 31st March, 2014. After providing for Depreciation, Interest and Tax, the loss after tax was Rs. 3,604 Lakh.

Silkroad Sugar Private Limited

The revenue for the year was Rs. 1,715 Lakh. During the year ended 31st March, 2014 the company made a loss before tax of Rs. 6,011 Lakh.

Parry Infrastructure Company Private Limited

During the year under review, the company earned an income of Rs. 2,209 Lakh with Profit before Tax of Rs. 320 Lakh. After providing for tax provision, the Profit after Tax was Rs. 217 Lakh.

Parry America Inc.

Parry America Inc, a 100% subsidiary based in US, reported an income of US$ 7,671 thousand for the year ended 31st March, 2014. The Profit after Tax was US$ 342 thousand.

Parry Phytoremedies Private Limited

The revenue for the year was Rs. 1,272 Lakh. During the year ended 31st March, 2014 the company made a loss before tax of Rs. 574 Lakh.

Parrys Sugar Limited

During the year ended 31st March 2014, the Company earned an income of Rs. 14 lakh with profit after tax of Rs. 14 lakh.

Parrys Investments Limited

During the year ended 31st March, 2014, the Company earned an income of Rs. 5 Lakh and the Profit after Tax was Rs. 4 Lakh.

US Nutraceuticals LLC

This overseas Subsidiary, during the year ended 31st March, 2014 earned an income of US$ 20,770 thousand and the Profit after Tax was Rs. 820 thousand.

SUBSIDIARY ACCOUNTS

In terms of the direction under Section 212(8) of the Companies Act, 1956 vide General Circular No.2/2011, bearing No.51/12/2007- CL-III dated 8-2-2011 issued by Government of India, Ministry of Corporate Affairs, the Board of Directors have passed a Resolution according consent to the Company for not attaching the financial statements in respect of all the Subsidiary Companies for the year ended 31st March, 2014.

The annual accounts of the subsidiary companies and the related detailed information will be made available to shareholders seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection by any shareholder in the Head Office of the Holding company and of the subsidiary companies concerned during working hours upto the date of the Annual General Meeting. A hard copy of details of accounts of subsidiaries will be furnished to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS-21 and AS- 27) issued by the Institute of Chartered Accountants of India and the same together with Auditors'' Report thereon form part of the Annual Report.

DIRECTORS

Mr.Anand Narain Bhatia Mr.M.B.N. Rao, Directors are liable to retire by rotation and the ensuing Annual General Meeting. The Board of Directors at their meeting held on 30th January, 2014 had appointed Mrs.Shyamala Gopinath as an Additional Director of the Company. She will hold office up to the ensuing Annual General Meeting, pursuant to Section 161 of the Companies Act, 2013

During the year, the Board of Directors at their meeting held on 30th January, 2014 have appointed Mr.V.Ramesh as an additional Director and also the Managing Director of the Company for a period of 3 Years w.e.f 30th January, 2014. The Shareholders vide their resolution dated 24th March 2014 passed through postal ballot have approved the appointment of Mr.V.Ramesh as the Managing Director of the Company.

In accordance with the provisions of Section 149 of the Companies Act, 2013, the Company proposes to appoint Mr.Anand Narain Bhatia, Mr.M.B.N.Rao, Mrs.Shyamala Gopinath and Mr.V.Manickam as Independent Directors at the ensuing Annual General Meeting. As required under clause 49 of the Listing Agreement a brief resume, expertise and details of other directorships of Mr.Anand Narain Bhatia, Mr.V.Manickam, Mr.M.B.N.Rao and Mrs.Shyamala Gopinath are provided in the Corporate Governance Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CEO/CFO CERTIFICATION

The Managing Director and the Chief Financial Officer have given a certificate to the Board as required under Clause 49 of the Listing Agreement.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 205C of the Companies Act, 1956 an amount of Rs. 48.94 lakh being unclaimed dividend of 2005-06 and Rs. 27.00 Lakh being unclaimed dividend of 2006-07 (Interim) were transferred during the year to the Investor Education and Protection Fund established by the Central Government.

DEPOSITS

Other than the deposits that were transferred to the Investor Education and Protection Fund, there were no other deposits due for repayment on 31st March, 2014. The Company had discontinued acceptance of deposits since July 2003.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that, to the best of their knowledge and belief :

In the preparation of the Profit & Loss Account for the financial year ended 31st March, 2014 and the Balance Sheet as at that date ("financial statements"), applicable Accounting Standards have been followed;

Appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognised. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function;

Proper systems are in place to ensure compliance of all laws applicable to the Company;

The financial statements have been prepared on a going concern basis.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, the Company''s Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

The Board, on the recommendation of the Audit Committee, has proposed that M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai be appointed as the Statutory Auditors of the Company for a period of three years at the Annual General Meeting of the Company. The Auditors have confirmed their willingness for reappointment as Auditors of the Company and has provided the necessary certificates in compliance of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

COST AUDITOR

M/s Geeyes & Co, Cost Accountants, who were appointed as Cost Auditors for the year ended 31st March, 2013 have filed the cost audit reports pertaining to Sugar, Co-generation, Industrial Alcohol and neem based pesticide with the Central Government. The Company has also filed the necessary Compliance Report with Ministry of Corporate Affairs in Form A as per The Companies (Cost Accounting Records Rules), 2011. The Company received the approval of the Central Government for the appointment of M/s. Geeyes & Co., Cost Accountants as Cost Auditors for the Financial Year 2013-14.

PARTICULARS OF EMPLOYEES

As required under the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report.

ACKNOWLEDGEMENT

The Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and also recognize the contribution made by the employees to the Company''s progress during the year under review.

On behalf of the Board

Chennai A. VELLAYAN

May 15, 2014 Chairman

Mar 31, 2013

The Directors have pleasure in presenting their report together with the audited accounts for the financial year ended 31st March, 2013.

The performance highlights of the company for the year are summarized below:

FINANCIAL RESULTS

Rs. in lakh

Particulars 2012-13 2011-12

Total Income 209,978 1,71,217

Profit Before Interest, 60,562 27,447 Depreciation and Tax

Less: Interest 13,668 6,443

Depreciation 10,787 7,397

Profit Before Tax 36,107 13,607

Less: Provision for Tax :

- Current 839 750

- MAT Credit entitlement (839) (750)

- Deferred 2,936 (125)

Profit After Tax 33,171 13,732 Add : Surplus brought forward 37,966 34,164

Amount available for 71,137 47,896 Appropriation

APPROPRIATIONS

Transfer to General Reserve 35,000 1,400

Transfer to Debenture 1,250 1,583 Redemption Reserve

Dividend on Equity Capital:

Interim dividend paid 10,431 6,947

Dividend Distribution Tax (Net) - -

Surplus carried to Balance 24,456 37,966 Sheet

TOTAL 71,137 47,896

PERFORMANCE

The Company posted an all-round improved performance with an impressive top line growth and earnings reflecting the robustness of its corporate strategy of creating multiple drivers of growth. This performance is particularly noteworthy when viewed against the backdrop of the extremely challenging business context resulting out of a regulated regime.

This year''s performance includes Units of Haliyal and Sankili of Parrys Sugar Industries Limited (PSIL), which were merged with the company as a result of the Scheme of Demerger approved by the Courts.

The Company recorded revenue of Rs. 2,09,978 lakh (including other income of Rs. 10,729 lakh) for the year ended 31st March, 2013 as compared to Rs. 1,71,217 lakh in the previous year 2011-12.

Other income for the year was Rs. 10,729 lakh (excluding bonus debenture of Rs. 26,573 lakh) as against Rs. 17,038 lakh in 2011-12. The dividend income for the year was Rs. 32,182 lakh (including the bonus debenture of Rs. 26,573 lakh) against Rs. 12,561 lakh in 2011-12. Interest income earned during the year was Rs. 3,347 lakh as against Rs. 2,247 lakh in 2011-12.

The Earnings before Interest, Depreciation, Tax and Amortization for the year was Rs. 60,562 lakh representing 30% of total sales as against previous year''s Rs. 27,447 lakh. Performance of sugar by-product division namely distillery and dividend income received have contributed towards EBIDTA during the year.

Sugar division''s sales increased from Rs. 1,43,782 lakh in 2011-12 to Rs. 1,87,888 Lakh in 2012-13 driven by increased Sugar and Alcohol sales.

Bio Pesticides division''s sales has marginally reduced to Rs. 7,321 Lakh as against Rs. 7,628 Lakh in 2011-12.

Nutraceuticals division''s sale has increased to Rs. 5,731 Lakh as against Rs. 4,359 Lakh in 2011-12.

BUSINESS SEGMENTS

SUGAR

The Company, along with its subsidiaries, has nine sugar plants spread across South India of which four are in Tamil Nadu, one in Puducherry, three in Karnataka and one in Andhra Pradesh. The company has a sugarcane crushing capacity of 34,750 TCD and cogeneration capacity of 146 MW across its sugar mills. The integrated sugar units have been designed to optimize process efficiencies, increase sugarcane recovery ratio, and increase energy efficiency through reduced steam and power consumption. The company during the year focused on removal of bottlenecks and improving process efficiencies.

The Company crushed 65 lakh MT of sugar cane during the financial year 2012-13. The recovery of sugar from sugar cane was at 9.23% as against 9.04% in the previous year owing to better quality of sugarcane crop and the integration of Haliyal & Sankili units following the demerger from PSIL. The Company produced 6,01,381 MT of sugar and 3,21,891 MT of molasses during the financial year 2012-13. This was possible due to increased usage of mechanical harvesters thereby reducing the dependence on manual labour, encouraging farmers to plant High Yielding Varieties of sugar cane, increased area under drip irrigation, soil fertility improvement activities etc.

The company sold 4,95,218 MT of Sugar as against 4,04,841 MT during the previous year. The company also sold 1,10,902 MT of Molasses as against 90,373 MT in the previous year.

POWER

The operations of power generation were smooth across all of the six cogen plants. While most of the power generated was continued to be used captively to run the plants, the surplus power was sold to TNEB and other merchant power purchasers.

Power generation was higher at 6,534 MW as compared to 5,243 MW in the previous year (including Haliyal and Sankili). The company exported 4,100 MW of power during the year as against 3,427 MW in the previous year.

DISTILLERY

During the year, Industrial Alcohol/ENA production was higher at 654 Lakh Litres as compared to 398 Lakh Litres during the previous year, resulting in an increase of over 64% over the previous year on account of greater efficiencies of production in Sivaganga distillery as well as the integration of Haliyal and Sankili units into EID''s sugar division.

BIO PRODUCTS

Bio Pesticides

The Bio-Pesticides Division registered revenue of Rs. 7,321 lakh in 2012-13 as compared to Rs. 7,628 lakh of previous year and accounting for 4% of the Company''s Revenue. The drop in turnover was due to lower sales in domestic market largely due to the weak agro climatic factors that prevailed during the year in our key markets. PBIT for the year was however higher at Rs. 1,557 lakh against Rs. 1,305 lakh in 2011-12. Sale of Technical to USA achieved an impressive growth of 25% over previous year. Production of Technical Aza was 10,141 Kgs, the highest ever in a year.

Nutraceuticals

The Nutraceuticals Division''s turnover was Rs. 5,731 lakh for the year ended 31st March, 2013 representing 3% of the Company''s Revenue. About 76% of this represents exports.

Premium Organic Spirulina continues to outperform competition in its segment and sales during the year had grown at 41% over the previous year. During the year, the company has successfully stabilized the production process of Astaxanthin, a carotenoid extracted from Haematococcus pluvialis, a micro algae, by producing 5,135 kgs of biomass (1.5% Carotenoid equivalent). The company is pursuing the ethical marketing route in the domestic market for creating awareness and acceptance of the OTC products, considering that the use of Nutraceutical products still depend on doctor''s endorsement.

DIVIDEND

During the year, the Company had paid 600% interim dividend (Rs. 6 per equity share of Rs. 1 each) in February, 2013. The Board has not recommended final dividend for the year ended March 31, 2013.

CORPORATE DEVELOPMENTS

ACQUISITION OF EQUITY SHARES FROM CARGILL ASIA PACIFIC HOLDINGS PTE LIMITED IN SILKROAD SUGAR PRIVATE LIMITED

The Company entered into a Share Purchase Agreement with Cargill Asia Pacific Holdings Pte Ltd and Silkroad Sugar Private Limited and purchased 5,69,77,800 equity shares of Rs. 10/- each from Cargill Asia Pacific Holdings Pte Ltd. Consequent to the above purchase of equity shares, the Company''s holding in Silkroad Sugar Private Limited has increased to 99% and has become Company''s subsidiary.

SCHEME OF ARRANGEMENT - MERGER OF DEMERGED SUGAR UNDERTAKINGS OF PARRYS SUGAR INDUSTRIES LIMITED INTO E.I.D.-PARRY (INDIA) LIMITED

Pursuant to the scheme of approval by the High Courts of Karnataka and Madras, two units of Parrys Sugar Industries Limited (PSIL) namely Haliyal unit and Sankili unit got merged with E.I.D.-Parry (India) Limited with effect from 1st April, 2012.

The Company has allotted 18,38,578 equity shares to the equity shareholders of Parrys Sugar Industries Limited pursuant to the Scheme of Arrangement (Demerger) during the financial year and the Equity Shares are listed and traded both in National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).

INVESTMENTS

During the financial year, the Company had invested an amount ofRs. 50 Crore in the Equity Share Capital of Sadashiva Sugars Limited, a wholly owned subsidiary, by converting a part of unsecured loan into equity shares.

During the financial year, the Company had also invested an amount ofRs. 15 Crore in 8% Cumulative Redeemable Preference Shares of Rs. 10/- each of Parrys Sugar Industries Limited by converting a part of unsecured loan.

EMPLOYEE STOCK OPTION SCHEME

Linder the ''Employee Stock Option Scheme'' (''the Scheme'') of the Company and based on the approval of the shareholders at the Annual General Meeting held on 26th July, 2007 and subsequent amendments thereof, the Company had not granted any options during the year ended 31st March, 2013. The details of the Options granted up to 31st March, 2013 and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure to this Report.

The Company''s Statutory Auditors, M/s.Deloitte Haskins & Sells, have certified that the Scheme had been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions passed by the Members in this regard.

CREDIT RATING

During the year, rating agency CRISIL has assigned Long term Debt rating of "AA" (High Safety) with negative outlook. The Company continued to enjoy A1 rating for short term borrowing.

SOCIAL RESPONSIBILITY

The Company undertook a wide range of initiatives for the livelihood enhancement and for health and hygiene awareness in the rural community in which it operates. The Company also worked towards the preservation of environment through various water and social conservation programs.

Towards utilising the scarce water resource, the Company promoted micro irrigation systems like Drip, Sprinklers and Group Lift Irrigation programs.

SUBSIDIARY COMPANIES

Coromandel International Limited

Coromandel achieved a revenue of Rs. 8,62,727 lakh for the year ended 31st March, 2013 and the profit after tax was Rs. 44,399 lakh. The Company''s Board had recommended a dividend ofRs. 4.50 per share (450%) for the year ended 31st March, 2013.

Parrys Sugar Industries Limited

The Company recorded revenues of Rs. 10,084 lakh for the 12 months period ended 31st March, 2013. After providing for Depreciation, Interest and Tax, the loss after tax was Rs. 1,293 lakh.

Sadashiva Sugars Limited

The Company recorded revenues of Rs. 12,206 lakh for the year ended 31st March, 2013. The Profit before finance costs and exceptional items amounted to Rs. 87 lakh. Net loss for the period was Rs. 3,004 lakh.

Silkroad Sugar Private Limited

The revenue for the year was Rs. 311 lakh. During the year ended 31st March, 2013 the company made a loss before tax ofRs. 6,580 lakh.

Parry Infrastructure Company Private Limited

During the year under review the company earned an income of Rs. 6,474 lakh with Profit Before Tax of Rs. 521 lakh. After providing for tax provision, the Profit after Tax was Rs. 368 lakh.

Parry America Inc.

Parry America Inc, the 100% subsidiary based in US, reported an income of US$ 7,537 thousand for the year ended 31st March, 2013. The Profit after Tax was US$ 361 thousand.

Parry Phytoremedies Private Limited

The revenue for the year was Rs. 519 lakh. During the year ended 31st March, 2013 the company made a loss before tax ofRs. 375 Lakh.

Parrys Sugar Limited

The Company during the year ended 31st March 2013, earned an income of Rs. 14 lakh with profit after tax of Rs. 14 lakh.

Parrys Investments Limited

During the year ended 31st March, 2013 the Company earned an income of Rs. 3 lakh and the Profit after Tax was Rs. 2 lakh.

US Nutraceuticals LLC

This overseas Subsidiary, during the year ended 31st March, 2013 earned an income of US$ 15,969 thousand and the Profit after Tax was US$ 55 thousand.

SUBSIDIARY ACCOUNTS

In terms of the direction under Section 212(8) of the Companies Act, 1956 vide General Circular No.2/2011, bearing No.51/12/2007-CL-lll dated 8-2-2011 issued by Government of India, Ministry of Corporate Affairs, the Board of Directors have passed a Resolution according consent to the Company for not attaching the financial statements in respect of all the Subsidiary Companies for the year ended 31st March, 2013.

The annual accounts of the subsidiary companies and the related detailed information will be made available to shareholders of the holding and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection by any shareholder in the Head Office of the holding company and of the subsidiary companies concerned during working hours upto the date of the Annual General Meeting. A hard copy of details of accounts of subsidiaries will be furnished to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS - 27) issued by the Institute of Chartered Accountants of India and the same together with Auditors'' Report thereon form part of the Annual Report.

DIRECTORS

Mr. A. Vellayan, Director is liable to retire by rotation in terms of Articles 102 and 103 of the Articles of Association of the Company and being eligible, offer himself for re-appointment. Mr. R A Savoor, Director liable to retire by rotation at the ensuing Annual General Meeting has opted not to seek re appointment.

Mr. Ravindra S Singhvi, Managing Director, resigned from the Board with effect from 10th April, 2013. The Board places on record its grateful appreciation for the valuable services rendered and contributions made by him.

Mr. V. Manickam who resigned from the Board pursuant to LIC withdrawing their nomination, joined the Board on 30th January, 2013 as an Independent Director and will hold office till the ensuing Annual General Meeting. The Company had received notice from a member proposing the appointment of Mr. V. Manickam as a Director of the Company.

As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships of Mr. A. Vellayan and Mr. V. Manickam, Directors are provided in the Notice of the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CEO/CFO CERTIFICATION

Mr. P. Gopalakrishnan, Manager appointed under Companies Act, 1956 & Vice President (Finance), has given a certificate to the Board as contemplated in Clause 49 of the Listing Agreement.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 205C of the Companies Act, 1956 an amount ofRs. 20.74 lakh being unclaimed dividend of 2004-05 was transferred during the year to the Investor Education and Protection Fund established by the Central Government.

DEPOSITS

Other than the deposits that were transferred to the Investor Education and Protection Fund, there were no other deposits due for repayment on or before 31st March, 2013. The Company had discontinued acceptance of deposits since July 2003.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that, to the best of their knowledge and belief:

- In the preparation of the Profit & Loss Account for the financial year ended 31st March, 2013 and the Balance Sheet as at that date ("financial statements"), applicable Accounting Standards have been followed;

- Appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognised. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function;

- Proper systems are in place to ensure compliance of all laws applicable to the Company;

- The financial statements have been prepared on a going concern basis.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, the Company''s Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

The Board, on the recommendation of the Audit Committee, has proposed that M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai be re-appointed as the Statutory Auditors of the Company and to hold office till the conclusion of the next Annual General Meeting of the Company. M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai have forwarded their certificate to the Company, stating that their re-appointment, if made, will be within the limit specified in that behalf in Sub- section (IB) of Section 224 of the Companies Act, 1956.

COST AUDITOR

Mr. D Narayanan, Cost Accountant, who was appointed as Cost Auditor for the year ended 31st March, 2012 has filed the following cost audit reports to Central Government

SI. Product Due date of Actual date No. filing cost of filing cost audit report audit report

1. Sugar 28.02.2013 31.01.2013

2. Cogeneration 28.02.2013 31.01.2013

3. Industrial 28.02.2013 31.01.2013 Alcohol

4. Neem based 28.02.2013 31.01.2013 Pesticide

*As per Central Government Circular No.2/2013 dated January 31,2013, Ministry of Corporate Affairs has extended the time limit for filing of Cost Audit Report for the financial year ended 31.03.2012 upto 28th February, 2013 or 180 days from the close of Company''s financial year whichever is later.

The Company had filed the Compliance Report with Ministry of Corporate Affairs in Form A on 31st January, 2013 within the due date of 28th February, 2013 as per The Companies (Cost Accounting Records Rules), 2011.

The Company received the approval of the Central Government for appointment of M/s Geeyes & Co., Cost Accountants as Cost Auditors for the financial year 2012- 2013.

SECRETARIAL AUDIT REPORT

As a measure of good corporate Governance practice, the Company appointed M/s. R. Sridharan & Associates, Prac- tising Company Secretaries, to conduct Secretarial Audit.

For the year ended 31st March, 2013 M/s. R. Sridharan & Associates, Practising Company Secretaries has conducted the secretarial audit and the report has been reviewed by the Board.

PARTICULARS OF EMPLOYEES

Under the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report.

FORWARD LOOKING STATEMENTS

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "will", and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This report should be read in conjunction with the financial statements included herein and the notes thereto.

ACKNOWLEDGEMENT

The Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and also recognize the contribution made by the employees to the Company''s progress during the year under review.

On behalf of the Board

Chennai A. VELLAYAN

April 30, 2013 Chairman

Mar 31, 2012

The Directors have pleasure in presenting their Report together with the audited accounts for the financial year ended 31st March, 2012.

The performance highlights of the Company for the year are summarized below:

FINANCIAL RESULTS

Rs.Lakhs

2011-12 2010-11

Total Income 171,217 143,840

Profit Before Interest,

27,447 18,927 Depreciation and Tax

Less : Interest 6,443 4,817

Depreciation 7,397 7,370

Profit Before Tax 13,607 6,740

Less: Provision for Tax :

- Current 750 -

- MAT Credit entitlement (750) -

- Deferred (125) (1,186)

Profit After Tax 13,732 7,926

Add : Surplus brought forward 34,164 30,680 Amount available for

47,896 38,606

Appropriation

APPROPRIATIONS

Transfer to General Reserve 1,400 800

Transfer to Debenture

1,583 750

Redemption Reserve

Dividend on Equity Capital :

Interim paid 6,947 3,466 Dividend Distribution Tax

(Met) - (574)

Surplus carried to Balance 37,966 34,164

Sheet ' '

TOTAL 47,896 38,606

PERFORMANCE

The Company posted an all-round improved performance with an impressive top line growth and earnings reflecting the robustness of its corporate strategy of creating multiple drivers of growth. This performance is particularly noteworthy when viewed against the backdrop of the extremely challenging business context resulting out of a regulated regime.

The Company recorded revenue of Rs. 171,217 Lakhs (including other income of Rs. 17,552 Lakhs) for the year ended 31st March, 2012. The total income of the company for the year 2011-12 grew by 19% to Rs. 171,217 Lakhs from Rs.143,840 Lakhs in the year 2010-11.

Other income for the year was Rs.17,552 Lakhs as against Rs. 16,699 Lakhs in 2010-11 which includes dividend income of Rs.12,561 Lakhs against Rs. 11,431 Lakhs in 2010-11. Interest income earned during the year was Rs. 2,247 Lakhs as against Rs. 1,689 Lakhs in 2010-11.

The Earnings before Interest, Depreciation, Tax and Amortization for the year was Rs. 27,447 Lakhs representing 18 % of total sales and showed a 45% rise over previous year's Rs. 18,927 Lakhs (including Profit on Sale of Investments of Rs. 2,214 Lakhs). Better performance of Bio Pesticides, other value added products of Sugar such as Cogeneration and Distillery and dividend income received have contributed towards EBIDTA during the year.

Sugar division's sales increased from Rs. 118,889 Lakhs in 2010-11 to Rs. 144,771 Lakhs in 2011-12 driven by increased Sugar and Alcohol sales.

Bio Pesticides division's sales has increased by 31% to Rs. 7,666 Lakhs as against Rs. 5,833 Lakhs in 2010-11.

Nutraceuticals division's sale has marginally reduced to Rs. 4,359 Lakhs as against Rs. 4,393 Lakhs in 2010-11.

BUSINESS SEGMENTS SUGAR

The Company has nine sugar plants spread across South India of which four are in Tamil Nadu, one in Puducherry, and through its subsidiaries, three in Karnataka and one in Andhra Pradesh. The Company has increased its throughput sugarcane capacity to 34,750 TCD and cogeneration capacity to 146 MW across its sugar mills. The integrated Sugar Units have been designed to optimize process efficiencies, increase sugarcane recovery ratio, and increase energy efficiency through reduced steam and power consumption. The company during the year focused on removal of bottlenecks, improving process efficiencies, sugarcane recovery ratio and increasing energy efficiency through reduced steam and power consumption.

The Company crushed 48.02 LMT of sugar cane during the year 2011 - 12 and processed 3,818 MT of raw sugar. The recovery of sugar from sugar cane was at 9.04% as against 8.90% in the previous year owing to better quality of sugarcane crop and certain other favorable factors. The Company produced 434,107 MT Sugar from Sugarcane, 3,484 MT Sugar from raw sugar and 246,439

MT Molasses during the financial year 2011 - 12. This was possible due to increased usage of mechanical harvesters thereby reducing the dependence on manual labour, encouraging farmers to plant High Yielding Varieties of sugar cane, increased area under drip irrigation, soil fertility improvement activities etc.

The company sold 404,841 MT of Sugar as against 335,760 MT during the previous year, registering an increase of 21%. The Company also sold 90,373 MT of Molasses as against 32,035 MT in the previous year, registering an increase of 182%.

POWER

The operations of power generation were smooth in all of the four cogen plants. While most of the power generated by us continued to be used actively to run the plants, the surplus power was sold to TNEB.

Power generation was higher at 5,243 MW as compared to 4,474 MW in the previous year recording a growth of 17% largely due to higher quantum of bagasse available from the crushing of sugarcane. The Company exported 3,427 MW of power during the year as against 3,147 MW in the previous year reporting an increase of 8.89%.

DISTILLERY

During the year, Industrial Alcohol/ENA production was higher at 398 Lakh Litres as compared to 275 Lakh Litres during the previous year, resulting in an increase of over 45% over the previous year.

BIO PRODUCTS Bio Pesticides

The Bio-Pesticides Division registered revenue of Rs. 7,666 Lakhs in 2011-12 as compared to Rs. 5,833 Lakhs of previous year and accounting for 5% of the Company's Revenue. PBIT for the year was Rs. 1,305 Lakhs against Rs. 1,151 Lakhs in 2010-11.

Nutraceuticals

The Nutraceuticals division's turnover was Rs. 4,359 Lakhs for the year ended 31st March, 2012 representing 3% of the Company's Revenue. About 78% of this represents exports.

Your company is planning to leverage the Parry brand into the wellness sector in the Indian Nutraceutical market by launching a range of OTC products under the Parry brand addressing various health concerns. The products will cover preventive as well as health specific management segments. Changing lifestyles and increasing health concerns of an ageing population, offer an emerging opportunity for the business. Your company has added two new products during the year viz., "GreenT6" and "Rejuveneyes" to its existing portfolio of Spirulina, Pro9, Pro9D and NBC9.

DIVIDEND

During the year, the Company had already paid an interim dividend of Rs. 4 (400 %) per equity share of Re.1 each in March, 2012. The Board has not recommended final dividend for the year ended March 31, 2012.

CORPORATE DEVELOPMENTS

INVESTMENT IN US NUTRACEUTICALS LLC

During the year, the company acquired 100% voting rights in its subsidiary company, US Nutraceuticals LLC (doing business as Valensa International), Florida, USA. Valensa International is a leading science-based developer and provider of high quality botanically sourced products for nutritional supplements and functional foods and has launched health condition specific formulations including for eye and joint health. This increase in holding provides the platform for your company to move up the value chain by manufacturing value added formulations from its ingredients, apart from cross selling opportunities in the US and in the rest of the world for both your company and Valensa.

APPROVAL OF SCHEME OF ARRANGEMENT - MERGER OF DEMERGED SUGAR UNDERTAKINGS OF PARRYS SUGAR INDUSTRIES LIMITED INTO E.I.D.-PARRY (INDIA) LIMITED

The Board of Directors at their meeting held on April 25, 2012 have approved a Scheme of Arrangement (Demerger) between the Company and Parrys Sugar Industries Limited (PSIL), a subsidiary of the Company, under Sections 391 to 394 of the Companies Act, 1956 pursuant to which the Sankili and Haliyal undertakings of PSIL would be merged into the Company with effect from 1st April, 2012. This is subject to the approval of the shareholders and various other statutory and regulatory approvals.

Upon this Scheme becoming effective, the Company shall issue equity shares of the Company to the shareholders of PSIL in the ratio of 5 (Five) equity shares of Re. 1/- each fully paid for every 19 (Nineteen) equity Shares of Rs.10/- each fully paid, held by them in PSIL.

DELISTING FROM MADRAS STOCK EXCHANGE (MSE)

During the year ended March 31, 2010, in accordance with the provisions of SEBI(Delisting of Equity Shares) Regulations, 2009, the Company had made an application to the Madras Stock Exchange for voluntary delisting of its Equity Shares. Madras Stock Exchange vide its letter dated April 4, 2012, informed of their decision to delist the company's shares from their Stock Exchange.

EMPLOYEE STOCK OPTION SCHEME

Under the 'Employee Stock Option Scheme' ('the Scheme') of the Company and based on the approval of the shareholders at the Annual General Meeting held on 26th July, 2007, the Company had granted 285,900 Options during the year ended 31st March, 2012. The details of the Options granted up to 31st March, 2012, and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure to this Report.

The Company's Statutory Auditors, Messrs. Deloitte Haskins & Sells, have certified that the Scheme had been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions passed by the Members in this regard.

CREDIT RATING

The Company continues to have "AA" rating from CRISIL for its various debt placements signifying Stable Outlook.

SOCIAL RESPONSIBILITY

The Company undertook a wide range of initiatives for the livelihood enhancement and for health and hygiene awareness in the rural community. The Company also worked towards the preservation of environment through various water and social conservation programs.

Towards utilizing the scarce water resource, the Company promoted micro irrigation systems like Drip, Sprinklers and Group Lift Irrigation programs.

During the month of December'11, cyclone "Thane" struck parts of Tamil Nadu causing loss of property and crops. With the aid of cane teams, farmers were met and assistance was provided to them through food and other facilities. All their priorities were identified and steps were taken to bring the farming fraternity to normalcy at the earliest possible time.

SUBSIDIARY COMPANIES

Coromandel International Limited

Coromandel achieved a turnover of Rs. 982327 Lakhs for the year ended 31st March, 2012 and the profit after tax was Rs.69327 Lakhs. The Company's Board had recommended a final dividend of Rs. 3 per share (300 %) for the year. With the interim dividend of Rs. 4 per share (400%) paid in 2012, the total dividend to be paid by Coromandel for the year ended 31st March, 2012 is Rs.7 per share. (700%)

Parrys Sugar Industries Limited

The company recorded a revenue of Rs. 59452 Lakhs for the 12 months period ended 31st March, 2012. After providing for Depreciation, Interest and Tax, the loss after tax was Rs.3343 Lakhs.

Sadashiva Sugars Limited

The Company recorded a revenue of Rs. 17580 Lakhs for the year ended 31st March, 2012. The Profit before Depreciation, Interest and Tax amounted to Rs. 1620 Lakhs. After providing for depreciation, interest and tax, the loss after tax was Rs. 2214 Lakhs.

Parry Infrastructure Company Private Limited

During the year under review the company earned an income of Rs. 5,721 Lakhs. After providing for interest, finance cost and other expenditure amounting to Rs. 5,387 Lakhs, the Profit Before Tax was Rs.334 Lakhs. After providing for tax provision of Rs. 108 Lakhs, the Profit after Tax was Rs. 226 Lakhs. With the brought forward amount of Rs. 89 lakhs, Rs. 315 Lakhs is carried to Balance sheet.

Parry America Inc.

Parry America Inc, the 100% subsidiary based in US, reported an income of US$ 6363 thousands for the year ended 31st March, 2012. The Profit After Tax was US$ 247 thousands. Including the carried forward profit of US$ 521 thousands for the previous year, the profit carried forward for the year was US$ 768 thousands.

Parry Phytoremedies Private Limited

The revenue for the year was Rs. 392 Lakhs. During the year ended 31st March, 2012 the company made a loss before tax of Rs. 299 Lakhs.

Parrys Sugar Limited

The Company during the year ended 31st March, 2012 earned an income of Rs. 16 Lakhs. After providing for tax of Rs. 4 Lakhs, the Profit after Tax was Rs. 12 Lakhs. With the brought forward amount of Rs. 45 Lakhs, Rs. 57 Lakhs is carried to Balance sheet.

Parrys Investments Limited

During the year ended 31st March, 2012 the company earned an income of Rs. 3 Lakhs and the Profit after Tax was Rs. 2 Lakhs.

US Nutraceuticals LLC

This overseas Subsidiary, during the year ended 31st March, 2012 earned an income of US$ 15,364 thousands and the Loss after Tax was US$ 677 thousands.

SUBSIDIARY ACCOUNTS

In terms of the direction under Section 212(8) of the Companies Act, 1956 vide General Circular No.2/2011, bearing No.51/12/2007-CL-III dated 8-2-2011 issued by Government of India, Ministry of Corporate Affairs, the Board of Directors have passed a Resolution according consent to the Company for not attaching the financial statements in respect of all the Subsidiary Companies for the year ended 31st March, 2012.

The annual accounts of the subsidiary companies and the related detailed information will be made available to shareholders of the holding and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies will also be available for inspection by any shareholders in the head office of the holding company and of the subsidiary companies concerned during working hours up to the date of the Annual General Meeting. A hard copy of details of accounts of subsidiaries will be furnished to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India and the same together with Auditors' Report thereon form part of the Annual Report.

DIRECTORS

Mr. V Ravichandran, Mr. M B N Rao and Mr. V Manickam, Directors retire by rotation in terms of Articles 102 and 103 of the Articles of Association of the Company and being eligible, offer themselves for re-appointment. As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships of Mr. V Ravichandran, Mr. M B N Rao and Mr. V. Manickam are provided in the Notice of the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CEO/CFO CERTIFICATION

Mr. Ravindra S. Singhvi, Managing Director and Mr. P. Gopalakrishnan, Vice President (Finance), have given a certificate to the Board as contemplated in Clause 49 of the Listing Agreement.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 205C of the Companies Act, 1956, an amount of Rs. 9.39 Lakhs being unclaimed dividend, interest on fixed deposit etc. was transferred during the year to the Investor Education and Protection Fund established by the Central Government.

DEPOSITS

Other than the deposits that were transferred to the Investor Education and Protection Fund, there were no other deposits due for repayment on or before 31st March, 2012. The Company had discontinued acceptance of deposits since July 2003.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief :

- In the preparation of the Profit & Loss Account for the financial year ended 31st March, 2012 and the Balance Sheet as at that date ("financial statements"), applicable Accounting Standards have been followed;

- Appropriate accounting policies have been selected and applied consistently and such judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognized. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function;

- Proper systems are in place to ensure compliance of all laws applicable to the Company;

- The financial statements have been prepared on a going concern basis.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai, the Company's Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

The Board, on the recommendation of the Audit Committee, has proposed that M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai be re-appointed as the Statutory Auditors of the Company and to hold office till the conclusion of the next Annual General Meeting of the Company. M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai have forwarded their certificate to the Company, stating that their re- appointment, if made, will be within the limit specified in that behalf in Sub-section (1B) of Section 224 of the Companies Act, 1956.

COST AUDITOR

Mr.D.Narayanan, Cost Accountant who was appointed as Cost Auditor for the year ended 31st March, 2011 has filed the following cost audit reports to the Government.

Sl. Product Due date of Actual date of No. filing cost filing cost audit audit report report

1. Sugar 30.09.2011 21.09.2011

2. Industrial 21.09.2011 & 30.09.2011 Alcohol 23.09.2011

3. Neem based 30.09.2011 26.09.2011 Pesticide

The Company received the approval of the Central Government for appointment of Mr.D.Narayanan as Cost Auditor to conduct the cost audits for the financial year 2011-12.

M/s. Geeyes & Co., Cost Accountants have been appointed as Cost Auditor to conduct cost audit relating to Sugar, Cogeneration Plants, Industrial Alcohol and Neem based Pesticide for the year ending 31st March, 2013.

SECRETARIAL AUDIT REPORT

As a measure of good corporate Governance practice, the Company appointed M/s. R. Sridharan & Associates, Practicing Company Secretaries, to conduct Secretarial Audit.

For the year ended 31st March, 2012 M/s. R. Sridharan & Associates, Practicing Company Secretaries have conducted the secretarial audit and the report has been reviewed by the Board.

PARTICULARS OF EMPLOYEES

Under the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors' Report.

FORWARD LOOKING STATEMENTS

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "will" and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statement that speak only as of their dates. This report should be read in conjunction with the financial statements included herein and the notes thereto.

ACKNOWLEDGEMENT

The Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and also recognize the contribution made by the employees to the Company's progress during the year under review.

On behalf of the Board

Chennai A. VELLAYAN

April 25, 2012 Chairman

Mar 31, 2011

The Directors have pleasure in presenting their Report together with the audited accounts for the financial year ended 31st March, 2011. The performance highlights of the Company for the year are summarised below:

FINANCIAL RESULTS

Rs. Lakhs

2010-11 2009-10

Total Income 143550 129682

Profit Before Interest, Depreciation and Tax 18353 35536

Less : Interest 4243 3857

Depreciation 7370 6933

Profit Before Tax 6740 24746

Less: Provision for Tax :

- Current (Net of MAT Credit) - 2600

- Deferred (1186) 2987

- MAT Credit entitlement - (1369)

Profit After Tax 7926 20528

Add : Surplus brought forward 30680 59180

Amount available for Appropriation 38606 79708

APPROPRIATIONS

Transfer to General Reserve 800 40000

Transfer to Debenture Redemption Reserve 750 417

Dividend on Equity Capital :

Interim paid 3466 5181

Proposed Final - 3454

Dividend Distribution Tax (Net) (574) (24)

Surplus carried to Balance Sheet 34164 30680

TOTAL 38606 79708

PERFORMANCE

The Company recorded a revenue of Rs. 143550 Lakhs (including other income of Rs. 17981 Lakhs) for the year ended 31st March, 2011. Other income includes Rs. 2214 Lakhs (2009-10 Ã Rs. 798 Lakhs) of profit on sale of investments. The total gross sales of the company for the year 2010-11 grew by 9 % to Rs. 129115 Lakhs from Rs.118576 Lakhs in the year 2009-10.

Other income for the year was Rs. 17981 Lakhs as against Rs. 14950 Lakhs in 2009-10 which includes income from sale of balance 3% stake in Roca Bathroom Products Pvt. Ltd. (formerly Parryware Roca Pvt. Ltd) - Rs. 2214 Lakhs, dividend income of Rs. 11431 Lakhs against Rs. 10017 Lakhs in the year 2009-10. Interest income earned during the year was Rs. 1689 Lakhs as against Rs. 772 Lakhs in the year 2009-10. The Earnings Before Interest, Depreciation, Tax and Amortisation (EBIDTA) for the year was Rs. 16139 Lakhs (excluding Profit on Sale of Investments of Rs. 2214 Lakhs) representing 13% of total sales and showed a dip of 53.54% over previous years EBIDTA of Rs. 34738 Lakhs (excluding Profit on Sale of Investments of Rs. 798 Lakhs). Losses of Sugar segment was the main contributor to above dip in EBIDTA.

However, better performance of Bio pesticides, Nutraceuticals, other value added products of Sugar such as Co-generation and Distillery and dividend income received have contributed towards positive side of EBIDTA during the year. Sugar divisions sales increased from Rs. 108887 Lakhs in the year 2009-10 to Rs. 115901 Lakhs in the year 2010-11 mainly driven by increased Power export and Alcohol sales.

Bio Pesticides divisions sales has increased by 63% to Rs. 5832 Lakhs as against sales during 2009-10. Nutraceuticals divisions sales has increased by 17% to Rs. 4393 Lakhs as against sales during 2009-10.

SUGAR

The sugar industry is one of the largest agro based industries, supporting Indias economic growth.

The Company has nine sugar plants spread across Southern India of which four are in Tamil Nadu, one in Puducherry, and through its subsidiaries, three in Karnataka and one in Andhra Pradesh.

The Company has increased the throughput sugarcane capacity to 32500 TCD and co-generation capacity to 146 MW across its sugar mills. The integrated Sugar Units have been designed to optimise process efficiencies, increase sugarcane recovery ratio, and increase energy efficiency through reduced steam and power consumption.

INVESTMENT In PARRYS SUGAR INDUSTRIES LIMITED (PREVIOUSLY Known As M/s GMR INDUSTRIES LTD.)

As part of the growth strategy for the Sugar business, the company acquired 65% equity stake in the equity capital of M/s Parrys Sugar Industries Ltd. (PSIL) (previously known as M/s GMR Industries Ltd.) after complying with all formalities relating to open offer under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997 to the shareholders of PSIL.

JOINT VENTURE WITH CARGILL ASIA PACIFIC HOLDINGS PTE LIMITED

During the financial year ended 31st March 2011, the Joint Venture entity viz. Silkroad Sugar Private Ltd., commenced commercial production. However, supply of gas is an area of concern and maximum efforts are put in for ensuring continuous supply of gas. With a capacity of 2000 tons of refined sugar production per day and with a 35 MW Co-generation Plant, this refinery will be the largest in the South Asian region.

BIO-PRODUCTS

bio-Pesticides

The Bio-Pesticides Division registered revenue of Rs. 5839 Lakhs in the year 2010-11 as compared to Rs. 3626 Lakhs in the previous year accounting for 4% of the Companys Revenue. PBIT for the year was Rs. 1151 Lakhs against Rs. 561 Lakhs in 2009-10.

Nutraceuticals

The Nutraceuticals divisions turnover was Rs. 4368 Lakhs for the year ended 31st March, 2011 representing 3% of the Companys Revenue. About 82% of this represents exports.

Nutraceuticals division is planning to leverage the Parry brand into the wellness sector in the Indian Nutraceutical market by launching a range of OTC products under the Parry brand addressing various health concerns. The products will cover preventive as well as health specific management segments. Changing lifestyles and increasing health concerns of an aging population, offer an emerging opportunity for the business. As part of this initiative, Nutraceuticals division has launched Protein drink products under the brand Pro9 and Pro9D during the last quarter of the year 2010-11. While the former is for the general public, the later is a variant for diabetic segment.

DIVIDEND

During the year, the Company had already paid an interim dividend of Rs. 2 (200 %) per equity share of Re. 1 each in March, 2011. The Board has not recommended final dividend for the year ended 31st March, 2011.

CORPORATE DEVELOPMENTS SUB DIVISION OF SHARES

In order to further improve liquidity of shares, widen the shareholder base and to make the shares affordable for smaller investors, the nominal value of equity shares were sub divided from Rs. 2 per share to Re. 1 per share with effect from 24th December, 2010 after obtaining the approval of shareholders through postal ballot.

INVESTMENT IN US NUTRACEUTICALs LLC

During the year under review, the Company acquired a further 3% stake in US Nutraceuticals LLC increasing the stake from 48% to 51% and consequently US Nutraceuticals LLC had become a subsidiary of the Company.

SALE OF SHARES IN ROCA BATHROOM PRODUCTS PRIVATE LIMITED

During the year, Roca Bathroom Investments S.L. (ROCA S.L.) exercised the call option notice for purchasing the balance 64045 equity shares held by the Company in Roca Bathroom Products Private Ltd., for a consideration of Rs. 22.20 Crore. The Company accepted their above said offer and transferred the balance 64045 equity shares of Rs. 10 each to ROCA S.L. in March, 2011. With this transfer, the entire stake in Roca Bathroom Products Private Ltd., had been divested.

DELISTING FROM LUXEMBOURG STOCK EXCHANGE Ã GLOBAL DEPOSITORY RECEIPTS (GDRs)

The total number of GDRs listed in Luxembourg Stock Exchange (LSE) was less than 0.15% of the share capital of the company. Further, there were negligible transactions since October 2005. In view of the compliance costs not commensurate with the total GDRs outstanding, the Board approved the delisting of GDRs from LSE. The GDRs from LSE have been delisted from April 11, 2011.

VOLUNTARY DELISTING OF EQUITY SHARES FROM THE MADRAS STOCK EXCHANGE LTD.

During the year ended 31st March, 2010, in accordance with the provisions of SEBI (Delisting of Equity Shares) Regulations, 2009, the Company had made an application to The Madras Stock Exchange Limited for voluntary delisting of its Equity Shares from where the Companys Equity Shares are listed and the application is pending.

EMPLOYEE STOCK OPTION SCHEME

Under the Employee Stock Option Scheme (the Scheme) of the Company and based on the approval of the shareholders at the Annual General Meeting held on 26th July, 2007, the Company had granted 366300 Options during the year ended 31st March, 2011.

The details of the Options granted up to 31st March, 2011, and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure to this Report.

The Companys Statutory Auditors, Messrs. Deloitte, Haskins & Sells, have certified that the Scheme had been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions passed by the Members in this regard.

SUBSIDIARY COMPANIES

Coromandel International Limited

Coromandel achieved a turnover of Rs. 752795 Lakhs for the year ended 31st March, 2011 and the profit after tax was Rs. 69446 Lakhs. The Companys Board has recommended a final dividend of Rs. 3 per share (300%) for the year. With the interim dividend of Rs. 4 per share (400%) paid in February, 2011, the total dividend declared by Coromandel for the year ended 31st March, 2011 is Rs. 7 per share. ( 700%)

Parrys sugar Industries Limited

Parrys Sugar Industries Ltd., (formerly GMR Industries Ltd.,) a listed subsidiary was acquired by EID Parry in August, 2010. The said company recorded a revenue of Rs. 29852 Lakhs for the 12 months period ended 31st March, 2011. After providing for depreciation, interest and expenses, the loss after tax was Rs. 6760 Lakhs.

Sadashiva Sugars Limited

The Company recorded a revenue of Rs. 7060 Lakhs for the year ended 31st March, 2011. The Profit before Depreciation, Interest and Tax amounted to

Rs. 787 Lakhs. After providing for depreciation, interest and tax, the loss after tax was Rs. 2082 Lakhs.

Parry Infrastructure company Private Limited

During the year under review the company earned an income of Rs. 1378 Lakhs. After providing for interest, finance cost and other expenditure amounting to Rs.1246 Lakhs, the Profit Before Tax was Rs. 132 Lakhs. After providing for tax provision of Rs. 44 Lakhs, the Profit after Tax was Rs. 88 Lakhs. With the brought forward amount of Rs. 1 lakh, Rs. 89 Lakhs is carried to Balance sheet.

Parry America Inc.

Parry America Inc. the 100% subsidiary based in US, reported an income of US$ 5524 thousands for the year ended 31st March, 2011. The Profit After Tax was US$ 245 thousands. With the carried forward profit of US$ 276 thousands for the previous year, the profit carried forward for the year was US$ 521 thousands.

Parry Phytoremedies Private Limited

The revenue for the year was Rs. 974 Lakhs. During the year ended 31st March, 2011 the company made a loss after tax of Rs. 90 Lakhs.

Parrys sugar Limited

The Company during the year ended 31st March 2011, earned an income of Rs. 11 Lakhs. After providing for tax of Rs. 3 Lakhs, the Profit after Tax was Rs. 8 Lakhs. With the brought forward amount of Rs. 9 Lakhs, Rs. 17 Lakhs is carried to Balance Sheet.

Parrys Investments Limited

During the year ended 31st March, 2011 the company earned an income of Rs. 97 Lakhs and the Profit after Tax was Rs. 92 Lakhs.

Us Nutraceuticals LLC

During the year ended 31st March, 2011, the overseas subsidiary earned an income of US$ 12075 thousands and the Loss after Tax was US$ 1703 thousands .

Coromandel Bathware Limited

In view of the Company suspending its operations with effect from 31st March, 2000, the Board of Directors of the Company applied to the Registrar of Companies, Tamil Nadu, Chennai for striking off the name of the Company under Section 560 of the Companies Act, 1956 under the Easy Exit Scheme, 2011 announced by the Ministry of Corporate Affairs, Government of India.

The Ministry of Corporate Affairs, Government of India vide their letter dated 29th January, 2011 had informed that the name of the company had been struck off the Register and dissolved.

SUBSIDIARY ACCOUNTS

In terms of the approval granted by the Central Government u/s 212 (8) of the Companies Act, 1956, vide their letter dated 24th January, 2011 copies of the Balance Sheet, Profit & Loss Account, Reports of the Board and the Auditors of all the Subsidiary Companies have not been attached to the Balance Sheet of the Company as at 31st March, 2011.

However, as directed by the Central Government, the financial data of the subsidiaries have been separately furnished forming part of the Annual Report. These documents will also be available for inspection at the Registered Office of the Company and the concerned subsidiary companies, during working hours up to the date of the Annual General Meeting. However, the related detailed information of the Annual Accounts of the Subsidiary Companies will be made available to the Holding and Subsidiary Companies investors seeking such information at any point of time. The Annual Accounts of the Subsidiary Companies will also be kept for inspection by the investors at the Registered Office of the Company and that of the Subsidiary Companies concerned.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India and the same together with Auditors Report thereon form part of the Annual Report.

DIRECTORS

Mr. K. Raghunandan stepped down from the Board both as the Managing Director and also as a Director with effect from 28th January, 2011 consequent to his movement to the Murugappa Group as Head of IT & Technology. The Board places on record its appreciation for the services rendered and the valuable contributions made by Mr. K. Raghunandan, during his tenure as Managing Director.

Mr. Ravindra S. Singhvi, who joined the Company as the Chief Executive Officer in December, 2010 was inducted in the Board as an Additional Director of the Company with effect from 29th January, 2011 and also appointed as the Managing Director for a period of 5 years with effect from 29th January, 2011.

The Company has received a notice from a member proposing the appointment of Mr. Ravindra S. Singhvi as a Director of the Company. As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships

of Mr. Ravindra S. Singhvi are provided in the Notice of the Annual General Meeting.

Mr. R.A. Savoor and Mr. Anand Narain Bhatia, Directors retire by rotation in terms of Articles 102 and 103 of the Articles of Association of the Company and being eligible, offer themselves for re-appointment. As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships of Mr. R.A. Savoor and Mr. Anand Narain Bhatia are provided in the Notice of the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report.

CEO/CFO CERTIFICATION

Mr. Ravindra S. Singhvi, Managing Director and Mr. P. Gopalakrishnan, Vice President (Finance), have given a certificate to the Board as contemplated in Clause 49 of the Listing Agreement.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 205C of the Companies Act, 1956, an amount of Rs. 9.14 Lakhs being unclaimed dividend, interest on fixed deposit and unclaimed deposits etc. was transferred during the year to the Investor Education and Protection Fund established by the Central Government.

DEPOSITS

Other than the deposits that were transferred to the Investor Education and Protection Fund, there were no other deposits due for repayment on or before 31st March, 2011. The Company had discontinued acceptance of deposits since July 2003.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief :

- in the preparation of the Profit & Loss Account for the financial year ended 31st March, 2011 and the Balance Sheet as at that date (Ãfinancial statementsÃ), applicable Accounting Standards have been followed;

- appropriate accounting policies have been selected and applied consistently and such judgements and

estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations have to be recognised. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function;

- proper systems are in place to ensure compliance of all laws applicable to the Company;

- the financial statements have been prepared on a going concern basis.

AUDITORS

M/s. Deloitte, Haskins & Sells, Chartered Accountants, Chennai, the Companys Statutory Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Board, on the recommendation of the Audit Committee, has proposed

that M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai be re-appointed as the Statutory Auditors of the Company and to hold office till the conclusion of the next Annual General Meeting of the Company. M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai have forwarded their certificate to the Company, stating that their re-appointment, if made, will be within the limit specified in that behalf in Sub-section (1B) of Section 224 of the Companies Act, 1956.

COST AUDITOR

The Company received the approval of the Central Government for appointment of Mr. D. Narayanan as Cost Auditor to conduct the cost audits for the financial year 2010-11.

PARTICULARS OF EMPLOYEES

Under the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors Report.

ACKNOWLEDGEMENT

The Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and also recognise the contribution made by the employees to the Companys progress during the year under review.

on behalf of the board

A. VELLAYAN Chairman

Chennai April 29, 2011

Mar 31, 2010

The Directors have pleasure in presenting their Report together with the audited accounts for the financial year ended 31st March, 2010.

The performance highlights of the Company for the year are summarised below:

FINANCIAL RESULTS

Rs. Lakhs 2009-2010 2008-2009 Total Income 129682 167772 Profit Before Interest and Depreciation 35536 96539 Less : Interest 3857 2682 Depreciation 6933 5017 Profit Before Tax 24746 88840 Less : Provision for Tax : - Current 2600 13800 - Deferred 2987 5776 - MAT Credit entitlement (1369) - - Fringe Benefit Tax Ã 68 Profit After Tax 20528 69196 Add : Surplus brought forward 59180 15784 Amount available for Appropriation 79708 84980 APPROPRIATIONS Transfer to General Reserve 40000 6920 Transfer to Debenture Redemption Reserve 417 - Dividend on Equity Capital : Interim paid 5181 12181 Proposed Final 3454 5167 Dividend Tax (Net) (24) 1532 Surplus carried to Balance Sheet 30680 59180 TOTAL 79708 84980

PERFORMANCE

The Company recorded a revenue of Rs.129682 lakhs (including other income of Rs.14950 lakhs) for the year ended 31st March, 2010. Other income includes Rs.798 lakhs (2008-09 - Rs.74972 lakhs) of Profit on sale of investments. The total gross sales of the company for the year 2009-10 grew by 51% to Rs. 118576 Lakhs from Rs. 78384 Lakhs in the year 2008 - 09.

The Earnings before Interest, Depreciation, Tax and Amortization for the year was Rs. 34738 Lakhs (excluding Profit on sale of Investments of Rs.798 lakhs) representing 30% of total sales and showed a growth of 61% over previous years Rs. 21567 Lakhs (excluding profit on sale of investments of Rs.74972 lakhs). The increased profits in Sugar resulted in higher EBIDTA during current year.

Sugar sales increased from Rs.58618 Lakhs to Rs.93634 Lakhs in 2009-10, showing a growth of 60% mainly driven by higher prices. Alcohol sales increased by 113% consequent to the newly commissioned Distillery plant at Sivaganga district, Tamilnadu. Revenue from sale of power recorded an increase of 29%.

Bio-Pesticides sales dropped marginally due to drop in volume.

Nutraceuticals divisions sales increased by 29%, due to higher sales volume of Spirulina and traded products that include Lycopene , Lutein & Others.

SUGAR

The sugar industry is one of the largest agro based industries, supporting Indias economic growth. The downturn in sugar production witnessed in 2008-09 Sugar Season is slated to continue into the next two Sugar Seasons (2009-10 and 2010-11) as production is expected to be significantly lower than consumption, leading to the possibility of sugar imports to meet domestic demand.

The Company has six sugar plants spread across South India of which four are in Tamil Nadu, one in Puducherry and one in Karnataka through its subsidiary, Sadashiva Sugars Ltd. The Company has increased the throughput sugarcane capacity to 21,500 TCD and cogeneration capacity to 100 MW across its sugar mills. The integrated Sugar Units have been designed to optimize process efficiencies, increase sugarcane recovery ratio, and increase energy efficiency through reduced steam and power consumption.

The Company continues to be one of the low cost producers of international quality sugar, through its innovative process and farmer centric practices.

The existing Distillery unit at Nellikuppam has been converted into a multi-product unit with ENA and Ethanol production facilities. Further expanding capacity from 40 KLPD to 75 KLPD is in progress. The green field stand alone distillery factory in Sivaganga, with a capacity of 60 KLPD, commissioned during March 2009 stabilised during the year.

INVESTMENT IN SADASHIVA SUGARS LIMITED

As part of the growth strategy for the Sugar business, in October, 2009 the Company acquired a 76% stake in the Equity of M/s Sadashiva Sugars Limited, Bangalore having its factory at Nagaral Nainegali, Bagalkot District, Karnataka. The factory has a capacity to crush sugarcane of 2500 TCD and Cogen capacity of 15.5 MW. With this acquisition, the Company made an entry in the State of Karnataka.

JOINT VENTURE WITH CARGILL ASIA PACIFIC HOLDINGS PTE LIMITED

During the financial year ended 31st March 2010, your company invested Rs. 1430 lakhs in the equity of the Joint Venture entity viz. Silkroad Sugar Private Ltd.

The commercial production is yet to commence and is expected to commence in 2010-11 and the delay has been due to non availability of gas. With a capacity of 2000 tons of refined sugar production per day and with a 35 MW Co-Generation Plant, this refinery will be the largest in the South Asian region.

BIO PRODUCTS

Bio Pesticides

The US market experienced economic slowdown resulting in 10-15% sales reduction for agrochemicals.

Organic crop areas reduced by 20-30% over 2008-09 leading to sales reduction of biological inputs. Better economic outlook over 2010-11 and thereafter is expected to bring back the organic momentum.

Domestic markets, mainly in Tamil Nadu, Karnataka, West Bengal and North Eastern States registered growth over 2008-09, mainly due to the product acceptability of Bio Granule Abda in rice and Fruits & Vegetables crop segments.

The revenue (including excise duty) for the year ended 31st March, 2010 was Rs.3626 lakhs as compared to Rs.3636 lakhs of previous year. PBIT for the year was Rs. 561 lakhs against the previous years Rs. 717 lakhs.

Nutraceuticals

The Nutraceuticals products continued to grow in all the markets and are currently exported to over 38 countries. Certified Organic Spirulina continues to outperform competition in its segment.

The revenue (including excise duty) for the year ended 31st March, 2010 was Rs. 3747 lakhs representing 3% of the Companys revenue. About 80% of this represents exports. Nutraceuticals divisions sales has increased by 28%, due to higher sales volume of Spirulina and traded products that include Lycopene, Lutein & Others.

To ensure that Parry Nutraceuticals maintains its edge in product development, the Parry Life Sciences facility was established at TICEL Park, Chennai to develop products and formulations in line with market demand across dietary supplement, functional foods and Pharmaceuticals segments.

R & D

During the year, the Company incurred a sum of Rs. 357.90 lakhs towards the revenue expenditure on account of Research and Development at the Approved In-House R & D units at Bangalore and Nellikuppam. The Company also incurred a sum of Rs. 1.61 lakhs towards Capital expenditure in respect of Approved In-House R & D units at Bangalore and Nellikuppam. In addition to the above, the Company also spent a sum of Rs. 270.49 lakhs towards revenue expenditure and Rs. 298.19 lakhs towards Capital expenditure for establishing a new research centre at Chennai.

DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 4 (200 %) per equity share of Rs. 2 each for the

financial year ended 31st March, 2010. During the year, the Company had already paid an interim dividend of Rs. 6 (300%) per equity share of Rs. 2 each in February, 2010.

With this, the total dividend declared for the year is Rs.10 (500%) per share.

CORPORATE DEVELOPMENTS

INVESTMENT IN EQUITY SHARES OF PARRY PHYTOREMEDIES PRIVATE LIMITED, SUBSIDIARY COMPANY

During the year under review, the Company acquired a further 20,000 equity shares of Rs. 100 each of Parry Phytoremedies Private Limited, a subsidiary increasing the stake from 51% to 63%.

INVESTMENT IN EQUITY SHARES OF COROMANDEL INTERNATIONAL LIMITED, SUBSIDIARY COMPANY

During the year, the Company acquired a further 3,36,500 shares of Rs.2 each of Coromandel International Limited, a listed Subsidiary of the Company. With this, the Company holds 63% in their Equity.

SALE OF SHARES IN TRICHY DISTILLERIES AND CHEMICALS LIMITED

During the year, the Company divested its entire stake of 2,20,000 equity shares of Rs.10 each held by the Company in Trichy Distilleries and Chemicals Limited.

VOLUNTARY DELISTING OF EQUITY SHARES FROM THE MADRAS STOCK EXCHANGE LTD.

In accordance with the provisions of SEBI (Delisting of Equity Shares) Regulations, 2009, the Company has made an application to The Madras Stock Exchange Limited for voluntary delisting of its Equity Shares from where the Companys Equity Shares are listed. The proposed voluntary delisting would not adversely affect the investors, as the Companys shares would continue to be listed on the NSE and BSE, which have nation wide terminals.

EMPLOYEE STOCK OPTION SCHEME

Under the ÃEmployee Stock Option SchemeÃ (Ãthe SchemeÃ) of the Company, the Company had not granted any Options during the year ended 31st March, 2010. The details of the Options granted up to 31st March, 2010, and other disclosures as required under Clause 12 of the Securities and Exchange Board of India

(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure to this Report.

The Companys Auditors, Messrs. Deloitte, Haskins & Sells, have certified that the Scheme had been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions passed by the Members in this regard.

SUBSIDIARY COMPANIES Coromandel International Limited

The name of the Company has been changed during the year from Coromandel Fertilisers Limited to Coromandel International Limited (Coromandel) in order to communicate the business potential of the Company across the globe to the stakeholders. Coromandel achieved a turnover of Rs. 639473 lakhs for the year ended 31st March, 2010 and the profit after tax was Rs.46820 lakhs. The Companys Board had recommended a final dividend of Rs. 4 per share (200 % ) for the year. With the interim dividend of Rs. 6 per share (300%) paid in February, 2010, the total dividend from Coromandel for the year ended 31st March, 2010 is Rs.10 per share (500%).

Parry Chemicals Limited

Parry Chemicals Limited, a 100% subsidiary of Coromandel, achieved a turnover of Rs.56.96 lakhs for the year ended 31st March, 2010. The Profit after Tax was Rs.1.68 lakhs.

Parrys Sugar Limited

The Company during the year ended 31st March 2010, earned an income of Rs.12.56 lakhs and after providing for expenses amounting to Rs.0.44 lakhs, the Profit before tax was Rs.12.12 lakhs. After providing for tax of Rs. 3 lakhs, the Profit after Ta x was Rs.9.12 lakhs. With the brought forward amount of Rs.27.95 lakhs, Rs.37.07 lakhs is carried to Balance sheet.

Parry Infrastructure Company Private Limited

The Company is in the process of evaluating various properties held by the Murugappa Group Companies and depending on the market demand and potential value, the Company will progress on the development of these properties for residential/commercial purposes.

During the year under review the company earned a profit of Rs.5 lakhs. After adjusting the carried forward loss of Rs.4 lakhs, the balance amount of Rs.1 lakh is carried to the Balance Sheet.

Parry America Inc.

Parry America Inc, the 100% subsidiary based in US, reported an income of US$ 2,960 thousands for the year ended 31st March, 2010. The Profit After Tax was US$ 134 thousands. Including the carried forward profit of US$ 142 thousands for the previous year, the profit carried forward for the year was US$ 276 thousands.

Parrys Investments Limited

During the year ended 31st March, 2010 the company earned an income of Rs.5 lakhs and the Profit after Tax was Rs.1 lakh.

Coromandel Bathware Limited

No operations were carried on during the current year.

Parry Phytoremedies Private Limited

The revenue for the year was Rs.603 lakhs. During the year ended 31st March, 2010 the company made a loss of Rs. 89 lakhs.

Sadashiva Sugars Limited

The Company, acquired by EID Parry during October, 2009 recorded a revenue of Rs.1123 lakhs for the year ended 31st March, 2010. After providing for depreciation, interest and expenses the loss carried forward was Rs.1470 lakhs.

SUBSIDIARY ACCOUNTS

In terms of the approval granted by the Central Government u/s 212 (8) of the Companies Act, 1956, copies of the Balance Sheet, Profit & Loss Account, Reports of the Board and the Auditors of all the Subsidiary Companies have not been attached to the Balance Sheet of the Company as at 31st March, 2010. However as directed by the Central Government, the financial data of the subsidiaries have been separately furnished forming part of the Annual Report. These documents will also be available for inspection at the Registered Office of the Company and the concerned subsidiary companies, during working hours up to the date of the Annual General Meeting. However, the related detailed information of the Annual Accounts of the Subsidiary Companies will be made available to the Holding and Subsidiary Companies investors seeking such information at any point of time. The Annual Accounts of the Subsidiary Companies will also be kept for inspection by the investors at the Registered Office of the Company and that of the Subsidiary Companies concerned.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India and the same together with Auditors Report thereon form part of the Annual Report.

DIRECTORS

Mr.Sridhar Ganesh, Director resigned from the Board with effect from 30th October, 2009.

The Board places on record its grateful appreciation of the valuable services rendered and contributions made by Mr.Sridhar Ganesh as a Director.

Mr.M.B.N.Rao and Mr.V.Ravichandran, joined the Board as Additional Directors on 1st August, 2009 and 30th October, 2009 respectively and will hold office till the ensuing Annual General Meeting. The Company had received notices from members proposing the appointments of Mr.M.B.N.Rao and Mr.V.Ravichandran as Directors of the Company.

Mr. A.Vellayan, Chairman retires by rotation in terms of Articles 102 and 103 of the Articles of Association of the Company and being eligible, offers himself for re-appointment.

As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships of Mr.M.B.N.Rao, Mr.V.Ravichandran and Mr.A.Vellayan are provided in the Notice of the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CEO / CFO CERTIFICATION

Mr.K.Raghunandan, Managing Director and Mr.P.Gopalakrishnan, Vice President (Finance), have given a certificate to the Board as contemplated in Clause 49 of the Listing Agreement.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 205C of the Companies Act, 1956, an amount of Rs.6.32 lakhs being unclaimed dividend, interest on fixed deposit and unclaimed deposits etc. was transferred during the year to the Investor Education and Protection Fund established by the Central Government.

DEPOSITS

4 deposits totalling to Rs. 0.39 lakhs due for repayment on or before 31st March, 2010 were not claimed by the Depositors on that date. Efforts are being made to contact all such deposit holders to facilitate the refund to them. The Company had discontinued acceptance of deposits since July 2003.

DIRECTORSÃ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief :

- in the preparation of the Profit & Loss Account for the financial year ended 31st March, 2010 and the Balance Sheet as at that date (Ãfinancial statementsÃ), applicable Accounting Standards have been followed;

- appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognised. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function;

- the financial statements have been prepared on a going concern basis.

AUDITORS

M/s. Deloitte, Haskins & Sells, Chartered Accountants, Chennai, the Companys Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

The Board, on the recommendation of the Audit Committee, has proposed that M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai be re-appointed as the Statutory Auditors of the Company and to hold office till the conclusion of the next Annual General Meeting of the Company. M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai have forwarded their certificate to the Company, stating that their re-appointment, if made, will be within the limit specified in that behalf in Sub-section (1B) of Section 224 of the Companies Act, 1956.

COST AUDITOR

The Company received the approval of the Central Government for appointment of Mr.D.Narayanan as Cost Auditor to conduct the cost audits for the financial year 2009-10.

PARTICULARS OF EMPLOYEES

Under the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors Report.

ACKNOWLEDGEMENT

The Directors thank the customers, suppliers, farmers, financial institutions, banks and shareholders for their continued support and also recognise the contribution made by the employees to the Companys progress during the year under review.

On behalf of the Board Chennai A. VELLAYAN April 24, 2010 Chairman

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