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Directors Report of EID Parry (India) Ltd.

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 – 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 – 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 (“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 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 – 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 ‘Employee Stock Option Scheme’ (‘the Scheme’) 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.

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, 2010 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;

- 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