Directors Report of Coromandel International Ltd.
Mar 31, 2023
The Board of Directors of your Company has pleasure in presenting the 61st Annual Report on the operational and business performance of the Company together with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2023.
1. Standalone Financial Highlights
|
Rs. in Crores |
||
|
Particulars |
FY 2022-23 |
FY 2021-22 |
|
Revenue |
||
|
From Operations |
29,609.55 |
19,088.26 |
|
Other Income |
174.76 |
143.17 |
|
Total Revenue |
29,784.31 |
19,231.43 |
|
Profit |
||
|
Profit before Interest, Depreciation and Taxation |
3,092.52 |
2,178.86 |
|
Less: Interest |
189.28 |
75.43 |
|
Less: Depreciation |
181.20 |
172.02 |
|
Profit Before Tax |
2,722.04 |
1,931.41 |
|
Less: Provision for Tax (including deferred tax) |
687.37 |
518.96 |
|
Profit After Tax |
2,034.67 |
1,412.45 |
Your Company''s Revenue from Operations for the year was Rs. 29,609.55 Crores as against Rs. 19,088.26 Crores last year. The Profit before Interest, Depreciation, and Taxation grew to Rs. 3,092.52 from Rs. 2,178.86 Crores in the previous year registering a growth of 42% year-on-year (YoY). The Net Profit for the year grew to Rs. 2,034.67 Crores from Rs. 1,412.45 in the previous year, i.e., recording an increase of 44% YoY. The EBITDA margin decreased 81 basis points to 9.85%, and the PAT margin decreased 53 basis points to 6.87% in FY 2022-23 over the previous reporting period. The Earnings Per Share (EPS) for the year stood at Rs. 69.25 per share compared to Rs. 48.14 per share for the previous year.
Your Company proposes to retain Rs. 2,034.67 in the Statement of Profit and Loss, and not transfer it to the General Reserve.
Global & Indian Economy
The worldwide economic system has managed to make significant positive strides despite the difficulties posed by the pandemic, but it faced headwinds arising out of ongoing geopolitical rift in Europe, volatility in commodity prices, and a slowing growth scenario across nations. World Bank estimates that the global economy has grown by 3.4% in 2022. Outlook for world economy is signalling weakness with persisting inflationary pressure and hawkish monetary policies adopted by the central banks.
India growth story remains intact as against the prevailing global macroeconomic environment with World Bank estimates suggesting GDP growth to be 6.9% during FY2023. Even though inflation breached the threshold in the first half of the year, the Reserve Bank of India''s careful strategy, combined with a reduction in global commodity prices, brought it down to comfortable levels by year-end. Major economic indicators including exports, gross GST collections,
etc. have improved in comparison to last year. Foreign exchange reserves continue to remain healthy, touching ~USD 580 bn as on 31st March 2023. India took on the G20 Presidency for the first time during the year, reiterating its significant stature in the global economy. With favourable government policies, substantial capital investments, and economic resilience, India is expected to have a dominant position in the global economy in the coming years.
Agriculture
Indian agriculture has grown at average growth rate of 4.6% per annum during the last six years, ably supported by government measures and enhanced investments in infrastructure. The country also experienced strong Kharif and Rabi seasons with above normal monsoon. As a result, total foodgrain production is expected to touch 323 million MT during FY2023 (2.5% growth over previous year).
Income support schemes by Central and State governments, expansion of pan-India electronic trading
system for agri produce, implementation of Cluster Development Programme, establishment of Agriculture Infrastructure Fund and other similar measures boosted farm income and enhanced India''s agricultural competitiveness. In addition to these, government is also promoting the adoption of latest technology in agricultural practices such as drone-based spraying which has significant potential in improving farm productivity and offering minimal environmental footprint.
India has the capability to become the major supplier of food for the world with its immense agricultural resources and growth potential. However, this will require continued investments towards faster adoption of technology, infrastructure enhancement, development of sustainable solutions, as well as effective policies and support for farming community to ensure long-term success.
Coromandel delivered a robust performance during FY2023 registering good growth in terms of revenue and profitability. The manufacturing plants maintained high levels of efficiency while prioritizing the safety of their operations. With a view to strengthen its upstream integration capabilities and operational flexibility, the company undertook strategic investments in Nutrients and Crop Protection businesses. It also prioritized technology & sustainability led investments and during the year, acquired stakes in three Ag-tech startups. The company continued its integrated crop management approach and worked closely with the value chain players to ensure timely availability of agri inputs and services to the farming community.
Fertiliser
Coromandel''s fertiliser business posted a strong performance during FY2023, strengthening its sales & marketing presence, manufacturing infrastructure, supply chain agility and new product development capabilities. The company continued to strengthen its existing business through backward integration, thus ensuring long-term raw material supply security. Coromandel acquired 45% stake in Baobab Mining and Chemicals Corporation (BMCC), Senegal, which is likely to support the company''s rock phosphate requirement. In addition to this, the commissioning of Sulphuric Acid plant is progressing and shall be completed in FY2024.
The fertiliser manufacturing plants operated at more than 90% capacity utilization and achieved a growth of 14% over previous year to post production volume of ~3.3 million MT. Single Super Phosphate (SSP) production volume grew by 19% to 8.6 lakh MT by resuming operations in Pali (Maharashtra) and capacity enhancement at Ennore (Tamil Nadu) via tolling arrangement. The company also continued its
unwavering focus on ensuring safe operations and Total Recordable Incident Rate (TRIR) for the year was 0.41 per million manhours.
In FY2023, primary sales volume of DAP & Complex fertilisers and SSP equalling 36.5 lakh MT and 8.1 lakh MT respectively was achieved by the business. Coromandel also supported the government by establishing Pradhan Mantri Kisan Samruddhi Kendras (PMKSKs) within its key geographies. These shall serve as one-stop shop for farmers by offering varied agri-inputs and farm advisory solutions. The company developed a nanotechnology-based fertiliser product, Nano DAP, which provides the farmers a sustainable solution in increasing nutrient uptake. Integrated nutrient marketing structure supported by the agronomist team and Nutriclinics continue to support the business in promoting its balanced nutrition approach and market development initiatives.
The sourcing team was able to ensure on-time availability of critical raw materials and overcome prevailing pricing pressures in the market through implementation of optimal buying strategy and diversification of sources. The company was also able to unlock additional capacity through process and feedstock optimization.
A Centre of Excellence (CoE) for manufacturing was set up at Visakhapatnam that focuses on real-time monitoring of production parameters and identifying efficiency improvement initiatives. This, along with multiple digital interventions across varied functions, reiterates Coromandel''s focus on âDigital'' at the core of its operations.
Specialty Nutrients
Speciality Nutrients business promotes balanced nutrition, offering a product portfolio comprising of bentonite sulphur, water-soluble fertilisers, micronutrients, liquid fertilisers, organic soil health restoring agents, plant-based biostimulants, organic manures, organic Potash, etc. During the year, the business focused on capacity building initiatives and was able to register robust growth.
3 new products were launched in FY2023 - âAcuMist Calcium'', âGardina - Soil Conditioner'' and âGardina - Growth Booster'', the latter two catering to urban gardening segment. With the aim of empowering farmers by providing access to the latest technologies available in the market, the business piloted the drone project âGromor Drive'' and offers soil, water & leaf testing services via Nutri-Clinics.
Infrastructure enhancement projects were carried out in its liquid fertiliser plant at Visakhapatnam and at the same time, the business has been making continuous
effort in de-risking procurement through diversifying its sources.
Crop Protection
Crop Protection Chemicals business clocked a modest growth of 5% this year. Domestic B2B and formulations business, especially new and speciality products, have exhibited good performance.
A Multi-Product facility was set up at Ankleshwar during the year, which aids the business in diversifying its product portfolio. This year also saw the introduction of 5 new formulation products (including 3 novel combinations) and 2 new agrochemical technicals.
In FY2023, the business embarked on a manufacturing excellence program and undertook operational efficiency improvement initiatives across its manufacturing plants yielding significant cost savings and reasonably protecting margins across key products. It maintained a strong emphasis on ensuring safety across its operations, and Total Recordable Incident Rate (TRIR) for the year improved significantly to 0.24 per million manhours.
The business strengthened its sourcing capabilities by developing new vendors and is improving its backward integration capabilities. It is working on a rich pipeline of new molecules and combination products.
As part of its long-term strategy, Crop Protection Chemicals business, has announced its expansion plans of foraying into CDMO and Specialty & Industrial chemical segments, which offer significant growth potential.
Bioproducts
The Bioproducts business registered lower sales in comparison to previous year owing to poor neem seed season and resulting challenges in procurement. However, business was able to partially pass through the raw material impact resulting in stable profitability during the year.
The business has been able to consistently produce Azadirachtin of superior purity through manufacturing innovation and ensuring adherence to stringent raw material quality norms. The R&D team has undertaken development of microbial products and plant extract-based biostimulants, which forms a key element of the business'' diversification strategy.
Retail
With a network of 751 rural retail stores across Andhra Pradesh, Telangana and Karnataka, the business focuses on providing diverse range of products and services to
farmers. The business also offers expert advice to the farming community via its âScientist-at-Store'' initiative.
During the year, Retail business adopted a crop focused approach to drive customized crop recommendations and farm advisory. It closely partnered with agritech startups and solution providers for promoting adoption of pest and weather prediction technologies, dronespraying, cold storage, digital farming, etc.
AgTech Investments
During the year, Coromandel made investments in three ag-tech startups that are dedicated to providing advanced agricultural solutions.
Ecozen Solutions Pvt. Ltd. provides advanced renewable energy-based solutions that can help farmers reduce post-harvest losses, thus empowering the agriculture sector.
String Bio Pvt. Ltd. is a startup in the field of biotechnology that specializes in developing a distinctive array of fermentation-based products for use in various segments such as agriculture, animal nutrition, human nutrition, and personal care.
Dhaksha Unmanned Systems Pvt. Ltd. focuses on drone technology and offers a comprehensive set of solutions for Unmanned Aerial Systems (UAS) in a variety of applications, from agriculture to surveillance.
Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back-up lines of credit. With higher raw material prices, the Working capital of the Company increased during the year; this was partially offset by improved market collection and higher subsidy receipts. Net Cash from Operations for the year stood at Rs. 560 Crores.
Your Company has been credit rated by CRISIL Limited (CRISIL) and India Ratings & Research Private Limited (India Ratings & Research). The Company''s long-term credit rating by CRISIL has been upgraded to âCRISIL AAA (Stable)'' and short-term debt rating stands at âCRISIL A1 ''. The Company''s long-term credit rating by India Ratings & Research has been upgraded to âIND AAA (Stable)'' and short-term debt rating stands at âIND A1 ''. This reflects a very strong (highest) degree of safety regarding timely servicing of financial obligations and a vote of confidence reposed in your Company''s financials.
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.
5. Dividend
The Board is pleased to recommend a final dividend of Rs. 6/- per equity share of Re. 1 each. The Board had earlier approved payment of interim dividend of Rs. 6/-per equity share at its meeting held on February 2, 2023, which was paid to the Members of the Company on February 28, 2023. The total dividend for the financial year ended March 31, 2023 would, accordingly, be Rs. 12/- per equity share of Re.1 each. The total outgo on account of the dividend for the year would be Rs. 352.81 crores, including tax deducted at source (TDS). The Company has adopted Dividend Distribution Policy in line with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Dividend Distribution Policy is available on the website of the Company at https://www.coromandel.biz/investors/policies/
6. Consolidated Financial Results
The consolidated financial statements, which are prepared in accordance with the provisions of the Companies Act, 2013 (âthe Act'') and the relevant accounting standards, form part of this Annual Report. As required under the provisions of the Act, a statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures is enclosed as Annexure A to this Report.
The financial statements of the subsidiary companies will be made available to the members of the Company on request and will also be kept for inspection at the Registered Office of the Company.
7. Subsidiary Companies
Brief details of the performance of the subsidiaries of the Company are given below:
i. Coromandel Chemicals Limited (CCL) [Formerly Parry Chemicals Limited]:
CCL, a wholly owned subsidiary of the Company, earned a total income of Rs. 2.18 crore for the year ended March 31, 2023, and Loss after tax was Rs. 5.57 crore.
During the year under review, CCL acquired 45% equity stake in Baobab Mining and Chemicals Corporation SA, Senegal (BMCC) at a consideration of USD 19.6 million and also extended a loan of USD 7 million to BMCC for capital projects and expansion. This strategic investment in mining operation is being made by the Company through CCL to strengthen its backward integration and secure long-term supply of rock phosphate, which is one
iv. CFL Mauritius Limited:
CFL Mauritius Limited, a wholly owned subsidiary, incurred a loss of USD 0.04 million (equivalent to Rs.0.32 crore) during the year ended March 31, 2023. The primary source of income for this subsidiary is dividend income from Foskor (Pty) Ltd. and the subsidiary did not receive any dividend from Foskor during the financial year 2022-23.
v. Coromandel Brasil Limitada (CBL):
CBL, a Limited Liability Partnership, owned 100% by the Company and its subsidiary CFL Mauritius Ltd, is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It earned a loss of Brazilian Reals 0.32 million (equivalent to Rs.0.49 crore) for the year ended March 31,2023.
vi. Coromandel Australia Pty Ltd (CAPL) [Formerly Sabero Australia Pty Ltd]:
CAPL did not have any significant operation during the year ended March 31,2023. It earned a loss of Australian Dollar 0.01 million (equivalent to Rs.0.07 crore) for the year ended March 31,2023.
vii. Sabero Organics America SA (SOAL):
SOAL is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It incurred a net loss of Brazilian Reals 0.34 million (equivalent to Rs.0.52 crore) for the year ended March 31, 2023.
viii. Sabero Europe BV (SEBV):
SEBV was liquidated voluntarily during the year, as it was not undertaking any business operations and had no plans for the future. Voluntary liquidation of SEBV was approved by the Chamber of Commerce, Netherlands with effect from May 25, 2022 and, accordingly, SEBV ceased to be a wholly owned subsidiary of the Company from that date.
ix. Coromandel Agronegocios De Mexico SA de CV (Coromandel Mexico):
Coromandel Mexico is primarily engaged in getting product registrations in Mexico and procuring orders for supplies from India. It earned a net profit of Mexican Peso 0.09 million (equivalent to Rs. 0.04 crore) for the year ended March 31, 2023.
x. Sabero Argentina SA (Sabero Argentina):
Sabero Argentina is primarily engaged in getting product registrations in Argentina and procuring orders for supplies from India. It did not have significant operation during the year ended March 31, 2023.
of the key raw materials for the Company. The Company infused equity into and advanced loan to CCL to finance the above strategic investment.
ii. Dare Ventures Limited (DVL) [Formerly Dare Investments Limited):
DVL, a wholly owned subsidiary of the Company, earned a profit of Rs. 0.04 crores for the year ended March 31, 2023.
DVL is a corporate venture capital arm of the Company with a focus on leading investments in early to growth stage start-up companies engaged in providing technology led solutions for complex and long-term problems in the agriculture and allied sectors.
The details of investments made by DVL in AgTech startups Companies during the financial year 2022-23 are as under:
Ecozen Solutions Private Limited (Ecozen)- DVL
invested Rs. 10 Crores during the financial year 202223 in Ecozen.
Ecozen develops climate-smart deeptech solutions and core technology stacks to deliver a sustainable future, including motor controls, loT, and energy storage.
String Bio Private Limited (String Bio) - DVL invested Rs. 16.49 Crores during the financial year 2022-23 in String Bio.
With a vision to build a world where cleaner and better ways of living are enabled by biotechnology, String Bio has developed a set of next generation products across different sectors to deliver such solutions.
I n agriculture, String Bio has developed several bio stimulant products targeting horticulture as well as large acreage crops.
Dhaksha Unmanned Systems Private Limited (Dhaksha)
- DVL invested Rs. 19.99 Crores during the financial year 2022-23 in Dhaksha.
Dhaksha, one of the forerunners in the drone space in India, provides a complete range of Unmanned Aerial Systems (UAS) technology solutions for different applications covering agriculture, defence, surveillance and delivery, among others.
iii. Coromandel Technology Limited (CTL)
CTL was incorporated on December 27, 2022 as a wholly owned subsidiary of the Company. CTL did not have any operation during the financial year 2022-23.
xi. Parry America Inc.:
Parry America Inc. is primarily engaged in the sale of bio-pesticides in America. It made a net profit of USD 1.18 million (equivalent to Rs.9.45 crore) for the year ended March 31, 2023.
xii. Coromandel International (Nigeria) Limited (CINL):
CINL is engaged in getting product registrations in Nigeria and procuring orders for supplies from India. It made a net profit of Naira 2.27 million (equivalent to Rs.0.04 crore) for the year ended March 31, 2023.
xiii. Coromandel Mali SASU (CMS):
Coromandel Mali SASU (CMS) was incorporated on February 04, 2020 as a Wholly Owned Subsidiary (WOS) of the Company for the purpose of obtaining registration for marketing of agrochemicals. CMS is registered with Ministry in Charge of Statistics, Republic of Mali and is yet to commence its business operations.
Associate Company
(i) Sabero Organics Philippines Asia Inc (SOPA)
SOPA, an associate company based in Philippines, did not have any significant operation during the year ended March 31, 2023.
(ii) Baobab Mining and Chemicals Corporation SA, Senegal (BMCC)
During the financial year 2022-23, your Company made a strategic investment in BMCC through its wholly owned subsidiary, Coromandel Chemicals Limited. (CCL) by way of acquisition of equity shares in BMCC, and infusing loan in it. CCL currently holds 45% equity in BMCC.
BMCC is a registered corporate entity in Dakar, Republic of Senegal (West Africa) and has been engaged in the business of mining, production and sale of Rock Phosphate, one of the key raw materials used in manufacturing of phosphoric acid, which in turn is used in manufacturing of complex fertilizers.
The Company has made this strategic investment in BMCC to secure supply of Rock Phosphate, on a longterm and sustainable basis.
Joint Venture Company
Brief details of the performance of the Yanmar Coromandel Agrisolutions Private Limited (YCAPL), Joint Venture (JV) company is given below:
YCAPL, a Joint Venture company between the Company, Yanmar & Co. Ltd, Japan, and Mitsui & Co. Ltd, Japan, is into sales and service of agri-tech equipment focussed on farm mechanization in India. YCAPL has been consolidating its position as amongst the market leaders
in India in the Combine Harvester and Rice Transplanter segments. The total income for the year was Rs. 127.74 crore and the net profit was Rs. 3.22 crore.
Strategic Investment(s):
Brief details of the performance of the Strategic Investment companies are given below:
i. Tunisian Indian Fertilisers S.A., Tunisia (TIFERT):
TIFERT, a company based in Tunisia, manufactures phosphoric acid which is a key raw material for operating Phosphatic Fertiliser plants. Your Company''s strategic investment in TIFERT (15% equity) is aimed at securing supply of phosphoric acid for the Company''s operations at Kakinada and Visakhapatnam. During the year, TIFERT operations were impacted by the other social and technical issues. Indian partners, Coromandel and GSFC, continue to provide necessary technical support to TIFERT to improve the plant performance.
ii. Foskor (Pty) Limited, South Africa (Foskor):
The Company, along with CFL Mauritius Limited, holds 14% equity in Foskor. Foskor supplies high-quality phosphoric acid and rock phosphate, which is used for phosphatic fertiliser manufacturing at Kakinada and Ennore plants of your company. The financial performance of Foskor improved during the year with efficient mining operations resulting in higher rock production. The Company is working with the Foskor team on a business turnaround plan and is providing technical assistance for improving acid production and plant efficiency.
The Company has constituted a Risk Management Committee, as per the details set out in the Corporate Governance Report. The Company has formulated a Risk Management Policy to ensure risks associated with the business operations are identified and risk mitigation plans put in place. Details of the key risk associated with the business are given in the Management Discussion and Analysis Report.
9. Internal Financial Control Systems and their adequacy
The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive
budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.
The Company has its own corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Controls and System across all key processes covering various locations. Deviations are reviewed periodically, and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any, are reported to the Board.
10. Related Party Transactions
All related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are foreseen and are repetitive in nature. The related party transactions entered into by the Company are reviewed by independent chartered accountants to confirm that they were in the ordinary course of business and on an arm''s length basis. Form AOC-2 will not form part of Board''s report, as all the transactions with related parties are in arm''s length basis and in ordinary course of business. There are no materially significant related party transactions during the year which may have a potential conflict with the interest of the Company at large.
Related party transactions as required under the Indian Accounting Standards are disclosed in Notes to the financial statements of the Company for the financial year ended March 31, 2023. The Policy on Related Party Transaction is available on the Company''s website at https://www.coromandel.biz/investors/policies/
None of the Directors had any pecuniary relationship or transactions with the Company except the payments made to them in the form of remuneration, sitting fee, commission and reimbursement of expenses, if any.
i. Statutory Auditors and their report
M/s. S.R. Batliboi & Associates LLP (Reg. No. FRN 101049W/E300004) were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 59th Annual General Meeting until the conclusion of the 64th Annual General Meeting of the Company.
As required under Regulation 33 of the Listing Regulations, the Auditors have confirmed that they hold
a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Auditor''s Report given by M/s. S.R. Batliboi & Associates LLP on the financial statements of the Company for the year ended March 31,2023, forms part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors did not report any matter under Section 143(12) of the Act. Therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.
ii. Cost Auditors and their report
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Company is required to maintain cost accounting records in respect of certain specified products and accordingly such accounts and records are made and maintained in the prescribed manner. The cost accounting records maintained by the Company are required to be audited and accordingly M/s. Narasimha Murthy & Co., and Mrs. Jyothi Satish were appointed as Cost Auditors for the financial year 2022-23.
On the recommendation of the Audit Committee, the Board has re-appointed M/s. Narasimha Murthy & Co., Cost Accountants and Mrs. Jyothi Satish, Cost Accountant as Cost Auditors for auditing the cost records of the Company for the financial year 2023-24. The Act mandates that the remuneration payable to the Cost Auditor is ratified by the shareholders. Accordingly, a resolution seeking ratification of the shareholders for the remuneration payable to the Cost Auditors for the financial year 2023-24 is included in the Notice convening the 61st Annual General Meeting.
During the year, the Company filed the Cost Audit Report for the financial year 2021-22 with the Ministry of Corporate Affairs within the prescribed time limit.
iii. Secretarial Auditor and their report
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2022-23.
The report of the Secretarial Auditor is enclosed as Annexure B and forms part of this report. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
In terms of Regulation 24A of the Listing Regulations, there is no material unlisted subsidiary incorporated in India. Material unlisted subsidiary for the purpose of the said Regulation is a subsidiary whose income/ net worth exceeds 10% of the consolidated income/net worth respectively of the Company and its subsidiaries in the immediately preceding accounting year. Hence, there is no requirement of a secretarial audit for any of the Company''s subsidiaries in India.
12. Board, Committees of the Board and other information
i. Directors
Your Company is managed and governed by a Board comprising an optimum blend of Executive and NonExecutive Directors. As on March 31, 2023, the Board of Directors comprised of eleven (11) Directors, consisting of Executive Vice Chairman, two (2) Wholetime Directors and eight (8) Non-Executive Directors, out of which six (6) Directors were Independent Directors, including two Woman Directors. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations and the relevant provisions of the Act. The Directors possess requisite qualifications and experience in general corporate management, strategy, finance, engineering, information technology and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company.
Mr. Sameer Goel superannuated from the services of the Company and, consequently, ceased to be the Managing Director of the Company with effect from close of business hours on January 31, 2023. The Board placed on record its appreciation of the significant contribution made and valuable services rendered by Mr. Sameer Goel during his tenure.
During the year, Dr. Deepali Pant Joshi (DIN:07139051) was appointed as Additional Director and designated as Non-Executive Independent Director. Mr. Sankarasubramanian S. (DIN: 01592772) was appointed as Additional Director, and designated as Executive Director - Nutrient Business. Dr. Raghuram Devarakonda (DIN:09749805) was appointed as Additional Director and designated as Executive Director - CPC, Bio and Retail Business of the Company. The above appointments were made effective from February 1, 2023, for a term of five (5) years, subject to approval of shareholders of the Company.
Subsequently, the shareholders through postal ballot on December 29, 2022, approved the appointment
of Dr. Deepali Pant Joshi as Independent Director, Mr. Sankarasubramanian S. as Executive Director -Nutrient Business, and Dr. Raghuram Devarakonda as Executive Director - CPC, Bio and Retail Business of the Company for a term of five years, effective from February 1, 2023.
I n accordance with Article 17.29 of the Company''s Articles of Association, read with Section 152 of the Act, Mr. M. M. Venkatachalam, Director (DIN: 00152619) retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.
ii. Board Meetings
The annual calendar of the board meetings is prepared and circulated to the Directors in advance. During the financial year 2022-23, seven (7) Board Meetings were held, the details of which are given in the Corporate Governance Report.
iii. Independent Directors and their declaration of Independence
As on March 31, 2023, the Independent Directors of the Company included Mr. Sumit Bose, Ms. Aruna B. Advani, Mr. K V Parameshwar, Dr. R Nagarajan, Mr. Sudarshan Venu and Dr. Deepali Pant Joshi. All the Independent Directors of the Company have furnished necessary declaration in terms of Section149(7) of the Act and Regulation 25(8) of Listing Regulations affirming that they meet the criteria of independence as stipulated under the Act and Listing Regulations. All the Independent Directors of the Company have registered on the Independent Directors Databank as required under the Act and the applicable Rules in the said regard. In the opinion of the Board, all the Independent Directors have the integrity, expertise and experience including the proficiency required to effectively discharge their roles and responsibilities in directing and guiding the affairs of the Company.
iv. Familiarization Programmes for Independent Directors
The Independent Directors of the Company are eminent professionals with several decades of experience in banking and financial services, technology, finance, governance and management areas, and fully conversant and familiar with the business of the Company.
The Company has an ongoing familiarization programme for all Independent Directors with regard to their roles, duties, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company, etc.
The Independent Directors, on their appointment, are made familiar about the Company''s operations and businesses. Interaction with the senior leadership team (Business Heads and key executives) of the Company is also facilitated. Detailed presentations on the business of each of the Division are made to the Directors from time to time. A manual containing all important policies of the Company is given to the Directors. Meetings with the Chairman, Executive Vice Chairman and the Managing Director / Executive Directors are facilitated for the new appointee to familiarise him/ her about the Company, its businesses and the practices and policies of the Group.
As part of the familiarization programme, a handbook is provided to all the Directors including Independent Directors at the time of their appointment. The handbook provides a snapshot to the Directors of their duties and responsibilities, rights, appointment process and evaluation, compensation, board procedure, and stakeholders'' expectations. The handbook also provides the Directors with an insight into the Group''s practices. Further, periodic emails are sent to all the Directors covering events that may have an impact on the business of the Company and/ or the agriculture sector in general and fertiliser and crop protection industries, in particular. The details of the familiarization programme are also disclosed on the Company''s website at https:// www.coromandel.biz/investors/policies/
v. Remuneration Policy
On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Salient features of the Remuneration Policy are set out in the Corporate Governance Report. The Remuneration Policy is available on the Company''s website at https://www.coromandel. biz/investors/policies/55
vi. Evaluation of the Board''s performance, its Committees and Directors
In accordance with the provisions of Section 134 of the Act and Regulation 17 of the Listing Regulations, the Board has carried out evaluation of its own performance, performance of Committees of the Board, namely, Audit Committee, Corporate Social Responsibility and Sustainability Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination and Remuneration Committee, and also the Directors individually. The manner of evaluation of performance and the process adopted for the purpose are explained in the Corporate Governance Report.
vii. Audit Committee
The Audit Committee comprises of Mr. Sumit Bose, Chairman, Ms. Aruna B. Advani, Member, Mr. K V Parameshwar, Member, Mr. Arun Alagappan, Member and Dr. Deepali Pant Joshi, Member. During the year, six (6) meetings of the Audit Committee were held, the details of which are provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
viii. Directors'' Responsibility Statement
As required pursuant to the provisions of Section 134(3) (c) and 134(5) of the Act, the Directors'' Responsibility Statement is enclosed as Annexure C to this Report and forms part of the Report.
Pursuant to the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Arun Alagappan, Executive Vice Chairman, Mr. Sankarasubramanian S., Executive Director - Nutrient Business, Dr. Raghuram Devarakonda, Executive Director - CPC, Bio and Retail Business, Mrs. Jayashree Satagopan, President - Corporate & Chief Financial Officer and Mr. Rajesh Mukhija, Sr. Vice President-Legal & Company Secretary are the Key Managerial Personnel of the Company.
14. Policy on prevention, prohibition and redressal of Sexual Harassment at workplace
The Company has put in place the Prevention of Sexual Harassment Policy (POSH) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliance Committee (ICC) has been constituted in compliance with the requirements of said Act to redress complaints received regarding sexual harassment. All employees are covered under this Policy. Employees at all levels are being sensitized about the Policy and the remedies available thereunder.
During the financial year 2022-23, three complaints were received by the ICC and two complaints were disposed off during the year under review, with its recommendations. One complaint was pending investigation as at the end of the year.
15. Employee Stock Option Plans
Employee Stock Option Scheme 2007
The Company had in the past approved the Employee Stock Option Scheme 2007 (ESOP Scheme 2007), under which employees were granted Options. The
Company made grants under the said Scheme during the period from 2007 to 2011. There were no vested Options outstanding at the end of the financial year. There will be no further grants issued under the ESOP Scheme 2007.
Employee Stock Option Plan 2016
The Employee Stock Option Plan 2016 (ESOP 2016), as approved by the Shareholders through Postal Ballot on January 11, 2017, was operational during the year. The Board / Nomination and Remuneration Committee has been authorised to issue to the employees such number of Options under ESOP 2016 as would be exercisable into not exceeding 1,45,81,000 fully paid- up equity shares of Re. 1/- each in the Company. Pursuant thereto, the Nomination and Remuneration Committee has formulated detailed terms and conditions of the ESOP 2016.
Further, the Nomination and Remuneration Committee is empowered to determine the eligible subsidiary companies, whether existing or future, whose employees will be entitled to stock options under ESOP 2016. Options granted under ESOP 2016 would vest on or after 1 (one) year from the date of grant but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee. The Company has granted 4,13,700 options to the employees during the year under the ESOP 2016. The number of Options vested and outstanding as at the year-end were 14,04,370. The disclosure required to be made under Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at https://www.coromandel.biz/investors/ annual-general-meetings/
Employee Stock Option Plan 2023
The Board at its meeting held on March 22, 2023 approved the Employee Stock Option Plan 2023 (ESOP 2023), as per the recommendation made by the Nomination & Remuneration Committee, subject to its approval by the Shareholders of the Company.
The Company is seeking approval of the Shareholders for the ESOP 2023 at the forthcoming Annual General Meeting, which is scheduled to be held on July 27, 2023.
The disclosure required to be made under Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at https://www.coromandel.biz/investors/ annual-general-meetings/
many years now even before it was mandated under the Act. The Company has put in place a CSRS policy, which is available on the website of the Company at https:// www.coromandel.biz/sustainability/
As per the provisions of Section 135 the Act and the Rules made thereunder, the Company is required to spend Rs. 33.45 crores for the financial year 2022-23 i.e. 2% of the average net profits of the Company made during the three immediately preceding financial years. The Company, however, spent an amount of Rs. 25.54 crores towards CSR activities during the financial year 2022-23. The unspent amount of Rs. 7.92 crores on the ongoing projects has been transferred in April 2023 to a separate bank account titled Coromandel International Limited - Unspent CSR Account -2022-23 and shall be spent within the time limits specified in the Act and the Rules made thereunder.
Details of the composition of the Corporate Social Responsibility & Sustainability Committee and the CSR Projects undertaken during the year are given in the Annual Report on CSRS Activities, which is appended as Annexure F to this Report.
21. Health, Safety, and Environment (HSE)
Your Company gives high priority to Health, Safety, and Environment (HSE) and has formulated a policy to operate the facilities safely, efficiently and in an environmentally responsible manner. It has put in robust processes and established safety performance indicators to track its HSE performance. A participative approach is adopted where employees are consistently encouraged to raise safety concerns, and these inputs are periodically monitored and actioned.
During the year, the Total Recordable Incident Rate (TRIR) for the company stands at 0.35 per million manhours.
Taking a major leap towards ESG, the company has voluntarily participated in DJSI Corporate Sustainability Assessment 2022 and obtained score of 50 which is substantial improvement from previous year. Company has started publishing its Integrated Reports and the first Report was published for the financial year 202122.
Nutrition Business
During the year, the Total Recordable Incident Rate (TRIR) for the company stands at 0.41 per million manhours.
16. Vigil Mechanism/ Whistle Blower Policy
The Company has a Whistle Blower Policy which provides the employees, customers, vendors, and directors an avenue to raise concerns on ethical and moral standards and compliance with legal provisions in conduct of the business operations of the Company. It also provides for necessary safeguards for protection against victimization for whistle blowing in good faith. The Vigil Mechanism is hosted at https://www.coromandel.biz/investors/policies/
The Company is committed to maintain the highest standards of Corporate Governance. As stipulated under the Listing Regulations, the Report on Corporate Governance is appended as Annexure D to this Report. The requisite certificate from M/s. R Sridharan & Associates, Company Secretaries confirming compliance with the conditions of Corporate Governance by the Company is also attached to the Report on Corporate Governance.
18. Management Discussion & Analysis
The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns, etc., is provided separately in the Annual Report and forms part of this Directors'' Report.
19. Business Responsibility and Sustainability Report
Pursuant to Regulation 34 of Listing Regulations, the Company has prepared the Business Responsibility and Sustainability Report in line with the business principles as provided in the Business Responsibility Policy adopted by the Company. The Business Responsibility and Sustainability Report is enclosed as Annexure E to this Report and the same is also available on the website of the Company.
20. Corporate Social Responsibility and Sustainability
The Murugappa group is known for its tradition of philanthropy and community service. The group''s philosophy is to reach out to the community by establishing service-oriented philanthropic institutions in the field of education and healthcare as the core focus areas. The Company upholds the group''s tradition by earmarking a part of its income for carrying out its social responsibilities.
The Company has been carrying out Corporate Social Responsibility and Sustainability (CSRS) activities for
The Company participated in the external survey and benchmarking studies on health and safety. As per recent UK-HSL health and safety survey, Coromandel achieved an overall score of 4.25 against the Global benchmarking of 3.48.
The Company has initiated many studies to assess and improve the overall environment, health and safety. Water audit was carried out at Fertilizers plants located at Vizag, Kakinada and Ennore and at Crop Protection Chemical plant located at Ranipet. Fugitive emission study was carried out at Vizag plant.
Under the Asset Integrity program, the Corrosion study was completed at Vizag, Ennore and Kakinada plants. To improve safety culture at the sites, the company through its e-learning platform âVidhya Online'' introduced safety related digital modules.
All facilities of Fertilizer & Single Super Phosphate (SSP) business and three facilities (Sarigam, Dahej, and Ankleshwar) of Crop Protection Chemical Plants (CPC) were successfully audited by accredited third party and re-certified for Integrated Management Systems (ISO-45001, ISO 14001 and ISO 9001) during the financial year 2022-23.
The Ennore plant was Certified with ISO: 50001 Certification, which is the energy management certification, during the financial year 2022-23.
To enhance emergency preparedness, projects on fire protection systems upgradation were taken up at fertilizer facilities and fire water systems have been installed and commissioned at SSP plants at Udaipur, Nandesari, Kota and Nimrani.
On environment front, Vizag plant undertook massive plantation under the âMiyawaki Plantationâ program and a total of 23000 saplings were planted. Similarly at Kakinada and Ennore, 3000 saplings in the âMiyawaki Plantation methodology were planted. All the plants are operating with Zero Liquid Discharge (ZLD) concept.
During the year, the Company received many accolades for the excellence in Health, Safety and Environment. Five plants of the Company, namely Kakinada. The Company''s Vizag plant has achieved the prestigious 5 Star Rating under the British Safety Council 5 Star rating audit during the year 2022-23. (Platinum Award), Ranipet & Kota (Gold Award) and Nimrani & Udaipur (Silver Award) received Kalinga Safety Excellence Award-2022 by Institute of Quality & Environment Management Services (IQEMS). Vizag plant was adjudged in five star
categories in Kalinga Environmental Excellence Award. Ennore plant bagged silver award and Hospet & Ranipet plants received Bronze award in CII Southern Reason EHS Excellent Award 2022.Vizag plant received 2nd prize for Green Visakha plantation under sustainability report from Public Relations Society of India for the year 2022.
Crop Protection Chemicals Business (CPC)
During the year 2022-23, CPC business has focused on the EHS initiatives and engagement of the employee in the safety culture enhancement. With consistent efforts by making safety as a value, the business has achieved Total Recordable Injury Rate (TRIR) of 0.24 for the year 2022-23. The Company''s CPC plants have achieved zero reportable incident during the year 2022-23. Theme based safety campaigns i.e. Fire Prevention, Confined space entry, Work at Height, Electrical Safety & Material Handling etc were conducted across all CPC units for continuous engagement in the safety excellence journey. The campaign has set safety as a value for business and made everyone demonstrate safety as an integral part of all activities. During the year 2022-23, the plants have received safety accolades. Sarigam plant has won Gold Trophy in QCFI Surat Chapter- One day National Safety Convention for their presentation on âCurrent Site Safety Management Systemsâ & Dahej unit has won Gold Trophy in QCFI Vadodara Chapter- One day National Safety Convention for their presentation on âCurrent Site Safety Management Systemsâ. Various employee engagement and safety awareness i.e. Road Safety Week, National Safety Week, National Fire Service Week, World Environment Day programmes were conducted across CPC plants. The Company has successfully implemented PSM 13 elements with Chola MS Risk Service at Ankleshwar & Dahej plants.
The business commissioned a new 500 KLD Effluent Treatment Plant (ETP) with MBBR technology commissioned at Dahej Plant. Electronic burner, auto blow down, Air compressor HRU system for preheating of boiler feed water, magnet in gas line were installed in boiler to improve boiler efficiency and reduce specific gas consumption in Dahej Plant. At Ankleshwar plant, 1662 trees were planted as a part of âWar on Waste Programâ.
The Company has changed majority of incineration waste disposal mode to coprocessing with 3R concepts. Overall integrated approach towards Environment, Health & Safety is followed at CPC business and accordingly actions are taken to improve the EHS Key Performance Indicators and make it sustainable business. Overall, the company has adopted an integrated EHS Management
system, all the EHS indices are tracked, and proactive actions are taken, and the Company is striving to protect the Health Safety & Environment through environmental friendly plant operations.
i. Share Capital
The paid-up equity share capital of the Company as on March 31, 2023 was Rs.29.40 crore. During the year, the Company has allotted 5,17,340 equity shares of Re.1 each under ESOP 2016. No equity shares were allotted under ESOP 2007 during the year.
ii. Material Subsidiary Policy
The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Regulations and the same is available on the website of the Company at https://www.coromandel.biz/ investors/policies/
iii. Annual Return
I n accordance with Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023, is available on the website of the Company at https://www.coromandel.biz/investors/annual-general-meetings/
iv. Conservation of energy, technology absorption, foreign exchange earnings and outgo.
The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed under sub-section (3)(m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure G to this Report and forms part thereof.
v. Particulars of Employees and Remuneration
The disclosure with respect to remuneration as required under Section 197 of the Act read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure H to this report.
The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report.
However, the annual report is being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.
vi. Particulars of Loans, Guarantees and Investments
Details of loans and guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements.
vii. Public Deposits
The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act read with Companies (Acceptance of Deposits) Rules, 2014 and no amount of principal or interest was outstanding as on the Balance Sheet date.
viii. Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government.
ix. Reporting of Frauds
There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.
23. Declaration/Affirmations
During the year under review
⢠there are no significant material orders passed by the Regulators or Courts which would impact the going concern status of the Company and its future operations.
⢠there are no applications made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016.
⢠the Company has not made any onetime settlement with any Bank or Financial Institution as such disclosure or reporting requirements in respect of the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions is not required.
24. Banks and financial institutions
Your Company is prompt in making the payment of interest and repayment of loans to the financial institutions / banks. Banks and Financial Institutions continue their unstinted support in all aspects and the Board had placed on record its appreciation for the same.
Your Directors wish to express their grateful appreciation for the valuable support and co-operation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of the
Government of India, as well as the State Governments, the farming community and all our other stakeholders.
The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results.
Mar 31, 2022
Your Board of Directors have the pleasure of presenting the 60th Annual Report on the operational and business performance of the Company together with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2022.
1. Standalone Financial Highlights
|
Rs. In crores |
||
|
Particulars |
FY 2021-22 |
FY 2020-21 |
|
Revenue |
||
|
From Operations |
19,088.26 |
14,156.20 |
|
Other Income |
143.17 |
74.49 |
|
Total Income |
19,231.43 |
14,230.69 |
|
Profit |
||
|
Profit before Interest, Depreciation and Taxation |
2,178.86 |
2,044.11 |
|
Less: Interest |
75.43 |
105.62 |
|
Less: Depreciation |
172.02 |
172.45 |
|
Profit Before Tax |
1,931.41 |
1,766.04 |
|
Less: Provision for Tax (including deferred tax) |
518.96 |
453.46 |
|
Profit After Tax |
1,412.45 |
1,312.58 |
Your Company''s Revenue from operations for the reporting year stood at Rs. 19,088.26 crores as against Rs. 14,156.20 crores last financial year. The Profit before Interest, Depreciation, and Taxation grew to Rs. 2,178.86 crores from Rs. 2,044.11 crores in the previous year, registering a growth of 6.6%. The Net Profit for the year grew to Rs. 1,412.45 crores from Rs. 1,312.58 crores in the previous year, an increase of 7.6% YoY The EBITDA margin decreased 325 basis points to 10.66%, and the PAT margin decreased 187 basis points to 7% in FY 2021-22 over the previous reporting period. The Earnings Per Share (EPS) for the year stood at Rs. 48.14 per share, an increase of 7.5 % compared to Rs. 44.77 per share for the previous reporting year.
global vaccine equality by supplying ~18 crores of vaccines to the low- and middle-income Countries has been lauded globally.
Agriculture
The agriculture sector in India experienced strong Kharif and Rabi seasons and is expected to grow by 3.3% during the year. Normal monsoon ensured higher crop acreages, and India is expected to record its highest food grain production (315 million tons). Agricultural exports grew by 20% to USD 50 billion, led by cereal, marine, sugar, and cotton crops. Further, disruptions in cereal supplies from the Baltic region have opened additional export opportunities for the Indian farmers.
The supportive Central and State Governments facilitated the continuance of sector operations by exempting agricultural activities during the lockdown. To improve liquidity in the system, direct money transfer programs, Agri credit schemes and record procurement under the MSP programme were implemented. The Government is focusing on leveraging technology and data analytics in agriculture and introduced several reforms to promote its adoption during the year.
On the subsidy front, the government''s increased subsidy disbursements were in line with increased raw material prices and kept the Agri input prices under control. For FY 2021-22, the revised estimate for fertiliser subsidies stands at Rs. 1,40,122 crores (Budget: Rs. 79,529 Crore).
Going forward, higher Agri commodity prices, Government agriculture focus, the expectation of a normal monsoon, and higher reservoir levels bodes well for agriculture.
ments. It continued to strengthen its safety focus and carried out structural strengthening across the manufacturing locations. During the year, the business has been augmenting its Quality, Safety, Sales, and Marketing functions.
With a view to enriching its product portfolio, the business introduced 6 new products during the year, including one novel combination product. The Business is working on a rich pipeline of new molecules and combination products. During the year, it received more than 80 registrations, including combination products and plans to leverage them to strengthen its offerings in the domestic and international markets.
Bio Products
The Bioproducts business registered a moderate growth during the year despite the challenges encountered in neem seed sourcing due to delayed neem seed arrivals. The R&D team is working on several new products and applications to expand its product offerings in collaboration with leading agriculture universities. With the increased focus on integrated pest management globally, the business is working towards ramping up its Aza production capacity.
Retail
The Retail business, which operates a network of 750 company-operated stores in Andhra, Telangana and Karnataka, continued to focus on improving its product offering and consumer connect with the farming community. Through its 2000 marketing team, the business offers farm advisory with initiatives like ''Scientist at Store'', soil test-
The global economy witnessed its fastest growth in the last 80 years in 2021. The World Bank estimates show that the global economy expanded by 5.7%. Relaxation of pandemic-related lockdowns and fiscal stimulus helped boost the demand. However, the outlook has deteriorated for 2022 as the emergence of new variants of Covid 19, the Russia-Ukraine crisis, frequent and wider-ranging lockdowns in China, persistent price pressures leading to a tightening of monetary policies in many countries and a commodity price surge in energy and food has increased the risk to growth prospects.
India has been staging a sustained economic recovery since the second half of FY 2020-21. The GDP is expected to grow by 8.7% during the current financial year. Though the year started on a muted note as the second wave of Covid-19 pandemic stretched the country''s health infrastructure, the ramped-up public health measures and policy interventions lent support and reversed the economic slowdown. Major economic indicators like forex reserves, merchandise exports, FDI inflows, GST collections etc., remain healthy. The inflationary trends experienced in the last six months remain a concern area for the economy.
On the Covid-19 front, India has made significant strides in ensuring a speedy and efficient vaccine rollout for containment and management of the pandemic. India commenced the world''s largest vaccination program with an ambitious target to inoculate its entire eligible population by December 31 2021, with at least the first dose. In the last year, it has administered more than 180 crore vaccines. In addition, India''s effort and leadership role in ensuring
3. Performance ReviewFertiliser
The Company''s fertiliser business recorded a strong performance during the year, strengthening its branding & marketing capabilities, manufacturing, and supply chain efficiencies. Amidst the second wave of Covid-19, the business undertook various initiatives at its offices, manufacturing plants and in the marketplace to ensure the safety of its employees, channel partners, the neighbouring communities, and the farmers. The plants operated flexibly to moderate their Annual Turnaround period and maximise production. Safety continued to be a key focus area, and the business undertook structural stability and preventive maintenance activities at the plants. To improve its backward integration capabilities, the business initiated a brownfield project to expand its Sulphuric acid manufacturing capacity at the Vizag plant. The plant is expected to come onstream in FY2024 and will help in reducing import dependence. The business has been strengthening its digital and automation capabilities to improve its consumer connect, business intelligence, and predictive analytics. During the year, it worked on several initiatives in this regard.
Overall, the primary sales volumes of DAP and Complex fertilisers were marginally lower at 33.2 lakh tons. Consumption, as reflected through the point of sales from retailers to the farmers, stood at 34.5 lakh tons. The Company''s consumption market share improved to 16.7% (FY21: 15.7%), with gains in major operating markets. The business introduced ''Groshakti Plus'', Zinc fortified NPK offering improved nutrient availability and balanced nutrition. Integrated nutrient marketing
structure supported by the agronomist team and Nutriclinics continued to support the business in promoting its balanced nutrition approach and market development initiatives.
Despite disruptions in Q1 due to COVID-19 related restrictions, Company''s fertiliser plants operated at 84% capacity and produced 28.4 lakh tons of DAP Complex Fertilisers.
Single Super Phosphate (SSP) product segment within fertiliser, an economical source of Phosphate providing multiple nutrients like Sulphur and Calcium, registered 55% consumption growth and maintained its leadership position with a market share of 16.1% (Last year 12.8%). During the year, sales volumes grew by 17% to 7.6 lakh tons. The business focused on providing farmers with superior granulated and fortified products like Groplus, which continued to receive encouraging feedback from the market. Production for the year stood at 7.3 lakh tons, 10% higher than the previous year.
Crop Protection business of your Company witnessed a strong revenue growth, improving its top line by 21% over last year. The increase was led by technical sales in Exports and the domestic B2B channel. New and speciality products continue to do well and have contributed ~56% of the domestic formulation sales.
Though Covid related disruptions impacted the supply chain, the business strengthened its sourcing capabilities by developing new vendors and customers. The business implemented manufacturing excellence initiatives that resulted in efficiency improve-
ing and agronomic recommendations, including balanced nutrition and integrated pest management.
During the year, the stores followed strict safety protocols and supported the farming community by offering Agri solutions, including products and services. The business has been testing out new technology solutions in the areas of nutrient management, crop diagnostics and spraying. During the year, it initiated drone and boom spraying trials. Further, it is partnering with the startup ecosystem to introduce novel products and technologies. The business continued to diversify its portfolio of products and services and focused on digital farming solutions to ensure better reach to the end customer.
Speciality Nutrients business, which promotes balanced nutrition by offering secondary & micro-nutrients, organic products and water-soluble fertilisers, registered robust growth during the year.
The business set up a liquid fertiliser plant at Vishakhapatnam and introduced 2 new products - a liquid fertiliser with Zinc and a water-soluble fertiliser for the Grapes segment. It improved its sourcing capabilities for organic products and registered a 27% volume growth. The business''s water-soluble fertiliser plant at Kakinada reported an 18% production growth during the year. It partnered with a variety of value chain partners, including seed companies, drip irrigation companies, FPOs, contract farming companies, e-commerce platforms and government institutions.
Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Dividend Distribution Policy is available on the website of the Company at https://www. coromandel.biz/investors/policies/
6. Scheme of Amalgamation of Liberty Pesticides and Fertilisers Limited (LPFL) and Coromandel SQM (India) Private Limited
(csqm)
Your Board approved the scheme of amalgamation of LPFL and CSQM with the Company (''Scheme''), subject to requisite statutory and regulatory approvals. Pursuant thereto, the joint petition was filed before the Hon''ble National Company Law Tribunal (NCLT), Hyderabad seeking approval of the Scheme. The Hon''ble NCLT vide its order dated April 26, 2022, approved the Scheme. The Appointed Date for the scheme is April 1, 2021. The Scheme shall be effective upon the filing of a certified true copy of the order with the Registrar of Companies, Hyderabad. Upon the Scheme becoming effective, LPFL and CSQM would stand dissolved without going through the process of winding up.
7. Consolidated Financial Results
The consolidated financial statements prepared in accordance with the provisions of the Companies Act, 2013 (''the Act'') and the relevant accounting standards form part of this Annual Report. As required under the provisions of the Act, a statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures are enclosed as Annexure A to this Report.
vii. Sabero Europe BV (SEBV):
SEBV is primarily engaged in getting product registrations in Europe and procuring orders for supplies from India. It did not have any significant operations during the year ended March 31, 2022.
viii. Coromandel Agronegocios De Mexico SA de CV (Coromandel Mexico):
Coromandel Mexico is primarily engaged in getting product registrations in Mexico and procuring orders for supplies from India. It earned a net profit of Mexican Peso 1.04 million (equivalent to Rs. 0.36 crore) for the year ended December 31, 2021.
ix. Sabero Argentina SA (Sabero Argentina):
Sabero Argentina is primarily engaged in getting product registrations in Argentina and procuring orders for supplies from India. It did not have significant operations during the year ended March 31, 2022.
x. Parry America Inc.:
Parry America Inc. is primarily engaged in the sale of bio-pesticides in America. It made a net profit of USD 1.40 million (equivalent to Rs.10.40 crore) for the year ended March 31, 2022.
Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and backup lines of credit. The Company''s working capital remained at comfortable levels through the year, and Net Cash from operations for the year stood at Rs. 2,093 crores.
During the year, the Company''s longterm credit rating by ''CRISIL'' has been revised to ''CRISIL AA (positive)'', and its short-term debt rating stands at ''CRISIL A1 ''. The Company''s long-term credit rating by ''India Ratings & Research (A Fitch Group Company) has been revised to ''IND AA (positive)'', and its shortterm debt rating stands at ''IND A1 ''. This reflects a very high degree of safety regarding timely servicing of financial obligations and a vote of confidence reposed in the Company''s financials.
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.
Your Directors are pleased to recommend a final Dividend of Rs. 6 per equity share of Re.1/- each. Your Board had earlier approved the payment of an interim dividend of Rs. 6 per equity share at its meeting held on February 3, 2022, and the same was paid on March 2, 2022. Accordingly, the total dividend for the year ended March 31, 2022, would be Rs. 12/- per equity share of Re.1/- each. The total outgo for the year would be Rs.352.20 crore, including tax deducted at source (TDS). The Company has adopted a Dividend Distribution Policy in line with the requirements of the SEBI (Listing Obligations and
The financial statements of the subsidiary companies will be made available to the members of the Company upon request. They will also be kept for inspection at the Registered Office of the Company.
Brief details of the performance of the subsidiaries of the Company are given below:
i. Parry Chemicals Limited (PCL):
PCL, a wholly owned subsidiary of the Company, earned a total revenue of Rs.0.97 crore for the year ended March 31, 2022, and Profit after Tax was Rs.0.36 crore. PCL has filed an application with the Ministry of Corporate Affairs (MCA) for a change of name of the Company to "Coromandel Chemicals Limited". MCA''s approval is awaited.
ii. Dare Ventures Limited (DVL) [Formerly Dare Investments Limited):
During the year, the Ministry of Corporate Affairs accorded its approval for the change of name from "Dare Investments Limited" to "Dare Ventures Limited" (''DVL''). Further, the Company acquired additional 7493,188 equity shares of DVL at a consideration of Rs. 11 crores.
DVL, a wholly owned subsidiary of the Company, did not have any significant operations. It incurred a loss of Rs. 0.40 crore for the year ended March 31, 2022.
DVL will serve as an investment vehicle for the Company in order to tap the growing startup ecosystem and identify and invest in early stage to late stage startups in the agri-tech and other sectors.
iii. CFL Mauritius Limited:
CFL Mauritius Limited, a wholly-owned subsidiary, incurred a loss of $ 0.04 million during the year ended March 31, 2022. The primary source of income for this subsidiary is dividend income from Foskor (Pty) Ltd. The subsidiary did not receive any dividend from Foskor during FY 2021-22.
iv. Coromandel Brasil Limitada (CBL):
CBL, a Limited Liability Partnership, owned 100% by the Company and its subsidiary CFL Mauritius Ltd, is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It earned a loss of Brazilian Reals 0.80 million (equivalent to Rs.0.11 crore) for the year ended March 31, 2022.
v. Coromandel Australia Pty Ltd (CAPL) [Formerly Sabero Australia Pty Ltd]:
CAPL did not have any significant operations during the year ended March 31, 2022.
vi. Sabero Organics America SA (SOAL):
SOAL is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It incurred a net loss of Brazilian Reals 0.30 million (equivalent to Rs.0.43 crore) for the year ended December 31, 2021.
xi. Coromandel International (Nigeria) Limited (CINL):
CINL is engaged in getting product registrations in Nigeria and procuring orders for supplies from India. It made a net profit of Naira 7.66 million (equivalent to Rs.0.01 crore) for the year ended December 31, 2021.
xii. Coromandel Mali SASU (CMS):
Coromandel Mali SASU (CMS) was incorporated on February 04, 2020, as a Wholly Owned Subsidiary (WOS) of the Company for the purpose of obtaining registration for the marketing of agrochemicals. CMS is registered with Ministry in Charge of Statistics, Republic of Mali and is yet to commence its business operations.
Sabero Organics Philippines Asia Inc (SOPA)
SOPA, an associate company based in the Philippines, did not have any significant operations during the FY 2021-22.
ii. Foskor (Pty) Limited, South Africa (Foskor):
Your Company, along with CFL Mauritius Limited, holds 14% equity in Foskor. Foskor supplies high-quality phosphoric acid used for phosphatic fertiliser manufacturing at the Kakinada and Ennore plants of your Company. The financial performance of Foskor improved during the year with efficient mining operations resulting in higher rock production. However, acid production was affected due to the disruptions caused by the pandemic resulting in lower capacity utilisation. Your Company is working with the Foskor team on a business turnaround plan and is providing technical assistance for improving acid production and plant efficiency.
9. Risk Management Policy
The Company has constituted a Risk Management Committee. Details of the constitution of the Committee are set out in the Corporate Governance Report. The Company has formulated a Risk Management Policy under which various risks associated with the business operations are identified. Risk mitigation plans have been put in place, details of which are set out in the Management Discussion and Analysis Report.
10. Internal Financial Control Systems and their adequacy
The Company has adequate internal controls consistent with the nature of business and size of the operations to effectively provide for the safety of its assets, reliability of financial transactions with adequate checks
for the year ended March 31, 2022, forms part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors had not reported any matter under Section 143(12) of the Act, therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.
ii. Cost Auditors and their report
Pursuant to Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Company is required to maintain cost accounting records in respect of certain specified products and accordingly, such accounts and records are made and maintained in the prescribed manner. The cost accounting records maintained by the Company are required to be audited and, accordingly, M/s. Narasimha Murthy & Co. and Mrs. Jyothi Satish were appointed Cost Auditors for FY 2021-22.
On the recommendation of the Audit Committee, the Board has re-appointed M/s. Narasimha Murthy & Co., Cost Accountants and Mrs. Jyothi Satish, Cost Accountant, as Cost Auditors for auditing the cost records of the Company for the financial year 2022-23. The Act mandates that the remuneration payable to the Cost Auditor is ratified by the shareholders. Accordingly, a resolution seeking ratification of the shareholders for the remuneration payable to the Cost Auditors for the financial year 2022-23 is included in the Notice convening the 60th Annual General Meeting.
Brief information on the performance of the Yanmar Coromandel Agrisolutions Private Limited (YCAPL), a Joint Venture (JV) Company, is given below:
YCAPL, a Joint Venture company between Coromandel, Yanmar, and Mitsui, is into sales and service of agri-tech equipment focussed on farm mechanisation in India. YCAPL has been consolidating its position as amongst the market leaders in India in the Combine Harvester and Rice Transplanter segments. The total income for the year was Rs. 145.96 crores, and the net profit was Rs.7.27 crore.
Brief details of the performance of the Strategic Investment companies are given below:
i. Tunisian Indian Fertilisers SA, Tunisia (TIFERT):
TIFERT, a company based in Tunisia, manufactures phosphoric acid, a key raw material for operating Phosphatic Fertiliser plants. Your Company''s strategic investment in TIFERT (15% equity) is aimed at securing a steady supply of phosphoric acid for the Company''s operations at Kakinada and Visakhapatnam. During the year, TIFERT operations were impacted by the pandemic and other social and technical issues. Indian partners, Coromandel and GSFC, continue to provide necessary technical support to TIFERT to improve the plant performance.
and balances, adherence to applicable statutes, accounting policies, approval procedures, and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against the approved budget on an ongoing basis.
The Company has a corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Controls and Systems of all key processes across various locations. Deviations arereviewedperiodically, and due compliance is ensured. Summary of Significant Audit Observations along with recommendations and their implementations are reviewed by the Audit Committee, and concerns, if any, are reported to the Board.
11. Related Party Transactions
All related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are foreseen and are repetitive in nature. The related party transactions entered by the Company are reviewed by independent chartered accountants to confirm that they were in the ordinary course of business and at arm''s length basis. Form AOC-2 will not form part of the Board''s report, as all the transactions with related parties are on an arm''s length basis and in the ordinary course of business. There are no materially significant related party transactions during the year which may have a potential conflict with the interest of the Company at large.
As required under the Indian Accounting Standards, related party transactions are disclosed in Notes to the Company''s financial statements for the financial year ended March 31, 2022. The Policy on Related Party Transaction is available on the Company''s website at https://www.coromandel.biz/investors/ policies/
None of the Directors had any pecuniary relationship or transactions with the Company except the payments made to them in the form of remuneration, sitting fee, commission and reimbursement of expenses if any.
i. Statutory Auditors and their report
M/s. S.R. Batliboi & Associates LLP (Reg. No. FRN 101049W/E300004) were appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 59th Annual General Meeting until the conclusion of the 64th Annual General Meeting of the shareholders of the Company. The requirement of annual ratification of the appointment of the Statutory Auditors at each Annual General Meeting has been dispensed with; accordingly, there is no requirement to seek annual ratification of their appointment.
As required under Regulation 33 of the Listing Regulations, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Auditor''s Report given by M/s. S.R. Batliboi & Associates LLP, on the financial statements of the Company
During the year, the Company filed the Cost Audit Report for FY 2020-21 with the Ministry of Corporate Affairs within the prescribed time limit.
iii. Secretarial Auditor and their report
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2021-22.
The report of the Secretarial Auditor is enclosed as Annexure B and forms part of this report. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
In terms of Regulation 24A of the Listing Regulations, there is no material unlisted subsidiary incorporated in India. Material unlisted subsidiary for the purpose of the said Regulation is a subsidiary whose income/net worth exceeds 10% of the consolidated income/net worth respectively of the Company and its subsidiaries in the immediately preceding accounting year. Hence, there is no requirement for a secretarial audit for any of the Company''s subsidiaries in India.
Sudarshan Venu as an Independent Director of the Company for a term of five years, effective from February 3, 2022.
Mr. Prasad Chandran ceased to be Director of the Company with effect from the close of business hours on April 20, 2022, on completion of his term of re-appointment as an Independent Director of the Company.
In accordance with Article 17.29 of the Company''s Articles of Association, read with Section 152 of the Act, Mr. A Vellayan retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment.
ii. Board Meetings
An annual calendar of Board meetings is prepared and circulated to the Directors in advance. During the financial year 2021-22, five (5) Board Meetings were held, the details of which are given in the Corporate Governance Report.
iii. Independent Directors and their declaration of Independence
As on March 31, 2022, the Independent Directors of the Company included Mr. Prasad Chandran, Mr. Sumit Bose, Ms. Aruna B. Advani, Mr. K V Parameshwar, Dr. R Nagarajan and Mr. Sudarshan Venu. All the Independent Directors of the Company have furnished the necessary declaration in terms of Section 149(6) of the Act affirming that they meet the criteria of Independence as stipulated thereunder and under the Listing Regulations. All the Independent Directors of the Company have registered on the Independent Directors Databank as required under the Act and the applicable Rules in the said regard. In the opinion of the Board,
vii. Audit Committee
As on March 31, 2022, the Audit Committee comprised of Mr. Sumit Bose, Chairman, Ms. Aruna B. Advani, Member, Mr. K V Parameshwar, Member, Mr. Prasad Chandran, Member, and Mr. Arun Al-agappan, Member. During the year, five (5) meetings of the Audit Committee were held, the details of which are provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
viii. Directors'' Responsibility Statement
As required pursuant to the provisions of Section 134(3)(c) and 134(5) of the Act, the Directors'' Responsibility Statement is enclosed as Annexure C to this Report and forms part of the report.
14. Key Managerial Personnel
Pursuant to the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Arun Alagappan, Executive Vice Chairman, Mr. Sameer Goel, Managing Director, Mrs. Jayashree Satagopan, Chief Financial Officer and Mr. Rajesh Mukhija, Company Secretary, are the Key Managerial Personnel of the Company.
15. Policy on prevention, prohibition and redressal of Sexual Harassment in the workplace
The Company has in place the Prevention of Sexual Harassment Policy (POSH) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliance Committee (ICC) has been constituted in compliance with the
13. Board, Committees of the Board and other information
i. Directors
Your Company is managed and controlled by a Board comprising an optimum blend of Executive and NonExecutive Directors. As on March 31, 2022, the Board of Directors comprised of eleven (11) Directors consisting of Executive Vice Chairman, Managing Director and nine (9) Non-Executive Directors, out of which six (6) Directors are Independent Directors, including one Independent Woman Director. The composition of the Board is in conformity with Regulation 17 of Listing Regulations and the relevant provisions of the Act. The Directors possess requisite qualifications and experience in general corporate management, strategy, finance, engineering, information technology and other allied fields, which enable them to contribute effectively to the Company in their capacity as Directors of the Company.
Mr. Ramesh K B Menon stepped down from the Board of the Company as Director with effect from the close of business hours on March 31, 2022. The Board placed on record its appreciation of the significant contribution made and valuable services rendered by Mr. Ramesh K Menon during his tenure.
Mr. Sudarshan Venu was appointed as an Additional Director designated as Non-Executive Independent Director of the Company effective from February 3, 2022, subject to the approval of the shareholders of the Company. Subsequently, through a postal ballot on March 17, 2022, the shareholders approved the appointment of Mr.
all the Independent Directors have the integrity, expertise and experience, including the proficiency required to effectively discharge their roles and responsibilities in directing and guiding the affairs of the Company.
iv. Familiarisation Programmes for Independent Directors
The Company''s Independent Directors are eminent professionals with several decades of experience in banking and financial services, technology, finance, governance, and management. They are fully conversant and familiar with the business of the Company.
The Company has an ongoing familiarisation programme for all Independent Directors regarding their roles, duties, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company, etc.
The Independent Directors, on their appointment, are familiarised with the Company''s operations and businesses. Interaction with the senior leadership team (Business Heads and key executives) of the Company is also facilitated. Detailed presentations on each division''s business are made to the Directors from time to time. A manual containing all important policies of the Company is given to the Directors. Meetings with the Chairman, Executive Vice Chairman and the Managing Director are facilitated for new appointees to familiarise them with the Company, its businesses and the practices and policies of the Group.
As part of the familiarisation programme, a handbook is provided to all the Directors, including Independent Directors, at the time of their appointment.
The handbook provides a snapshot to the Directors of their duties and responsibilities, rights, appointment process and evaluation, compensation, board procedure, and stakeholders'' expectations. The handbook also provides the Directors with an insight into the Group''s practices. Further, periodic emails are sent to all the Directors covering events that may have an impact on the business of the Company and/ or the agriculture sector in general and fertiliser and crop protection industries, in particular. The details of the familiarisation programme as above are also disclosed on the Company''s website.
v. Remuneration Policy
On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for the selection and appointment of Directors, Senior Management and their remuneration. Salient features of the Remuneration Policy are set out in the Corporate Governance Report. The Remuneration Policy is available on the Company''s website at https ://www.coromandel. biz/investors/policies/
vi. Evaluation of the Board''s performance, its Committees and Directors
In accordance with the provisions of Section 134 of the Act and Regulation 17 of the Listing Regulations, the Board has carried out the evaluation of its own performance and the performance of Committees of the Board, namely, the Audit Committee, CSR Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination and Remuneration Committee as well as of the Directors individually. The manner of evaluation of performance and the process adopted for the purpose is explained in the Corporate Governance Report.
requirements of said Act to redress complaints received regarding sexual harassment. All employees are covered under this policy. Employees at all levels are being sensitised about the policy and the remedies available thereunder. During the financial year 2021-22, one complaint was received by the ICC and disposed off during the year under review, with its recommendations. No complaint was pending as of the end of the year.
16. Employee Stock Option Plans
Employee Stock Option Scheme 2007 -ESOP 2007
The Company had in the past approved an Employee Stock Option Scheme 2007 (ESOP Scheme 2007), under which employees were granted Options. The Company made grants under the said Scheme from 2007 to 2011. There were no vested Options outstanding at the end of the financial year, and there will be no grants issued under the ESOP Scheme 2007.
Employee Stock Option Plan - ESOP 2016
The Shareholders had, through Postal Ballot, on January 11, 2017, authorised the Board/ Nomination and Remuneration Committee to issue to the employees such number of Options under the ESOP 2016, as would be exercisable into not exceeding 1,45,81,000 fully paid-up equity shares of Rs. 1 each in the Company. The Nomination and Remuneration Committee is empowered to formulate detailed terms and conditions of the ESOP 2016 and administer and supervise the same. The specific employees to whom the Options would be granted and their eligibility criteria would be determined by the Nomination and Remuneration Committee at its sole discretion.
18. Corporate Governance
The Company is committed to maintaining the highest standards of Corporate Governance. As stipulated under the Listing Regulations, the Report on Corporate Governance is appended as Annexure D to Board''s Report. The requisite certificate from the M/s. R Sridharan & Associates, Practising Company Secretary confirming compliance with the conditions of Corporate Governance by the Company is also attached to the Report on Corporate Governance.
19. Management Discussion & Analysis
The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns, etc., is presented in a separate section on page 109 of the Integrated Report.
20. Business Responsibility Report
Pursuant to Regulation 34 of Listing Regulations, the Company has prepared the Business Responsibility Report in line with the business principles as provided in the Business Responsibility Policy adopted by the Company. Business Responsibility Report is enclosed as Annexure E to Board''s Report, and the same is also available on the website of the Company.
and Ankleshwar) of Crop Protection Chemical Plants (CPC) were successfully audited by an accredited third party and re-certified for Integrated Management Systems (ISO-45001, ISO 14001 and ISO 9001) in 2021-22. Mitigation of chemical exposure at the Ankleshwar site was done through the implementation of a closed loop Bromine handling system in the Phenthoate plant & installation of a Tote bin system in the Malathion Plant to eliminate H2S gas exposure.
During the year, the combined Total Recordable Injury Rate (TRIR) per million-man hours for the Company stood at 0.60. All fertiliser facilities continued with phase-3 of the structural integrity upgrading program to mitigate asset integrity risks, which has been audited and ratified by a competent third party. To enhance emergency preparedness, projects on fire protection systems upgradation were taken up at fertiliser facilities, and firewater systems have been installed and commissioned in SSP plants (Udaipur, Nandesari, Kota and Nimrani). The fire systems at Dahej and Ankleshwar sites were also upgraded to mitigate the fire hazards by installing a CO2 flooding System, sprinkler system, smoke detectors, and fire alarm & increasing the Firewater reservoir capacity.
Your Company''s commitment to environmental sustainability remains firm. Fertiliser, SSP & CPC business units have obtained the unified registration for plastic waste management from CPCB. During the FY 2021 -22, the Company has successfully recycled 5462 MT of Plastic Waste. The Company has completed the plantation of around 2,25,000 saplings under the flagship programme of the Government of Andhra Pradesh known as "Green Visaka".
Further, the Nomination and Remuneration Committee is empowered to determine the eligible subsidiary companies, whether existing or future, whose employees will be entitled to stock options under ESOP 2016. Options granted under ESOP 2016 would vest on or after 1 (one) year from the date of grant but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee. The Company has granted 3,31,720 options to the employees during the year under the ESOP 2016. The number of Options vested and outstanding as of the year-end was 10,39,370. The disclosure required to be made under Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at https://www.coromandel.biz/inves-tors/annual-general-meetings/
17. Vigil Mechanism/Whistle Blower Policy
The Company has a Whistle Blower Policy, which provides the employees, customers, vendors and directors an avenue to raise concerns on ethical and moral standards and compliance with legal provisions in the conduct of the business operations of the Company. It also provides necessary safeguards for protection against victimisation for whistleblowing in good faith. The Vigil Mechanism is hosted at https://www. coromandel.biz/investors/policies/
21. Corporate Social Responsibility
The Murugappa group is known for its tradition of philanthropy and community service. The Group''s philosophy is to reach out to the community by establishing service-oriented philanthropic institutions in the field of education and healthcare as the core focus areas. The Company upholds the Group''s tradition by earmarking a part of its income for carrying out its social responsibilities.
The Company has been carrying out Corporate Social Responsibility (CSR) activities for many years, even before mandated under the Act. The Company has put in place a CSR policy, which is available on the website of the Company at https://www.coromandel. biz/sustainability/
As per the provisions of Section 135 of the Act and the Rules made thereunder, the Company is required to spend Rs.28.12 crores for the financial year 2021-22, i.e. least 2% of the average net profits of the Company made during the three immediately preceding financial years. The Company, however, spent an amount of Rs. 24.65 crores towards CSR activities during the financial year 2021-22. The unspent amount of Rs. 3.47 crores on ongoing projects would be transferred to a separate bank account titled CSR unspent account for FY 2021-22 on or before April 30, 2022, and shall be spent within the time limits specified in the Act and the Rules made thereunder.
Details of the composition of the CSR Committee and the CSR Projects undertaken during the year are given in the Annual Report on CSR Activities, which is appended as Annexure F to this Report.
22. Health, Safety, and Environment (HSE)
Your Company gives high priority to Health, Safety, and Environment (HSE) and has formulated a policy to operate the facilities safely, efficiently and in an environmentally responsible manner. Your Company has put in robust processes and established safety performance indicators to track its HSE performance. A participative approach is adopted where employees are consistently encouraged to raise safety concerns, and these inputs are periodically monitored and actioned. The "Drive to Zero" campaign was launched across CPC sites to increase employee participation in mitigating the work hazard.
The Company has carried out a Safety Culture survey for the fourth consecutive year for fertiliser and a Safety perception survey for CPC, and an overall improvement in performance has been observed. The process safety management enhancement is being firmed up by successfully rolling out the Asset Integrity Policy, Coromandel Common Engineering Standards & Philosophies and PSMS e-learning competency modules across the fertiliser facilities. In CPC business, a framework is being developed for process safety culture in the manufacturing sites of CPC through Dupont sustainable solution and Chola MS Risk Service. The key recommendations from the technical safety audit of Ammonia facilities in the fertiliser business were implemented, thus minimising the risk from ammonia storage & handling.
All facilities of the Fertiliser & Single Super Phosphate (SSP) business and three facilities (Sarigam, Dahej,
The Company has created a plantation Known as "HARITHA VANAM" at Visakapatnam unit, where around 9,020 saplings were planted and maintained under TERI''s bioremediation Mycorrhiza technology. The Company has planted 14000 saplings under the "Miyawaki Plantation" Methodology at Visakhapatnam Unit. Across the SSP plants, the green coverage has been increased by planting additional 2,029 saplings covering 8,983 sqm. A new HDPE lining of 5 acres was completed along with the gypsum ponds of Visakhapatnam for gypsum storage. A scrubber efficiency study was carried out across fertiliser facilities to establish gaps and rectify them. At the Kakinada unit, a new De-dusting system has been installed at Screen House to improve fugitive emission. To improve efficiencies, scrubber upgradation has been undertaken at the Kota unit.
The Company has upgraded the Online Continuous Emission Monitoring System (OCEMS) at all the Fertiliser & SSP units. During the FY21-22, a new online AAQMS system was installed at the Visakhapatnam unit. The Company has undertaken many jobs for the improvements at Visakhapatnam, including constructing a garland drain with water recycling arrangements, and enhancing the greenery and aesthetics by creating additional Lawns. The plants continue to improve water efficiency by recycling and Zero Liquid Discharge (ZLD) programmes.
CPC sites also implemented green initiatives through the philosophy of 3R''s - Reduce the landfilling waste, Recycle the Multi Effect Evaporator condensate in processes, and Reuse raw materials and ingredients.
23. Other disclosures
i. Share Capital
The paid-up equity share capital of the Company as on March 31, 2022, was Rs. 29.35 crore. During the year, the Company has allotted 1,17,730 equity shares of Re. 1 each under ESOP 2016 (4,22,780 shares). No equity shares were allotted under ESOP 2007 during the year.
ii. Material Subsidiary Policy
The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Regulations, and the same is available on the website of the Company at https://www.coromandel. biz/investors/policies/
iii. Annual Return
In accordance with Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2022, is available on the website of the Company at https://www.coromandel.biz/inves-tors/annual-general-meetings/
iv. Conservation of energy, technology absorption, foreign exchange earnings and outgo.
The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed under sub-section (3)(m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure G to this Report and form part thereof.
⢠There are no applications made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016.
⢠The Company has not made any one time settlement with any Bank or Financial Institution as such disclosure or reporting requirements in respect of the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions is not required.
25. Banks and financial institutions
Your Company is prompt in paying interest and repayment of loans to the financial institutions/banks. Banks and Financial Institutions continue their unstinted support in all aspects, and the Board had placed its appreciation for the same on record.
About 4000 saplings were planted across CPC Business, including an external green belt area of 15,597 Sqm (1560 trees) at Ankleshwar Plant, to increase the Green Belt Area using the concept of Social Forestry.
The Bioproducts business of your Company planted 2000 saplings which comprise of Cashew nary and Eucalyptus varieties in and around the Neem Plantation boundaries at Rasipatti and Kudikdu area as a preventive measure to act as a windbreaker. In addition to this, it has developed a natural storm water drainage system inside the factory to avoid stagnation of continuous water.
Coromandel International Limited Fertiliser Business was awarded Industry Stewardship Champion Gold Award from International Fertilizer Association (IFA) in Dubai in October 2021. Kakinada Unit won Gold Award & Sectorial Topper Award from CII-SR EHS Excellence Award 2021, and Ennore Unit won Bronze Award from CII-SR EHS Excellence Award 2021. Udaipur unit received an appreciation award for the plantation campaign from the District Magistrate of Udaipur. SSP Corporate Function Won Silver Award from CII Award 2020. Nimrani Won the Platinum & Silver Award from CII Award 2020.
During Covid-19 lockdowns, your Company has ensured safe plant shutdown and start up at all manufacturing sites and continues to sustain all efforts throughout the pandemic.
v. Particulars of Employees and Remuneration
The disclosure with respect to remuneration as required under Section 197 of the Act read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure H to this report.
The statement containing names of the top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this report.
However, the annual report is being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection. Any Member interested in obtaining a copy of the same may write to the Company Secretary.
vi. Particulars of Loans, Guarantees and Investments
Details of loans and guarantees given and investments made under Section 186 of the Act are shown in the Notes to the Financial Statements.
vii. Public Deposits
The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act read with Companies (Acceptance of Deposits) Rules, 2014. No amount of principal or interest was outstanding as on the Balance Sheet date.
viii. Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government.
ix. Reporting of Frauds
There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act and the Rules made thereunder.
During the year under review
⢠There are no significant material orders passed by the Regulators or Courts that would impact the Company''s going concern status and future operations.
Your Directors wish to express their grateful appreciation for the valuable support and cooperation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of the Government of India, as well as the State Governments, the farming community and all our other stakeholders.
The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results.
Mar 31, 2021
Your Board of Directors have pleasure in presenting the 59th Annual Report on the operational and business performance of the Company together with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31,2021.
1. Summary of Standalone Financial Results
|
'' In crores |
||
|
Particulars |
2020-21 |
2019-20 |
|
Revenue |
||
|
From Operations |
14,163 |
13,117 |
|
Other Income |
42 |
38 |
|
Total Revenue |
14,205 |
13,155 |
|
Profit: |
||
|
Profit before Interest, Depreciation and Taxation |
2,043 |
1,763 |
|
Less: Interest |
106 |
235 |
|
Depreciation |
172 |
157 |
|
Profit Before Tax |
1,765 |
1,371 |
|
Less: Provision for Tax (including deferred tax) |
453 |
312 |
|
Profit After Tax |
1,312 |
1,059 |
Your Company''s Revenue from Operations for the year was ''14,163 crores as against ''13,117 crores last year. The Profit before Interest, Depreciation, and Taxation grew to ''2,043 crores from ''1,763 crores in the previous year registering a growth of 15.88%. The Net Profit for the year grew to ''1,312 crores from ''1,059 crores in the previous year i.e., an increase of 23.89% YoY.
EBITDA margin increased 100 basis points to 14.4% in 2020-21 over 2019-20 and PAT margin increased 120 basis points to 9.2% in 2020-21 over 2019-20. The Earnings Per Share (EPS) for the year stood at ''44.76 per share, an increase of 23.65% compared to ''36.20 per share for the previous year.
Your Company does not propose to transfer any amount to the General Reserves and propose to retain ''2,401.50 crores in the Statement of Profit and Loss.
2. Business Environment
The global economy was severely impacted by the COVID 19 pandemic as it experienced one of the most unfathomable health emergencies in modern history. While the impact of the pandemic varied across the regions, it had a disproportionate effect on the vulnerable sections. After a massive contraction in the first half of the year, the global economy began reviving in the later part of 2020. As the countries continue to fight through the pandemic, there are visible green shoots of recovery.
India has also shown remarkable resilience in its fight against the virus, led by its frontline COVID 19 warriors and is emerging as the vaccination capital of the world. Given the vulnerabilities of a weak health system, India undertook lockdown during the initial phase of COVID 19 spread. This enabled the flattening of the pandemic curve and provided the necessary time to ramp up the health and testing infrastructure. Over the last 12 months, India has been able to reverse the economic slowdown - from reporting a 23.9% contraction in GDP in Q1 to a 0.8% growth in Q3. The recovery is seen across all key economic indicators including GST collection, fuel demand, Manufacturing PMI and others. Though the path of recovery has been challenging with the emergence of the 2nd wave, the ramped-up public health measures and policy interventions lend support towards achieving stability in the coming months.
Despite the Covid 19 induced uncertainties impacting the major operations, the Agriculture Sector emerged as a bright spot and is expected to register a 3.4% GVA growth in FY 2020-21. This reflects the indomitable grit and resilience of the Indian farmers ensuring food security for the nation under challenging circumstances. India is expected to produce record food grain (303 million tons) and horticulture (327 million tons) output along with improvement in cereal exports. The Governments at the Centre and State were supportive in enabling continuance of operations and providing cash injection in rural India. Reforms like the advancement of PM Kisan disbursement, direct money transfer, increased MGNREGA days, increase in agri credit schemes, higher procurement under MSP for both Kharif and Rabi season were implemented. The Agri Marketing reforms announced during the year are currently under discussion with the stakeholders and the Government expects an amicable resolution before its implementation.
The Government''s efforts were well supported by favourable environmental conditions experienced during the year. Above normal rainfall and good soil moisture conditions resulted in higher crop acreage in Kharif and Rabi seasons. In the Company''s home markets of Andhra Pradesh and Telangana, Government continued its support through Direct Cash Transfer schemes to the farmers. Further, the infrastructure investment made over the last few years through the Kaleswaram and Pattiseema projects has resulted in assured irrigation and increased cropping intensity in the catchment areas.
On the subsidy front, the Government provided an additional allocation of ''65,000 crores for the year, which has improved the working capital position of the industry through a significant reduction in the amount of subsidy outstanding.
With the higher water levels in the reservoirs and the prediction of a normal southwest monsoon by the Indian Meteorological Department, Indian agriculture is expected to witness a good Kharif season during the coming year.
3. Performance Review Fertiliser
Fertiliser business recorded its highest ever sales volume driven by favourable agro-climatic conditions during the year. Covid-19 protocols such as social distancing, sanitising and usage of masks etc., were implemented at the Plants and field to ensure the safety of employees and enable continuity of operations. Business focused on strengthening quality systems, implementing automation and digitalization projects, optimising the production, smart buying of key raw materials and customer centricity through brand building activities with increased thrust on Digital Marketing. Business implemented critical and safety related infrastructure projects, and consciously deferred other capital expenditure projects considering the uncertainties due to COVID 19.
Overall, primary sales volumes of DAP and Complex fertilisers grew by 7% to 33.5 lakh tons with the sale of manufactured products at 29.4 lakh tons. Consumption as reflected through the point of sales from retailers to the farmers, increased by 18% to 37.2 lakh tons. Market share for the year in DAP Complex fertiliser segment stood at 15.3 percent, a marginal reduction from 15.7 percent in 2019-20.
Business continued to improve its marketing focus through creation of strong brands. During the year, your Company''s unique product 14-35-14 was rebranded as Groshakti. Similarly, Grosmart, which was launched last year, was well received by customers. Integrated nutrient marketing structure with the experienced agronomist team has supported the business well in promoting its balanced nutrition approach and market development initiatives.
Despite disruptions in Q1 due to COVID-19 related restrictions, your Company''s fertiliser plants produced 28.4 lakh tons of DAP Complex Fertilisers at a capacity utilization of 82%.
Single Super Phosphate (SSP) business, which is now fully integrated with fertiliser business, maintained its leadership position with a market share of 13.5%. During the year, sales volumes grew by 17% to 6.7 lakh tons. The business focused on providing farmers with superior granulated and fortified products like Groplus which received encouraging feedback from the market. Production for the year stood at 6.6 lakh tons, which is 9% higher than the previous year.
Crop Protection
Crop Protection business of your Company witnessed a strong turnaround this year, growing by 24% over last year. The domestic formulation and B2B business has seen robust growth during the period. New products continue to do well and have contributed ~25% of the domestic formulation sales. Business has strengthened its position in certain international geographies. The business continued its focus on customer connect through digital means and is embarking on Sales and Channel Centre of Excellence.
The Business continues to focus on enriching the product portfolio and is working on a rich pipeline of new molecules and combination products. During the year, it received more than 50 registrations including combination products and plans to leverage them for strengthening its offerings in the domestic and international markets. Infrastructure strengthening and capacity expansion projects are on track. On the manufacturing front, the business improved the overall capacity utilisation. Collaboration with global agro chemical companies for new products and co-marketing arrangements was further strengthened during the year. Overall, the profitability of the business has improved due to a better product mix, coupled with efficiencies in sourcing and manufacturing.
The Bio pesticides business registered impressive growth in the US markets. Business plans to expand capacity at its Thyagavalli plant to cater to the increased demand for Bio products. The R&D team is working on several new products and applications to expand its product offerings in collaboration with leading agriculture universities. Some of the products are in the stage of regulatory approvals and slated for launch in the coming year.
Retail
The Retail stores were fully functional during the year despite the COVID disruptions. The stores followed strict safety protocols and continued to support the farming community by offering Agri solutions including products, farm advisory and mechanization services. The business has improved its operational efficiencies and has leveraged technology to reach out to the farmer community. It has engaged agriculture scientists under the "Scientist at Storeâ initiative to provide crop advisory to the farmers. Business is actively pursuing farm mechanization activities in the areas of sowing, harvesting and spraying to improve farm efficiency and costs. During the year, the business registered its highest ever turnover driven by favourable environmental conditions and improved advisory to farmers across the markets.
The Specialty Nutrient products have been doing very well for the Company and continuously increasing its base in the market. The business has introduced two new products Fitsol Sugarcane and Gromor Power 168-24 in the market. The Business has collaborated with different value chain partners like seed companies, drip companies and channels like FPOs, contract farming to increase its business prospects. The business has been active in the digital marketing space and reached out to millions of farmers through digital and social media for enhancing its consumer connect.
The Company has been pioneering efforts in the area of soil health enrichment by marketing diversified organic portfolio including various composts like City Compost, Pressmud compost, PROM (Phosphate rich Organic Manure) with K-ash (Potash derived from molasses), cake mixtures, soil conditioners like Ca-Mg-S and branded gypsum. During the year, Business continued its commitment towards improving soil health and creating awareness among the users by performing more than 33,000 carbon tests at the farmer''s field. Business continued its focus on promoting differentiated variants segment, strengthened its sourcing capabilities and quality assurance systems and registered a 25% volume growth (1.6 lakh tons).
Your Company continually assessed and took proactive measures to counter the COVID-19 pandemic and engaged closely with its employees, partners, customers and society to promote safe operations. It worked with the Government and local regulatory bodies and supported them through various initiatives in combating the virus. Agriculture inputs have been designated as essential products and services which helped the Company to operate throughout the year and serve the farmer community to ensure maximum benefit of a good season.
Your Company has implemented COVID-19 safety protocols across its operations to help protect and support its employees, customers and suppliers. It has created Standard Operating Procedures to be followed across its operations including Manufacturing, Supply chain, Marketing and others. The Company successfully transitioned to operate from a virtual environment, enabling "work from homeâ for its employees. The crisis management team and leadership continue to monitor the COVID-19 situation and adjust plans accordingly.
Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. Working capital of the Company
improved through the year and Net Cash from operations for the year stood at ''4,125 crores.
Your Company became a "Debt Freeâ company during the year and has deployed the surplus funds purposefully.
It has been credit rated by CRISIL Limited (CRISIL) and India Ratings & Research Private Limited (India Ratings & Research). The Company''s long-term credit rating by ''CRISIL'' continued to be ''CRISIL AA (stable)'' and shortterm debt rating at ''CRISIL A1 ''. The Company''s longterm credit rating by ''India Ratings & Research (A Fitch Group Company) continued to be ''I ND AA (stable)'' and short-term debt rating at ''IND A1 ''. This reflects a very high degree of safety regarding timely servicing of financial obligations and also a vote of confidence reposed in your Company''s financials.
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.
Your Directors are pleased to recommend a final Dividend of ''6 per equity share of ''1 each. Your Board had earlier approved payment of interim dividend of ''6 per equity share at its meeting held on February 1, 2021 and same was paid on February 24, 2021. The total dividend for the year ended March 31, 2021 would accordingly be ''12 per equity share of ''1 each. The total outgo for the year would be ''352 Crore, including tax deducted at source (TDS). The Company has adopted Dividend Distribution Policy in line with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Dividend Distribution Policy is available on the website of the Company at https://coromandel.biz/pdf/2016-2017/InvestorsInformation/DividendDistribution Policy.pdf
6. Consolidated Financial Results
The consolidated financial statements prepared in accordance with the provisions of the Act and the relevant accounting standards forms part of this Annual Report. As required under the provisions of the Companies Act, 2013 (the Act), a statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures are enclosed as Annexure A to this Report.
The financial statements of the subsidiary companies will be made available to the members of the Company on request and will also be kept for inspection at the Registered Office of the Company.
Brief details of the performance of the subsidiaries of the Company are given below:
CFL Mauritius Limited, a wholly-owned subsidiary, incurred a loss of $ 0.04 million during the year ended March 31, 2021. The primary source of income for this subsidiary is dividend income from Foskor (Pty) Ltd. and the subsidiary did not receive any dividend from Foskor during the year 20-21.
ii Parry Chemicals Limited (PCL):
PCL, a wholly owned subsidiary of the Company, earned a total revenue of ''0.86 crore for the year ended March 31, 2021 and Profit after Tax was ''0.30 crore.
iii Dare Investments Limited (DIL):
DIL, a wholly owned subsidiary of the Company, did not have any significant operations and incurred a loss of '' 0.01 crore for the year ended March 31, 2021. DIL has filed an application with Registrar of Companies for change of name of the company into "Dare Ventures Limitedâ.
DIL is proposed to serve as an investment vehicle to Coromandel, in order to tap the growing startup ecosystem and its core objective shall be to identify and invest in early stage to late stage startups in AgTech and other sectors.
iv Liberty Pesticides and Fertilisers Limited (LPFL):
LPFL, a wholly owned subsidiary of the Company, did not have any significant operations during the year 2020-21. It earned a profit of '' 0.06 crore for the year ended March 31, 2021. During the year, your Board approved the amalgamation of LPFL and CSQM with the Company. The necessary joint application was filed before the Hon''ble National Company Law Tribunal (NCLT), Hyderabad. The application was pending for hearing by NCLT.
v Coromandel Brasil Limitada (CBL):
CBL, a Limited Liability Partnership, owned 100% by the Company and its subsidiary CFL Mauritius Ltd., is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It earned a profit of Brazilian Reals 0.4 million (equivalent to ''0.51 crore) for the year ended March 31,2021.
vi Sabero Organics America SA (SOAL):
SOAL is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It incurred a net loss of Brazilian Reals 0.21 million (equivalent to ''0.30 crore) for the year ended December 31,2020.
vii Sabero Australia Pty Ltd. (SAPL):
SAPL did not have any significant operations during the year ended March 31,2021.
viii Sabero Europe BV (SEBV):
SEBV is primarily engaged in getting product registrations in Europe and procuring orders for supplies from India. It did not have any significant operations during the year ended March 31,2021.
ix Sabero Argentina SA (Sabero Argentina):
Sabero Argentina is primarily engaged in getting product registrations in Argentina and procuring orders for supplies from India. It incurred a net loss of ARS 0.90 million (equivalent to '' 0.09 crore) for the year ended March 31,2021.
x Coromandel Agronegocios De Mexico SA de CV (Coromandel Mexico):
Coromandel Mexico is primarily engaged in getting product registrations in Mexico and procuring orders for supplies from India. It earned a net profit of Mexican Peso 0.17 million (equivalent to ''0.06 crore) for the year ended December 31,2020.
Parry America Inc. is primarily engaged in the sale of bio-pesticides in America. It made a net profit of USD 1.58 million (equivalent to ''11.71 crore) for the year ended March 31, 2021.
xii Coromandel International (Nigeria) Limited (CINL):
Coromandel International (Nigeria) Limited is engaged in getting product registrations in Nigeria and procuring orders for supplies from India. It made a net profit of Naira 7.62 million (equivalent to ''0.16 crore) for the year ended December 31, 2020.
xiii Coromandel Mali SASU (CMS):
Coromandel Mali SASU (CMS) was incorporated on February 04, 2020 as a Wholly Owned Subsidiary (WOS) of the Company for the purpose of obtaining registration for marketing of agrochemicals. CMS is registered with Ministry in Charge of Statistics, Republic of Mali and is yet to commence its business operations.
xiv Coromandel SQM (India) Private Limited (CSQM):
CSQM, a joint venture between Coromandel and Soquimich European Holding (SQM), Chile. CSQM manufactures Water Soluble Fertilisers (WSF) at Kakinada, Andhra Pradesh and offers Speciality Nutrition Solutions to institutional clients. Total
income for the year was ''51.12 crore and the net profit was ''1.8 crore.
During the year, Coromandel acquired 50,00,000 equity shares of ''10 each constituting 50% of the total share capital of CSQM for a consideration of ''12 Crores. Consequently, CSQM has now become a wholly owned subsidiary of the Company, with effect from August 24, 2020.
Joint Venture Company
Brief details of the performance of the Joint Venture (JV)
company is given below:
i Yanmar Coromandel Agrisolutions Private Limited (YCAPL):
YCAPL, a Joint Venture company between Coromandel, Yanmar, and Mitsui, is in the business of sales and service of agri-tech equipment focussed on farm mechanization in India. YCAPL''s Combine Harvester has been consolidating its position as amongst the market leaders in India. Total income for the year was ''145.95 crore and the net profit was ''13.28 crore.
Associate Company
Brief details of the performance of the Associate
company is given below:
i Sabero Organics Philippines Asia Inc (SOPA):
SOPA, an associate company, is based in Philippines and did not have any significant operations during the year 2020-21.
Strategic Investment:
Brief details of the performance of the Strategic
Investment companies are given below:
i. Tunisian Indian Fertilisers S.A., Tunisia (TIFERT):
TIFERT, a company based in Tunisia, manufactures phosphoric acid which is a key raw material for operating Phosphatic Fertiliser plants. Your Company''s strategic investment in TIFERT (15% equity) is aimed at securing an uninterrupted supply of phosphoric acid for the Company''s operations at Kakinada and Visakhapatnam. During the year, TIFERT operations were impacted by the pandemic and other social and technical issues. Indian partners, Coromandel and GSFC, continue to provide necessary technical support to TIFERT to improve the plant performance.
ii. Foskor (Pty) Limited, South Africa (Foskor):
Your Company, along with CFL Mauritius Limited, holds 14% equity in Foskor. Foskor supplies high-quality phosphoric acid, which is used for phosphatic fertiliser manufacturing at Kakinada and Ennore plants of your company. The performance of Foskor was affected during the year due to the disruptions caused by the Covid pandemic that resulted in lower
capacity utilization. Your Company is working with the Foskor team on a business turnaround plan and is providing technical assistance for improving acid production and plant efficiency.
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report. The Company has formulated a Risk Management Policy, under which various risks associated with the business operations are identified and risk mitigation plans have been put in place, details of which are set out in the Management Discussion and Analysis Report.
9. Internal Financial Control Systems and their adequacy
The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.
The Company has its own corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Controls and System across all key processes covering various locations. Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any, are reported to the Board.
10. Related Party Transactions
All related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are foreseen and are repetitive in nature. The related party transactions entered into by the Company are reviewed by independent chartered accountants to confirm that they were in the ordinary course of business and at arm''s length basis. Related party transactions entered during the financial year under review are disclosed in Notes to the financial statements of the Company for the financial year ended March 31, 2021. Form AOC-2 will not form part of Board''s report, as all the transactions with related parties are in arm''s length basis and in ordinary course of business. The Policy on Related Party Transaction is available on the Company''s website at https://coromandel.biz/pdf/2020-2021/InvestorsInformation/PoliciesAndCodes/ PolicvOnRelatedPartvTransactions 2020.pdf
None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration, sitting fee and commission.
1 1 . Auditorsa) Statutory Auditors and their report
M/s. Deloitte Haskins & Sells (DHS), Chartered Accountants, have been the statutory auditors of the Company since 2011-12. The existing term of DHS as statutory auditors will expire at the conclusion of the ensuing Annual General Meeting of the Company and they are not eligible for re-appointment in terms of provisions of Section 139(2) of the Companies Act, 2013 (Act).
Accordingly, in terms of the provisions of Section 139 of the Companies Act, 2013, the Company is required to appoint new statutory auditors. Based on the recommendation of the Audit Committee, the Board of Directors have recommended the appointment of M/s. S.R. Batliboi & Associates LLP (Reg. No. FRN 101049W/E300004) as the Statutory Auditors of the Company to hold office from the conclusion of this 59th Annual General Meeting until the conclusion of the 64th Annual General Meeting of the shareholders of the Company at a remuneration of ''75,00,000 (Rupees Seventy-Five Lakhs Only) for the financial year 2021-22, subject to the approval by the shareholders pursuant to applicable laws. A resolution seeking approval of the shareholders for the appointment of Statutory Auditors is included in the Notice convening the ensuing Annual General Meeting.
M/s. S.R. Batliboi & Associates LLP have confirmed their eligibility under Section 141 of the Act and the Rules framed thereunder for their appointment as Statutory Auditors. Further, as required under Regulation 33 of the Listing Regulations, they have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Auditor''s Report given by DHS on the financial statements of the Company for the year ended March 31,2021 forms part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors had not reported any matter under Section 143(12) of the Act. Therefore no disclosure is required in terms of Section 134(3)(ca) of the Act. As required under Regulation 33 of the Listing Regulations, DHS have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Board of Directors take the opportunity to place on record its sincere appreciation for the contribution and services rendered by DHS, its partners and managers during their tenure as the Statutory Auditors of the Company.
b) Cost Auditors and their report
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Company is required to maintain cost accounting records in respect of certain specified products of the and accordingly such accounts and records are made and maintained in the prescribed manner. Further, the cost accounting records maintained by the Company are required to be audited.
For the financial year 2020-21, M/s. Narasimha Murthy & Co., and Mrs. Jyothi Satish were appointed as Cost Auditors. On the recommendation of the Audit Committee, the Board has re-appointed M/s. Narasimha Murthy & Co., Cost Accountants and Mrs. Jyothi Satish, Cost Accountant as Cost Auditors for auditing the cost records of the Company for the financial year 2021-22.
The Act mandates that the remuneration payable to the Cost Auditor is ratified by the shareholders. Accordingly, a resolution seeking the shareholders'' ratification of the remuneration payable to the Cost Auditors for the FY 2021-22 is included in the Notice convening the 59th Annual General Meeting.
During the year, the Company filed the Cost Audit Report for the financial year 2019-20 with the Ministry of Corporate Affairs within the prescribed time limit.
c) Secretarial Auditor and their report
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2020-21.
The report of the Secretarial Auditor is enclosed as Annexure B and forms part of this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
In terms of Regulation 24A of the Listing Regulations, there is no material unlisted subsidiary incorporated in India. Material unlisted subsidiary for the purpose of this Regulation is a subsidiary whose income/ net worth exceeds 10% of the consolidated
income/net worth respectively of the Company and its subsidiaries in the immediately preceding accounting year. Hence, there is no requirement of a secretarial audit for any of the Company''s subsidiaries in India.
12. Particulars of Loans, Guarantees and Investments
Details of loans and guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements.
The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act read with Companies (Acceptance of Deposits) Rules, 2014 and no amount of principal or interest was outstanding as on the Balance Sheet date.
14. Board and Committeesa) Board of Directors
Your Company is managed and controlled by a Board comprising an optimum blend of Executive and Non-Executive Directors. As on March 31, 2021, the Board of Directors comprised of ten (10) Directors consisting of a Managing Director, Executive Vice Chairman and eight (8) Nonexecutive Directors, out of which five (5) Directors are Independent Directors, including one Woman Director. The composition of the Board is in conformity with Regulation 17 of Listing Regulations and the relevant provisions of the Act. The Directors possess requisite qualifications and experience in general corporate management, strategy, finance, engineering, information technology and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company.
Declarations from all Independent Directors have been received confirming that they meet the criteria of independence as prescribed under Section 149(6) read with Schedule IV to the Act as well as Listing Regulations and the same were taken on record by the Board.
Dr. B.V.R. Mohan Reddy stepped down as Director from the Board of the Company w.e.f. October 12, 2020 on attaining the age of 70 years.
Mr. M M Murugappan, upon turning 65 years of age and with a desire to devote time to philanthropic activity and other interests, stepped down from the Board of the Company as Chairman and Director with effect from close of business hours on November 11, 2020.
Mr. V. Ravichandran stepped down from the Board of the Company as Vice Chairman and Director with effect from close of business hours on November 11, 2020.
The Board placed on record its appreciation of the significant contribution made and valuable services rendered by Dr. B.VR. Mohan Reddy, Mr. M M Murugappan and Mr. V. Ravichandran during their tenure.
Mr. A Vellayan was appointed as Additional Director of the Company with effect from November 11, 2020, and was also elected as Chairman of the Board with effect from November 12, 2020.
Mr. Arun Alagappan was appointed as Additional Director of the Company with effect from November 11, 2020 and subsequently appointed as Wholetime Director of the Company for a period of 5 (Five) years with effect from February 15, 2021. Mr. Alagappan was also elected as Vice Chairman, and designated as Executive Vice Chairman, with effect from February 15, 2021 by Board of Directors.
Mr. Ramesh K.B. Menon was appointed as Additional Director of the Company with effect from November 11, 2020.
The Company has received notice from a member under Section 160 of the Act proposing the nomination of Mr. A Vellayan, Mr. Arun Alagappan and Mr. Ramesh K.B. Menon as Directors of the Company at the ensuing Annual General Meeting. The proposal for the appointment as Directors is included in the Notice convening the 59th Annual General Meeting for consideration and approval by the shareholders.
Consequent to the changes in the Board composition, the Committees of Board were also reviewed and re-constituted, the details of which are in the Corporate Governance section of the Report.
In accordance with Article 17.29 of the Company''s Articles of Association, read with Section 152 of the Act, Mr. M M Venkatachalam retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
b) Evaluation of the Board''s performance
In accordance with the provisions of Section 134 of the Act and Regulation 17 of the Listing Regulations, the Board has carried out evaluation of its own performance, the performance of Committees of the Board, namely, Audit Committee, CSR Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination and Remuneration Committee and also the Directors individually.
The manner of evaluation of performance and the process adopted for the purpose are explained in the Corporate Governance Report.
c) Board Meetings
Annual calendar of Board meetings is prepared and circulated to the Directors in advance. During the financial year 2020-21, seven (7) Board Meetings were held, the details of which are given in the Corporate Governance Report.
d) Audit Committee
The Audit Committee comprises of Mr. Sumit Bose, Chairman, Ms. Aruna B. Advani, Member, Mr. K V Parameshwar, Member, Mr. Prasad Chandran, Member, and Mr. Arun Alagappan, Member. Consequent to the changes in the composition of the Board, the committee was reconstituted with effect from December 1, 2020. During the year, five (5) meetings of the Audit Committee were held, the details of which are provided in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
e) Familiarisation Programmes for Independent Directors
The Company''s independent directors are eminent professionals with several decades of experience in banking and financial services, technology, finance, governance and management areas and are fully conversant and familiar with the business of the Company.
The Company has an ongoing familiarisation programmes for all Independent directors with regard to their roles, duties, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company, etc.
The Independent Directors, on their appointment, are familiarised about the Company''s operations and businesses. Interaction with the senior leadership team (Business Heads and key executives) of the Company is also facilitated. Detailed presentations on the business of each of the Division are made to the Directors from time to time. A manual containing all important policies of the Company is given to the Directors. Meetings with the Chairman and the Managing Director are facilitated for the new appointee to familiarise him/ her about the Company, its businesses and the practices and policies of the Group.
As part of the familiarisation programme, a handbook is provided to all the Directors including Independent Directors at the time of their appointment. The handbook provides a snapshot to the Directors of
their duties and responsibilities, rights, appointment process and evaluation, compensation, board procedure, and stakeholders'' expectations. The handbook also provides the Directors with an insight into the Group''s practices. Further, periodic emails are sent to all the Directors covering events that may have an impact on the business of the Company and/ or the agriculture sector in general and, fertiliser and crop protection industries, in particular. The details of the familiarisation programme as above are also disclosed on the Company''s website.
All the Independent Directors of the Company have registered their names in the Independent Directors Databank as required under the Act and the Rules referred therein. The Independent Directors are also required to take up an online proficiency selfassessment test within two years from the date of inclusion of their name in the Independent Directors databank, unless exempted from such requirement, under the Act and the Rules referred therein.
f) Directors'' Responsibility Statement
As required pursuant to the provisions of Section 134(3)(c) and 134(5) of the Act , the Directors'' Responsibility Statement is enclosed as Annexure C to this Report and forms part of the Report.
Mr. Arun Alagappan, Executive Vice Chairman, Mr. Sameer Goel, Managing Director, Mrs. Jayashree Satagopan, Chief Financial Officer and Mr. Rajesh Mukhija, Company Secretary, are the Key Managerial Personnel of the Company.
During the year, Mr. P Varadarajan, Company Secretary, retired from the services of the Company with effect from August 31,2020 and Mr. Rajesh Mukhija, was appointed as Company Secretary with effect from September 1,2020.
a) Remuneration Policy
On the recommendation of the Nomination and Remuneration Committee, the Board has, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Salient features of the Remuneration Policy are set out in the Corporate Governance Report. The Remuneration Policy is available on the Company''s website at https://coromandel.biz/pdf/2020-2021/InvestorsInformation/PoliciesAndCodes/ RemunerationPolicy 2020.pdf
b) Policy on prevention, prohibition and redressal of Sexual Harassment at workplace
The Company has in place Prevention of Sexual Harassment Policy (POSH) in line with the requirements of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy. During the financial year 2020-21, no incidents of sexual harassment was reported.
The disclosure with respect to remuneration as required under Section 197 of the Act read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure D to this report.
The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. However, the annual report is being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.
e) Employee Stock Option Plans
Employee Stock Option Scheme 2007 -
ESOP 2007
The Company had in the past, approved an Employee Stock Option Scheme 2007 (ESOP Scheme 2007), under which employees were granted Options. The Company made grants under the said Scheme during the period from 2007 to 2011. There were no vested Options outstanding at the end of the financial year and there will be no grants under the ESOP Scheme 2007.
Employee Stock Option Plan - ESOP 2016
The Shareholders had, through Postal Ballot, on January 11,2017 authorised the Board/ Nomination and Remuneration Committee to issue to the employees, such number of Options under the ESOP 2016, as would be exercisable into not exceeding 1,45,81,000 fully paid- up equity shares of '' 1 each in the Company. The Nomination and Remuneration Committee, is empowered to formulate detailed terms and conditions of the ESOP 2016, administer and supervise the same. The specific employees to whom the Options would be granted and their eligibility criteria would be determined by the Nomination and Remuneration Committee at its sole discretion. Further, the Nomination
and Remuneration Committee is empowered to determine the eligible subsidiary companies, whether existing or future, whose employees will be entitled to stock options under ESOP 2016. Options granted under ESOP 2016 would vest on or after 1 (one) year from the date of grant but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee. The Company has granted 2,13,400 options to the employees during the year under the ESOP 2016. The number of Options vested and outstanding as at the year-end were 9,68,110. The disclosure required to be made under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company at https://coromandel.biz/ inv financial.html
In accordance with Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2021, is available on the website of the Company at https://coromandel.biz/
18. Vigil Mechanism/ Whistle Blower Policy
The Company has a Whistle Blower Policy which provides the employees, customers, vendors and directors an avenue to raise concerns on ethical and moral standards and compliance with legal provisions in conduct of the business operations of the Company. It also provides for necessary safeguards for protection against victimization for whistle blowing in good faith. The Vigil Mechanism is also placed on the website of the Company at https://coromandel.biz/inv financial.html
19. Conservation of energy, technology absorption, foreign exchange earnings and outgo.
The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed under sub-section (3)(m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure E to this Report and form part thereof.
20. Corporate Social Responsibility
The Murugappa group is known for its tradition of philanthropy and community service. The group''s philosophy is to reach out to the community by establishing service-oriented philanthropic institutions in the field of education and healthcare as the core focus areas. The Company upholds the group''s tradition by earmarking a part of its income for carrying out its social responsibilities.
The Company has been carrying out corporate social responsibility (CSR) activities for many years now even before it was mandated under the Act. The Company has put in place a CSR policy, which is available on the
website of the Company at https://coromandel.biz/csr policy.html.
As per the provisions of the Act, the Company is required to spend at least 2% of the average net profits of the Company made during the three immediately preceding financial years. This amount aggregated to ''23.22 crores. The Company, however, spent '' 23.01 crores towards CSR activities during the financial year 2020-21.
Details of composition of the CSR Committee and the CSR Projects undertaken during the year are given in the Annual Report on CSR Activities, which is appended as Annexure F to this Report.
In addition to the above CSR expenditure, the Company also contributed ''5 crores to PM CARES Fund, ''2 crores to Andhra Pradesh Chief Minister Relief Fund, ''1 crores to Telangana Chief Minister Relief Fund ''2 crores to Gujarat Chief Minister Relief Fund, and ''2 crores to Other COVID-19 Relief Fund during the year 2020-21.
21. Health, Safety, and Environment (HSE)
Your Company gives high priority to Health, Safety, and Environment (HSE) and has formulated a policy to operate the facilities safely, efficiently and in an environmentally responsible manner. Your Company has put in robust processes and established safety performance indicators to track its HSE performance. Employees are consistently encouraged to raise safety concerns and these inputs are periodically monitored and actioned. The Company has carried out Safety Culture survey for the third consecutive year for fertilizer and Safety perception survey for CPC and an overall improvement in performance has been observed. The process safety management enhancement is being sustained by successfully rolling out the five enablers for process safety management across the fertilizer facilities, engaging Prism consultant and developing framework for process safety culture in the manufacturing sites of CPC through Dupont sustainable solution and MS Chola. Technical safety audits of Ammonia facilities at fertilizer business were carried out engaging Thyssenkrupp Industrial Solutions (India) and action on recommendations are being implemented. All facilities of Fertiliser & Single Super Phosphate (SSP) business and three facilities (Sarigam, Dahej, and Ankleshwar) of Crop Protection Chemical Plants (CPC) successfully migrated to the new standard "ISO 45001 - OH&S Management Systemsâ and got certified in 202021.
During the year, the combined Total Recordable Injury Rate (TRIR) per million-man hours stood at 0.85 for Fertilizer & SSP business and 0.91 for CPC. All key manufacturing sites continued with the phase-2 of structural integrity upgrading program to mitigate asset integrity risks, which has been audited and ratified by competent third party. As part of emergency
preparedness gap study of fire protection systems has been carried out and upgradation of fire protection systems across fertilizer & SSP business has been taken up. The fire systems at Dahej and Ankleshwar sites were also upgraded. The fertilizer facilities have carried out fleet management study to improve internal road safety and have established the action plan.
Your Company''s commitment towards environmental sustainability remains firm. Fertiliser, SSP & CPC business units have made combined submission for plastic waste management to CPCB and entered into agreement with competent recyclers. The Company has completed the plantation of around 1,45,000 saplings under flagship programme of Government of Andhra Pradesh known as "Green Visakaâ and further planned 80,000 saplings in the year 2021. In addition, around 9,020 saplings were planted and maintained under TERIs bioremediation mycorrhiza Technology at Visakhapatnam unit. Across the SSP plants the green coverage has been increased by planting additional 2,029 saplings covering 8,983 sqm. New HDPE lining of 10 acres was completed along the gypsum ponds of Visakhapatnam and 2.25 acres at Ennore, for gypsum storage. The plants continue to improve water efficiency by recycling and Zero Liquid Discharge (ZLD) programmes.
CPC sites also implemented green initiatives, through philosophy of 3Rs - Reduce the landfilling waste, Recycle the Multi Effect Evaporator condensate in process, Reuse of raw materials and ingredients. At Ankleshwar plant, external green belt for 15,597 Sqm is planned to be completed in the year 2021.
Visakhapatnam unit was awarded CII National Excellent Energy Efficient Unit 2020. Hospet unit achieved CII EHS Excellence award from Southern Region and was rated 3 stars. Ranipet OHC (jointly with CPC division) has been awarded by Dr. C. K. Ramachandran award for the Year 2020-21 by the Indian Association of Occupational Health, Tamil Nadu Branch. Ankleswar and Dahej plants won QCF (Quality Circle Forum of India -Gujarat Chapter) awards for various Safety and health environment projects.
During Covid-19 Pandemic lockdown, your Company has ensured safe plant shutdown and start up at all manufacturing sites and continues to sustain all efforts in current pandemic situation.
Your Company is continuously striving for occupational health and safety, and to protect the environment.
The Company is committed to maintain the highest standards of Corporate Governance. As stipulated under the Listing Regulations, the Report on Corporate Governance is appended as Annexure G to this Report. The requisite certificate from the Auditor confirming compliance with the conditions of Corporate Governance
by the Company is also attached to the Report on Corporate Governance.
23. Management Discussion & Analysis
The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns, etc., is provided separately in the Annual Report and forms part of this Directors'' Report.
24. Business Responsibility Report
Pursuant to Regulation 34 of Listing Regulations, the Company has prepared the Business Responsibility Report in line with the business principles as provided in the Business Responsibility Policy adopted by the Company. Business Responsibility Report is enclosed as Annexure H to this Report and the same is also available on the website of the Company at https://coromandel. biz/inv report.html
a) Share Capital
The paid-up equity share capital of the Company as on March 31, 2021 was ''29.33 crore. During the year, the Company has allotted 4,24,930 equity shares of ''1 each under ESOP Scheme 2007 (2,150 shares) and under ESOP 2016 (4,22,780 shares).
b) Material Subsidiary Policy
The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Regulations. The Policy on Material Subsidiary is available on the website of the Company at https://coromandel.biz/pdf/2020-2021/InvestorsInformation/PoliciesAndCodes/ PolicyOnMaterialSubsidiaries 2020.pdf
c) Compliance of Secretarial Standards
The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government.
d) Reporting of Frauds
There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.
e) Significant and material orders passed by regulators or courts
There are no significant material orders passed by the Regulators or Courts which would impact the going concern status of the Company and its future operations.
f) Insolvency and Bankruptcy Code
There are no applications made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.
g) Onetime settlement with any Bank or Financial Institution
No disclosure or reporting is required in respect of the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
26. Banks and financial institutions
Your Company is prompt in making the payment of interest and repayment of loans to the financial institutions / banks. During the COVID-19 Pandemic period, it has not availed any moratorium on any of its payments to the institutions. Banks and Financial Institutions continue their unstinted support in all aspects and the Board records its appreciation for the same.
Your Directors wish to express their grateful appreciation for the valuable support and co-operation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of the Government of India, as well as the State Governments, the farming community and all our other stakeholders.
The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results.
The Directors deeply regret the loss of life caused due to the outbreak of COVID-19 and are grateful to every person who risked their life and safety to fight this pandemic.
On behalf of the Board of Directors
Place : Chennai A Vellayan
Date : April 29, 2021 Chairman
Mar 31, 2019
DIRECTORS'' REPORT
Dear Members,
Your Board of Directors have pleasure in presenting the 57th Annual Report together with the Audited Financial Statements for the financial year ended 31 March, 2019.
1. Summary of Financial Results
Rs In crores
Your Company''s Revenue from Operations for the year grew to Rs 13,204 crores from Rs 11,109 crores last year registering a growth of 19% year on year (YoY). The Profit before Interest, Depreciation and Taxation grew to Rs 1,450 crores from Rs 1,305 crores in the previous year. The Net Profit for the year grew to Rs 714 crores from Rs 685 crores in the previous year i.e. an increase of 4% YoY. EBITDA margin declined 77 basis points to 11 % in 2018-19 over 2017-18 and PAT margin declined 76 basis points to 5% in 2018-19 over 2017-18. The Earnings per share (EPS) for the year stood at Rs 24.41 per share, an increase of 4% compared to Rs 23.44 per share for the previous year.
Your Company proposes to transfer an amount of Rs 300 crore to the General Reserves and retain Rs 989 crore in the Statement of Profit and Loss.
2. Business Environment
During the year, India received below normal South West monsoon (91 percent of long period average).
Your Company''s key South Peninsular markets of Telangana, Coastal Andhra and South Interior Karnataka received normal rains that resulted in improved agri input consumption during Kharif season. However, deficit North East monsoon (56 percent of long period average) affected the Rabi season crop sowing. Overall, food grain production for the year is expected to come down marginally by 1 percent to 281 million tons.
During the year, income support schemes like increasing the minimum support price of crops to 1.5 times the cost of production, Raythu Bandhu, PM-KISAN, etc. were introduced. To ensure remunerative prices to the farmers for their produce, MSP-based deficiency payment scheme PM-ASHAA was launched. Major irrigation projects in your Company''s key markets of Telangana and Andhra are progressing well and are expected to improve agriculture prospects of these States.
Direct Benefit Transfer (DBT) in fertiliser has been fully implemented and stabilised during the year. The Indian fertiliser industry in collaboration with Department of Fertilizers can proudly claim to be amongst the early adopters of technology/ data revolution, connecting the production, distribution and consumption cycles digitally, bringing transparency and reducing supply side volatility across the system. From industry''s perspective, companies have started to align their production cycle closer to the consumption period. Companies are strengthening their infrastructure and field presence and so far adapted well in meeting the farmer''s nutrient demand.
During the year, the GST Council revised the GST rate on Fertiliser grade phosphoric acid from 12 percent to 5 percent. This has largely addressed the issue related to the inverted duty structure and subsequent credit accumulation for the domestic phosphatic fertiliser industry. Further, the refund claim generation and disbursement process under GST has been fully stabilised.
There has been a good amount of activity in the agri technology space in India and globally. Sensors, imagery, mechanisation, protected agriculture, micro-irrigation, advisory, and crop diagnostics, etc. are being widely used in developed markets and is fast catching up in India as well. To meet the customer needs, the companies are increasingly packaging the products as a service, thereby engaging with the farmer throughout the agri value chain.
3. Performance Review
Your Company had a resilient performance during the year, gaining significant market share and improving its customer reach. This was despite deficit North East monsoon, which impacted the sowings and agri input consumption in the Company''s key markets.
Company''s mission to enhance the prosperity of the farmers through quality farm solutions with sustainable value for all stakeholders remains central to its actions. During the year, your Company has carried out pilot trials utilising upcoming agri technologies for offering crop diagnostics and application services. The Company has strengthened its R&D, product development and registration capabilities, and during the year introduced ten new products in nutrient and crop protection businesses. It has established some key partnerships in the areas of research, technology, sourcing, and marketing to meet its future growth aspirations. Agronomists and integrated marketing structure have improved its farm-level interventions and consumer connect initiatives, promoting sustainable agricultural practices. Your Company continued to invest and augment its infrastructure for improving its efficiencies and operational flexibility.
|
2018-19 |
2017-18 |
|
|
Revenue: |
||
|
From Operations |
13,204 |
11,109 |
|
Other Income |
36 |
59 |
|
Total Revenue |
13,240 |
11,168 |
|
Profit: |
||
|
Profit before Interest, Depreciation and Taxation |
1,450 |
1,305 |
|
Less: Interest |
251 |
178 |
|
Depreciation |
113 |
99 |
|
Profit Before Tax |
1,086 |
1,028 |
|
Less: Provision for Tax (including deferred tax) |
372 |
343 |
|
Profit After Tax |
714 |
685 |
Fertiliser
Your Company''s Phosphatic fertiliser sales volumes grew by 10 percent to 30.3 lakh tons. The Business has registered growth across all its markets, improving its market share to 16.3 percent. It continued its focus on building differentiation through value-added, unique product offerings and market development through integrated nutrient and agronomis tteams.
Phosphatic fertiliser plants operated at 85 percent of the capacity, up from 83 percent a year ago. The brownfield expansion project of the Phosphoric Acid facility at Vishakhapatnam is on track and is likely to be commisioned in 2019. With this, the Vishakhapatnam unit will become self-sufficient for its phosphoric acid needs. Safety remained a key focus area and the Business carried out Quantitative risk assessment, safety surveys and structural strengthening across its major manufacturing units.
Business is actively engaging with research institutions like IIT Bombay - Monash University and Tamil Nadu Agriculture University, for new product development. Further, it is closely working on developing the team''s capability. During the year, your Company initiated ''Manufacturing Centre of Excellence'' at its plant in Kakinada and ''Sales Force Academy'' at National Academy of Agricultural Research Management (NAARM), Hyderabad.
Crop Protection
Crop Protection business registered a top-line growth of 8%, driven by higher exports and domestic formulation performance. The business introduced five new products during the year, including two in-house patented combination molecules. These have received very encouraging response from the market. During the year, business carried out strategic sourcing tie-ups and co-marketing arrangements with partner companies.
The integration of Bio Pesticide business has supported its expansion into complementary product segments and geographies. Your Company is presently the largest player in neem seed extract-based ''Azadirachtin'' segment. With increased consumer consciousness and strict environmental norms, the Biologicals are becoming a high growth area.
Business is in the process of building a strong product pipeline for future product launches. Towards this, Product development and registration, technology transfer and R&D teams were strengthened during the year. On the
manufacturing side, safety and quality processes are being firmed up to improve the sustainability of the plant operations. The business is developing capacities and pilot facilities for new product manufacturing, along with Mancozeb capacity expansion at Dahej, Gujarat.
Retail
The retail business registered a marginal growth, driven by its fertiliser sales. Its key Rayalaseema and North Interior Karnataka markets were impacted by two consecutive deficit monsoon seasons that impacted the crop acreages. Overall, Business continued to strengthen its customer value proposition of ''Quality, Trust and Farm Advice''.
Business is in the process of leveraging technology solutions to improve its customer connect initiatives and product delivery mechanisms. During the year, it has piloted drone-based crop diagnostics and farm advisory solutions. It expanded its farm mechanisation offerings through the Custom Hiring and Service Centres and introduced paddy harvester. People processes and skill development initiatives including certification of employees under Diploma in Agricultural Extension Services for Input Dealers (DAESI) program have progressed well during the year.
Speciality Nutrients
Speciality Nutrients business continued its focused product approach. Technologically superior unique products and crop-based solutions have helped the business in driving its sales during the year. Two new products were introduced during the year, which have been well received by the farming community. Agronomists and Integrated Nutrient Teams have well supported the business in expanding its concept-based marketing approach. Further, the Business has partnered with multiple players across the agri value chain to improve its connect with the farmers. With increased focus on water conservation, nutrient uptake efficiency and soil health, Speciality Nutrient business is likely to witness significant growth in the coming years.
Organic Manure
During the year, Organic volumes came down by 10% to 1.3 lakh tons, as its key markets were affected by deficit monsoons. Business continued its focus on promoting differentiated variants and strengthened its sourcing capabilities and quality assurance systems. Its captive facility at Vishakhapatnam, which converts municipal waste into City Compost, has been fully stabilised.
Single Super Phosphate (SSP)
SSP sales for the year have gone up by 9 percent to 5.7 lakh tons, with the major increase coming from differentiated (fortified and granulated) product segments. Two new products launched during the year have generated significant interest from the farming community. During the year, the Government''s policy intervention mandating the sale of SSP in the manufacturer''s brand names has helped the quality-focused players like your Company in developing product awareness. Business continued to create quality consciousness among the farmers and during the year carried out around 800 quick tests. As Government targets to achieve self-sufficiency in oilseeds and pulses production, SSP is ideally suited to meet the crop''s nutrient requirements and support ''Make in India'' initiative.
4. Finance
Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. Net Cash from operations for the year stood at Rs 513 crores. Your Company follows a prudent financial policy and aims at maintaining an optimum financial gearing. Your Company continues to be a long term debt free Company. Debt to Equity Ratio was 0.86 as on 31 March, 2019.
Your Company has been credit rated by CRISIL Limited and India Ratings & Research. The Company''s long term credit rating by ''CRISIL'' continued to be ''CRISIL AA (stable)'' and short term debt rating at ''CRISIL A1 ''. The Company''s long term credit rating by ''India Ratings & Research (A Fitch Group Company)'' continued to be ''IND AA (stable)'' and short term debt rating at ''IND A1 ''. This reflects a very high degree of safety regarding timely servicing of financial obligations and also a vote of confidence reposed in your Company''s fmancials.
5. Dividend
Your Directors are pleased to recommend a final Dividend of Rs 3.50 per equity share Rs 1/- each. Your Board had earlier approved an interim dividend of Rs 3/- per equity share at its meeting held on 21 January, 2019 and same was paid on 06 February, 2019. The total dividend for the year ended 31 March, 2019 would accordingly be Rs 6.50 per equity share of Rs 1/- each. The total outgo for the year would be Rs 229 crore, including dividend distribution tax of Rs 39 crore.
The Company has adopted Dividend Distribution Policy in line with the requirements of Listing Regulations. The Dividend Distribution Policy is available on the website of the Company at https://coromandel.biz/pdf/2016-201II Investorslnformation/DividendDistributionPolicy.pdf
6. Consolidated Financial Results
Consolidated Financial Statements incorporating the operations of the Company, its Subsidiaries, Associates and Joint Venture Companies is appended. As required under the provisions of the Companies Act, 2013 (the Act), a statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures is enclosed as Annexure A to this Report.
The financial statements of the subsidiary companies will be made available to the members of the Company and its subsidiary companies on request and will also be kept for inspection at the Registered Office of the Company.
7. Subsidiary Companies:
Brief details of the performance of the subsidiaries of the Company are given below:
a) CFL Mauritius Limited:
CFL Mauritius Limited, a wholly owned subsidiary, incurred a loss of $ 0.04 million (equivalent to Rs 0.27 crore) during the year ended 31 December, 2018. Primary source of income for this subsidiary is dividend income from Foskor (Pty) Ltd. and the subsidiary did not receive any dividend from Foskor during the year 2018.
b) Parry Chemicals Limited (PCL):
PCL, a wholly owned subsidiary of the Company, earned a total revenue of Rs 0.93 crore for the year ended 31 March, 2019 and Profit after Tax was Rs 0.18 crore.
c) Dare Investments Limited (OIL):
DIL, a wholly owned subsidiary of the Company, did not have any significant operations and incurred a loss of Rs 0.02 crore for the year ended 31 March, 2019.
d) Liberty Pesticides and Fertilisers Limited (LPFL):
LPFL, a wholly owned subsidiary of the Company, did not have any significant operations during the year 2018-19. It earned a profit of Rs 0.12 crore for the year ended 31 March, 2019.
e) Coromandel Brasil Limitada (CBL):
CBL, a Limited Liability Partnership, owned 100% by the Company and its subsidiary CFL Mauritius Ltd., is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It earned a profit of Brazilian Reals 0.05 million (equivalent to Rs 0.10 crore) for the year ended 31 December, 2018.
f) Sabero Organics America SA (SOAL)
SOAL is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It incurred a net loss of Brazilian Reals 0.25 million (equivalent to Rs 0.46 crore) for the year ended 31 December, 2018.
g) Sabero Australia Pty Ltd. (SAPL)
SAPL did not have any significant operations during the year 2018-19. It incurred a net profit of AUD 0.01 million (equivalent to Rs 0.07 crore) for the year ended 31 March, 2019.
h) Sabero Europe BV (SEBV)
SEBV is primarily engaged in getting product registrations in Europe and procuring orders for supplies from India. It did not have any significant operations during the year ended 31 May, 2018.
i) Sabero Argentina SA (Sabero Argentina)
Sabero Argentina is primarily engaged in getting product registrations in Argentina and procuring orders for supplies from India. It incurred a net profit of Argentine Peso 0.82 million (equivalent to Rs 0.21 crore) for the year ended 31 December, 2018.
j) Coromandel Agronegocios De Mexico SA de CV (Coromandel Mexico)
Coromandel Mexico is primarily engaged in getting product registrations in Mexico and procuring orders for supplies from India. It earned a net loss of Mexican Peso 0.07 million (equivalent to Rs 0.03 crore) for the year ended 31 December, 2018.
k) Parry America, Inc.
Parry America, Inc is primarily engaged in the sale of bio-pesticides in America. It made a net profit of USD 0.48 million (equivalent to Rs 3.29 crore) for the year ended 31 March, 2019.
I) Coromandel International (Nigeria) Limited (CINL)
CINL is engaged in getting product registrations in Nigeria and procuring orders for supplies from India. It made a net loss of Naira 1.96 million (equivalent to Rs 0.04 crore) for the year ended 31 December, 2018.
Joint Venture Companies
Brief details of the performance of the Joint Venture (JV) companies of the Company are given below:
a) Coromandel SQM (India) Private Limited (CSQM)
CSQM, a joint venture between Coromandel and SQM Chile, manufactures Water Soluble Fertilisers (WSF) at Kakinada, Andhra Pradesh and offers Speciality Nutrition Solutions to institutional clients. During the year, the JV launched two new crop specific WSF products ''Ultrasol Solanaceae'' and ''Speedfol Chilli'' which have received encouraging response from the customer. Total income for the year was Rs 75.97 crore for the year ended 31 March 2019 and the net profit was Rs 2.04 crore.
b) Yanmar Coromandel Agrisolutions Private Limited (YCAPL)
YCAPL, a Joint Venture Company between Coromandel, Yanmar and Mitsui, is in the business of sales and service of agri-tech equipment focussed on farm mechanisation in India. Combine Harvester introduced in the market last year has received positive response from the customers. Total income for the year was Rs 57.96 crore and the net profit was Rs 0.32 crore.
Associate Company
a) Sabero Organics Philippines Asia Inc (SOPA)
SOPA, an associate company, is based in Philippines and did not have any significant operations during the year 2018-19.
Strategic Investment:
a) Tunisian Indian Fertilisers S.A., Tunisia (TIFERT):
TIFERT, a company based in Tunisia, manufactures phosphoric acid which is a key raw material for operating Phosphatic Fertiliser plants. Your Company''s strategic investment in TIFERT (15% equity) is aimed at securing uninterrupted supply of phosphoric acid for Company''s operations at Kakinada and Visakhapatnam. During the year, TIFERT improved its performance in production of phosphoric acid. Indian partners, Coromandel and GSFC, continued to provide necessary technical support to TIFERT to improve the plant performance.
b) Foskor (Pty) Limited, South Africa (Foskor):
Your Company, along with CFL Mauritius Limited, holds 14% equity in Foskor. The profitability of Foskor was affected during the year due to various operational issues and increase in input costs, resulting in lower capacity utilisation. Foskor management, in consultation with IDC, the major shareholder in Foskor, is working on restructuring its operations and is evaluating various options. IDC has provided funding support to Foskor to manage the liquidity problem. During the year, your Company has also funded Foskor to the tune of Rs 17.90 crore as preference share capital. Your Company is engaged with Fosk or for providing technical support, as and when required, for running the plant efficiently.
8. Risk Management Policy
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report.
The Company has formulated a Risk Management Policy, under which various risks associated with the business operations are identified and risk mitigation plans have been put in place, details of which are set out in the Management Discussion and Analysis Report.
9. Internal Financial Control Systems and their adequacy
The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.
The Company has its own corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Controls and System across all key processes covering various locations. Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any are reported to the Board.
10. Related Party Transactions
All related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are foreseen and are repetitive in nature. The related party transactions entered into are reviewed by an independent audit firm to confirm that they were in the ordinary course of business and at arm''s length basis. The Policy on Related Party Transaction is available on the Company''s website at https:// coromandel.biz/pdf/201 8-201 9/Investors Inform at ion/ PoliciesAndCodes/PolicyOnRelatedPartyTransactions 2019. J2df
None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration, sitting fee and commission.
11. Auditor''s
a) Statutory Auditor''s
M/s. Deloitte Haskins & Sells (DHS), Chartered Accountants, were appointed as Auditors of the Company for a period of 5 years from the conclusion of the AGM held on 23 July, 2014 and their term of appointment would expire at the ensuing Annual General Meeting. DHS have been the Auditors of the Company since 2011-12. Considering the provisions of Section 139 of the Act, DHS can be appointed as Auditors for a further period of 2 years. DHS has given their consent for their re-appointment. A resolution proposing the re-appointment of DHS as auditors of the Company for a period of two years is being placed before the shareholders for their approval.
The Auditor''s Report given by M/s Deloitte Haskins & Sells, Statutory Auditor''s, on the financial statements of the Company for the year ended 31 March, 2019 is part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
b) Cost Auditors
Pursuant to Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules 2014, the cost records of the Company are required to be audited. For the financial year 2018-19, Mr. V Kalyanaraman and Mrs. Jyothi Satish were appointed as Cost Auditors. On the recommendation of the Audit Committee, the Board has appointed Narasimha Murthy & Co., Cost Accountants and Mrs. Jyothi Satish, a Practicing Cost Accountant, as Cost Auditors for auditing the cost records of the Company for the year 2019-20.
The Cost Audit Report for the year 2017-18 has been filed with Ministry of Corporate Affairs within the prescribed time limit.
c) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2018-19.
The report of the Secretarial Auditor is enclosed as Annexure B and forms part of this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
12. Particulars of Loans, Guarantees and Investments
Details of loans, guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements.
13. Public Deposits
The Company has not accepted any deposit from the public under Chapter V of the Act or under the corresponding provisions of Section 58A of the Companies Act, 1956, since 2003 and no amount of principal or interest was outstanding as on the Balance Sheet date.
14. Board and Committees a) Board of Directors
Your Company is managed and controlled by a Board comprising an optimum blend of Executive and Non-Executive Professional Directors. As on 31 March, 2019, the Board of Directors consists often (10) Directors consisting of Managing Director and nine (9) Non-executive Directors, out of which five (5) are Independent Directors including one Woman Director. The composition of the Board is in conformity with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and the relevant provisions of the Companies Act, 2013. The Directors possess requisite qualifications and experience in general management, strategy, finance, engineering, information technology and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company.
Declarations from all Independent Directors have been received confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and the Listing Regulations and the same have been considered and taken on record by the Board.
Ms. Aruna B. Advani was appointed as an Additional Director (Non-Executive, Independent) with effect from 30 August, 2018 and Dr. R Nagarajan and Mr. K V Parameshwar were appointed as Additional Directors (Non-Executive, Independent) with effect from 01 October, 2018. Brief profile of these Directors are mentioned in the Corporate Governance Report attached to this Report. The Board has recommended the appointment of Independent Directors for a period of five years at the ensuing Annual General Meeting of the Company. The Company has received notices from members under Section 160 of the Act proposing their nominations for Directorship at the ensuing Annual General Meeting.
Mr. Prasad Chandran was appointed as an Independent Director of the Company for a period of 5 years w.e.f. 23 July, 2014 and his current term ends on 22 July, 2019. Section 149 of the Act, provides that an independent Director shall hold office for a term up to two term on the Board of a company, but after expiry of first term of five years shall be eligible for reappointment on passing of a special resolution by the company. Board has recommended his reappointment as an Independent Director of the Company. Accordingly, a special resolution proposing the reappointment of Mr. Prasad Chandran as an Independent Director of the Company for a period from 22 July, 2019 to 20 April, 2022 is being placed before the shareholders for their approval.
Dr. B V R Mohan Reddy was appointed as an Independent Director of the Company for a period of 5 years w.e.f. 23 July, 2014. In view of the amendment made to Regulation 16 of the Listing Regulations regarding definition of Independent Director, Dr. B V R Mohan Reddy has been treated as Non-independent Director, effective 1 October, 2018 and continued as Director on the Board. His current term as Director ends on 22 July, 2019. Accordingly, a resolution proposing the appointment of Dr B V R Mohan Reddy, as Director of the Company liable to retire by rotation is being placed before the shareholders for their approval.
In accordance with Article 17.29 of the Company''s Articles of Association, read with Section 152 of the Act, Mr. V Ravichandran retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
b) Evaluation of the Board''s performance
In accordance with the provisions of Section 134 of the Act and Regulation 17 of the Listing Regulations, the Board has carried out evaluation of its own performance, the performance of Committees of the Board, namely, Audit Committee, CSR Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination and Remuneration Committee and also the Directors individually. The manner in which the evaluation was carried out and the process adopted has been mentioned in the Corporate Governance Report.
c) Board Meetings
A calendar of Board meetings is prepared and circulated in advance to the Directors. During the year 2018-19, five Board Meetings were held, the details of which are given in the Corporate Governance Report.
d) Audit Committee
The Audit Committee comprises of Mr. Sumit Bose, Chairman, Dr. B V R Mohan Reddy, Mr. Prasad Chandran, Mr. M M Venkatachalam, Ms. Aruna B. Advani and Mr. K V Parameshwar. All the recommendations made by the Audit Committee were accepted by the Board.
e) Familiarisation Programme for Independent Directors
On their appointment, Independent Directors are familiarised about the Company''s operations and businesses. Interaction with the Business Heads and key executives of the Company is also facilitated. Detailed presentations on the business of each of the Division are also made to the Directors. A manual containing all important policies of the Company are also given to the Directors. Direct meetings with the Chairman and the Managing Director are further facilitated for the new appointee to familiarise him/ her about the Company/ its businesses and the Group practices.
As part of the familiarisation programme, a handbook is provided to all the Directors including Independent Directors at the time of their appointment. The handbook provides a snapshot to the Directors of their duties and responsibilities, rights, appointment process and evaluation, compensation, Board procedure and stakeholders'' expectations. The handbook also provides the Directors with an insight into the Group''s practices. Further, periodic emails are sent to all the Directors covering events that may have impact on the business of the Company and/ or the agriculture sector in general and, fertiliser and pesticides industries in particular. The details of familiarisation programme as above are also disclosed on the Company''s website.
f) Directors'' Responsibility Statement
The Directors'' Responsibility Statement pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013 ("the Act") is appended as Annexure C to this Report.
15. Key Managerial Personnel
Mr. Sameer Goel, Managing Director, Mrs. Jayashree Satagopan, Chief Financial Officer and Mr. P Varadarajan, Company Secretary, are the Key Managerial Personnel (KMP) of the Company.
Employees
a) Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Salient features of the Remuneration Policy are set out in the Corporate Governance Report. The Remuneration Policy is available on the Company''s website at https:// coromandel.biz/pdf/2018-2019/lnvestorslnformation/ PoliciesAndCodes/RemunerationPol icy_2019.pdf
b) Policy on prevention of Sexual Harassment
The Company has in place Prevention of Sexual Harassment Policy (POSH) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy. During the year 2018-19,2 (two) incidents of sexual harassment were reported, which was investigated by the ICC under the Policy and action has been taken thereon.
c) Particulars of Employees
A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure D to this Report.
A statement containing the name of employees who are in receipt of remuneration in excess of the prescribed limits and top 10 employees in terms of remuneration drawn, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure E to this Report.
d) Employee Stock Option Plans
Employee Stock Option Scheme 2007 - ESOP 2007
The Company had in the past, approved an Employee Stock Option Scheme 2007 (ESOP Scheme 2007), under which employees were granted Options. The Company made grants under the said Scheme during the period 2007 to 2011. Number of vested Options outstanding as at the year end under the ESOP Scheme 2007 was 28,400. It is not proposed to make any further grants under ESOP Scheme 2007.
Employee Stock Option Plan - ESOP 2016
The Shareholders had, through Postal Ballot, on 11 January, 2017 authorised the Board/ Nomination and Remuneration Committee to issue to the employees, such number of Options under the ESOP 2016, as would be exercisable into not exceeding 1,45,81,000 fully paid- up equity shares of Rs 1/- each in the Company.
The Nomination and Remuneration Committee, is empowered to formulate detailed terms and conditions of the ESOP Scheme 2016, administer and supervise the same. The specific employees to whom the Options would be granted and their eligibility criteria would be determined by the Nomination and Remuneration Committee at its sole discretion. Further, the Nomination and Remuneration Committee is empowered to determine the eligible subsidiary companies, whether existing or future, whose employees will be entitled to stock options under this Scheme.
Options granted under this ESOP 2016 would vest on or after 1 (one) year from the date of grant but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee. The Company has granted 2,43,620 options to the employees during the year under ESOP 2016. The number of Options vested and outstanding as at the year-end was 6,13,820.
The disclosure required to be made under Regulation 14 of the said Regulations is available on the Company''s website at https://coromandel.biz/inv_financial.html
16. Extract of the Annual Return
In accordance with Section 134(3)(a) of the Act, an extract of the Annual Return in the prescribed format is appended as Annexure F to this Report.
17. Vigil Mechanism/ Whistle Blower Policy
The Company has a Whistle Blower Policy which provides the employees, customers, vendors and directors an avenue to raise concerns on ethical and moral standards and legal provisions in conduct of the business operations of the Company. It also provides for necessary safeguards for protection against victimisation for whistle blowing in good faith. The Vigil Mechanism is also placed on the website of the Company.
18. Conservation of energy, technology absorption, foreign exchange earnings and outgo.
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure G to this Report.
19. Corporate Social Responsibility Initiatives
Corporate Social Responsibility (CSR) has been an integral part of your Company''s culture and the Company has been associated in the past directly and through AMM Foundation (an autonomous public charitable trust engaged in philanthropic activities in the field of Education and Healthcare) for contributing towards society''s development. During the year, your Company has undertaken various CSR projects in the areas of education, health and community development targeting inclusive growth and social capital improvement. Details of composition of CSR Committee and CSR Projects undertaken during the year are given in Annexure H to this Report.
20. Safety, Health and Environment (SHE)
Your Company gives utmost importance to employee''s health and safety, given the sensitive nature of operations that involves handling of chemical products. Company has put in robust processes and safety performance indicators to track its SHE performance. Employees are encouraged to raise ''near-miss'' safety concerns and these inputs are periodically monitored and closed. The workforce are valued as the crucial resource for sustaining safety and have been imparted need based training in SHE, by engaging both internal and external expertise. During the year, the Total Recordable Injury Rate (TRIR) per million man hours stood at 0.48. Your Company implemented the additional five elements under advanced risk-based Process Safety Management Systems (PSMS), expanding management''s commitment and involvement towards Plant safety. All key manufacturing sites had took up structural integrity upgrading program to mitigate risks, also carried out Safety Culture Survey to identify gaps & improve safety culture.
Your Company''s commitment towards environmental sustainability remains firm. To improve Environmental Management reporting, advanced emission monitoring equipment were installed and maintained at the sites. Energy efficient lighting systems were deployed across the organisation. During the year, new avenue of vertical plantation has been explored to expand the green zone at site, where land is a constraint. The bio-diversity effort of having Bird''s Paradise inside the factory premises at Kakinada has been recognised by the Discovery Channel who had made a documentary titled "Between Soil and Sky - The Coromandel Story" and telecasted on 31 January, 2019.
21. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance. As stipulated under the requirements of the Listing Regulations, a report on Corporate Governance duly audited is appended as Annexure I for information of the Members. The requisite certificate from the Auditor''s of the Company confirming compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance.
22. Management Discussion & Analysis
The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc. is furnished separately and forms part of this Directors'' Report.
23. Business Responsibility Report
Pursuant to Regulation 34 of Listing Regulations, the Company has prepared the Business Responsibility Report in line with business principles as provided in the Business Responsibility Policy adopted by the Company. Business Responsibility Report is enclosed as Annexure J to this Report and the same is also available on the website of the Company at https://coromandel.biz/inv report.html
24. Other disclosures
a) Share Capital
The paid-up equity share capital of the Company as on 31 March, 2019 was Rs 29.25 crore. During the year, the Company has allotted 1,43,920 equity shares of Rs 1 each under ESOP Scheme 2007 (23,700 shares) and under ESOP 201 6 (1,20,220 shares).
b) Material Subsidiary Policy
The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Regulations. The Policy on Material Subsidiary is available on the website of the Company at https:// coromandel.biz/pdf/2018-2019/lnvestorslnformation/ PoliciesAndCodes/PolicvOnMaterialSubsidiaries_2019.
c) Compliance of Secretarial Standards
The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government.
25. Acknowledgement
Your Directors wish to express their grateful appreciation for the valuable support and co-operation received from bankers, business associates, lenders, financial institutions, shareholders, various departments of the Government of India, as well as the State Governments, the farming community and all our other stakeholders.
The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results.
|
On behalf of the Board of Directors |
|
|
Place : Secunderabad |
M M Murugappan |
|
Date : 23 April, 2019 |
Chairman |
Mar 31, 2018
DIRECTORS'' REPORT
Dear Members,
The Board of Directors have pleasure in presenting the 56th Annual Report together with the Audited Financial Statements for the financial year ended 31 March, 2018.
1. Summary of Financial Results
Rs, In crores
|
2017-18 |
2016-17 |
|
|
Revenue: |
||
|
From Operations |
10,986 |
10,185 |
|
Other Income |
58 |
54 |
|
Total Revenue |
11,044 |
10,239 |
|
Profit: |
||
|
Profit before Interest, Depreciation |
1,278 |
1,036 |
|
and Taxation |
||
|
Less: Interest |
178 |
224 |
|
Depreciation |
97 |
100 |
|
Profit Before Tax |
1,003 |
712 |
|
Less: Provision for Tax |
344 |
235 |
|
(including deferred tax) |
||
|
Profit After Tax |
659 |
477 |
Your Company''s Revenue from Operations for the year grew to Rs, 10,986 crores from Rs, 10,185 crores last year registering a growth of 8% year on year (YoY). The Profit before Interest, Depreciation and Taxation grew to Rs, 1,278 crores from Rs, 1,036 crores in the previous year. The Net Profit for the year grew to Rs, 659 crores from Rs, 477 crores in the previous year i.e. an increase of 38% YoY. EBIDTA margin improved 146 basis points to 11.6% in 2017-18 over 2016-17 and PAT margin strengthened 132 basis points to 6.0% in 2017-18 over 2016-17. The Earnings per share (EPS) for the year stood at Rs, 22.57 per share an increase of 38% compared to Rs, 16.35 per share for the previous year.
Your Company proposes to transfer an amount of Rs, 300 crores to the General Reserves and retain Rs, 785 crore in the Statement of Profit and Loss.
2. Business Environment
During the year, India received rainfall at 95% of long period average (LPA) which is lower than the normal rainfall. However, Coromandel''s key south peninsular markets recorded normal south west monsoon (at 99% of LPA levels) that resulted in higher residual moisture and improved reservoir levels, aiding in higher crop sowing during Kharif and Rabi seasons. India''s food grain production is expected to increase by 2 percent to 280 million tons. With higher expected output in horticulture, cotton and sugarcane, Agriculture GVA grew by 3.4 percent during the year.
The Government''s ambitious goal of doubling farmer income by 2022 continues to be a major enabler of farm productivity and farmer prosperity. Several progressive policy measures undertaken by the Government like bringing additional area under irrigation coverage, promoting micro irrigation & precision farming, direct benefit transfer of subsidies, mandatory soil health cards, financial inclusion, crop insurance schemes, developing agri infrastructure and storage capabilities are all set to positively change the dynamics of India''s agriculture industry. Initiatives targeted towards productivity improvement, cost and consumption reduction in farm inputs like seed and water, increased farmer awareness and access to markets towards a better realization augur well for improving the overall well being of the farming community.
On the policy front, Direct Benefit Transfer (DBT) in fertilizers has been rolled out across India in a phased manner, wherein around 2 lakh Point of Sales (PoS) machines have been distributed to the retailers for recording the purchase of fertilizers. The system entailed at improving traceability across the fertilizer value chain and promoting soil health, is a positive step towards driving balanced nutritional practices. Furthermore, the Government has mandated the industry to market Urea in 45 kg bags instead of traditional 50 kg bags from 2018-19 onwards. Higher budgetary allocation towards NPK fertilizers signals a positive intent in promoting balanced nutritional practices. Your Company smoothly transitioned into the new subsidy regime, strengthened its field presence and aligned its sales closer to consumption period.
During the year, the Government implemented Goods and Services Tax (GST), the biggest indirect tax reform in the country since its independence. The long-term impact of GST is seen as positive, having a simplified, unified indirect tax regime across the country and driving formalization of the economy favoring organized players like your Company. Your Company successfully migrated to the Goods and Services Tax regime. The incidence of GSTs on some of the raw materials being higher than the output rates, Phosphatics Fertilizer industry is currently under an inverted duty structure resulting in GST credit accumulation. Industry has been making active representations to the GST Council to address this concern.
3. Performance Review
Favorable agricultural environment in your Company''s key markets, supported by stable raw material prices and lower channel inventory, aided higher agri input consumption and resulted in improved business performance. During the year, your Company has made significant strides by expanding its market presence, scaling up its branding & customer connect initiatives through our integrated marketing approach, improving its sourcing efficiencies and enhancing its manufacturing capabilities.
Fertilizer
Phosphatics Fertiliser business of your Company improved its sales volumes by 11 percent to 27.66 lakh tons, registering significant growth of unique products and increasing its market share to 15.8 percent (14.6 percent in FY17). The normal monsoon in South and East markets aided faster stock liquidation and your Company''s channel stocks remain at comfortable levels. Your Company has further strengthened its field team presence to improve its last mile connectivity with the retailers and farmers.
Manufacturing units drove operational efficiencies and significantly increased its capacity utilization to 83 percent, up from 70 percent in FY17. Production volumes grew by 19 percent to 28.64 lakh tons. The Phosphoric acid augmentation project, envisaged to add another 1 lakh tons of acid at Visakhapatnam unit is on track and is slated to be completed in 2019-20. Further, your Company continued the focus on developing its operational flexibility by working with alternate phosphate rock and acid sources.
Crop Protection
Crop Protection business registered top-line growth in domestic and exports markets, improving its turnover by 7% percent in FY17-18. Lower crop prices, higher stock inventory in Latin American markets and higher raw material costs driven by strict environment regulations in China impacted the margins of the business. Mannose production at both the manufacturing facilities of Sarigam and Dahej, improved the product availability for catering to the growth opportunities in international markets.
Domestic formulations did well on specialty and captive generics front, improved its channel presence and dealer engagement initiatives. During the year, four new formulations were introduced in the domestic markets, which have received encouraging response from the customers. R&D centre focused on developing chemistry and technology for some of the key recently off patented molecules, apart from development of new combination products and process improvement relating to the existing products.
During the year, your Company acquired the Bio pesticide business from E.I.D Parry (India) Limited which would enable the business to gain entry in high growth bio pesticide segment in Indian, North American and European markets. The acquisition has been effective from 01 April, 2018 and provides a synergistic fit to its crop protection product portfolio.
Retail
Coromandel''s Retail business registered good growth, improving its scale and operational efficiency. The growth was primarily driven by strong performance of the non-fertilizer segment and a focused product and store approach. To improve farm advisory services, ''Gromor Advisory Council'' comprising of scientists from leading agriculture universities was constituted and nutritional package of practices for eight crops were developed. Business expanded its footprint in Western Maharashtra by opening four new stores during the year. Partnering with the Andhra Pradesh Government, your company opened five new Custom Hiring & Service Centers (CHSC) for providing farm mechanization services.
Specialty Nutrients
Specialty Nutrients registered good growth during the year leveraging strengths of the integrated marketing structure and promoting its focus products. New crop specific water soluble fertiliser products were introduced during the year which have received good response from the market. With the Government''s thrust towards promoting balanced nutrition and water use efficiency, the business expects significant growth opportunities in coming years.
Single Super Phosphate (SSP)
The Single Super Phosphate (SSP) business increased its sales by 9 percent to 5.20 lakh tons, becoming the market leader, despite higher channel stocks and sub-par monsoons in its key markets. Capacity consolidation was carried out through debottlenecking Udaipur, Baroda and Nimrani units, improving the operational efficiencies and production throughput. Business continued its focus on promoting quality awareness amongst the customers and carried out multiple Quick Test campaigns. With the industry formalization post GST implementation, Government''s policy intervention (effective 01 April, 2018) mandating the sale of SSP in manufacturer''s brand names, your Company expects fresh impetus driving business volumes in coming years for the organized players.
Organic Manure
Your Company''s Organic business grew its volumes by 9 percent to 1.44 lakh tons, focusing on value added, granulated products. Coromandel continued to be the market leader in the City Compost segment. To serve organic certified inputs, necessary reliable vendor base, quality assurance systems and supply chain models have been established
4. Finance
Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. Net Cash from operations for the year stood at '' 253 crores. Your Company follows a prudent financial policy and aims at maintaining an optimum financial gearing. Your company continues to be a Long Term Debt Free company. Debt to Equity Ratio was 0.86 as on 31 March, 2018.
Your Company has been credit rated by CRISIL Limited. The Company''s long term credit rating by ''CRISIL'' continued to be ''CRISIL AA (stable)'' and short term debt rating at ''CRISIL A1 ''. This reflects a very high degree of safety regarding timely servicing of financial obligations and also a vote of confidence reposed in your Company''s financials.
5. Dividend
Your Directors are pleased to recommend a final Dividend of Rs, 3.50 per equity share Rs, 1/- each. Your Board had earlier approved an interim dividend of Rs, 3/- per equity share on 16 March, 2018 and the same was paid on 03 April, 2018. The total dividend for the year ended 31 March, 2018 would accordingly be Rs, 6.50 per equity share of Rs, 1/- each. The total outgo for the year would be Rs, 229 crore, including dividend distribution tax of Rs, 39 crore.
The Company has adopted Dividend Distribution policy in line with the requirements of Listing Regulations. The Dividend Distribution Policy is available on the website of the Company at http://coromandel.biz/pdf/2016-2017/ InvestorsInformation/DividendDistributionPolicy.pdf.
6. Consolidated Financial Results
Consolidated Financial Statements incorporating the operations of the Company, its Subsidiaries, Associates and
Joint Venture Companies is appended. As required under the provisions of the Act, a statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures is enclosed as Annexure A to this Report.
The financial statements of the subsidiary companies will be made available to the members of the Company and its subsidiary companies on request and will also be kept for inspection at the Registered Office of the Company.
7. Subsidiary Companies:
Brief details of the performance of the subsidiaries of the Company are given below:
a) CFL Mauritius Limited:
CFL Mauritius Limited, a wholly owned subsidiary, incurred a loss of $0.04 million (equivalent to Rs, 0.28 crore) during the year ended 31 December, 2017. Primary source of income for this subsidiary is dividend income from Foskor (Pty) Ltd. and the subsidiary did not receive any dividend from Foskor during the year 2017.
b) Parry Chemicals Limited (PCL):
PCL, a wholly owned subsidiary of the Company, earned a total revenue of Rs, 0.93 crore for the year ended 31 March, 2018 and Profit after Tax was Rs, 0.09 crore.
c) Dare Investments Limited (DIL):
DIL, a wholly owned subsidiary of the Company, did not have any significant operations and incurred a loss of Rs, 0.04 crore for the year ended 31 March, 2018.
d) Liberty Pesticides and Fertilizers Limited (LPFL):
LPFL, a wholly owned subsidiary of the Company, did not have any significant operations during the year 2017-18. It earned a profit of Rs, 0.13 crore for the year ended 31 March, 2018.
e) Coromandel Brasil Limitada (CBL):
CBL, a Limited Liability Partnership, owned 100% by the Company and its subsidiary CFL Mauritius Ltd., is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It earned a profit of Brazilian Reals 0.25 million (equivalent to Rs, 0.51 crore) for the year ended 31 December, 2017.
f) Saber Organics America SA (SOAL)
SOAL is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It incurred a net loss of Brazilian Realâs 0.42 million (equivalent to Rs, 0.87 crore) for the year ended 31 December, 2017.
g) Sabero Australia Pty Ltd. (SAPL)
SAPL did not have any significant operations during the year 2017-18. It incurred a net loss of AUD 0.01 million (equivalent to Rs, 0.04 crore) for the year ended 31 March, 2018.
h) Sabero Europe BV (SEBV)
SEBV is primarily engaged in getting product registrations in Europe and procuring orders for supplies from India. It did not have any significant operations during the year ended 31 March, 2018.
i) Sabero Argentina SA (Sabero Argentina)
Sabero Argentina is primarily engaged in getting product
registrations in Argentina and procuring orders for supplies from India. It incurred a net loss of Argentine Peso 0.18 million (equivalent to Rs, 0.07 crore) for the year ended 31 December, 2017.
j) Coromandel Agronegocios De Mexico SA de CV (Coromandel Mexico)
Coromandel Mexico is primarily engaged in getting product registrations in Mexico and procuring orders for supplies from India. It earned a net profit of Mexican Peso 0.22 million (equivalent to Rs, 0.08 crore) for the year ended 31 December, 2017.
Joint Venture Companies
Brief details of the performance of the Joint Venture (JV) companies of the Company are given below:
a) Coromandel SQM (India) Private Limited (CSQM)
CSQM, a joint venture between Coromandel and SQM Chile, manufactures Water Soluble Fertilizers (WSF) at Kakinada, Andhra Pradesh and offers Specialty Nutrition Solutions to institutional clients. During the year, the JV launched two new crop specific WSF products ''Ultrasol Solanaceae'' and ''Speedfol Chilli'' which have received encouraging response from the customer. Total income for the year was Rs, 73.80 crore and the net profit was Rs, 4.37 crore.
b) Yanmar Coromandel Agrisolutions Private Limited (YCAPL)
YCAPL, a Joint Venture company between Coromandel, Yanmar and Mitsui, is in the business of sales and service of agri-tech equipment focussed on farm mechanization in India. Combine Harvester introduced in the market last year has received positive response from the customers. Total income for the year was Rs, 23.26 crore and the net loss was Rs, 6.78 crore.
Associate Company
a) Sabero Organics Philippines Asia Inc (SOPA)
SOPA, an associate company, is based in Philippines and did not have any significant operations during the year 2017-18.
Strategic Investment:
a) Tunisian Indian Fertilisers S.A., Tunisia (TIFERT):
TIFERT, a company based in Tunisia, manufactures phosphoric acid which is a key raw material for operating Phosphatic Fertilizer plants. Your Company''s strategic investment in TIFERT (15% equity) is aimed at securing uninterrupted supply of phosphoric acid for Company''s operations at Kakinada and Visakhapatnam. During the year, TIFERT sought strategic intervention from the Tunisian Government for ensuring uninterrupted supplies of rock phosphate from mines to the Plant. The ongoing improvement projects including commissioning of Auxiliary Boiler in December 2017, improved the concentrated acid throughput. Indian partners, Coromandel and GSFC, continued to provide necessary technical support to TIFERT to improve the plant performance.
b) Foskor (Pty) Limited, South Africa (FOSKOR):
Your Company, along with CFL Mauritius Limited, holds 14% equity of FOSKOR. During the year, FOSKOR improved its performance on rock phosphate and NPK production, with phosphoric acid production remaining at last year levels. Weak acid & rock prices and strong South African Rand impacted business profitability. Your Company is continuously engaged with FOSKOR for providing technical support in running the plant efficiently.
8. Risk Management Policy
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report.
The Company has formulated a Risk Management Policy, under which various risks associated with the business operations are identified and risk mitigation plans have been put in place, details of which are set out in the Corporate Governance Report/Management Discussion and Analysis Report.
9. Internal Financial Control Systems and their adequacy
The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.
The Company has its own corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Controls and System across all key processes covering various locations. Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any, are reported to Board.
10. Related Party Transactions
During the year, the Company has obtained approval of the shareholders, through Postal Ballot, for the following transactions: (a) Acquisition of Bio Pesticides Business of E.I.D Parry (India) Ltd., holding company; (b) Acquiring from E.I.D Parry (India) Limited, the total shareholding in Parry America Inc.; and (c) Appointment of Mr. A Vellayan, as Advisor to the Company for a period of five years.
Except these transactions, all other transactions that were entered into with the related parties during the financial year were at arm''s length and in the ordinary course of business. There were no material related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management Personnel which may have a potential conflict with the interest of the Company at large.
All related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are foreseen and are repetitive in nature. The related party transactions entered into are reviewed by an independent audit firm to confirm that they were in the ordinary course of business and at arm''s length basis. The Policy on Related Party Transaction is available on the Company''s website at http://www.coromandel.biz/pdf/InvestorsInformation/RPT PolicyJul2017.pdf.
None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration, sitting fee and commission.
11. Auditors
a) Statutory Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, were appointed as Auditors of the Company for a period of five years from the conclusion of the Annual General Meeting held on 23 July, 2014. As required under the provisions of Section 139 of the Act, a resolution for the yearly ratification of their appointment is being placed before the shareholders for their approval.
The Auditors Report given by M/s Deloitte Haskins & Sells, Statutory Auditors, on the financial statements of the Company for the year ended 31 March, 2018 is part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
b) Cost Auditors
Pursuant to Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules 2014, the cost records of the Company are required to be audited. Based on the recommendations of the Audit Committee, your Board has appointed Mr. V Kalyanaraman and Ms. Jyothi Satish, Practicing Cost Accountants, to audit the cost records of the Company.
The Cost Audit Report for the year 2016-17 has been filed with Ministry of Corporate Affairs within the prescribed time limit.
c) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2017-18.
The report of the Secretarial Auditor is enclosed as Annexure B and forms part of this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
12. Particulars of Loans, Guarantees and Investments
Details of loans and guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements.
13. Public Deposits
The Company has not accepted any deposit from the public under Chapter V of the Act or under the corresponding provisions of Section 58A of the Companies Act, 1956, since 2003 and no amount of principal or interest was outstanding as on the Balance Sheet date.
14. Board and Committees
a) Board of Directors
Your Company is managed and controlled by a Board comprising an optimum blend of Executive and Non-Executive Professional Directors. As on 31 March, 2018, the Board of Directors consists of eight (8) Directors consisting of Managing Director and seven (7) Non-executive Directors, out of which four (4) are Independent Directors including one Woman Director. The composition of the Board is in conformity with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the relevant provisions of the Companies Act, 2013. All the Directors possess requisite qualifications and experience in general corporate management, strategy, finance, engineering, information technology and other allied fields which enable them to contribute effectively to the Company in their capacity as Directors of the Company. Declarations from all Independent Directors have been received confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and the Listing Regulations, 2015, and the same have been considered and taken on record by the Board.
After serving the Company''s Board close to two decades, Mr. A Vellayan stepped down as Chairman and Director of the Company on 31 January, 2018, on attaining the age of 65 years. Under his leadership, the Company transformed into one of the leading farm solutions providers in India by establishing long standing relationships across its wide spectrum of stakeholders with a reputation for trust, ethical standards and passion for growth. The Board placed on record its appreciation of the valuable contribution made by Mr. A Vellayan during his tenure, as Chairman and Director, for the growth and development of the Company.
Given his deep business insight on agri inputs industry, his association with industry bodies and associations, policy advocacy with various government bodies/institutions, and dealing with global players in the industry, Board recommended the appointment of Mr. A Vellayan as an Advisor to the Company effective 1 February, 2018, and the same has been approved by the shareholders through postal ballot.
Mr. M M Murugappan was appointed as an Additional Director (Non-Executive Non-Independent) and as Chairman of the Company with effect from 31 January, 2018. Mr. M M Murugappan has extensive experience in the field of engineering, technology, corporate strategy, policy formulation and organization transformation. He brings in valuable business insights being an active Board member of various companies specialized in the areas of engineering, automotive, financial services and IT. His keen business acumen is invaluable for the business growth of the Company. Company has received a notice from a member under Section 160 of the Act proposing his nomination for Directorship at the ensuing Annual General Meeting.
In accordance with Article 17.29 of the Company''s Articles of Association, read with Section 152 of the Act, Mr. M M Venkatachalam retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
b) Evaluation of the Board''s performance
In accordance with the provisions of Section 134 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations), the Board has carried out evaluation of its own performance, the performance of Committees of the Board, namely, Audit Committee, CSR Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination and Remuneration Committee and also the directors individually. The manner in which the evaluation was carried out and the process adopted has been mentioned in the Corporate Governance Report.
c) Board Meetings
A calendar of Board meetings is prepared and circulated in advance to the Directors. During the year 2017-18, six Board Meetings were held, the details of which are given in the Corporate Governance Report.
d) Audit Committee
The Audit Committee comprises of Mr. Sumit Bose, Chairman, Dr. B V R Mohan Reddy, Mr. Prasad Chandran and Mr. M M Venkatachalam. All the recommendations made by the Audit Committee were accepted by the Board.
e) Familiarization Programme for Independent Directors
On their appointment, Independent Directors are familiarized about the Company''s operations and businesses. Interaction with the Business Heads and key executives of the Company is also facilitated. Detailed presentations on the business of each of the Division are also made to the Directors. A manual containing all important policies of the Company is also given to the directors. Direct meetings with the Chairman and the Managing Director are further facilitated for the new appointee to familiarize him/her about the Company/its businesses and the Group practices.
As part of the familiarization programme, a handbook is provided to all the Directors including Independent Directors at the time of their appointment. The handbook provides a snapshot to the Directors of their duties and responsibilities, rights, appointment process and evaluation, compensation, Board procedure and stakeholders'' expectations. The handbook also provides the Directors with an insight into the Group''s practices. Further, periodic emails are sent to all the directors covering events that may have impact on the business of the Company and/or the agriculture sector in general and, fertilizer and pesticides industries in particular. The details of familiarization programme as above are also disclosed on the Company''s website.
f) Directors'' Responsibility Statement
The Directors'' Responsibility Statement pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013 ("the Act") is appended as Annexure C to this Report.
15. Key Managerial Personnel
Mr. Sameer Goel, Managing Director, Mrs. Jayashree Satagopan, Chief Financial Officer (effective 1 November, 2017), and Mr. P Varadarajan, Company Secretary, are the Key Managerial Personnel (KMP) of the Company. Mr. S Sankarasubramanian, as Chief Financial Officer, was one of the KMP of the Company till 31 October, 2017. He has taken up the role as President-Fertiliser Business.
16. Employees
a) Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Salient features of the Remuneration Policy is set out in the Corporate Governance Report. The Remuneration Policy is available on the Company''s website at http:// www.coromandel.biz/pdf/InvestorsInformation/ RemunerationPolicyJul2017.pdf .
b) Policy on prevention of Sexual Harassment
The Company has in place Prevention of Sexual Harassment Policy (POSH) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy. During the year 2017-18, an incident of sexual harassment was reported, which was investigated by the ICC under the Policy and action has been taken thereon.
c) Particulars of Employees
A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure D to this Report.
A statement containing the name of employees who are in receipt of remuneration in excess of the prescribed limits and top 10 employees in terms of remuneration drawn, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure E to this Report.
d) Employee Stock Option Plans
Employee Stock Option Scheme 2007 - ESOP 2007 The Company had in the past, approved an Employee Stock Option Scheme 2007 (ESOP Scheme 2007), under which employees were granted Options. The Company made grants under the said Scheme during the period 2007 to 2011. Number of vested Options outstanding as on date under the ESOP Scheme 2007 are 52,100. It is not proposed to make any further grants under ESOP Scheme 2007.
Employee Stock Option Plan - ESOP 2016
The Shareholders had, through Postal Ballot, on 11 January, 2017 authorized the Board/Nomination and Remuneration Committee to issue to the employees, such number of Options under the ESOP 2016, as would be exercisable into not exceeding 1,45,81,000 fully paid-up equity shares of '' 1/- each in the Company.
The Nomination and Remuneration Committee, is empowered to formulate detailed terms and conditions of the ESOP Scheme 2016, administer and supervise the same. The specific employees to whom the Options would be granted and their eligibility criteria would be determined by the Nomination and Remuneration Committee at its sole discretion. Further, the Nomination and Remuneration Committee is empowered to determine the eligible subsidiary companies, whether existing or future, whose employees will be entitled to stock options under this Scheme.
Options granted under this ESOP 2016 would vest on or after 1 (one) year from the date of grant but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee. The Company has granted 1,48,900 options to the employees during the year under ESOP 2016. Total number of Options granted under ESOP Scheme 2016 is 23,23,400. The number of Options vested and outstanding are 3,1 1,740.
The disclosure required to be made under Regulation 14 of the said Regulations is available on the Company''s website at http://www.coromandel.biz/inv financial.html.
17. Extract of the Annual Return
In accordance with Section 134(3)(a) of the Act, an extract of the Annual Return in the prescribed format is appended as Annexure F to this Report.
18. Vigil Mechanism/Whistle Blower Policy
The Company has a Whistle Blower Policy which provides the employees, customers, vendors and directors an avenue to raise concerns on ethical and moral standards and legal provisions in conduct of the business operations of the Company. It also provides for necessary safeguards for protection against victimization for whistle blowing in good faith. The Vigil Mechanism is also placed on the website of the Company.
19. Conservation of energy, technology absorption, foreign exchange earnings and outgo.
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure G to this Report.
20. Corporate Social Responsibility Initiatives
Corporate Social Responsibility (CSR) has been an integral part of your Company''s culture and the Company has been associated in the past directly and through AMM Foundation (an autonomous public charitable trust engaged in philanthropic activities in the field of Education and Healthcare) for contributing towards society''s development. During the year, your Company has undertaken various CSR projects in the areas of education, health and community development targeting inclusive growth and social capital improvement.
On the health front, Coromandel has begun construction of a Hospital in Kakinada having diagnostic facilities and an out-patient facility which is scheduled to be completed during the financial year 2018-19. The Coromandel Medical Centres in Ennore, Sarigam, Kakinada and Vizag catered to the medical needs of ~80,000 patients and the Mobile Medical Van catered to ~13,000 patients in Sarigam in 2017-18.
The Coromandel Girl Child Education Scheme, offering economic assistance to girls in standards IX and X, reached out to 1,468 girls in 658 schools. The Scheme aims at providing educational assistance to girls, to encourage them to continue their education. All the CSR projects of the Company are in accordance to the provisions of Section 135 of the Act. The CSR policy of the organization is mentioned on the Company website (http://coromandel.biz/csr policy.html). Details of composition of CSR Committee and CSR Projects undertaken during the year are given in Annexure H to this Report.
21. Safety, Health and Environment (SHE)
Your Company gives utmost importance to employee''s health and safety, given the sensitive nature of operations that involves handling of chemical products. Company has put in robust processes and safety performance indicators to track its SHE performance. Employees are encouraged to raise ''near-miss'' safety concerns and these inputs are periodically monitored and closed. During the year, the Total Recordable Injury Rate (TRIR) per million man hours stood at 0.94. Coromandel adopted additional five elements under advanced risk based Process Safety Management Systems (PSMS), expanding management''s commitment and involvement towards Plant safety. All key manufacturing sites took up Quantitative Risk Assessment (QRA) studies through external agencies to refresh the risk register and improve safety culture.
Coromandel''s commitment towards environmental sustainability remains firm. To improve Environmental Management reporting, advanced emission monitoring equipment were installed at the sites. Energy efficient lighting systems were deployed across the organisation. During the year, around 10,000 tree saplings were planted in public areas. Green belt cover at Kakinada manufacturing site was extended to 50 percent of the factory area, providing a conducive environment and a Bird''s Paradise inside the factory premises.
22. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance. As stipulated under the requirements of the Listing Regulations, a report on Corporate Governance duly audited is appended as Annexure I for information of the Members. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance.
23. Management Discussion & Analysis
The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc. is furnished separately and forms part of this Directors'' Report.
24. Business Responsibility Report
Pursuant to Regulation 34 of Listing Regulations, the Company has prepared the Business Responsibility Report in line with business principles as provided in the Business Responsibility Policy adopted by the Company. Business Responsibility Report is enclosed as Annexure J to this Report and the same is also available on the website of the Company at http:// coromandel.biz/inv report.html .
25. Other disclosures
a) Share Capital
The paid up equity share capital of the Company as on 31 March, 2018 was '' 29.24 crore. During the year, the Company has allotted 7,14,282 equity shares of Re. 1 each under ESOP Scheme 2007 (6,09,082 shares) and under ESOP 2016 (1,05,200 shares).
b) Postal Ballot
During the year under review, shareholders have approved following business through Postal ballot (including e-voting) on 23 February, 2018, by way of ordinary resolutions with requisite majority:
a) Acquisition of Bio Business from E.I.D Parry (India) Ltd.
b) Acquisition of Parry America Inc. from E.I.D Parry (India) Ltd.
c) Appointment of Mr. A Vellayan as Advisor to the Company for a period of 5 years.
c) Material Subsidiary Policy
The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Regulations. The Policy on Material Subsidiary is available on the website of the Company at http://coromandel.biz/pdf/InvestorsInformation/ PolicyOnMaterialSubsidiary.pdf.
d) Compliance of Secretarial Standards
The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government.
26. Acknowledgement
Your Directors wish to express their grateful appreciation for the valuable support and co-operation received from bankers, business associates, lenders, financial institutions,shareholders, various departments of the Government of India, as well as the State Governments, the farming community and all our other stakeholders.
The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results.
On behalf of the Board of Directors
For Coromandel International Limited
Place: Secunderabad M M Murugappan
Date: 24 April, 2018 Chairman
Mar 31, 2017
Directorsâ Report
The Board of Directors have pleasure in presenting the 55th Annual Report together with the Audited Financial Statements for the financial year ended March 31, 2017.
Summary of Financial Results
Rs, in Crore
|
2016-17 |
2015-16 |
|
|
Revenue: |
||
|
From Operations |
10,185 |
11,625 |
|
Other |
54 |
65 |
|
Total Revenue |
10,239 |
11,690 |
|
Profit: |
||
|
Profit before Interest, Depreciation and Taxation |
1,036 |
831 |
|
Less: Interest |
224 |
221 |
|
Depreciation |
100 |
106 |
|
Profit Before Exceptional Items & Tax |
712 |
504 |
|
Exceptional Item |
- |
25 |
|
Profit Before Tax |
712 |
529 |
|
Less: Provision for Tax |
235 |
171 |
|
(including deferred tax credit) |
||
|
Profit After Tax |
477 |
358 |
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA), vide its notification in the Offical Gazzette dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the earlier Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. For the Company, Ind AS is applicable from April 1, 2016 with a transition date of April 1, 2015.
The following are the areas which had an impact on account of transition to Ind AS:
- Fair valuation of certain financial instruments
- Employee costs pertaining to defined benefit obligations
- Discounting of certain long-term liabilities
- Share-based payments
- Accounting for joint ventures
The reconciliations and descriptions of the effect of the transition from Indian GAAP to Ind AS has been provided in Note 48 and 49 in the notes to the standalone and consolidated financial statements, respectively.
Transfer to Reserves
The Company proposes to transfer Rs, 300 Crore to the General Reserves of the Company and retain Rs, 706.76 Crore in the Statement of Profit and Loss.
Dividend
Your Directors are pleased to recommend a Dividend of '' 5/- per equity share of '' 1/- each for the year 2016-17.
Operations
It has been an eventful year for the Indian Agriculture, which benefitted from a normal south west monsoon after experiencing two consecutive droughts in previous seasons. Improved residual moisture and higher reservoir levels aided in higher sowings and crop acreage went up by 5.5-6%. Though the North East monsoon, which significantly impacts our peninsular Indian States, were down by 45% during Rabi, overall agriculture scenario remained positive. As per Reserve Bank of India''s Monetary Policy Report, agriculture sartorial growth is projected at 4.1% for the year 2016-17 (0.8% last year), driven by record food grain output (273 million tons) and improved livestock performance. The year was marked by a radical initiative taken by the Government to reform the economy by demonetizing high denomination currencies. While the informal/cash-intensive sectors were affected by the demonetization, overall impact has been redistributive. For agriculture, key indicators of area sown, cropping pattern and productivity have shown a neutral to positive behavior over the staid period, though perishable commodities showed drop in arrivals and market prices.
On the reforms front, a slew of measures targeting soil health, farm infrastructure, mechanization, technology interventions for price discovery and damage assessment for crop insurance were introduced during the year. These are steps in the right direction and will facilitate farmer''s income stability and productivity improvements, going forward.
On the fertilizer policy front, to ensure subsidy reaches the target farmers, Direct Benefit Transfer (DBT) in Fertilizer was rolled out on a pilot basis in 16 districts across India. Retail stores of the Company in the district of Ranga Reddy in Telangana and West Godavari and Krishna districts in Andhra Pradesh were part of the said pilot project. Though some technology gaps persist in implementation, it is a welcome step for the farmers and the industry. Going forward, your Company anticipates the subsidies to be directly passed on to the farmers, who can make an informed choice based on the crop needs and health status of the soil.
During the year 2016-17, fertilizer industry benefitted from a benign raw material environment that made the domestic manufacturing viable. Overall, DAP production was up by 13%, partially substituting the drop in imports. Industry, on its part, passed on the gains from soft raw material prices to the farmers - overall, Phosphatics prices were brought down by 15%-20%. This, along with favorable South West monsoon, aided in liquidation of the channel inventory. Though the Phosphatics sales were down by 8%, the overall liquidation profile for the industry improved considerably.
Buoyed by the positive business sentiments, your Company improved its financial performance during the year. In line with the Company''s vision to be a leader in farm solutions business, Coromandel took gentle stride towards developing a differentiated business model. Towards this, business moved closer to the customers by developing an agronomist based integrated nutrient management structure. Fertilizer business improved its sourcing efficiency and resorted to strategic buying of raw materials. Further, a stable exchange rate, which strengthened towards the end of the year, added to the cost competitiveness of the business. New capacities were added in crop protection space, providing Coromandel the scale and advantage of demand situation in the international markets. The supply chain and process efficiencies were streamlined to improve operational flexibility in Retail and SSP businesses. Crop specific product introductions were made in Specialty SBU, in line with Business''s shift towards crop based approach. During the year, your Company has prepaid its long term loans, thereby making it a zero long term debt company. Overall, it has been a satisfying year, where inspite of moderation in sales volumes, your Company strengthened its processes and stakeholder engagement to improve the Business performance.
Phosphatic fertilizer business of the Company, though down by 7% in volume terms during the year 2016-17, continued to remain the largest manufacturer and marketer of NPK fertilizers in private sector in India, maintaining a market share of 14.5%. In the wake of high channel inventory at the beginning of the year and sub normal North East monsoon, your Company consciously moderated its sales during the 2nd half of the year. Continuous focus of the Business towards improving liquidation has led to normalization of channel inventory as compared to last year levels. Over the last few years, your Company has positioned itself as a unique solution provider, offering technologically superior products- two unique grades introduced in the year 2015-16, demonstrated significant value proposition to the farmers. Further, the branding and marketing initiatives were strengthened to promote the concept and that has resulted in improving share of unique grades to 33% of the Phosphatics sales. Customer centric and channel engagement initiatives were taken forward during the year by leveraging technology tools and agri extension services. With likelihood of DBT getting implemented pan India in 2017-18, Business has initiated steps towards improving the customer connect by strengthening the marketing structure and increasing channel reach.
On the Operations front, the Company''s continued focus and investments towards strengthening plant infrastructure, process and behavioral safety has resulted in Fertilizer business achieving its best ever safety performance. Overall, Total Recordable Injury Rate (TRIR) has been brought down considerably in the fertilizer manufacturing locations. Process Safety Management System (PSMS), adopted across the units last year, improved on its performance scores through strengthening safety processes and employee training.
On the production front, the manufacturing volumes remained at last year levels of 24.1 Lakh tons and the Company has not resorted to any imports during the year. Availability of Phosphoric Acid improved considerably through combination of higher captive production, alternate rock/acid sourcing, improved global availability and higher off take from Foskor. In order to achieve self-sufficiency in captive Phosphoric Acid production at its Vishakhapatnam unit, your Company has plans to augment its acid production capacity. In relation to this, the Company successfully completed the public hearing for the proposed expansion.
Your Company''s Crop Protection Business had a strong year, benefitting from softness in raw materials and utilities cost and improved demand for its key molecule Mancozeb in domestic and international markets. During the year, your Company expanded its Mancozeb production capacities through debottlenecking at Sarigam unit and brown field expansion at Dahej unit. Company''s branded formulation business was partially impacted by challenging market conditions in its key operating markets. However, two new product launches, along with scaling up of captive generics volumes improved the overall Business performance during the year. On the operations front, cost reduction initiatives undertaken across the Business units improved the production efficiencies and reduced manufacturing costs. R&D product synthesis lab at Hyderabad, set up in 2015, has started to deliver results, spanning in the areas of process improvement and product development.
Specialty Nutrients business, which comprises of Water Soluble Fertilizersâ (WSFs), Sulphur products and Micro nutrient segments, showed steady growth over last year as a result of growing WSF market and favorable seasonal conditions. During the year, Business introduced new micronized sulphur variant to expand its product portfolio. Further, it continued its crop based marketing approach, launching crop specific products for potato and pulses segment, which were well accepted by the farmer community. With the Government''s focus shifting towards improving water and nutrients use efficiency by making higher budgetary allocation towards micro irrigation, Business foresees significant growth opportunities, going forward.
Your Company''s Organic manure business responded positively to the call of Government of India to bring focus to soil health through promoting City Compost manure and marketed nearly 20,000 tons during the year, making it the largest seller of City Compost in the country. To expand its presence in niche organic product segments, Business introduced two new grades, which have been well received by the market. Organic Business forayed into new channels through corporate tie ups and institutional participation, and is exploring the possibility of getting in to the certified product segment.
Retail Business, which operates through a network of around 800 centers spread across Andhra Pradesh, Telangana and Karnataka, had an impressive performance in 2016-17 inspite of tough conditions in its operating geographies. Business expanded its digital footprint into areas of marketing communication, knowledge dissemination, employee productivity, customer analytics and inventory management to improve business efficiencies. Due to the cash based nature of the Business, the operations were partially impacted during the demonetization period; however, it swiftly adapted to the changed scenario by installing PoS machines at all its centers within a short span of time and organizing awareness campaigns among the farmers, which resulted in cashless sales share moving up considerably.
SSP business environment remained largely subdued during the year under review, especially in the first half, owing to subsidy drop and high channel inventory stocks slowing down the demand prospects. Business took a conscious call to restrict its SSP sales volumes to effectively manage its cash flows and focused on improving its operating efficiencies through a combination of strategic sourcing, process improvements and plant rationalization. Business continued its focus towards creating quality differentiation and towards it set up quick test centers across major operating markets and carried out 750 quality tests during the year 2016-17. New value added product Zincated SSP was introduced during the year and business plans to scale it up in targeted crop segments.
Overall, your Company has recorded a total turnover of Rs, 10,239 Crore. Profit for the year before depreciation, interest and taxation was Rs, 1,036 Crore and Profit before Tax was Rs, 712 Crore. Net Profit after Tax was Rs, 477 Crore.
Management Discussion & Analysis
The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc. is furnished separately and forms part of this Directors'' Report.
Directorsâ Responsibility Statement
The Directors'' Responsibility Statement pursuant to the provisions of Section 134(3) (c) and 134(5) of the Companies Act, 2013 is appended as Annexure Ato this Report.
Consolidated Financial Results
Consolidated Financial Statements incorporating the operations of the Company, its Subsidiaries, Associates and Joint Venture Companies is appended. As required under the provisions of Companies Act 2013, a statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures is enclosed as Annexure Bto this Report.
The financial statements of the subsidiary companies will be made available to the members of the Company and its subsidiary companies on request and will also be kept for inspection at the Registered Office of the Company.
Subsidiary Companies:
Brief details of the performance of the subsidiaries of the Company are given below:
a) CFL Mauritius Limited:
CFL Mauritius Limited, a wholly owned subsidiary, incurred loss of $0.04 million (equivalent to Rs, 0.25 Crore) during the year ended December 31, 2016. Primary source of income for this subsidiary is dividend income from Foskor (Pty) Limited and the subsidiary did not receive any dividend from Foskor during the year 2016.
b) Parry Chemicals Limited (PCL):
PCL, a wholly owned subsidiary of the Company, earned a total revenue of Rs, 1.11 Crore for the year ended March 31, 2017 and Profit after Tax was Rs, 0.34 Crore.
c) Dare Investments Limited (DIL):
DIL, a wholly owned subsidiary of the Company, did not have any significant operations and incurred a loss of Rs, 0.01 Crore for the year ended March 31, 2017.
d) Liberty Pesticides and Fertilizers Limited (LPFL):
LPFL, a wholly owned subsidiary of the Company, did not have any significant operations during the year 2016-17. It earned a profit of Rs, 0.12 Crore for the year ended March 31, 2017.
e) Coromandel Brasil Limitada (CBL):
CBL, a Limited Liability Partnership, owned 100% by the Company and its subsidiary CFL Mauritius Limited, is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It incurred net loss of Brazilian Reals 0.05 million (equivalent to Rs, 0.10 Crore) for the year ended December 31, 2016.
f) Sabero Organics America SA (SOAL):
SOAL is primarily engaged in getting product registrations in Brazil and procuring orders for supplies from India. It incurred net loss of Brazilian Reals 0.49 million (equivalent to Rs, 0.95 Crore) for the year ended December 31, 2016.
g) Sabero Australia Pty Limited (SAPL):
SAPL did not have any significant operations during the year 2016-17. It made a net profit of AUD 0.01 million (equivalent to Rs, 0.05 Crore) for the year ended March 31, 2017.
h) Sabero Europe BV (SEBV):
SEBV is primarily engaged in getting product registrations in Europe and procuring orders for supplies from India. It did not have any significant operations during the year ended March 31, 2017.
i) Sabero Argentina SA (SA):
SA is primarily engaged in getting product registrations in Argentina and procuring orders for supplies from India. It did not have any significant operations during the year ended December 31, 2016.
j) Coromandel Agronegocios De Mexico SA de CV (CAM):
CAM is primarily engaged in getting product registrations in Mexico and procuring orders for supplies from India. It made a net profit of Peso 1.21 million (equivalent to Rs, 0.44 Crore) for the year ended December 31, 2016.
Joint Venture Companies
Brief details of the performance of the Joint Ventures (JV) of the Company are given below:
- During the year under review, Coromandel Getax Phosphates Pte. Limited, a Joint Venture based in Singapore was closed, as the JV could not achieve the objective of identifying opportunities for rock phosphate mining / sourcing, even after a lapse of 8 years.
a) Coromandel SQM (India) Pvt Limited (CSQM):
CSQM, a joint venture between Coromandel and SQM, manufactures Water Soluble Fertilizersâ (WSF) at Kakinada, Andhra Pradesh and offers Specialty Nutrition Solutions to institutional clients. During the year, the JV launched two new crop specific WSF product ''Speedos Pulses SP'' and ''Speed fol Potato SP'' and undertook field efficacy trials for developing other crop solutions in horticulture space. On the manufacturing front, improved plant throughput and market demand for WSFs led to 46% higher production during the year. The JV has earned a total income of Rs, 55.28 Crore for the year ended March 31, 2017 and the net Profit was Rs, 3.64 Crore.
b) Yanmar Coromandel Agrisolutions Private Limited (YCAPL):
YCAPL, a joint venture company that commenced operations in July 2014, recorded sales of Rs, 21.27 Crore in FY 2016-17 and a net loss of Rs, 6.19 Crore. The company is currently in the business of importing and marketing of agri machinery in the Indian market. During the year, the JV introduced combine harvester and new variant in rice transplanted segment, which have received positive response from the market. The JV launched its second Agri-Support Centre in Tanjore, Tamil Nadu,in addition to its facility in Tadepalligudam, Andhra Pradesh, to strengthen its service capability and after sales support. Further plans of expansion are under pipeline for launch of new Agri-Support Service Centre in other States. Coromandel holds 40% equity in the JV and the balance is held by Yanmar (40%) and Mitsui (20%).
Associate Company
a) Sabero Organics Philippines Asia Inc (SOPA):
SOPA, an associate company is based in Philippines and did not have any significant operations during the year 2016-17.
Strategic Investment
a) Tunisian Indian Fertilizersâ S.A., Tunisia (TIFERT):
TIFERT, a company based in Tunisia, manufactures phosphoric acid which is a key raw material for operating Phosphatic fertilizer plants. Your Company''s strategic investment in TIFERT (15% equity) is aimed at securing uninterrupted supply of phosphoric acid for Company''s operations at Kakinada and Visakhapatnam. During the year, TIFERT could not operate at desired capacity due to local disturbances and technical problems at the Plant. The lower capacity utilization impacted the liquidity position of TIFERT, resulting in delayed payment of loan installment due in March 2017 to the lenders. As a result, the lenders issued an Acceleration Notice followed by a call notice to the shareholders of TIFERT, calling upon them to pay the loan outstanding in proportion of their respective shareholding (Coromandel''s share: USD 35.25 million). Subsequent to issuance of Acceleration Notice, TIFERT paid the loan installment on March 30, 2017. The shareholders (Tunisian and Indian) are in discussions with the lenders to resolve the situation amicably as TIFERT plans to improve its capacity utilization through ensuring business continuity during 2017-18 and beyond. Towards this, the shareholders of TIFERT have extended support to scale up phosphoric acid production and improve plant throughput.
b) Foskor (Pty) Limited, South Africa (FOSKOR):
Your Company, along with CFL Mauritius Limited, holds 14% equity of Foskor (Pty) Limited. During the year, Foskor''s production improved considerably and plant achieved consistency in production numbers. Coromandel extended continuous support to Foskor in terms of providing preventive maintenance, ensuring spares availability and recruitment of key personnel.
Safety, Health and Environment (SHE)
Your Company gives utmost importance to employees health and safety, given the sensitive nature of operations that involves handling of chemical products. Company has put in robust processes and safety performance indicators to track its SHE performance. During the year, your Company demonstrated its commitment towards ensuring employee safety and the Total Recordable Injury Rate (TRIR) per million man hours has been restricted below 1 levels (0.73). Process Safety Management System (PSMS) were strengthened across the fertilizer units - HAZOP studies, Root Cause Analysis, Safety process standardization and PSM training were carried out- resulting in improvement in scores across the locations.
Your Company has demonstrated consistent progress in key environmental performance indicators, including reducing air emissions, waste water generation, hazardous and non-hazardous wastes generation, and natural resource management by implementing 4R approach - Replace, Reduce, Reuse and Recycle. Your Company has established the Environmental Management System (EMS), ISO 14000-certified, with defined processes and procedures for identifying, evaluating and reducing the environmental impacts, while maintaining the operating efficiency and ensuring regulation compliance. All manufacturing sites undergo Environmental Impact assessment to understand the long term impact of manufacturing activities. During the year, your Company''s commitment towards environment remained firm- Green belt coverage in the key manufacturing sites stood between 25% to 50% levels. Your Company has planted about 8,800 saplings across its manufacturing sites in collaboration with local Forest Department authorities and Social Forest Conservation agencies, bringing an additional 19 acres under the green belt.
Corporate Social Responsibility Initiatives
Corporate Social Responsibility (CSR) has been an integral part of your Company''s culture and the Company has been associated in the past directly and through AMM Foundation (an autonomous public charitable trust engaged in philanthropic activities the field of Education and Healthcare) for contributing towards society''s development. During the year, your Company has undertaken various CSR projects in the areas of education, health and community development targeting inclusive growth and social capital improvement. Coromandel Girl Child Education Scheme, which offers economic assistance to IX & X standard students, was relaunched and expanded coverage to 2,120 girls in 857 schools. On the health front, Coromandel Medical Centre and Mobile van facilities were introduced at Sarigam, which catered to the medical needs of nearly 11,000 community members. Going forward, your Company plans to address the health needs including diagnostic facilities and an out-patient facility by seting up a hospital at Kakinada. Coromandel has also created access to opportunities and resources through its economic development and infrastructure & environment support initiatives. In accordance with the provisions of Section 135 of the Companies Act, 2013, the Company has formed a CSR Committee and a CSR Policy is in conformity with the provisions of the Act. The CSR Policy can be accessed on the Company''s website at http://www.coromandel. biz/csr policy.html. The projects undertaken during the year are in accordance with Schedule VII of the Act. Details of composition of CSR Committee and CSR Projects undertaken during the year and reasons for not spending the balance amount are given in Annexure Cto this Report.
Awards/Recognition
Your Company has won various external recognitions at National and Global level for the people practices in the areas of Employee Connect, Total Quality Management, CSR and Labour management initiatives, mentioned as under:
- Manufacturing:
- Best Management Award from Labour department of Government of Andhra Pradesh for Vizag and Kakinada Plants, May 2016
- Best operating Phosphoric acid for the Vizag plant for the year 2015-16 by Fertilizer Association of India
- âSustainable Waste & Resource Management Award'' during India Sustainability Leadership Summit-2016
- CII Energy Efficient Unit Award 2016 for Vizag Plant-consecutively for 3 years.
- Employee Involvement in TQM Initiatives:
- Strong commitment award for 5S Sustenance level at Vizag Unit, ABK-AOTS, Tamil Nadu Centre
- Excellence in Suggestion Scheme under Fertilizer Industry, 2nd Rank, Indian National Suggestion Scheme Association
- Excellence and Gold Awards for Small Group Activity Projects from Quality Circle Forum of Indian, Regional and National Chapters
- Corporate
- ICAI Award for Excellence in Financial Reporting for Annual Report 2015-16
- Award for ''Chronicle'' in Best Employee Communication Category from Public Relations Society of India (PRSI)
- Best House Journal Category for âVoice'' from PRSI as well as from Association of Business Communicators of India (ABCI)
- Award for ''Corporate Social Responsibility Brochure Design Communication'' in Best Brochure Design Communication Category from ABCI
- Global Award of Distinction (Silver) for in-house magazine âVoice'', Distinction for ''Voice'' Cover page from Academy of Interactive & Visual Arts, New York.
Particulars of Loans, Guarantees and Investments
Details of loans and guarantees given and investments made under Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.
Public Deposits
The Company has not accepted any deposit from the public under Chapter V of the Companies Act, 2013 or under the corresponding provisions of Section 58A of the Companies Act, 1956, since 2003 and no amount of principal or interest was outstanding as on the Balance Sheet date.
Share Capital
The paid up equity share capital of the Company as on March 31, 2017 was Rs, 29.17 Crore. During the year, the Company had allotted 3,48,662 equity shares of Rs, 1 each under ESOP Scheme 2007.
Postal Ballot-2016
During the year under review, shareholders have approved following business through Postal ballot (including e-voting) on January 11, 2017, by way of special resolution with requisite majority:
a) Approval for alteration of Articles of Association of the Company for adoption of new set of Articles of Association in alignment with the Companies Act, 2013.
b) Approval for Employee Stock Option Plan 2016 (âESOP 2016'') and grant of Stock Options to the employees of the Company under the ESOP 2016.
c) Approval for grant of Stock Options to the Employees of Subsidiary Companies of the Company under Employee Stock Option Plan 2016.
Internal Control Systems and their adequacy
The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.
The Company has its own corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Controls and System across all key processes covering various locations. Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any, are reported to Board.
Vigil Mechanism/Whistle Blower Policy
The Company has a Whistle Blower Policy which provides the employees, customers, vendors and directors an avenue to raise concerns on ethical and moral standards and legal provisions in conduct of the business operations of the Company. It also provides for necessary safeguards for protection against victimization for whistle blowing in good faith. The Vigil Mechanism is also placed on the website of the Company.
Policy on prevention of Sexual Harassment
The Company has in place Prevention of Sexual Harassment Policy (POSH) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy. During the year 2016-17, there were no complaints received by the ICC.
Directors
In accordance with Article 17.29 of the Company''s Articles of Association, read with Section 152 of the Act, Mr. V Ravichandran retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Mrs. Nirupama Rao was appointed as an Additional Director (Non-Executive Independent) of the Company with effect from September 05, 2016.
Mrs. Ranjana Kumar ceased to be an Independent Director of the Company, on completion of her term on July 22, 2016.
All the Independent Directors of the Company have given declarations under subsection (6) of Section 149 of the Act and the same have been considered and taken on record by the Board.
Board Evaluation
In accordance with the provisions of Section 134 of the Act and Regulation 17 of the Listing Regulations, the Board has carried out evaluation of its own performance, the performance of Committees of the Board, namely, Audit Committee, CSR Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination and Remuneration Committee and also the directors individually. Pursuant to guidance note of SEBI on Board Evaluation, the forms used for evaluation exercise were reviewed and revised bythe Nomination and Remuneration Committee and the evaluation process was carried out. The manner in which the evaluation was carried out and the process adopted has been mentioned in the Corporate Governance Report.
Familiarization Programme for Independent Directors
On their appointment, Independent Directors are familiarized about the Company''s operations and businesses. Interaction with the Business Heads and key executives of the Company is also facilitated. Detailed presentations on the business of each of the Division are also made to the Directors. A manual containing all important policies of the Company is also given to the directors. Direct meetings with the Chairman and the Managing Director are further facilitated for the new appointee to familiarize him/her about the Company/its businesses and the group practices.
As part of the familiarization programme, a handbook is provided to all the Directors including Independent Directors at the time of their appointment. The handbook provides a snapshot to the Directors of their duties and responsibilities, rights, appointment process and evaluation, compensation, Board procedure and stakeholders'' expectations. The handbook also provides the Directors with an insight into the Group''s practices. The details of familiarization programme as above are also disclosed on the Company''s website.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Salient features of the Remuneration Policy is set out in the Corporate Governance Report. The Remuneration Policy is available on the Company''s website at http://www.coromandel.biz/csr policy.html.
Risk Management Policy
The Company has constituted a Risk Management Committee. Details of constitution of the Committee are set out in the Corporate Governance Report. The Company has formulated a Risk Management Policy, under which various risks associated with the business operations are identified and risk mitigation plans have been put in place, details of which are set out in the Corporate Governance Report/Management Discussion and Analysis Report.
Material Subsidiary Policy
The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Regulations. The Policy on Material Subsidiary is available on the website of the Company at http://coromandel.biz/pdf/ Investors Information/PolicyOnMaterialSubsidiary.pdf.
Dividend Distribution Policy
The Company has adopted Dividend Distribution policy in line with the requirements of Listing Regulations, 2015. The Dividend Distribution Policy is available on the website of the Company at http://coromandel.biz/pdf/2016-2017/InvestorsInformation/DividendDistributionPolicy.pdf
Board Meetings
A calendar of Board meetings is prepared and circulated in advance to the Directors. During the year 2016-17, seven Board Meetings were held, the details of which are given in the Corporate Governance Report.
Related Party Transactions
All related party transactions that were entered into during the financial year were on arm''s length basis and in the ordinary course of business. There were no material related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management Personnel which may have a potential conflict with the interest of the Company at large.
All related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are foreseen and are repetitive in nature. The related party transactions entered into are reviewed by an independent audit firm to confirm that they were in the ordinary course of business and at arm''s length basis. The Policy on Related Party Transaction is available on the Company''s website at http://www.coromandel.biz/pdf/InvestorsInformation/RPT Policy.pdf.
None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration, sitting fee and commission.
Audit Committee
The Audit Committee comprises of Mr. Sumit Bose, Chairman, Dr. BVR Mohan Reddy, Mr. Prasad Chandran and Mr. M M Venkatachalam. All the recommendations made by the Audit Committee were accepted by the Board.
Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, were appointed as Auditors of the Company for a period of five years from the conclusion of the Annual General Meeting held on July 23, 2014. As required under the provisions of Section 139 of the Act, a resolution for the yearly ratification of their appointment is being placed before the shareholders for their approval.
Cost Auditors
Pursuant to Section 148 of the Act, read with The Companies (Cost Records and Audit) Rules 2014, the cost records of the Company are required to be audited. Based on the recommendations of the Audit Committee, your Board has appointed the following Practicing Cost Accountants, to audit the cost records of the Company as per details given below:
|
Name of the Cost Units covered by Auditors the Cost Auditors |
Audit Fees (Rs,in Lakhs) |
|
Mr. V Kalyanaraman All units of the Company at Visakhapatnam, Kakinada and Ennore |
7.00 |
|
Mrs. Jyothi Satish All units of the Company |
4.00 |
|
manufacturing Single Super |
|
|
Phosphate at Ranipet, Udaipur, |
|
|
Hospet, Nandesari - Baroda, Kota, |
|
|
Raigad, Nimrani, Raebareili and the |
|
|
Pesticides Units in Sarigam, Dahej, |
|
|
Ranipet, Ankleshwar and Jammu |
The Cost Audit Report for the year 2015-16 has been filed with Ministry of Corporate Affairs within the prescribed time limit as per the Act.
Particulars of Employees
A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure D to this Report.
A statement containing the name of employee employed throughout the financial year and in receipt of remuneration aggregating Rs, 1,02,00,000 or more and top 10 employees in terms of remuneration drawn, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure E to this Report.
Extract of the Annual Return
In accordance with Section 134(3)(a) of the Act, an extract of the Annual Return in the prescribed format is appended as Annexure F to this Report.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance. As stipulated under the requirements of the Listing Regulations, a report on Corporate Governance duly audited is appended as Annexure G for information of the Members. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s. R Sridharan & Associates, Practicing Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2016-17. The report of the Secretarial Auditor is enclosed as Annexure Hand forms part of this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Key Managerial Personnel
Mr. Sameer Goel, Managing Director, Mr. S Sankarasubramanian, Chief Financial Officer and Mr. P Varadarajan, Company Secretary, are the Key Managerial Personnel (KMP) of the Company.
Conservation of energy, technology absorption, foreign exchange earnings and outgo.
The particulars as prescribed under Sub-section (3) (m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure I to this Report.
Employee Stock Option Plans
Employee Stock Option Scheme 2007 - ESOP 2007
The Company had in the past, approved an Employee Stock Option Scheme 2007 (ESOP Scheme 2007), under which employees were granted Options. The Company made grants under the said Scheme during the period 2007 to 2011. Number of Options outstanding as on date under the ESOP Scheme 2007 are
6,61,182. It is not proposed to make any further grants under ESOP Scheme 2007.
Employee Stock Option Plan - ESOP 2016
The Shareholders have, through Postal Ballot, on January 11, 2017 authorized the Board/Nomination and Remuneration Committee to issue to the employees, such number of Options under the ESOP 2016, as would be exercisable into not exceeding 1,45,81,000 fully paid-up equity shares of Rs, 1/- each in the Company.
The Nomination and Remuneration Committee, is empowered to formulate detailed terms and conditions of the ESOP Scheme 2016, administer and supervise the same. The specific employees to whom the Options would be granted and their eligibility criteria would be determined by the Nomination and Remuneration Committee at its sole discretion. Further, the Nomination and Remuneration Committee is empowered to determine the eligible subsidiary companies, whether existing or future, whose employees will be entitled to stock options under this Scheme.
Options granted under this ESOP 2016 would vest on or after 1 (one) year from the date of grant but not later than 4 (four) years from the date of grant of such Options or any other terms as decided by the Nomination and Remuneration Committee. The Company has granted 21,74,500 options to the employees during the year under ESOP 2016.
The disclosure required to be made under Regulation 14 of the said Regulations is available on the Company''s website at http://www.coromandel.biz/inv_financial.html.
Business Responsibility Report
Pursuant to Regulation 34 of Listing Regulations, the Company has prepared the Business Responsibility Report in line with business principles as provided in the Business Responsibility Policy adopted by the Company. Business Responsibility Report is enclosed as Annexure J to this Report and the same is also available on the website of the Company at http://coromandel.biz/inv report.html.
Acknowledgement
The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results. The Directors also wish to acknowledge and record their appreciation of the continued support and assistance received by the Company from State Bank of India and other Banks, financial institutions, mutual funds, as well as from various Government bodies both at the Centre and the State.
On behalf of the Board
Place: Secunderabad A Vellayan
Date: April 28, 2017 Chairman
Mar 31, 2015
Dear Members,
The Board of Directors have pleasure in presenting the 53rd Annual
Report together with the Audited Financial Statements for the financial
year ended March 31, 2015.
Summary of Financial Results Rs.in Crore
2014-15 2013-14
Revenue:
From Operations 11285 9381
Other 56 6
Total revenue 11341 9442
Profit:
Profit before interest, Depreciation 908 800
and Taxation
Less: interest 209 211
Depreciation 103 82
Profit Before Exceptional Items 596 507
& tax
exceptional Item 4 13
Profit Before Tax 592 494
Less: Provision for Tax 189 149
(including deferred tax)
Profit After tax 403 345
The results for the current year include results of erstwhile Sabero
Organics Gujarat Limited, which has been amalgamated with your Company
with effect from April 1,2014, pursuant to a Scheme of Amalgamation
approved by the Hon''ble High Court of Judicature at Hyderabad for the
State of Telangana and the State of Andhra Pradesh and the Hon''ble High
Court of Gujarat.
transfer to reserves
The Company proposes to transfer Rs. 300 crore to the General Reserves of
the Company and retain Rs. 616.28 crore in the Profit and Loss Account.
Dividend
Your Directors are pleased to recommend a final Dividend of Rs. 2.50 per
equity share of Rs. 1 each. The Company had announced an interim dividend
of Rs. 2 per equity share on March 23, 2015 and paid the same during
April 2015. The total dividend for the year ended March 31, 2015 would
accordingly be Rs. 4.50 per equity share of Rs. 1 each. The total outgo for
the year would be Rs. 157.53 crore, including dividend distribution tax
of Rs. 26.47 crore.
operations
After experiencing two difficult years, fertiliser industry''s
performance improved during 2014-15, on account of normalisation of
pipeline inventories, relatively stable currency rates and modest
global prices of fertilisers and key inputs. The industry sales for
DAP and complex fertilisers recovered moderately by 12%. However, the
farm sector was impacted by deficit monsoons, lower reservoir levels,
falling crop acreages and declining agri commodity prices in key
markets.
Your Company leveraged its strengths to post significant growth during
the year, by offering its complete portfolio of agri-inputs, comprising
of fertilisers and organic manure, crop protection products and
speciality nutrients. Further, your Company continued expansion of its
rural retail footprint in Andhra Pradesh, Telangana and Karnataka to
about 800 stores and improved its performance by growing the
non-fertiliser business and increasing its realizations.
During the year, your Company has strengthened its market leadership
position in complex fertilisers segment, growing the volumes by 32% and
improving its market share from 23% to 26%. The overall market share in
Phosphatic segment improved from 16% to 16.3% with a healthy volume
growth of 15% over last year. The brand equity index in key markets has
seen a turnaround, which resulted in increased market share in Andhra
Pradesh, Telangana, Karnataka, Tamil Nadu, West Bengal and Maharashtra.
The year saw establishment of Divisional Marketing Offices to improve
customer interface and response time. With the setting up of focused
Marketing, Supply Chain, Finance and HR support services at the
regional level, it is expected that decision making and customer
servicing will improve going forward.
On the Operations front, your Company effectively managed phosphoric
acid availability to improve its capacity utilization. Fortified
products like 24:24:0:8S and Zincated DAP were introduced during the
year and production was successfully stabilized. Vizag plant
operations, which were affected by Hud hud cyclone in October 2014,
were efficiently handled and impact was minimized with nil injury to
workmen. Your Company continued its focused commitment towards
improving plant safety, and ensured Total Recordable injury Rate per
million man hours (TRiR) of the fertiliser units is less than 1.
Crop Protection division strengthened its Exports business to key
markets in Latin America (LATAM) and Europe and posted significant
growth during the year. Domestic formulations business, though impacted
by season failure, continued to improve its brand equity through
umbrella branding "Gromor Suraksha". Your Company established a China
desk for improving its sourcing efficiency, marketing, registration,
technology partnerships and market information capabilities. To bring
focus to product synthesis and new molecule development, an R&D Centre
has been set up in Hyderabad. The facility will be used to establish
new product pipeline on a continuous basis to meet global business
needs and growth aspirations.
During the year, Sabero Organics Gujarat Limited, a subsidiary of the
Company, was merged with the Company, pursuant to the Scheme of
Amalgamation approved by the High Court of Judicature at Hyderabad for
the State of Telangana and the State of Andhra Pradesh and the High
Court of Gujarat. The synergy of both the businesses will be leveraged
to strengthen technical product portfolio and improve penetration
globally.
Your Company continues to be among the market leaders in Water Soluble
Fertilisers (WSF) and Sulphur product segments. During the year,
Speciality Nutrients business strengthened its crop based promotion
approach through launch of "Gromor Sampoorthi" initiative. The
initiative aims at providing complete crop specific nutrition solution
to maximize farmer''s yields through adoption of Speciality fertilisers.
Business also leveraged strengths of its joint venture partner SQM, to
introduce crop specific WSF grades and developing crop knowledge.
Retail business, despite low off take of fertilisers, reported growth
in non fertiliser products. A number of new initiatives were introduced
during 2014-15 to improve process efficiencies and facilitate long term
growth. This has led to a growth in Retail margins by 12.5% over the
previous year levels. Our retail outlets, spread across Andhra Pradesh,
Telangana and Karnataka, have become the face of the Company and
received many prestigious awards during the year, in recognition of its
contribution to agriculture and business performance in rural retail.
Your Company enhanced its geographical presence in Northern and Western
region post acquisition of Liberty Phosphate Limited in 2013-14. During
the year, SSP business consolidated its operations to maximize synergy
out of the combined team. As a result, sales volumes improved by 1.5%,
inspite of severe crop losses in key operating markets. Specific focus
was given to strengthen brand building initiatives for integrating
Double Horse brand with Gromor through mass media campaigns.
During the year, your Company entered into a joint venture (JV) with
Yanmar and Mitsui, for manufacturing and marketing farm implements -
rice transplanters and combined harvesters. With reducing resources and
dropping yields in india, your Company is now suitably positioned to
offer cost effective solutions to farmers to improve their crop
productivity. The JV will be leveraged to develop equipment, tailored
for indian farm requirements and scale up its Farm Mechanization
Services operations.
Your Company has recorded a total revenue of Rs. 11,341 crore. Profit
for the year before depreciation, interest and taxation was Rs. 908 crore
and Profit before tax was Rs. 592 crore. Net Profit after tax was Rs. 403
crore.
Management Discussion & Analysis
The Management Discussion and Analysis Report highlighting the industry
structure and developments, opportunities and threats, future outlook,
risks and concerns etc. is furnished separately and forms part of this
Report.
Directors'' Responsibility Statement
The Directors'' Responsibility Statement pursuant to the provisions of
Section 134(3)(c) and 134(5) of the Companies Act, 2013 ("the Act") is
appended as Annexure A to this Report.
Consolidated Financial Results
Consolidated Financial Statements incorporating the operations of the
Company, its subsidiaries and Joint Venture Companies is appended. As
required under the provisions of the Act, a statement showing the
salient features of the financial statements of the subsidiaries,
associates and joint ventures is enclosed as an Annexure B to this
Report.
The financial statements of the subsidiary companies will be made
available to the members of the Company and its subsidiary companies on
request and will also be kept for inspection in the Registered Office
of the Company.
Subsidiary Companies
During the year under review, Liberty Phosphate Limited (LPL), Liberty
Urvarak Limited and Sabero Organic Gujarat Limited (Sabero) have ceased
to be subsidiaries of the Company, consequent to their merger with the
Company pursuant to Schemes of Amalgamation. Sabero Organics America
SA, Brazil, Sabero Australia Pty Ltd., Australia, Sabero Europe BV,
Netherland, Sabero Argentina SA, Argentina and Sabero Organics Mexico
SA de CV, Mexico, which were subsidiaries of Sabero have now become
direct subsidiaries of the Company consequent to the merger of Sabero
with the Company. Similarly, Liberty Pesticides and Fertilisers Ltd.,
which was subsidiary of LPL, has also become a direct subsidiary of the
Company.
Brief details of the performance of the subsidiaries of the Company are
given below.
a) CFL mauritius Limited (CML)
CFL Mauritius Limited, a wholly owned subsidiary, incurred loss of US $
0.05 million (equivalent to Rs. 0.31 crore) during the year ended
December 31,2014. Primary source of income for this subsidiary is
dividend income from Foskor (Pty) Ltd. and the subsidiary did not
receive any dividend from Foskor during the year.
b) Parry Chemicals limited (Pd)
PCL, a wholly owned subsidiary of the Company, earned a total revenue
of Rs. 1.12 crore for the year ended March 31, 2015 and Profit after Tax
was Rs. 0.60 crore.
c) dare Investments limited (Du)
DiL, a wholly owned subsidiary of the Company, did not have any
significant operations and incurred a loss of Rs. 0.01 crore for the year
ended March 31, 2015.
d) liberty Pesticides and Fertilisers limited (LPFL)
LPFL, a wholly owned subsidiary of the Company, did not have any
significant operations during the year 2014-15.
e) Coromandel Brasil Limitada (CBL)
CBL, a Limited Liability Partnership, owned 100% by the Company and its
subsidiary CFL Mauritius Ltd., is primarily engaged in getting product
registrations in Brazil and procuring orders for supplies from india.
it incurred a net loss of Brazilian Reals 0.22 million (equivalent to Rs.
0.58 crore) for the year ended December 31, 2014.
f) Sabero organics america SA (SoAL)
SOAL is primarily engaged in getting product registrations in Brazil
and procuring orders for supplies from india. it incurred a net loss of
Brazilian Reals 0.26 million (equivalent to Rs. 0.68 crore) for the year
ended December 31, 2014.
g) Sabero Australia Pty Ltd. (SAPL)
SAPL did not have any significant operations during the year 2014-15.
it incurred a net loss of AUD 0.03 million (equivalent to Rs. 0.14 crore)
for the year ended March 31, 2015.
h) Sabero Europe BV (SEBV)
SEBV is primarily engaged in getting product registrations in Europe
and procuring orders for supplies from india. it did not have any
significant operations during the year ended May 31, 2014.
i) Sabero Argentina SA (SA)
SA is primarily engaged in getting product registrations in Argentina
and procuring orders for supplies from india. it incurred a net loss of
Peso 0.01 million (equivalent to Rs. 0.01 crore) for the year ended
December 31, 2014.
j) Sabero Organics Mexico SA de CV (SOM)
SOM is primarily engaged in getting product registrations in Mexico and
procuring orders for supplies from india. it incurred a net loss of
Peso 2.64 million (equivalent to Rs. 1.21 crore) for the year ended
December 31, 2014.
Joint Venture Companies
a) Coromandel Sqm (India) Pvt Ltd.
The Joint Venture Company, formed to set up a Water Soluble Fertilisers
(WSF) Plant at Kakinada, Andhra Pradesh, has earned a total income of Rs.
63.39 crore for the year ended March 31, 2015 and the net Profit was Rs.
2.02 crore.
b) Yanmar Coromandel Agrisolutions Private Limited
The Joint Venture formed during the year, would initially sell imported
rice transplanters and combined harvesters and, over a period of time,
increase the level of indigenization by manufacturing various
components in order to reduce costs and customize the products for
indian conditions. Coromandel holds 40% equity in the JV Company and
the balance is held by Yanmar (40%) and Mitsui (20%). The JV Company
has commenced operations and during the year ended March 31, 2015
recorded a revenue of Rs. 7.35 crore and incurred a loss of Rs. 1.71 crore.
c) Coromandel Getax Phosphates Pte. ltd
The Joint Venture Company based in Singapore was formed for leveraging
opportunities for rock phosphate mining/ sourcing. it incurred a loss
of US $ 0.15 million (equivalent to Rs. 0.94 crore) for the year ended
December 31, 2014.
Associate Company
a) Sabero organic Philippines asia Inc (SoPA)
Consequent to the merger of Sabero with the Company, SOPA has become an
associate company. The company is based in Philippines. However, no
operations have commenced in the company.
Strategic Investments
a) Tunisian Indian Fertilisers S.A., Tunisia (TIFERT)
Your Company has a strategic investment of 15% equity stake in TiFERT,
a company based in Tunisia, manufacturing phosphoric acid. The
strategic investment in TiFERT is aimed at securing uninterrupted
supply of phosphoric acid for the Company''s operations at Kakinada and
Visakhapatnam. TiFERT''s plant in Tunisia, which was commissioned
during the year 2013, could not operate at desired capacity due to
paucity in supply of phosphate rock on account of social unrest in that
country. With the normalcy returning in Tunisia, the rock supply
situation is expected to improve resulting in better performance by
TiFERT during the year 2015.
b) Foskor (Pty) limited, South africa
Your Company, along with CFL Mauritius Limited, holds 14% equity of
Foskor (Pty) Limited and continues to leverage its relationship with
Foskor in sourcing phosphoric acid, the key raw material, for
manufacturing phosphatic fertilisers.
Safety, Health and Environment (SHE)
Company''s focus on Safety, Health and Environment continued during the
year under review across all locations with all manufacturing plants
maintaining high safety standards. Company has put in place robust
processes and performance indicators to track its SHE performance.
There was a significant reduction in reportable incidents during the
year. Your Company maintained high standards of environmental
performances with all facilities operating well within norms. Your
Company continued its efforts to track health indicators of all its
operating staff working in critical areas through its occupational
health centres at its factories.
Process safety focused on fertiliser plants and special drive carried
out during annual turnaround time helped in addressing the process
related ''near miss'' incidents. Structural safety initiatives undertaken
at Ennore and Visakhapatnam units will continue to improve the
structural integrity. increased emphasis laid on contractor safety
training, performance monitoring, continuous communication and
initiation of a reward mechanism resulted in healthy plant safety
environment.
Action plan implemented based on DuPont safety management evaluation
assessment will continue to strengthen the safety culture of the
organisation. All the plants continued to make significant progress in
attaining external SHE recognition, and have been certified with iSO
14001 Environmental Management System certification and conforms to
Process Safety Management System. The overall safety and environment
continued to improve during the year.
Corporate Social responsibility Initiatives
The Company has taken up various Corporate Social Responsibility (CSR)
initiatives in the past, directly and also through AMM Foundation, an
autonomous public charitable trust engaged in philanthropic activities
in the field of Education and Healthcare. With the enactment of the CSR
provisions in the Act, Company has formed a CSR Committee and a CSR
Policy in conformity with the provisions of the Act. The CSR Policy can
be accessed on the Company''s website at the following link
http://coromandel.biz/csr_policy.html. During the year, the Company has
undertaken various CSR projects in the areas of education, health,
water and sanitation. These projects are in accordance with Schedule
Vii of the Act. As per the provisions of the Act, the Company was
required to spend Rs. 13.23 crore towards CSR activities during the year
2014-15, of which the Company has spent Rs. 10.28 crore. Details of
constitution of the CSR Committee, CSR Projects undertaken during the
year and the reasons for not spending the balance amount are given in
the Annexure C to this Report.
Awards and Recognition
Your Company continues to receive many awards and accolades from
industry associations. During the year the Company received the
following awards/accolades:
a) "Outstanding Agrisolutions Provider of india" from the Consortium of
indian Farmers Associations at the 10th National Farmers Conference
held in December 2014.
b) ''Agriculture Leadership Awards 2014'' for empowering farms and
farmers with agriculture inputs products and farm services.
c) CMO Asia Retail Excellence Award 2014 for Customer Loyalty Program
initiative.
d) Cii-iTC Sustainability Awards 2014 - Commendation for Significant
Achievement in Environment Management - by the Ennore Plant.
e) india Manufacturing Excellence Award (iMEA) for Workplace Safety
Management in innovative category by Frost & Sullivan at Mumbai, for
the Ennore Plant.
f) "Retailer of the Year" award under Rural impact and CSR Category by
ABP News.
g) Prestigious Global Communicator Awards from Academy of interactive &
Visual Arts, New York - Global Award of Excellence (Gold) for "Calendar
2013", Global Award of Distinction for "Voice (Silver) 2013"Cover page,
Global Award of Distinction (Silver) for "Voice 2013".
Particulars of Loans, Guarantees and Investments
Details of loans and guarantees given and investments made under
Section 186 of the Act are given in the Notes to the Financial
Statements.
Public Deposits
The Company has not accepted any deposit from the public under Chapter
V of the Act or under the corresponding provisions of Section 58A of
the Companies Act, 1956, since 2003 and no amount of principal or
interest was outstanding as on the Balance Sheet date.
Share Capital
The paid up equity share capital of the Company as on March 31, 2015
was Rs. 29.13 crore. During the year the Company had issued shares as
detailed below:
a) 25,74,193 equity shares of Rs.1 each to the shareholders of erstwhile
Liberty Phosphate Limited pursuant to a Scheme of Amalgamation;
b) 53,09,210 equity shares of Rs. 1 each to the shareholders of erstwhile
Sabero Organics Gujarat Limited pursuant to a Scheme of Amalgamation;
and
c) 1,85,132 equity shares of Rs. 1 each under ESOP Scheme 2007 of the
Company.
Particulars of Employees
A table containing the particulars in accordance with the provisions of
Section 197(12) of the Act, read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, is
appended as Annexure D to this Report.
A statement containing the name of every employee employed throughout
the financial year and in receipt of remuneration of Rs. 60 lakh or more,
or employed for part of the year and in receipt of Rs. 5 lakh or more a
month, under Rule 5(2) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, is enclosed as Annexure E to this
Report.
Extract of the Annual Return
in accordance with Section 134(3)(a) of the Act, an extract of the
Annual Return in the prescribed format is appended as Annexure F to
this Report.
Corporate Governance
The Company is committed to maintain high standards of Corporate
Governance. As stipulated under the requirements of the Listing
Agreement with Stock Exchanges, a report on Corporate Governance duly
audited is appended as Annexure G for information of the Members. The
requisite certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance is attached to
the Report on Corporate Governance.
directors and Key Managerial Personnel
in accordance with Article 121 of the Company''s Articles of
Association, read with Section 152 of the Act, Mr M M Venkatachalam
retires by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for re-appointment.
Mr. Prasad Chandran was appointed as an Additional Director on April
18, 2014 and then as an independent Director of the Company at the last
Annual General Meeting held on July 23, 2014.
All the independent Directors of the Company have given declarations
under sub-section (6) of Section 149 of the Act, and the same have been
considered and taken on record by the Board.
Mr. S Sankarasubramanian, Chief Financial Officer and Mr. P
Varadarajan, Company Secretary, are the Key Managerial Personnel (KMP)
of the Company in terms of the provisions of the Act. Mr. Kapil Mehan,
Managing Director, who was one of the KMPs, has resigned and was
relieved on February 13, 2015.
Familiarisation Programme for Independent directors
On their appointment, independent Directors are familiarized about the
Company''s operations and businesses. interaction with the Business
Heads and key executives of the Company is also facilitated. Detailed
presentations on the business of each of the Division are also made to
the Directors. Direct meetings with the Chairman and the Managing
Director are further facilitated for the new appointee to familiarize
him/her about the Company/its businesses and the group practices.
As part of the familiarization programme, a handbook is provided to all
Directors including independent Directors at the time of their
appointment. The handbook provides a snapshot to the Directors of their
duties and responsibilities, rights, appointment process and
evaluation, compensation, Board procedure and stakeholders''
expectations. The handbook also provides the Directors with an insight
into the Group''s practices.
The details of familiarisation programme as above are also disclosed on
the Company''s website http://coromandel.biz/ investorsinformation_iDFP.
Number of Board Meetings
A calendar of meetings is prepared and circulated in advance to the
Directors. During the year 2014-15, six Board Meetings were held, the
details of which are given in the Report on Corporate Governance.
Internal Financial Control Systems
The Company has adequate internal Financial Controls consistent with
the nature of business and size of the operations, to effectively
provide for safety of its assets, reliability of financial transactions
with adequate checks and balances, adherence to applicable statues,
accounting policies, approval procedures and to ensure optimum use of
available resources. These systems are reviewed and improved on a
regular basis. it has a comprehensive budgetary control system to
monitor revenue and expenditure against approved budget on an ongoing
basis.
The Company has its own corporate internal audit function to monitor
and assess the adequacy and effectiveness of the internal Financial
Controls and System across all key processes covering various
locations. Deviations are reviewed periodically and due compliance
ensured. Summary of Significant Audit Observations along with
recommendations and its implementation are reviewed by the Audit
Committee and concerns, if any, are reported to Board.
Vigil Mechanism / Whistle Blower Policy
The Company has a Whistle Blower Policy which provides the employees,
customers, vendors and directors an avenue to raise concerns on ethical
and moral standards and legal provisions in conduct of the business
operations of the Company. it also provides for necessary safeguards
for protection against victimization for whistle blowing in good faith.
The Whistle Blower Policy and the Vigil Mechanism is also placed on the
website of the Company.
Board Evaluation
in accordance with the provisions of the Act and Clause 49 of the
Listing Agreement, the Board has carried out evaluation of its own
performance, the performance of Committees of the Board, namely, Audit
Committee, CSR Committee, Risk Management Committee, Stakeholders
Relationship Committee, and Nomination and Remuneration Committee and
also the directors individually. The manner in which the evaluation was
carried out and the process adopted has been mentioned out in the
Report on Corporate Governance.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration
Committee, framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. Salient features of the
Remuneration Policy are set out in the Report on Corporate Governance.
Risk Management Policy
The Company has constituted a Risk Management Committee. Details of
constitution of the Committee and its terms of reference are set out in
the Report on Corporate Governance. The Company has formulated a Risk
Management Policy, under which various risks associated with the
business operations are identified and risk mitigation plans have been
put in place, details of which are set out in the Management Discussion
and Analysis Report.
Material Subsidiary Policy
The Company has adopted a policy for determining material subsidiary,
in line with the requirements of the Listing Agreement. The Policy on
Material Subsidiary is available on the website of the Company at
http://coromandel.biz/pdf/investorsinformation/
PolicyOnMaterialSubsidiary.pdf
related Party Transactions
All related party transactions that were entered into during the
financial year were on arm''s length basis and were in the ordinary
course of business. There were no material significant related party
transactions made by the Company with the Promoters, Directors, Key
Managerial Personnel or the Senior Management which may have a
potential conflict with the interest of the Company at large.
All related party transactions were placed before the Audit Committee /
Board for approval. Prior approval of the Audit Committee was obtained
for the transactions which are foreseen and are in repetitive in
nature. The related party transactions entered into are reviewed by an
independent audit firm to confirm that they were in the ordinary course
of business and at arm''s length basis. The Company has formulated a
policy for Related Party Transactions which has been approved by the
Board and is placed on the website of the Company.
None of the Directors had any pecuniary relationship or transactions
with the Company, except the payments made to them in the form of
remuneration, sitting fee and commission.
Audit Committee
The Audit Committee comprises of Mr. Uday Chander Khanna, Chairman, Dr.
BVR Mohan Reddy, Mr. Prasad Chandran and Mr. MM Venkatachalam. All the
recommendations made by the Audit Committee were accepted by the Board.
Statutory Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, were appointed as
Auditors of the Company for a period of five years from the conclusion
of the last Annual General Meeting held on July 23, 2014. As required
under the provisions of Section 139 of the Act, a resolution for the
yearly ratification of their appointment is being placed before the
shareholders for their approval. in this regard, the Company has
received a certificate from the auditors to the effect that if they are
reappointed, it would be in accordance with the provisions of Section
141 of the Act.
Cost Auditors
Pursuant to Section 148 of the Act, read with The Companies (Cost
Records and Audit) Rules 2014, as amended, the cost records of the
Company are required to be audited. Based on the recommendations of the
Audit Committee, your Board has appointed the following practicing Cost
Accountants, Mr. V Kalyanaraman, Ms. Jyothi Satish and Mr. P D Dani, to
audit the cost records of the Company as per details given below:
Name of the Units covered by Remuneration
Cost Auditor the Cost Auditor Rs. in Lakhs*
Mr. V Kalyanaraman All units of the Company at 7.00
Visakhapatnam, Kakinada,
Ennore, Ranipet (pesticides),
Ankleshwar and Jammu
Ms. Jyothi Satish All units of the Company 1.00
manufacturing Single Super
Phosphate
Mr P D Dani The Pesticides Units in Sarigam 2.00
and Dahej
* Excluding reimbursement of out of pocket expenses and applicable
taxes
The Cost Audit Report for the year 2013-14 has been filed with MCA
within the prescribed time limit.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014, the
Board had appointed Mr. Tumuluru Krishna Murty of M/s. Tumuluru & Co.,
Practicing Company Secretaries, to undertake the secretarial audit of
the Company. The report of the Secretarial Auditor is marked as
Annexure H to this Report. The Secretarial Audit Report does not
contain any qualification, reservation or adverse remark.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The particulars as prescribed under Sub-section (3)(m) of Section 134
of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as
Annexure I to this Report.
Employees'' Stock options
The disclosures regarding Employee Stock Option Scheme as required
under the Act and the applicable SEBi Regulations are appended as
Annexure J to this Report for information of the Members.
Acknowledgement
The Directors acknowledge and would like to place on record the
commitment and dedication on the part of the employees of your Company
for their continued efforts in achieving good results. The Directors
also wish to acknowledge and record their appreciation of the continued
support and assistance received by the Company from State Bank of india
and other Banks, financial institutions, mutual funds, as well as from
various Government bodies both at the Centre and the State.
on behalf of the Board
Place: Secunderabad a. Vellayan
Date: April 30, 2015 Chairman
Mar 31, 2014
The Board of Directors have pleasure in presenting the highlights of
the performance of your Company together with the Audited Accounts for
the Financial Year ended 31st March 2014.
SUMMARY OF FINANCIAL RESULTS
Rs. in crore
2013-14 2012-13
Revenue :
From Operations 9381 8560
Other 61 67
Total Revenue 9442 8627
Profit:
Profit before Interest, Depreciation 800 802
and Taxation
Less: Interest 211 177
Depreciation 82 59
Profit Before Exceptional Items & 507 566
Tax
Exceptional Item 13 -
Profit Before Tax 494 566
Less: Provision for Tax 149 122
(including deferred tax credit)
Profit After Tax 345 444
The results for the current year include results of erstwhile Liberty
Phosphate Limited (LPL) and erstwhile Liberty Urvarak Limited (LUL),
which have been amalgamated with your Company with effect from 1st
April 2013, pursuant to a Scheme of Amalgamation approved by the
Hon''ble High Courts of Andhra Pradesh and Gujarat.
Operations
The south-west monsoon in 2013-14 was one of the best experienced in
recent years and positively infl uenced Kharif sowing and output. Your
Company leveraged the favourable monsoon conditions and its complete
portfolio of agri-inputs comprising of fertilisers, crop protection and
specialty nutrients to register robust growth. Further, your Company
has expanded its retail footprint in Andhra Pradesh and Karnataka and
improved its performance by growing the non-fertiliser segment thereby
registering profi table growth over previous year.
The consumption levels of P&K fertilisers which had declined to
historic lows in 2012-13 recovered in 2013-14 due to increased sowing,
good monsoon and improved groundwater conditions. This has helped the
industry to reduce the pipeline inventory signifi cantly.
Your Company also reduced its inventory of finished products, improved
collections and increased its sales volume resulting in an increase in
market share. In addition, your Company maintained tight controls on
conversion costs and fixed costs and effectively managed phosphoric
acid availability to improve capacity utilization. The new production
stream, C-train at Kakinada produced various grades of complex
fertilisers and DAP. Higher working capital due to pipeline inventory
and receivables has impacted the overall financing costs and focused
efforts helped in easing the position considerably in the current year.
During the year, your Company pursuant to the Scheme of Amalgamation
approved by the Hon''ble High Courts of Andhra Pradesh and Gujarat, has
completed the transfer of the entire business undertaking of LPL and
LUL, including all its assets and liabilities effective 1st April 2013.
Your Company has also acquired the business undertaking from M/s
Tungabhadra Fertilisers and Chemicals Company Limited (TFCCL) on a
slump sale basis. With the addition of LPL and LUL manufacturing
facilities in the northern and western parts of India and the
associated marketing network, your Company will be able to leverage the
combined marketing network to increase the sale of phosphatics and
Single Super Phosphate (SSP). In the year 2013-14 the excessive fi eld
stock of SSP inventory and high input cost of raw materials have
impacted performance of SSP operations.
During the year the Crop Protection business recorded strong growth
over previous years by leveraging its domestic distribution network and
its direct presence in key Latin America and Asia Pacifi c markets. The
Company has added to its portfolio of export registrations and
initiated a regional focus approach with a view to expand its overseas
presence. Domestic formulations business benefi tted from demand
arising out of increased sowing of critical crops like paddy, cotton
and pulses. To create a new identity and to present the farmers with a
stronger value proposition, the Company launched a new umbrella brand
"Gromor Suraksha". The business also improved its production effi
ciencies at its technical manufacturing locations and completed various
projects that have improved the overall product quality, safety and
plant reliability. With the proposed merger of Company''s subsidiary
Sabero Organics Gujarat Limited, the crop protection SBU is poised for
growth leveraging domestic market network and global presence.
Specialty Nutrients business has registered a healthy growth in all
three product categories  Water Soluble Fertilisers (WSF), Sulphur
Products and Micro Nutrients. Your Company is the market leader in
Water Soluble Fertilisers and Sulphur product segments. During the
year, six new products were introduced to offer need based crop
solutions and the business is focused on achieving scale by adopting a
crop based approach to sales and marketing efforts.
The Retail business completed a series of new initiatives and robust
processes in the year 2013-14 to facilitate long term growth. The
business focused on positioning every outlet as a "Complete Farming
Solution" platform through range expansion in the Non-Fertilisers
segments. These initiatives have resulted in Retail registering a
signifi cant growth during the year.
The Company has recorded a total revenue of Rs. 9442 crore. Profi t for
the year before depreciation, interest and taxation was Rs. 800 crore
and Profi t before tax was Rs. 494 crore. Net Profi t after tax was Rs.
345 crore.
Subsidiary Companies:
Sabero Organics Gujarat Limited (Sabero)
Sabero''s total revenue for the year ended 31st March 2014 was Rs.
721.43 crore with a Net profi t of Rs. 33.13 crore as compared to a
profi t of Rs. 7.73 crore in the previous year.
During the year the Boards of your Company and Sabero have approved a
Scheme of Amalgamation for merger of Sabero with the Company, subject
to approval of the respective shareholders, creditors, concerned High
Courts and such other authorities, as may be required. The Scheme will
be with effect from 1st April 2014 but would become operative after
receipt of necessary approvals. Meetings of the shareholders and
creditors of the Company and Sabero are scheduled to be held on 16th
June 2014 and 20th June 2014, respectively.
CFL Mauritius Limited:
The Company (a 100% subsidiary) incurred loss of US $ 0.18 million
(equivalent to Rs. 1.07 crore) during the year ended 31st December
2013. Primary source of income for this subsidiary is dividend income
from Foskor (Pty) Ltd. and during the year, the subsidiary did not
receive any dividend from Foskor. Your Company has during the year made
a further investment of Rs. 25.07 crore in this company.
Parry Chemicals Limited (PCL):
The Company (a 100% subsidiary) earned a total revenue of Rs. 3.32
crore for the year ended 31st March 2014 and Profi t after Tax was Rs.
2.91 crore.
PCL, during the year had sold 558249 equity shares of Sabero Organics
Gujarat Limited (Sabero) representing 1.65% of the equity capital of
Sabero to its holding company, Coromandel.
Dare Investments Limited (DIL):
During the year Dare Investments Limited, which was a wholly owned
subsidiary of PCL, has become a direct subsidiary of the Company. Your
Company had during the year made a further investment of Rs. 4.95 crore
in this company.
Coromandel Brasil Limitada:
The Limited Liability Partnership is primarily engaged in getting
product registrations in Brazil and procuring orders for supplies from
India. It incurred net loss of Brazilian Reals 0.26 million (equivalent
to Rs. 0.70 crore ) for the year ended 31st December 2013.
Liberty Pesticides and Fertilisers Limited (LPFL):
During the year, LPFL which was a wholly owned subsidiary of LPL, has
become a direct subsidiary of the Company and it did not have any
signifi cant operations during 2013-14.
Joint Venture Companies
Coromandel Getax Phosphates Pte Ltd
The Joint Venture Company based in Singapore formed for leveraging
opportunities for rock phosphate mining/ sourcing continued scouting
for opportunities during the year.
Coromandel SQM (India) Pvt Ltd.
The Joint Venture Company, formed to set up a Water Soluble Fertilisers
(WSF) Plant at Kakinada; Andhra Pradesh has earned a total income of
Rs. 63.24 crore for the year ended 31st March 2014 and the net profi t
was Rs. 1.59 crore.
Strategic Investment
Tunisian Indian Fertilisers S.A. (TIFERT)
Company has a strategic investment of 15% equity stake in TIFERT, a
company based in Tunisia, manufacturing phosphoric acid. With the
restoration of near normalcy in Tunisia the plant was commissioned last
year and your Company received phosphoric acid from TIFERT and the
plant is getting stabilized. Your Company''s strategic investment in
TIFERT is aimed at securing uninterrupted supply of phosphoric acid for
the Company''s operations especially for expanded capacity at Kakinada.
Foskor (Pty) Limited (South Africa):
Coromandel along with CFL Mauritius Limited holds 14% equity of Foskor
(Pty) Limited. Coromandel continues to leverage its relationship with
Foksor in sourcing phosphoric acid, the key raw material, for
manufacturing phosphatic fertilisers.
Safety, Health and Environment (SHE)
Company''s focus on Safety, Health and Environment continued during the
year under review across all locations with all manufacturing plants
maintaining high safety standards. Company has put in place robust
processes and performance indicators to track its SHE performance.
There was a signifi cant reduction in reportable incidents during the
year. Your Company maintained high standards of environmental
performances with all facilities operating well within norms. Your
Company continued its efforts to track health indicators of all its
operating staff working in critical areas through its occupational
health centres at its factories.
Process safety focused on fertiliser plants and special drive carried
out during annual turnaround time facilitated to address the process
related ''near miss'' incidents. Structural safety initiatives undertaken
at Ennore and Visakhapatnam units will continue to improve the
structural integrity. Increased emphasis laid on contractor safety
training, performance monitoring, continuous communication and
initiation of a reward mechanism resulted in healthy plant safety
environment.
Action plan implemented based on DuPont safety management evaluation
assessment will continue to strengthen the safety culture of the
organisation. All the plants continued to make signifi cant progress in
attaining external SHE recognition, and have been certifi ed with ISO
14001 Environmental Management System certifi cation and conforms to
Process Safety Management System. The overall safety and environment
continued to improve during the year.
Dividend
Your Directors recommend a Dividend of Rs. 4.50 per equity share.
Bonus Debentures
28,28,17,658 9% Unsecured Redeemable Non-convertible fully paid Bonus
Debentures of Rs. 15 each aggregating to Rs. 424 crores issued by the
Company to the shareholders in July 2012 were to be redeemed in three
annual installments from July 2014. The Company has fully redeemed
these debentures in March 2014 by exercising its option of early
redemption.
Consolidated Financial Results
A Consolidated Financial Statement incorporating the operations of the
Company, its subsidiaries and Joint Venture Companies is appended.
The Ministry of Company Affairs, has given general exemption to
companies from publishing the annual report of its subsidiary companies
wherever a Consolidated Statement has been appended. In view of this,
the Annual Report of the Subsidiary Companies have not been annexed.
However, the Accounts of the Subsidiary Companies and the related
information will be made available to the Members of Coromandel
International Limited and its subsidiary Companies on request and will
also be kept for inspection in the Registered Offi ce of the Company.
Awards/Recognition
Your Company continues to receive numerous awards/ accolades from
industry associations. During the year the Company received the
following awards/accolades:
- ''India''s Best Board - 2013'' Award, instituted by Economic Times and
Hay Group.
- Dun & Bradstreet Corporate Awards 2012 - Top Indian company under the
sector - fertilisers.
- FAI Award on application of Information and Communication Technology
(ICT) in Agriculture -2013''. The award was given in recognition of the
pioneering efforts involving ICT in agriculture initiated by the retail
division while discharging farmer extension services.
- "Retailer of the Year Award" under Rural Impact & CSR category from
Asia Retail Congress.
- First prize in State Energy Conservation from the Government of
Andhra Pradesh for commendable efforts towards signifi cant improvement
in conservation of energy.
Management Discussion & Analysis and Corporate Governance
The "Management Discussion and Analysis Report" highlighting the
industry structure and developments, opportunities and threats, future
outlook, risks and concerns etc. is furnished separately and forms part
of this Directors'' Report.
As per the requirements of the Listing Agreement with Stock Exchanges,
a report on Corporate Governance duly audited is annexed for
information of the Members.
Directors
In accordance with Article 121 of the Company''s Articles of
Association, read with Section 152 of the Companies Act 2013 and the
corresponding provisions in the Companies Act 1956, Mr V Ravichandran
and Dr BVR Mohan Reddy are retiring at the ensuing Annual General
Meeting. Mr V Ravichandran and Dr BVR Mohan Reddy, being eligible,
offer themselves for re-appointment.
Dr J S Sarma, who was appointed as an Additional Director with effect
from 8th August 2013 passed away on 28th February 2014. The Board
places on record its sincere appreciation of the services rendered by
Dr J S Sarma during his tenure of directorship.
The Board of Directors appointed Mr. Prasad Chandran as an Additional
Director effective 18th April 2014. The Company has received notice
from a member proposing his nomination for Directorship.
Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and are eligible for reappointment. Members are requested to appoint
the auditors and fi x their remuneration.
Cost Auditors
In pursuance of Section 233B of the Companies Act, 1956 the Central
Government has ordered Cost Audit for Fertilisers and Insecticides
products. Accordingly, Shri V Kalyanaraman and Shri Dantu Mitra, Cost
Accountants, were appointed Cost Auditors to render reports to the
Central Government. The Report for the year 2012-13 were submitted on
18th September 2013, before the due date and for the year 2013-14 the
report will be submitted on or before the due date.
Disclosures
Additional information on conservation of energy, technology absorption
and foreign exchange earnings/ outgo, as required to be disclosed in
terms of Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed hereto and forms part of this
Report.
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956, read with Companies (Particulars of Employees) Rules, 1975
and the Companies (Particulars of Employees) Amendment Rules, 2011, the
name and other particulars are set out in the annexure to the
Directors'' Report.
As required by Section 217 (2AA) of the Companies Act, 1956, Directors''
responsibility statement is annexed hereto and forms part of this
report.
The disclosures as required under Clause 12 of SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 are
annexed to this report for information of the Members.
Acknowledgement
The Directors acknowledge and would like to place on record the
commitment and dedication on the part of the employees of your Company
for their continued efforts in achieving good results, in an adverse
situation.
The Directors also wish to acknowledge and record their appreciation of
the continued support and assistance received by the Company from State
Bank of India and other Banks, fi nancial institutions, mutual funds,
as well as from various Government bodies both at the Centre and the
State.
On behalf of the Board
Place: Hyderabad A. Vellayan
Date: 12th May 2014 Chairman
Mar 31, 2013
The Board of Directors have pleasure in presenting the highlights of
the performance of your Company together with the Audited Accounts for
the Financial Year ended March 31, 2013.
Summary of Financial Results:
Rs. in crore
2012-13 2011-12
Revenue:
From Operations 8560 9,823
Other 67 117
Total Revenue 8627 9,940
Profit:
Profit before Interest, Depreciation and Taxation 802 1,178
Less: Interest 177 117
Depreciation 59 56
Profit Before Exceptional Items & Tax 566 1005
Exceptional Item - (35)
Profit Before Tax 566 970
Less: Provision for Tax (including
deferred tax credit) 122 277
Profit After Tax 444 693
Add: Surplus brought forward 481 318
Amount available for appropriation 925 1011
Appropriations:
Transferred to debenture redemption reserve 25 -
Transferred to general reserve 250 300
Interim dividend [includes Rs.7 lakhs on
final dividend for 2011-12 (Rs.5 lakhs on
final dividend for 2010-11)] * 113
Proposed dividend 127 85
Dividend distribution tax 22 32
Surplus carried to the Balance Sheet 501 481
*Less than Rs.1 crore Operations
The year gone by was a very eventful one with a strategic acquisition
of Liberty Phosphate Limited, market leader in SSP segment, on the one
side and a steep decline in demand for P & K fertilisers on the other
side. Demand contraction was driven by near drought conditions in key
addressable market states of Andhra Pradesh, Karnataka and Maharashtra
and steep increase in P & K fertilisers prices due to rupee
depreciation. A very high disparity between Urea and Phosphates prices
also impacted the demand for phosphatic fertilisers. These factors
impacted sales volumes of the Company during the year, which in turn
impacted adversely profitability of the Company for the year under
review. The Company had under the adverse conditions, improved its
market share in the primary markets and recorded a total revenue of
Rs.8627 crore. Profit for the year before depreciation, interest and
taxation was Rs.802 crore and profit after tax was Rs.444 crore. Your
Company also improved the financial performance of Sabero Organics
Gujarat Limited (Sabero) with company turning in EBIDTA of Rs.50.80
crore as against (Rs.34.36) crore in the previous year.
Deficient monsoon during the year impacted other businesses as well
viz., Crop Protection and Speciality Nutrients. With the acquisition of
Sabero, Crop Protection business has expanded its product portfolio and
increased the share of global business. The main thrust during the year
was to integrate Sabero operations with the Company''s business and
enhance its presence in both domestic and global markets. These efforts
have started yielding positive results with the formulations business
registering a sales growth of 16% over the previous year. The business
successfully redeployed the manufacturing capacity of Endosulfan plant
to produce alternate products.
In Speciality Nutrient Business, while the adverse monsoon had impacted
sulphur volumes, sale of Water Soluble Fertilisers registered a growth
of 14%. In line with the overall strategy to enhance the Speciality
Nutrients business the Company has adopted crop based approach for
demand creation and also put in place dedicated sales force to improve
the performance. Organic Manure business, despite adverse market
conditions registered volume growth of 12%. The Company would continue
to drive this business in helping the farmer to improve soil fertility.
Retail business, despite low off take of fertilisers, reported a 26%
growth in non fertiliser products and the Company continues to focus on
expanding its product portfolio. There are 550 outlets in the state of
Andhra Pradesh and 96 outlets in Karnataka. The retail outlets have
become the face of the Company and has helped in the increased sales of
Pesticides and Speciality Nutrients. The Company''s efforts are directed
towards making these retail outlets a complete farm solution platform.
Subsidiary Companies:
Acquisition of Liberty Phosphate Limited and Liberty Urvarak Limited
(Liberty group)
During the year, your Company entered into a Share Purchase Agreement
with the erstwhile promoters of Liberty group and acquired 70,19,406
equity shares (representing 48.62%) of Liberty Phosphate Limited (LPL)
at Rs.241/- per share. Consequent to this on March 7, 2013 the Company
reconstituted the Board of LPL and took control of the management of
LPL.
The Company, also made a public announcement to further acquire
37,53,933 equity shares (26%) of LPL through an Open Offer from the
shareholders of LPL at a price of Rs.241/- per share, pursuant to the
provisions of SEBI (Substantial Acquisition of Shares and Takeover)
Regulations, 2011. Approval of SEBI is awaited for completing the
process of the open offer.
Your Company also acquired 100% equity shares of Liberty Urvarak
Limited (LUL) from its shareholders. LUL has a manufacturing unit in
Nimrani in the state of Madhya Pradesh. LUL holds 7,22,928 equity
shares (representing 5%) of LPL. Your Company along with LUL holds
77,42,334 equity shares (representing 53.62%) of LPL. With completion
of the abovesaid acquisition, both LPL and LUL have become subsidiaries
of Coromandel.
LPL and LUL manufacture Single Super Phosphate (SSP) grade fertilisers
with 5 manufacturing facilities spread across the States of Gujarat,
Madhya Pradesh, Rajasthan and Uttar Pradesh. The shares of LPL are
listed on the Bombay Stock Exchange.
Your Company had also signed a term sheet with the M/s Tungabhadra
Fertilisers and Chemicals Company Limited (TFCL) for buying its
business undertaking on slump sale basis.
The acquisition of LPL, LUL and proposed acquisition of the business
undertaking of TFCL would make your Company a pan India Company and
also would make the Company a formidable and leading player in SSP
segment.
Despite adverse market conditions and deficient monsoon, LPL''s total
revenue for the year ended March 31, 2013 was Rs.469.65 crore with a
Net profit of Rs.32.05 crore.
LUL''s total revenue for the year ended March 31, 2013 was Rs.90.76
crore with a Net profit of Rs.5.37 crore.
In view of these acquisitions, your Company has deferred the setting up
of SSP plant at Bhatinda, Punjab for the present.
Sabero Organics Gujarat Limited (Sabero)
Sabero''s total revenue for the year ended March 31, 2013 was Rs.515.78
crore with a Net profit of Rs.7.73 crore as compared to a loss of
Rs.61.24 crore in the previous year.
CFL Mauritius Limited:
The company (a 100% subsidiary) earned a total revenue of US $ 0.49
million (equivalent to Rs.2.65 crore) and net profit of US $ 0.09
million (equivalent to Rs.0.48 crore) during the year ended December
31, 2012.
Parry Chemicals Limited (PCL):
The company (a 100% subsidiary) earned a total revenue of Rs.0.87 crore
for the year ended March 31, 2013 and Profit after Tax was Rs.0.36
crore.
PCL, during the year had acquired 100000 equity shares of Sabero
Organics Gujarat Limited representing 0.295% from the stock market.
Coromandel Brasil Limitada:
The Limited Liability Partnership in Brazil incurred net loss of
Brazilian Reals 0.45 million (equivalent to Rs.1.21 crore) for the year
ended December 31, 2012. Your Company had during the year made a
further investment of Rs.0.89 crore in this company.
Joint Venture Companies
Tunisian Indian Fertilizers S.A. (TIFERT)
TIFERT, a joint venture company, was formed in Tunisia in 2008, to set
up a phosphoric acid plant. The plant which was originally expected to
be commissioned by the first quarter of 2011 got delayed mainly due to
the political developments in Tunisia in the last two years. With the
restoration of near normalcy in Tunisia the plant has been commissioned
and is in the process of being stabilized and the phosphoric acid
supplies are expected to commence during the current financial year
onwards. Your Company during the year had given a loan of US $ 4.65
million to TIFERT to part fund the cost overrun of the project. Your
Company''s strategic investment towards 15% equity stake in TIFERT is
aimed at securing uninterrupted supply of phosphoric acid for the
Company''s operations especially for the expanded capacity in Kakinada.
Coromandel Getax Phosphates Pte Ltd
The joint venture Company based in Singapore formed for leveraging
opportunities for rock phosphate mining/sourcing continued scouting for
opportunities during the year.
Coromandel SQM (India) Pvt Ltd.
The joint venture company formed to set up a Water Soluble Fertilisers
(WSF) Plant at Kakinada, Andhra Pradesh, has commenced its operations
during the year 2011-12. The company earned a total revenue of Rs.36.96
crore for the year ended March 31, 2013 and a Net profit of Rs.1.61
crore.
Strategic Investment
Foskor (Pty) Limited (South Africa):
The relationship with Foskor continues to be beneficial to both the
companies and ensures sourcing of critical raw material i.e.,
phosphoric acid. Coromandel along with CFL Mauritius Limited holds 14%
equity of Foskor (Pty) Limited.
Investment in Andhra Pradesh Gas Power Corporation Limited (APGPCL)
The Company has acquired additional equity in APGPCL entitling it to
draw power equivalent to 15.12 MW. With the existing holding of shares
equivalent to 5 MW, the total entitlement stands increased to 20.12 MW.
The acquisition of additional shares in APGPCL would ensure regular
power supply (at low cost) which would ensure smooth operations at
Visakhapatnam and Kakinada plants.
Expansion Projects
Your Company has successfully commissioned and commenced production
from the new third Complex granulation train at Kakinada plant at a
total cost of Rs.337 crore. As part of this expansion, your Company
also completed building storage tanks and other support facilities to
augment infrastructure for the expanded capacities. With the
commissioning of this plant, your Company has established facilities to
produce up to 3.6 million MT of phosphatic fertilisers.
Safety, Health and Environment (SHE)
Company''s focus on Safety, Health and Environment continued during the
year under review across all locations with all manufacturing plants
maintaining high safety standards. Company has put in place robust
processes and performance indicators to track its SHE performance.
There was a significant reduction in reportable incidents during the
year. Your Company maintained high standards of environmental
performances with all facilities operating well within norms. Your
Company continued its efforts to track health indicators of all its
operating staff working in critical areas through its occupational
health centres at its factories.
Special focused drive on structural safety started at Ennore and
Visakhapatnam, will continue to improve the structural integrity.
Decommissioning of the ammonia storage terminal at Visakhapatnam was
completed successfully and replacement of undersea ammonia pipe line at
Ennore was carried out to sustain the mechanical integrity of critical
operations. Increased emphasis was laid on contractor safety training,
performance monitoring, continuous communication and initiation of a
reward mechanism resulting in healthy plant safety environment.
All the plants continued to make significant progress in attaining
external SHE recognition, and have been certified with ISO 14001
Environmental Management System certification and conforms to Process
Safety Management System. DuPont safety management evaluation
assessment was carried out and the action plan workshop is in progress.
The overall safety environment continued to improve during the year
under review.
Dividend
Your Directors recommend a Dividend of Rs.4.50/- per equity share.
Bonus Debentures
In order to commemorate the golden jubilee of the Company and to reward
the shareholders for their continued support, the Board of Directors
allotted on July 23, 2012, one 9% Unsecured
Redeemable Non-convertible Fully Paid up Bonus Debenture of Rs.15/-
each for every equity share by appropriating the General Reserve
through a Scheme of Arrangement. The Debentures are redeemable in three
equal installments, the first installment commencing from July 2014.
The Company has an option to redeem the debentures prior to its
maturity.
Consolidated Financial Results
Consolidated Financial Statements incorporating the operations of the
Company, its subsidiaries and Joint Venture Companies is appended.
The Ministry of Corporate Affairs, has given a general exemption to
companies from publishing the Annual Report of its subsidiary companies
wherever a Consolidated Statement has been appended. In view of this,
the Annual Report of the subsidiary companies, i.e. Parry Chemicals
Limited and its subsidiary Dare Investments Limited, Sabero Organics
Gujarat Limited and its subsidiaries, Liberty Phosphate Limited and its
subsidiary Liberty Pesticides and Fertilisers Limited, Liberty Urvarak
Limited, CFL Mauritius Limited and Coromandel Brasil Limitada have not
been annexed.
However, the accounts of the subsidiary companies and the related
information will be made available to the Members of Coromandel
International Limited and its subsidiary companies on request and will
also be kept for inspection at the Registered Office of the Company.
Awards/Recognition
Your Company continues to receive numerous awards/accolades from
industry associations. During the year the Company received the
following awards/accolades:
- Company was awarded Significant Achievement in the CII-EXIM Bank
Business Excellence Award 2012 and Significant Achievement in HR
Excellence Award 2012.
- Company received Institute of Directors Golden Peacock National
Training Award for the year 2013.
- Company was awarded ''Retail Marketing Campaign of the Year award''
under Awards for Retail Excellence presented by ET Now.
Management Discussion & Analysis and Corporate Governance
The Management Discussion and Analysis Report highlighting the industry
structure and developments, opportunities and threats, future outlook,
risks and concerns etc. is furnished separately and forms part of this
report.
As per the requirements of the Listing Agreement with Stock Exchanges,
a report on Corporate Governance duly audited is annexed for
information of the Members.
Directors
In accordance with Article 121 of the Company''s Articles of
Association, read with Sections 255, 256 and 262 of the Companies Act,
1 956, Mr A Vellayan, Mrs Ranjana Kumar and Mr K Balasubramanian are
retiring at the ensuing Annual General Meeting. Mr A Vellayan and Mrs
Ranjana Kumar, being eligible, offer themselves for re-appointment. Mr
K Balasubramanian expressed his desire to retire at the ensuing Annual
General Meeting. The Board places on record its sincere appreciation
of the services rendered by Mr K Balasubramanian during his tenure of
directorship.
The Board of Directors appointed Mr Uday Chander Khanna as an
Additional Director effective July 23, 2012. The Company has received
notice from a Member proposing his nomination for Directorship.
Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and are eligible for reappointment. Members are requested to appoint
the Auditors and fix their remuneration.
Cost Auditors
In pursuance of Section 233B of the Companies Act, 1956 the Central
Government has ordered Cost Audit for Fertilisers and Insecticides
products. Accordingly, Mr. V Kalyanaraman and Mr. Dantu Mitra, Cost
Accountants, were appointed Cost Auditors to render reports to the
Central Government. The Reports for the year 2011-12 were submitted on
December 31, 2012 (due date February 15, 2013) and for the year 2012-13
the reports will be submitted on or before the due date.
Disclosures
Additional information on conservation of energy, technology absorption
and foreign exchange earnings/outgo, as required to be disclosed in
terms of Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed hereto and forms part of this
report.
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956, read with Companies (Particulars of Employees) Rules, 1975
and the Companies (Particulars of Employees) Amendment Rules, 2011, the
name and other particulars are set out in the annexure to the
Directors'' Report.
As required under Section 217 (2AA) of the Companies Act, 1956,
Directors'' Responsibility Statement is annexed hereto and forms part of
this report.
The disclosures as required under Clause 12 of SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 are
annexed to this report for information of the Members.
Acknowledgement
The Directors acknowledge and would like to place on record the
commitment and dedication on the part of the employees of your Company
for their continued efforts in achieving good results, in an adverse
situation.
The Directors also wish to acknowledge and record their appreciation of
the continued support and assistance received by the Company from State
Bank of India and other Banks, financial institutions, mutual funds, as
well as from various Government bodies both at the Centre and the
State.
On behalf of the Board
Place : Hyderabad A Vellayan
Date : April 23, 2013 Chairman
Mar 31, 2012
Dear Members,
The Board of Directors have pleasure in presenting the highlights of
the performance of your Company together with the Audited Accounts for
the Financial Year ended March 31, 2012.
SUMMARY OF FINANCIAL RESULTS:
Rs. in crore
2011-2012 2010-2011
Income:
From Operations 9,823 7,639
Other 117 80
TOTAL 9,940 7,719
Profit:
Profit before Interest,
Depreciation and Taxation 1,178 1,136
Less: Interest 117 86
Depreciation 56 62
Profit Before Exceptional Items
& Tax 1,005 988
Exceptional Item (35) --
Profit Before Tax 970 988
Less: Provision for Tax 277 294
(including deferred tax credit)
Profit After Tax 693 694
Add: Surplus brought forward 318 203
Amount available for Appropriation 1,011 897
Appropriation
- Interim Dividend
(incl. dividend tax) 131 131
- Proposed Final Dividend
(incl. dividend tax) 99 98
- Transfer to General Reserve 300 350
- Surplus retained in the
Profit and Loss Account 481 318
Operations
The Company has shown improved performance in all its business segments
and achieved a higher revenue of Rs. 9,940 crore for the year ended 31
March 2012 (2010-11 - Rs. 7,719 crore). Profit for the year before
depreciation, interest and taxation was Rs. 1,178 crore compared to Rs.
1,136 crore in the previous year. Profit after tax was Rs. 693 crore as
against Rs. 694 crore in 2010-11.
Improved operational efficiencies and appropriate sourcing strategies
have significantly contributed to overall improved performance inspite
of lower production of fertilisers due to shortage of phosphoric acid
and high volatility in the Rupee. The fertiliser business achieved a
total sales volume (including imported fertilisers) of 30.08 lakh tons
as against 28.63 lakh tons achieved in the previous year. Besides, the
Company also handled 2.65 lakh tons of urea against 1.98 lakh tons
achieved in the previous year. Timely purchase of input raw materials
and pro-active forex management coupled with faster liquidation of
stocks has helped the Company in improving operational profits.
Crop Protection business performed reasonably well during the year
despite a continuing ban imposed on Endosulfan by Hon'ble the Supreme
Court of India at the beginning of the year and unfavourable monsoon
conditions in certain States during Rabi season. The acquisition of
Sabero Organics Gujarat Limited, a technical grade manufacturer has
expanded product profile of crop protection business and has given
greater access to global markets. Timely introduction of new
technicals at Ankleshwar facility has mitigated the impact on volumes
due to ban of Endosulfan. Leveraging the Retail presence in Andhra
Pradesh and Karnataka, the Company has significantly improved the sale
of specialties and captive technical formulations.
In Speciality Nutrient Business, the Company has achieved sales growth
in Organic Compost, Gromor Sulphur and Water Soluble Fertilisers (WSF)
despite difficult seasonal and market conditions. The Company
continues to be a market leader in Bentonite Sulphur and registered a
growth of 14% over last year in this segment. In the organic
fertilisers, the Company has registered a growth of 33% in volumes as
compared to previous year.
In Retail business, the Company has opened 200 new retail centres in
Andhra Pradesh and Karnataka. With this expansion, the Company has 641
centres in Andhra Pradesh and Karnataka. Retail turnover has grown by
11% during the year. In retail business, the Company has decided to
focus more on agri-input business and exit from the life style
products. The Company continues to explore Farm Mechanisation Business
as part of its retail service offerings to the farmers.
Subsidiary Companies:
Acquisition of Sabero Organics Gujarat Limited (Sabero)
During the year, your Company entered into a Share Purchase Agreement
with the erstwhile promoters of Sabero and acquired 1,42,98,112 equity
shares of Sabero at Rs. 160 per share and also paid a non-compete fee of
Rs. 38.47 per share for the resident shareholders aggregating to Rs. 35.53
crore.
The Company, also further acquired 1,05,00,000 equity shares of Sabero
through an Open Offer from the shareholders of Sabero at a price of Rs.
160/- per share, pursuant to the approval from Securities Exchange
Board of India (SEBI) for the Open Offer under SEBI (Substantial
Acquisition of Shares and Takeover) Regulations, 1997. Post completion
of this acquisition, your Company now holds 2,47,98,112 equity shares
representing 73.23% in the equity share capital of Sabero. The Company
along with its wholly owned subsidiary (Parry Chemicals Ltd.,) holds
74.57% of the equity share capital of Sabero and effective December 17,
2011 Sabero has become a subsidiary of the Company. The Consolidated
results include results of Sabero effective this date.
Sabero manufactures technical grade pesticides with manufacturing
facilities in Sarigam, Gujarat and plans are underway for setting up an
ancillary project at Dahej, in the state of Gujarat. Sabero's shares
are listed on the National Stock Exchange and Bombay Stock Exchange.
Sabero's revenue from operations for the year ended March 31, 2012 was
Rs. 358.43 crore with a Net loss of Rs. 61.24 crore. The production of
Sabero during the year was impacted under judicial restraint. However,
the Company was able to get permission for utilization of capacity up
to 75% starting December 2011. In view of the under utilization of the
capacities, higher power and fuel cost and certain accounting
adjustments necessitated on reconciliation of major balances, the
Company had incurred the loss. The Company is investing into
comprehensive revamping of Environmental Management System to comply
with environmental standards. These investments are aimed at further
compliance with environmental regulations and will also enable the
Company to ramp up production and sales volumes from 2012-13 onwards.
The acquisition of Sabero is part of the company's long term vision to
consolidate its position as a significant player in the crop protection
business with a combination of products in technical/formulation grade
pesticides catering to both domestic and global markets.
CFL Mauritius Limited:
The Company (a 100% subsidiary) earned a total revenue of US $ 1.22
million (equivalent to Rs. 5.76 crore) and net profit of US $ 0.74
million (equivalent to Rs. 3.61 crore) during the year ended December 31,
2011. During the year, the Company has received dividend from Foskor
(Pty) Ltd amounting to US $ 1.14 million.
Parry Chemicals Limited (PCL):
The Company (a100% subsidiary) earned a total revenue of Rs. 0.57 crore
for the year ended March 31, 2012 and Profit after Tax was Rs. 0.03
crore. Your Company had during the year subscribed a sum of Rs. 9.50
crore for acquiring additional 95,00,000 lakh equity shares of Rs. 10/-
each of PCL.
PCL, during the year had acquired equity 4,58,249 equity shares of
Sabero Organics Gujarat Limited representing 1.35% from the stock
market.
Coromandel Brasil Limitada:
The Limited Liability Partnership in Brazil incurred net loss of
Brazilian Reals 0.56 million (equivalent to Rs. 1.58 crore) for the year
ended December 31, 2011. Your Company had during the year made a
further investment of Rs. 1.38 crore in this company.
Joint Venture Companies
Tunisian Indian Fertilisers Company Limited (TIFERT)
TIFERT, a joint venture Company, was formed in Tunisia in 2008, to set
up a phosphoric acid plant. The plant which was originally expected to
be commissioned by the first quarter of 2011 got delayed mainly due to
the political developments in Tunisia last year. With the restoration
of normalcy in Tunisia, it is expected that this plant would be
commissioned by second half of 2012-13. The delay has caused cost
overrun to the extent of US $ 30 million and the Board of Directors of
your Company in terms of the JV agreement had approved an additional
investment of US$ 5 million towards its share by way of equity/loan.
Your Company's strategic investment towards 15% equity stake in TIFERT
is aimed at securing uninterrupted supply of phosphoric acid for the
Company's operations.
Coromandel Getax Phosphates Pte Ltd
The JV Company based in Singapore formed for leveraging opportunities
for rock phosphate mining/sourcing continued scouting for opportunities
during the year.
Coromandel SQM (India) Pvt Ltd.
The Joint Venture Company, formed to set up a WSF Plant at Kakinada,
Andhra Pradesh has commenced its operations during the year. The plant
is capable of producing various grades of Water Soluble Fertilisers and
this will enhance the product range offerings in Specialty Nutrients by
the Company resulting in overall increase in market share of Coromandel
in this segment. The Company earned a total income of Rs. 3.81 crore for
the year ended March 31, 2012 and Net loss was Rs. 0.70 crore.
Technical Assistance Agreement with Foskor (Pty) Limited (South
Africa):
The Technical Assistance Agreement with Foskor (Pty) Limited, South
Africa, for a period of two years ended on March 31, 2012. The
relationship with Foskor continues to be beneficial to both the
Companies.
Expansion Projects
Your Company is in the process of expanding capacities and is currently
executing a third Complex granulation train at Kakinada plant. The
Plant is expected to be completed during the financial year 2012-13. As
part of this expansion, your Company is also building Storage Tanks and
other support facilities to augment infrastructure for the expanded
capacities. Your Company is also firming up its plans for setting up a
green field Single Super Phosphate plant in the state of Punjab.
Safety, Health and Environment (SHE)
Company's focus on Safety, Health and Environment continued during the
year under review across all locations with all manufacturing plants
maintaining high safety standards.
All the plants continued to make significant progress attaining
external SHE recognition, and have been certified with ISO 14001
Environmental Management System certification and conforms to Process
Safety Management System. Visakhapatnam and Kakinada plants were
awarded five star rating by British Safety council. Barring an
unfortunate workplace fatal incident in Visakhapatnam Plant, the
overall safety environment had continued to improve during the year
under review.
Dividend
Your Directors recommend a Final Dividend of Rs. 3/- per equity share.
With this the total dividend for the year would be Rs. 7/- per equity
share including an interim dividend of Rs. 4/- per equity share paid to
the Members. The Members may recall that a Dividend of Rs. 7/- per equity
share was paid last year.
Bonus Debentures
In order to commemorate the golden jubilee of the Company and to reward
the Shareholders for their continued support, the Board of Directors
approved issuance of one 9% Unsecured Redeemable
Non- convertible Fully Paid Bonus Debentures of ? 15/- each for every
equity share by appropriating the General Reserve through a Scheme of
Arrangement (Scheme). The Members had approved the said Scheme for
issuance of unsecured fully redeemable non convertible Bonus Debentures
and the Company had filed the petition in the Hon'ble High Court of AP
seeking its approval of the Scheme. The Company would complete the
process of issue of the Bonus Debentures upon receipt of necessary
approvals.
Consolidated Financial Results
A Consolidated Financial Statement incorporating the operations of the
Company, its Subsidiaries and Joint Venture Companies is appended.
The Ministry of Corporate Affairs, has given a general exemption to
Companies from publishing the Annual Report of its subsidiary Companies
wherever a Consolidated Statement has been appended. In view of this,
the Annual Report of the Subsidiary Companies, i.e. Parry Chemicals
Limited, Sabero Organics Gujarat Limited and its subsidiaries, CFL
Mauritius Limited and Coromandel Brasil Limitada have not been annexed.
However, the Accounts of the Subsidiary Companies and the related
information will be made available to the Members of Coromandel
nternational Limited and its Subsidiary Companies on request and will
also be kept for inspection in the Registered Office.
Awards/Recognition
Your Company continues to receive numerous awards/accolades from
Industry associations. During the year the Company received the
following awards/accolades:
- Company was awarded Significant Achievement in the CII-EXIM Bank
Business Excellence Award - 2011.
- Company was awarded Business Excellence Award by 'Industria
Economist' a business magazine.
- Kakinada Plant received FAI Award for best overall performance of an
operating fertiliser unit for complex fertilisers
- Visakhapatnam Plant received the CII's National Water Management
Award for Water Efficient Unit
- FICCI Award received for Best Brand "Godavari Gold"
Management Discussion & Analysis and Corporate Governance
The "Management Discussion and Analysis Report" highlighting the
industry structure and developments, opportunities and threats, future
outlook, risks and concerns etc. is furnished separately and forms part
of this Directors' Report.
As per the requirements of the Listing Agreement with Stock Exchanges,
a report on Corporate Governance duly audited is annexed for
information of the Members.
Directors
In accordance with Article 121 of the Company's Articles of
Association, read with Section 255, 256 and 262 of the Companies Act,
1956, Mr M K Tandon, Mr R A Savoor and Mr M M Venkatachalam are
retiring at the ensuing Annual General Meeting.
Mr M K Tandon and Mr R A Savoor have expressed their desire to retire
at the ensuing Annual General Meeting. The board places on record its
sincere appreciation of the services rendered by both Mr M K Tandon and
Mr R A Savoor during their tenure of directorship.
Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual Genera Meeting
and are eligible for reappointment. Members are requested to appoint
the auditors and fix their remuneration.
Cost Auditors
In pursuance of Section 233B of the Companies Act, 1956 the Central
Government has ordered Cost Audit for Fertilisers and nsecticides
products. Accordingly, Shri V Kalyanaraman and Shri Dantu Mitra, Cost
Accountants, were appointed Cost Auditors to render reports to the
Central Government. The Report for the year 2010-11 were submitted on
September 26, 2011 (due date September 30, 2011) and for the year
2011-12 will be submitted on/before due date.
Disclosures
Additional information on conservation of energy, technology absorption
and foreign exchange earnings/outgo, as required to be disclosed in
terms of Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed hereto and forms part of this
Report.
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956, read with Companies (Particulars of Employees) Rules, 1975
and the Companies (Particulars of Employees) Amendment Rules, 2011, the
name and other particulars are set out in the annexure to the
Directors' Report.
As required by Section 217 (2AA) of the Companies (Amendment) Act,
2000, Director's responsibility statement is annexed hereto and forms
part of this report.
The disclosures as required under clause 12 of SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are
annexed to this report for information of the Members.
Acknowledgement
The Directors acknowledge and would like to place on record the
commitment and dedication on the part of the employees of your Company
in achieving good results, all round.
The Directors also wish to acknowledge and record their appreciation of
the continued support and assistance received by the Company from State
Bank of India and other Banks, financial institutions, mutual funds, as
well as from various Government bodies both at the Centre and the
State.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors of Coromandel International Limited confirm that
in the preparation of the Statement of Profit & Loss for the year ended
March 31, 2012 and the Balance Sheet as at that date ("financial
statements") :
- the applicable accounting standards have been followed
- appropriate accounting policies have been selected and applied
consistently and 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, subject to the inherent
limitations that should be recognised in weighing the assurance
provided by any such system of internal controls. 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.
On behalf of the Board
Place : Hyderabad A Vellayan
Date : April 23, 2012 Chairman
Mar 31, 2011
The Board of Directors have pleasure in presenting the highlights of
the performance of your Company together with the Audited Accounts for
the Financial Year ended March 31, 2011.
SUMMARY OF FINANCIAL RESULTS:
Rupees in crore
2010-2011 2009-2010
Income
From Operations 7527.95 6394.73
Other 188.19 132.12
Total 7716.14 6526.85
Profit
Profit before Interest,
Depreciation and Taxation 1134.42 843.04
Less: Interest 84.22 75.37
Depreciation 61.74 59.23
Profit Before Tax 988.46 708.44
Less: Provision for Tax
(including deferred tax credit) 294.00 240.24
Profit after Tax 694.46 468.20
Add: Surplus brought
forward 203.18 148.86
Amount available for
Appropriation 897.64 617.06
Appropriation
- Interim Dividend
(incl. dividend tax) 131.47 98.45
- Proposed Final Dividend
(incl. dividend tax) 98.27 65.43
- Transfer to General Reserve 350.00 250.00
- Surplus retained in the
Profit and Loss Account 317.90 203.18
Operations
The Company has shown improved performance in all its business segments
and achieved higher revenue of Rs.7716 crore for the year ended March
31, 2011 (2009-10 - Rs.6527 crore). Profit for the year, before
depreciation, interest and taxation was Rs.1134 crore, compared to Rs.
843 crore in the previous year. Profit after tax was Rs.694 crore as
against Rs.468 crore in 2009-10 recording an increase of 48%. Higher
volumes and improved operating and raw material procurement
efficiencies have significantly contributed to improved performance all
round, resulting in higher profit.
The Fertiliser division continued to improve on its performance with
record volume of production and sales. The total fertiliser sales
(including bought out fertilisers) during the year touched the record
level of 31.0 lakh MT compared to 29.8 lakh MT in the previous year.
Kakinada Plant achieved a number of new records including highest
production ever.
The Plant Protection business also performed well during the year
recording higher sale of technicals and significant volume increase in
branded formulations especially through "Mana Gromor" retail outlets.
There has been a significant improvement in the operations of the
Ankleshwar Unit with the commissioning of new facilities for
manufacturing technicals and robust environment management system. With
the centralisation of technical grade facilities at Ankleshwar, Navi
Mumbai operations have been stopped. Management is taking initiative
for alternate use of the existing facilities. The Jammu formulation
units including the newly acquired unit of Pasura Bio-Tech Private
Limited have performed well during the year.
The Speciality Nutrients business consisting of Water Soluble
Fertilisers (WSF), Secondary and Micro Nutrients and Municipal Compost,
achieved profitable growth over the previous year and established new
sales records.
The rural retail business which was started in 2007 has now 443 centres
operating across Andhra Pradesh and Karnataka catering to the
requirements of the farming community - both agri and some of the
non-agri products including life style products. During the year, the
Company has launched a pilot farm mechanization project to provide
services to the farmers.
Sub-division of Equity Shares
During the year under review, the Members had approved the sub-
division of the equity shares of the Company from Rs 2/- each into Re.
1/- each through a Special Resolution passed by way of Postal Ballot.
Your Company has completed the process of crediting the split shares in
electronic mode and also dispatched the new share certificates to the
respective Members.
Acquisition and Amalgamation of Pasura Bio-Tech Private Limited
During the year under review, your Company acquired 100% equity capital
of Pasura Bio-Tech Private Limited, which has a Pesticides formulations
manufacturing facility in Jammu (adjacent to Companys existing unit in
Jammu) and completed the process of its Amalgamation into the Company
through a Scheme approved by the Honble High Court of Andhra Pradesh.
With this acquisition, your Company is in a stronger position to cater
to the pesticides formulation needs of the markets in the northern
parts of the country.
Subsidiary Companies
CFL Mauritius Limited
The Company (a 100% subsidiary) earned a total income of US $ 0.14
million (equivalent to Rs.0.62 crore) and net loss of US $ 0.026
million (equivalent to Rs.0.12 crore) during the year ended December
31, 2010.
Parry Chemicals Limited (PCL)
The Company (a 100% subsidiary) earned a total income of Rs.0.47 crore
for the year ended March 31, 2011 and Profit after Tax was Rs. 0.03
crore.
Coromandel Brasil Limitada
The Company, a Limited Liability Partnership incurred net loss of
Brazilian Real 0.515 million (equivalent to Rs.1.33 crore) for the year
ended December 31, 2010.
Technical Assistance Agreement with Foskor (Pty) Limited (South Africa)
Your Company along with its wholly owned subsidiary Company, CFL
Mauritius Limited continues to hold 14.0% of equity of Foskor.
During the year the Company renewed the Technical Assistance Agreement
with Foskor (Pty) Limited, South Africa, for a period of two years
which would end on March 31, 2012. The relationship with Foskor
continues to be mutually beneficial.
Joint Venture Companies
Tunisian Indian Fertilizers (TIFERT)
TIFERT, a joint venture Company, was formed in Tunisia in 2008, to set
up a phosphoric acid plant. The plant which was originally expected to
be commissioned by the first quarter of 2011 is delayed mainly due to
the recent political developments in Tunisia and it is now expected
that this plant would be commissioned by the second half of 2011-12.
Your Companys strategic investment of a sum of about US $ 29 Million
towards 15% equity stake in TIFERT is aimed at securing uninterrupted
supply of phosphoric acid for the Companys operations.
Coromandel Getax Phosphates Pte Limited
The Joint Venture Company based in Singapore continued its efforts to
explore opportunities for rock phosphate mining/sourcing.
Coromandel SQM India Private Limited
The Joint Venture Company, formed to set up a WSF Plant at Kakinada,
Andhra Pradesh, has since secured all necessary statutory approvals.
The Plant is expected to be commissioned during the course of the year
(2011).
Safety, Health and Environment (SHE)
Companys focus on Safety, Health and Environment continued during the
year under review across all locations with all manufacturing plants
maintaining high safety standards.
Dividend
Your Directors recommend a Final Dividend of Rs.3/- per equity share.
With this the total dividend for the year would be Rs.7/- per equity
share including an interim dividend of Rs. 4/- per equity share paid to
the Members. The Members may recall that a Dividend of Rs. 10.00 per
equity share of Rs.2/- each (equivalent to Rs.5/- per equity share of
the face value of Re.1/- each) was paid last year.
Consolidated Financial Results
A Consolidated Financial Statement incorporating the operations of the
Company, its Subsidiaries and Joint Venture Companies is appended.
The Ministry of Corporate Affairs, has given a general exemption to
Companies from publishing the Annual Report of its Subsidiary Companies
wherever a Consolidated Statement has been appended. In view of this,
the Annual Report of the Subsidiary Companies, i.e. Parry Chemicals
Limited, CFL Mauritius Limited and Coromandel Brasil Limitada have not
been annexed.
However, the Accounts of the Subsidiary Companies and the related
information will be made available to the Members of Coromandel
International Limited and its Subsidiary Companies on request and will
also be kept for inspection in the Registered Office.
Awards/Recognition
Your Company continues to receive awards/accolades from Industry
associations. During the year the Company received the following
awards/accolades:
- Fertiliser Association of India Award for Best Operating Phosphoric
Acid Plant received by Visak Plant
- CIIs National Award for excellence in Water Management was received
by Visak Plant
- Energy Conservation Award for 2009-10 from NEDCAP, Dept. of Energy,
Govt. of AP was received by Visak Plant
- Kakinada Plant received Commendation Certificate from CII- Exim Bank
for "Significant Achievement" in Business Excellence
- Significant Achievement in HR Excellence at a National level by the
Confederation of Indian Industries (CII).
- Dun & Bradstreet - Rolta Corporate Award 2009 in the Fertiliser
sector.
- VOICE - the in house magazine received the Best House Magazine Award
from the Public Relations Society of India, New Delhi at the National
Awards.
Management Discussion & Analysis and Corporate Governance
The "Management Discussion and Analysis Report" highlighting the
industry structure and developments, opportunities and threats, future
outlook, risks and concerns etc. is furnished separately and forms part
of this Directors Report.
As per the requirements of the Listing Agreement with Stock Exchanges,
a report on Corporate Governance duly audited is annexed for
information of the Members.
Directors
During the year under review, Mr V Ravichandran, consequent to his
appointment as a Lead Director on the Corporate Board of Murugappa
Group, resigned from the office of the Managing Director; however, he
continues to serve on the Board of the Company as a Non Executive
Director effective October 20, 2010.
In accordance with Article 121 of the Companys Articles of
Association, read with Section 255, 256 and 262 of the Companies Act,
1956, Mr V Ravichandran, Dr B V R Mohan Reddy and Mr K Balasubramanian,
are retiring at the ensuing Annual General Meeting.
The Board of Directors appointed Mr Kapil Mehan as an Additional
Director and Managing Director effective October 19, 2010. The Company
has received notice from a Member proposing his nomination for
Directorship.
Auditors
M/s Price Waterhouse, Chartered Accountants, Auditors of the Company,
are retiring and have informed that they do not wish to seek
re-election as Auditors at the ensuing Annual General Meeting.
The Board records its sincere appreciation of the long association your
Company had with M/s Price Waterhouse.
A Special Notice has been received from a Member proposing the
appointment of M/s Deloitte Haskins & Sells, Chartered Accountants, as
Auditors.
Disclosures
Additional information on conservation of energy, technology absorption
and foreign exchange earnings/outgo, as required to be disclosed in
terms of Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed hereto and forms part of this
Report.
A statement concerning employees as required by Section 217(2A) of the
Companies Act, 1956 is attached to this report.
As required by Section 217 (2AA) of the Companies (Amendment) Act,
2000, Directors responsibility statement is annexed hereto and forms
part of this report.
The disclosures as required under Clause 12 of SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 are
annexed to this report for information of the Members.
Acknowledgement
The Directors acknowledge and would like to place on record the
commitment and dedication on the part of the employees of your Company
in achieving good results, all round.
The Directors also wish to acknowledge and record their appreciation of
the continued support and assistance received by the Company from State
Bank of India and other Banks, financial institutions, mutual funds, as
well as from various Government bodies both at the Centre and the
State.
On behalf of the Board
Place : Secunderabad A Vellayan
Date : April 21, 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting their report together with
the audited accounts for the financial year ended March 31, 2010.
SUMMARY OF FINANCIAL RESULTS:
Rupees in crore
2009-2010 2008-2009
Income:
From Operations 6394.73 9374.98
Income from Business
Assistance Agreement - 158.59
Other 132.12 134.23
TOTAL 6526.85 9667.80
Profit:
Profit before Interest 843.04 949.03
Depreciation and Taxation
Less: Interest 75.37 84.72
Depreciation 59.23 56.13
Profit Before Tax 708.44 808.18
Less: Provision for Tax 240.24 311.80
(including FBT and deferred
tax credit)
Profit after Tax 468.20 496.38
Add: Surplus brought
forward 148.86 53.01
Amount available for Appropriation 617.06 549.39
Appropriation:
Interim Dividend
(incl. dividend tax) 98.45 98.20
Proposed Final Dividend
(incl. dividend tax) 65.43 65.47
Transfer from Debenture
Redemption Reserve - (13.14)
Transfer to
General Reserve 250.00 250.00
Surplus retained in
the Profit and
Loss Account 203.18 148.86
Operations
Your Companys performance for the year under review has been quite
satisfactory despite the monsoon playing truant during the Kharif
season. All business units have significantly improved on operational
performance over last year and the lower turnover is mainly on account
of steep fall in the prices of fertiliser raw.materials and traded
fertilisers.
The Fertiliser Plants at Visak and Kakinada, continued to establish a
number of new records including record daily DAP/Complex production.
Sale volume of fertilisers has gone up by nearly 34%. During the year
Pesticides formulation volumes improved significantly thanks to higher
sales through "Mana Gromor" retail outlets. The operations at the new
manufacturing facilities commissioned at Ankhleshwar Unit have been
stabilized.
Speciality nutrients business comprising of Water Soluble Fertilisers,
Secondary and Micro Nutrients and Municipal Compost achieved increased
market share despite adverse weather condition and increased
competition.
The Mana Gromor Centres (MGC), which started in the year 2007,
currently have more than 400 Centres operating across Andhra
Pradesh. During the year under review, sale of Life Style Products
(LSP) were introduced in some of these centres. These centres in
addition to selling Fertilisers and Pesticides also provide a number of
value added services such as Technical Training, Soil Testing
Facilities etc. Consequent to members approval, the Objects Clause was
amended to provide for farm mechanization services being rendered to
the farming community.
Coromandel International Limited - New Brand/New Image
During the year, the Company which is a flagship Company of the
Murugappa Group, changed its name from Coromandel Fertilisers Limited
to Coromandel International Limited (Coromandel) to reflect its
growing business profile and its global presence. The Company also
unveiled its new Brand identity through a new logo, vision statement
and values reflecting its evolving persona. The new Brand building
block Maximiser is a step to portray Coromandels entrepreneurial
spirit going; beyond just pure fertiliser business which manifests in
its global scale of operations and its internal resources, people,
technology and processes, all being world class. The brand focus
continues to be on maximising productivity, progress, protection and
prosperity for the customers of Coromandel. It also gives a new
dimension about maximizing internal progress for the new level of
performance, employee engagement and governance.
Technical Assistance Agreement with Foskor (Pty) Limited (South Africa)
The relationship with Foskor continues to yield mutual benefits. Your
Company along with its wholly owned subsidiary Company, CFL Mauritius
Ltd. continues to hold 14.0% of equity of Foskor.
The two year Technical Assistance Agreement with Foskor (Pty) Limited,
South Africa, came to an end in March 2010. The Company is in the
process of renewing the Agreement for a further period of two years
effective April 1, 2010.
Subsidiary Companies
CFL Mauritius Limited
The subsidiary Company earned a total income of US $1 5.91 million
(equivalent to Rs. 76.22 crore) and net profit of US $ 14.70 million
(equivalent to Rs.70.43 crore) during the year ended December 31, 2009
comprising mainly the dividend income received from Foskor against its
investment in that Company.
Parry Chemicals Limited (PCL)
PCL which is a 100% subsidiary of your Company earned a total income of
Rs. 0.57 crore for the year ended March 31, 2010 and the Profit after
Tax was Rs. 0.02 crore.
Coromandel Brasil Limitada
Coromandel Brasil Limitada, the Limited Liability Company in Brazil
incorporated last year commenced its operations and initiated product
registration activities. The Company incurred net loss of Brazilian
Reals 0.23 million (equivalent to Rs. 0.57 Crore) for the year ended
December 31, 2009.
Joint Venture Companies
TIFERT
Tunisian Indian Fertilisers Company Limited (TIFERT) formed" in Tunisia
to set up a phosphoric acid plant has achieved technical and financial
closure and work on the Project is progressing well. Your Company has
invested a sum of about US $ 29 Million towards 15% equity stake in
TIFERT. The plant is expected to be commissioned by the first quarter
of 2011. This strategic investment is aimed at securing uninterrupted
supply of phosphoric acid for the Companys operations.
Coromandel Getax Phosphates Pte Ltd
The JV Company "Coromandel Getax Phosphates Pte Ltd" in Singapore
formed for exploring the opportunities for rock phosphate
mining/sourcing continued its effort during the year under review.
Coromandel SQM India Pvt Ltd
During the year under review, your Company along with SQM, Chile, world
leaders in manufacturing Water Soluble Fertilisers (WSF) had formed a
joint venture Company by name "Coromandel SQM India Pvt Ltd" to set up
a WSF plant at Kakinada, Andhra Pradesh and is awaiting statutory
approvals.
Safety, Health and Environment
Companys focus on Safety, Health and Environment (SHE) continued
during the year under review across the locations. However during the
year there was an unfortunate accident at the Kakinada Plant in which
two operators lost their lives during ammonia ship unloading
operations. The Company had immediately taken all necessary measures to
provide necessary assistance to the affected families and to ensure
that such incidents do not recur.
Dividend
Your Directors recommend a Final Dividend of Rs.4/- per equity share.
With this the total dividend for the year would be Rs.10/- per equity
share including an interim dividend of Rs. 6/- per equity share paid to
the members. The Members may recall that a Dividend of Rs. 10.00 per
equity share was paid last year.
Consolidated Financial Results
A Consolidated Financial Statement incorporating the operations of the
Company, its subsidiaries, Joint Venture Companies and Associate
Company has been appended.
The Ministry of Corporate Affairs, while exercising its powers under
Section 21 2 (8) of the Companies Act, 1 956 has exempted the Company
from publishing the Annual Report of its subsidiary Companies since a
Consolidated Statement has been appended. In view of this, the Annual
Report of the Subsidiary Companies, i.e. Parry Chemicals Limited, CFL
Mauritius Limited and Coromandel Brasil Limitada have not been annexed.
However, the Accounts of the Subsidiary Companies and the related
information will be made available to the Members of Coromandel
International Limited and its Subsidiary Companies on request and will
also be kept for inspection in the Registered Office.
Awards/Recognition
Your Company continues to receive a number of awards/accolades from
Industry associations. During this year your Company received the
following awards/accolades:
- Fertiliser Association of India Award for Best Production performance
for Complex Fertilisers received by Kakinada Plant
- Fertiliser Association of India - Environment Protection Award for
Complex Plant at Visak
- Fertiliser Association of India Award for Best Video Film on Gromor
NPK 19:19:19 Water Soluble Fertilisers
- Visak and Kakinada Plants received the commendation from Cll for its
strong commitment to excel in the Cll-Exim Bank Business Excellence
Award
Management Discussion & Analysis and Corporate Governance
The "Management Discussion and Analysis Report" highlighting the
industry structure and developments, opportunities and threats, future
outlook, risks and concerns etc. is furnished separately and forms part
of this Directors Report.
As per the requirements of the Listing Agreement with Stock Exchanges,
a report on Corporate Governance duly audited is annexed for
information of the Members.
Directors
In accordance with Article 121 of the Companys Articles of
Association, read with Section 255, 256 and 262 of the Companies Act,
1956, Mr M K Tandon and Mr A Vellayan are retiring at the ensuing
Annual General Meeting and are seeking re-election.
The Board of Directors appointed Mrs Ranjana Kumar as an Additional
Director effective March 19, 2010. The Company has received notice from
a Member proposing her nomination for Directorship.
Auditors
M/s Price Waterhouse, Chartered Accountants, Auditors retire at . the
ensuing Annual General Meeting and are eligible for reappointment.
Auditors Report
The Auditors in their report have observed that subsidy income
estimation for the year is based on managements understanding/
estimates under the subsidy scheme in vogue for the year ended March
31, 2010.
The Board is of the view that the Company has consistently been
following a prudent method of accrual/recognizing subsidy income based
on managements understanding/estimate of the likely subsidy receivable
under the prevalent Subsidy Scheme.
Disclosures
Additional information on conservation of energy, technology absorption
and foreign exchange earnings/outgo, as required to be disclosed in
terms of Section 217(l)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed hereto and forms part of this
Report.
A statement concerning employees as required by Section 21 7(2A) of the
Companies Act, 1 956 is attached to this report.
As required by Section 217 (2AA) of the Companies (Amendment) Act,
2000, Directors Responsibility Statement is annexed hereto and forms
part of this report.
The disclosures as required under clause 12 of SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines 1 999 are
annexed to this report for information of the Members.
Acknowledgement
The Directors acknowledge and would like to place on record the
commitment and dedication on the part of the employees of your Company
in achieving overall good results.
The Directors also wish to acknowledge and record their appreciation of
the continued support and assistance received by the Company from State
Bank of India and other Banks, financial institutions, as well as from
various Government bodies both at the Centre and the State.
On behalf of the Board
Place : Secunderabad A Vellayan
Date : April 22, 2010 Chairman
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Coromandel International Ltd.
-
Coromandel International Ltd. Tools
- Bulk Deals
- Block Deals
-
Coromandel International Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
Coromandel International Ltd. Key Financial Ratios
- Ratios
-
Coromandel International Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Coromandel International Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Coromandel International Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Coromandel International Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
- Change of Name
