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Coromandel International Ltd.

BSE: 506395 | NSE: COROMANDEL | Series: NA | ISIN: INE169A01031 | SECTOR: Fertilisers

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

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

Director’s Report