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Coromandel International Ltd.

BSE: 506395 | NSE: COROMANDEL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE169A01031 | SECTOR: Fertilisers

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Annual Report

For Year :
2021 2019 2018 2017 2016 2015 2014 2013 2012

Director’s Report

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 Store” 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.

Specialty Nutrients

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.

Organic Fertilizer

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).

Update on COVID-19:

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 home” for its employees. The crisis management team and leadership continue to monitor the COVID-19 situation and adjust plans accordingly.

4. Finance

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 Free” 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.

5. Dividend

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.

7. Subsidiary Companies:

Brief details of the performance of the subsidiaries of the Company are given below:

i CFL Mauritius Limited:

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 Limited”.

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.

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 1.58 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.

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 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.

13. 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.

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.

15. Key Managerial Personnel

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.

16. Employees

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.

c) Disclosure of 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 D to this report.

d) Particulars of Employees

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

17. Annual Return

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 Systems” 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 Visaka” 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.

22. Corporate Governance

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

25. Other disclosures

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.

27. 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.

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

Director’s Report