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Coromandel International Ltd.

BSE: 506395 Sector: Agri and agri inputs
NSE: COROMANDEL ISIN Code: INE169A01031
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VOLUME 46185
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P/E 18.67
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OPEN 920.00
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VOLUME 46185
52-Week high 955.95
52-Week low 681.65
P/E 18.67
Mkt Cap.(Rs cr) 26,006
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Coromandel International Ltd. (COROMANDEL) - Director Report

Company director report

Dear Members

Your Board of Directors have pleasure in presenting the 59th Annual Reporton the operational and business performance of the Company together with the AuditedFinancial

Statements (Standalone and Consolidated) for the financial year ended March 31 2021.

1. Summary of Standalone Financial Results

Rs. In crores

Particulars 2020-21 2019-20
Revenue
From Operations 14163 13117
Other Income 42 38
Total Revenue 14205 13155
Profit:
Profit before Interest Depreciation and Taxation 2043 1763
Less: Interest 106 235
Depreciation 172 157
Profit Before Tax 1765 1371
Less: Provision for Tax (including deferred tax) 453 312
Profit After Tax 1312 1059

Your Company’s Revenue from Operations for the year was Rs.14163 crores asagainst Rs.13117 crores last year.

The Profit before Interest Depreciation and Taxation grew to Rs.2043 crores fromRs.1763 crores in the previous year registering a growth of 15.88%. The Net Profit forthe year grew to Rs.1312 crores from Rs.1059 crores in the previous year i.e. anincrease of 23.89% YoY.

EBITDA margin increased 100 basis points to 14.4% in 2020-21 over 2019-20 and PATmargin increased 120 basis points to 9.2% in 2020-21 over 2019-20. The Earnings Per Share(EPS) for the year stood at Rs.44.76 per share an increase of 23.65% compared toRs.36.20 per share for the previous year.

Your Company does not propose to transfer any amount to the General Reserves andpropose to retain Rs.2401.50 crores in the Statement of Profit and Loss.

2. Business Environment

The global economy was severely impacted by the COVID 19 pandemic as it experiencedone of the most unfathomable health emergencies in modern history. While the impact of thepandemic varied across the regions it had a disproportionate effect on the vulnerablesections. After a massive contraction in the first half of the year the global economybegan reviving in the later part of 2020. As the countries continue to fight throughreduction in the amount the pandemic there are visible green shoots of recovery.

India has also shown remarkable resilience in its fight against the virus led by itsfrontline COVID 19 warriors and is emerging as the vaccination capital of the world. Giventhe vulnerabilities of a weak health system India undertook lockdown during the initialphase of COVID 19 spread. This enabled the flattening of the pandemic curve and providedthe necessary time to ramp up the health and testing infrastructure. Over the last 12months 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 keyeconomic 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 theramped-up public health measures and policy interventions lend support towards achievingstability in the coming months.

Despite the Covid 19 induced uncertainties impacting the major operations theAgriculture Sector emerged as a bright spot and is expected to register a 3.4% GVA growthin FY 2020-21. This reflects the indomitable grit and resilience of the Indian farmersensuring food security for the nation under challenging circumstances. India is expectedto produce record food grain (303 million tons) and horticulture (327 million tons) outputalong with improvement in cereal exports. The Governments at the Centre and State weresupportive in enabling continuance of operations and providing cash injection in ruralIndia. Reforms like the advancement of PM Kisan disbursement direct money transferincreased MGNREGA days increase in agri credit schemes higher procurement under MSP forboth Kharif and Rabi season were implemented. The Agri Marketing reforms announced duringthe year are currently under discussion with the stakeholders and the Government expectsan amicable resolution before its implementation.

The Government’s efforts were well supported by favourable environmentalconditions experienced during the year. Above normal rainfall and good soil moistureconditions resulted in higher crop acreage in Kharif and Rabi seasons. In theCompany’s home markets of Andhra Pradesh and Telangana Government continued itssupport through Direct Cash Transfer schemes to the farmers. Further the infrastructureinvestment made over the last few years through the Kaleswaram and Pattiseema projects hasresulted in assured irrigation and increased cropping intensity in the catchment areas.

On the subsidy front the Government provided an additional allocation of Rs.65000crores for the year which has improved the working capital position of the of industrythrough a significant subsidy outstanding.

With the higher water levels in the reservoirs and the prediction of a normal southwestmonsoon by the Indian Meteorological Department Indian agriculture is expected to witnessa good Kharif season during the coming year.

3. Performance Review Fertiliser

Fertiliser business recorded its highest ever sales volume driven by favourableagro-climatic conditions during the year. Covid-19 protocols such as social distancingsanitising and usage of masks etc. were implemented at the Plants and field to ensure thesafety of employees and enable continuity of operations. Business focused on strengtheningquality systems implementing automation and digitalization projects optimising theproduction smart buying of key raw materials and customer centricity through brandbuilding activities with increased thrust on Digital Marketing. Business implementedcritical and safety related infrastructure projects and consciously deferred othercapital expenditure projects considering the uncertainties due to COVID 19.

Overall primary sales volumes of the of business DAP and has improvedComplex fertilisers grew by 7% to 33.5 lakh tons with the sale of manufactured products at29.4 lakh tons. Consumption as reflected through the point of sales from retailers to thefarmers increased by 18% to 37.2 lakh tons. Market share for the year in DAP + Complexfertiliser segment stood at 15.3 percent a marginal reduction from 15.7 percent in2019-20. Business continued to improve its marketing focus through creation of strongbrands. During the year your Company’s unique product 14-35-14 was rebranded asGroshakti. Similarly Grosmart which was launched last year was well received bycustomers. Integrated nutrient marketing structure with the experienced agronomist teamhas supported the business well in promoting its balanced nutrition approach and marketdevelopment initiatives.

Despite disruptions in Q1 due to COVID-19 related restrictions your Company’sfertiliser plants produced 28.4 lakh tons of DAP + Complex Fertilisers at a capacityutilization of 82%.

Single Super Phosphate (SSP) business which is now fully integrated with fertiliserbusiness maintained its leadership position with a market share of 13.5%. During theyear sales volumes grew by 17% to 6.7 lakh tons. The business focused on providingfarmers with superior granulated and fortified products like Groplus which receivedencouraging feedback from the market. Production for the year stood at 6.6 lakh tonswhich is 9% higher than the previous year.

Crop Protection

Crop Protection business of your Company witnessed a strong turnaround this yeargrowing by 24% over last year. The domestic formulation and B2B business has seen robustgrowth during the period. New products continue to do well and have contributed ~25% ofthe domestic formulation sales. Business has strengthened its position in certaininternational geographies. The business continued its focus on customer connect throughdigital 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 arich pipeline of new molecules and combination products. During the year it received morethan 50 registrations including combination products and plans to leverage them forstrengthening its offerings in the domestic and international markets. Infrastructurestrengthening and capacity expansion projects are on track. On the manufacturing frontthe business improved the overall capacity utilisation. Collaboration with global agrochemical companies for new products and co-marketing arrangements was further strengthenedduring the year.

Overall the profitability due to a better product mix coupled with efficiencies insourcing and manufacturing. The Bio pesticides business registered impressive growth inthe US markets. Business plans to expand capacity at its Thyagavalli plant to cater to theincreased demand for Bio products. The R&D team is working on several new products andapplications to expand its product offerings in collaboration with leading agricultureuniversities. Some of the products are in the stage of regulatory approvals and slated forlaunch 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 communityby offering Agri solutions including products farm advisory and mechanization services.The business has improved its operational efficiencies and has leveraged technology toreach 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 sowingharvesting and spraying to improve farm efficiency and costs. During the year thebusiness registered its highest ever turnover driven by favourable environmentalconditions and improved advisory to farmers across the markets.

Specialty Nutrients

The Specialty Nutrient products have been doing very well for the Company andcontinuously increasing its base in the market. The business has introduced two newproducts Fitsol Sugarcane and Gromor Power 16-8-24 in the market. The Business hascollaborated with different value chain partners like seed companies drip companies andchannels like FPOs contract farming to increase its business prospects. The business hasbeen active in the digital marketing space and reached out to millions of farmers throughdigital and social media for enhancing its consumer connect.

Organic Fertilizer

The Company has been pioneering efforts in the area of soil health enrichment bymarketing diversified organic portfolio including various composts like City CompostPressmud compost PROM (Phosphate rich Organic Manure) with K-ash (Potash derived frommolasses) cake mixtures soil conditioners like Ca-Mg-S and branded gypsum. During theyear Business continued its commitment towards improving soil health and creatingawareness among the users by performing more than 33000 carbon tests at the farmer’sfield. Business continued its focus on promoting differentiated variants segmentstrengthened 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-19pandemic and engaged closely with its employees partners customers and society topromote safe operations. It worked with the Government and local regulatory bodies andsupported them through various initiatives in combating the virus. Agriculture inputs havebeen designated as essential products and services which helped the Company to operatethroughout the year and serve the farmer community to ensure maximum benefit of a goodseason.

Your Company has implemented COVID-19 safety protocols across its operations to helpprotect and support its employees customers and suppliers. It has created StandardOperating Procedures to be followed across its operations including Manufacturing Supplychain Marketing and others. The Company successfully transitioned to operate from avirtual environment enabling "work from home" for its employees. The crisismanagement team and leadership continue to monitor the COVID-19 situation and adjust plansaccordingly.

4. Finance

Your Company continued to focus on managing cash and efficiently back up lines ofcredit. Working capital of the Company improved through the year and Net Cash fromoperations for the year stood at Rs.4125 crores.

Your Company became a "Debt Free" company during the year and has deployedthe surplus funds purposefully. It has been credit rated by CRISIL Limited (CRISIL) andIndia Ratings & Research Private Limited (India Ratings & Research). TheCompany’s long-term credit rating by ‘CRISIL’ continued to be ‘CRISILAA+ (stable)’ and short-term debt rating at ‘CRISIL A1+’. TheCompany’s long-term credit rating by ‘India Ratings & Research (A FitchGroup 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 servicingof financial obligations and also a vote of confidence reposed in your Company’sfinancials.

There were no material changes and commitments operations and affecting the financialposition 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 Rs.6 per equity share ofRs.1 each. Your Board had earlier approved payment of interim dividend of Rs.6 per equityshare at its meeting held on February 1 2021 and same was paid on February 24 2021. Thetotal dividend for the year ended March 31 2021 would accordingly be Rs.12 per equityshare of Rs.1 each. The total outgo for the year would be Rs.352 Crore including taxdeducted at source (TDS). The Company has adopted Dividend operations Distribution Policyin line with the requirements of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations). The Dividend Distribution Policy isavailable 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 theAct and the relevant accounting standards forms part of this Annual Report. As requiredunder the provisions of the Companies Act 2013 (the Act) a statement showing the salientfeatures of the financial statements of the subsidiaries associates and joint venturesare enclosed as Annexure A to this Report.

The financial statements of the subsidiary companies will be made available to themembers of the Company on request and will also be kept for inspection at the RegisteredOffice 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 operations during subsidiary incurred a lossof $ 0.04 million during the year ended March 31 2021. The primary source of income forthis subsidiary is dividend income from Foskor (Pty) Ltd. and the subsidiary did notreceive 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 Rs.0.86 crorefor the year ended March 31 2021 and Profit after Tax was Rs.0.30 crore.

iii Dare Investments Limited (DIL):

DIL a wholly owned subsidiary of the Company did not have any significant loss of Rs.0.01 crore for the year ended March 31 2021. DIL has filed an application with Registrarof Companies for change of name of the company into "Dare Ventures Limited". DILis proposed to serve as an investment vehicle to Coromandel in order to tap the growingstartup ecosystem and its core objective shall be to identify and invest in early stage tolate 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 year2020-21. It earned a profit of Rs. 0.06 crore for the year ended March 31 2021. Duringthe year your Board approved the amalgamation of LPFL and CSQM with the Company. Thenecessary joint application was filed before the Hon’ble National Company LawTribunal (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 CFLMauritius Ltd. is primarily engaged in getting product registrations in Brazil andprocuring orders for supplies from Reals 0.4 million India.Itearned a profit (equivalentto Rs.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 procuringorders for supplies from India. It incurred a net loss of Brazilian Reals 0.21 million(equivalent to Rs.0.30 crore) for the year ended December 31 2020.

vii Sabero Australia Pty Ltd. (SAPL): SAPL did not have any significant the yearended March 312021.

viii Sabero Europe BV (SEBV):

SEBV is primarily engaged in getting product registrations in Europe and procuringorders for supplies from India. It did not have any significant operations during the yearended March 31 2021.

ix Sabero Argentina SA (Sabero Argentina):

Sabero Argentina is primarily engaged in getting product registrations in Argentina andprocuring orders for supplies from India. It incurred a net loss of ARS 0.90 million(equivalent to Rs. 0.09 crore) for the year ended March 31 2021.

x Coromandel Agronegocios De Mexico SA de CV (Coromandel Mexico): Coromandel Mexicois primarily engaged in getting product registrations in Mexico and procuring orders forsupplies from India. It earned a net profit of Mexican Peso 0.17 million (equivalent toRs.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. Itmade a net profit of USD 1.58 million (equivalent to Rs.11.71 crore) for the year endedMarch 31 2021.

xii Coromandel International (Nigeria) Limited (CINL): Coromandel International(Nigeria) Limited is engaged in getting product registrations in Nigeria and procuringorders for supplies from India. It made a net profit of Naira 7.62 million (equivalent toRs.0.16 crore) for the year ended December 31 2020.

xiii Coromandel Mali SASU (CMS): Coromandel Mali SASU (CMS) was incorporated onFebruary 04 2020 as a Wholly Owned Subsidiary (WOS) of the Company for the purpose ofobtaining registration for marketing of agrochemicals. CMS is registered with Ministry inCharge of Statistics Republic of Mali and is yet to commence its business operations.

xiv Coromandel SQM (India) Private Limited (CSQM): CSQM a joint venture betweenCoromandel and Soquimich European Holding (SQM) Chile. CSQM manufactures Water SolubleFertilisers (WSF) at Kakinada Andhra Pradesh and offers Speciality Nutrition Solutions toinstitutional clients. Total income for the year was Rs.51.12 crore and the net profitwasRs.1.8 crore. During the year Coromandel acquired 5000000 equity shares of Rs.10each constituting 50% of the total share capital of CSQM for a consideration of Rs.12Crores. Consequently CSQM has now become a wholly owned subsidiary of the Company witheffect 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 thebusiness of sales and service of agri-tech equipment focussed on farm mechanization inIndia. YCAPL’s Combine Harvester has been consolidating its position as amongst themarket leaders in India. Total income for the year was Rs.145.95 crore and the net profitwasRs.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 basedin Philippines during and did not have any significant the year 2020-21.

Strategic Investment:

Brief details of the performanceAudit Observations alongof the Strategic Investmentcompanies are given below:

i. Tunisian Indian Fertilisers S.A. Tunisia (TIFERT):

TIFERT a company based in Tunisia manufactures phosphoric acid which is a key rawmaterial for operating Phosphatic Fertiliser plants. Your Company’s strategicinvestment in TIFERT (15% equity) is aimed at securing an uninterrupted supply ofphosphoric acid for the Company’s operations at Kakinada and Visakhapatnam. Duringthe year TIFERT operations were impacted by the pandemic and other social and technicalissues. Indian partners Coromandel and GSFC continue to provide necessary technicalsupport 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. Foskorsupplies high-quality phosphoric acid which is used for phosphatic fertilisermanufacturing at Kakinada and Ennore plants of your company. The performance of Foskor wasaffected during the year due to the disruptions caused by the Covid pandemic that resultedin lower capacity utilization. Your Company is working with the Foskor team on a businessturnaround plan and is providing technical assistance for improving acid production andplant efficiency.

8. Risk Management Policy

The Company has constituted a Risk Management Committee. Details of constitution of theCommittee are set out in the Corporate Governance Report. The Company has formulated aRisk Management Policy under which various risks associated with the business operationsare identified and risk mitigation plans have been put in place details of which are setout 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 andsize of the operations to effectively provide for safety of its assets reliability offinancial transactions with adequate checks and balances adherence to applicable statuesaccounting policies approval procedures and to ensure optimum use of available resources.These systems are reviewed and improved on a regular basis. It has a comprehensivebudgetary control system to monitor revenue and expenditure against approved budget on anongoing basis.

The Company has its own corporate internal audit function to monitor and assess theadequacy and effectiveness of the Internal Controls and System across all key processescovering various locations. Deviations are reviewed periodically and due complianceensured.

Summary of Significant recommendations and its implementations are reviewed by theAudit 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 areforeseen and are repetitive in nature. The related party transactions entered into by theCompany are reviewed by independent chartered accountants to confirm that they were in theordinary course of business and at arm’s length basis. Related party transactionsentered during the financial year under review are disclosed in Notes to the financialstatements of the Company for the financial year ended March 31 2021. Form AOC-2 will notform part of Board’s report as all the transactions with related parties are inarm’s length basis and in ordinary course of business. The Policy on Related PartyTransaction is available on the Company’s website athttps://coromandel.biz/pdf/2020-2021/InvestorsInformation/PoliciesAndCodes/PolicyOnRelatedPartyTransactions_2020.pdf None of the Directors had any pecuniaryrelationship or transactions with the Company except the payments made to them in theform of remuneration sitting fee and commission.

11. Auditors a) Statutory Auditors and their report

M/s. Deloitte Haskins & Sells (DHS) Chartered Accountants have been the statutoryauditors of the Company since 2011-12. The existing term of DHS as statutory auditors willexpire at the conclusion of the ensuing Annual General Meeting of the Company and they arenot eligible for re-appointment in terms of provisions of Section 139(2) of the CompaniesAct 2013 (Act). Accordingly in terms of the provisions of Section 139 of the CompaniesAct 2013 the Company is required to appoint new statutory auditors. Based on therecommendation of the Audit Committee the Board of Directors have recommended theappointment of M/s. S.R. Batliboi & Associates LLP (Reg. No. FRN 101049W/E300004) asthe Statutory Auditors of the Company to hold office from the conclusion of this 59thAnnual General Meeting until the conclusion of the 64th Annual General Meetingof the shareholders of the Company at a remuneration of Rs.7500000 (Rupees Seventy-FiveLakhs Only) for the financial year 2021-22 subject to the approval by the shareholderspursuant to applicable laws. A resolution seeking approval of the shareholders for theappointment of Statutory Auditors is included in the Notice convening the ensuing AnnualGeneral Meeting.

M/s. S.R. Batliboi & Associates LLP have confirmed their eligibility under Section141 of the Act and the Rules framed thereunder for their appointment as StatutoryAuditors. Further as required under Regulation 33 of the Listing Regulations they havealso confirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.

The Auditor’s Report given by DHS on the financial statements of the Company forthe year ended March 31 2021 forms part of the Annual Report. The Auditor’s Reportdoes not contain any qualification reservation or adverse remark. During the year underreview 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 requiredunder Regulation 33 of the Listing Regulations DHS have confirmed that they hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia.

The Board of Directors take the opportunity to place on record its sincere appreciationfor the contribution and services rendered by DHS its partners and managers during theirtenure 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 accountingrecords in respect of certain specified products of the and accordingly such accounts andrecords are made and maintained in the prescribed manner. Further the cost accountingrecords maintained by the Company are required to be audited.

For the financial year 2020-21 Murthy & Co. and Mrs. Jyothi Satish were appointedas Cost Auditors. On the recommendation of the Audit Committee the Board has re-appointedM/s. Narasimha Murthy & Co. Cost Accountants and Mrs. Jyothi Satish Cost Accountantas Cost Auditors for auditing the cost records of the Company for the financial year2021-22.

The Act mandates that the remuneration payable to the Cost Auditor is ratified by theshareholders. Accordingly a resolution seeking the shareholders’ ratification of theremuneration payable to the Cost Auditors for the FY 2021-22 is included in the Noticeconvening the 59th Annual General Meeting.

During the year the Company filed the Cost Audit Report for the financial year 2019-20with 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 andRemuneration of Managerial Personnel) Rules 2014 the Board had appointed M/s.

R Sridharan & Associates Practicing Company Secretaries to undertake thesecretarial audit of the Company for the financial year 2020-21. The report of theSecretarial Auditor is enclosed as Annexure B and forms part of this report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.

In terms of Regulation 24A of the Listing Regulations there is no material unlistedsubsidiary incorporated in India. Material unlisted subsidiary for the purpose of thisRegulation is a subsidiary whose income/ net worth exceeds 10% of the consolidatedincome/net worth respectively of the Company and its subsidiaries in the immediatelypreceding accounting year. Hence there is no requirement of a secretarial audit for anyof the Company’s subsidiaries in India.

12. Particulars of Loans contribution made and valuable Guarantees andInvestments

Details of loans and guarantees given and investments made under Section 186 of the Actare 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 ofSection 73 of the Act read with Companies (Acceptance of Deposits) Rules 2014 and noamount 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 ofExecutive and Non-Executive Directors. As on March 31 2021 the Board of Directorscomprised of ten (10) Directors consisting of a Managing Director Executive Vice Chairmanand eight (8) Non-executive Directors out of which five (5) Directors are IndependentDirectors including one Woman Director. The composition of the Board is in conformitywith Regulation 17 of Listing Regulations and the relevant provisions of the Act. TheDirectors possess requisite qualifications and experience in general corporate managementstrategy finance engineering information technology and other allied fields whichenable them to contribute effectively to the Company in their capacity as Directors of theCompany. Declarations from all Independent Directors have been received confirming thatthey meet the criteria of independence as prescribed under Section 149(6) read withSchedule IV to the Act as well as Listing Regulations and the same were taken on record bythe Board. Dr. B.V.R. Mohan Reddy stepped down as Director from the Board of the Companyw.e.f. October 12 2020 on attaining the age of 70 years. Mr. M M Murugappan uponturning 65 years of age and with a desire to devote time to philanthropic activity andother interests stepped down from the Board of the Company as Chairman and Director witheffect from close of business hours on November 11 2020.

Mr. V. Ravichandran stepped down from the Board of the Company as Vice Chairman andDirector with effect from close of business hours on November 11 2020. The Boardplaced on record its appreciation of the significant rendered by Dr. B.V.R. Mohan ReddyMr. M M Murugappan and Mr. V. Ravichandran during their tenure.

Mr. A Vellayan was appointed as Additional Director of the Company with effect fromNovember 11 2020 and was also elected as Chairman of the Board with effect from November12 2020.

Mr. Arun Alagappan was appointed as Additional Director of the Company with effect fromNovember 11 2020 and subsequently appointed as Whole-time Director of the Company for aperiod of 5 (Five) years with effect from February 15 2021. Mr. Alagappan was alsoelected as Vice Chairman and designated as Executive Vice Chairman with effect fromFebruary 15 2021 by Board of Directors. Mr. Ramesh K.B. Menon was appointed as AdditionalDirector of the Company with effect from November 11 2020.

The Company has received notice from a member under Section 160 of the Act proposingthe nomination of Mr. A Vellayan Mr. Arun Alagappan and Mr. Ramesh K.B. Menon asDirectors of the Company at the ensuing Annual General Meeting. The proposal for theappointment as Directors is included in the Notice convening the 59th AnnualGeneral Meeting for consideration and approval by the shareholders. Consequent to thechanges in the Board composition the Committees of Board were also reviewed andre-constituted the details of which are in the Corporate Governance section of theReport. In accordance with Article 17.29 of the Company’s Articles of Associationread with Section 152 of the Act Mr. M M Venkatachalam retires by rotation at the ensuingAnnual 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 theListing Regulations the Board has carried out evaluation of its own performance theperformance of Committees of the BoardnamelyAuditCommitteeCSRCommitteeRisk ManagementCommittee Stakeholders Relationship Committee and Nomination and Remuneration Committeeand also the Directors individually.

The manner of evaluation of performance and the process adopted for the purpose areexplained in the Corporate Governance Report.

c) Board Meetings

Annual calendar of Board meetings is prepared and circulated to the Directors inadvance. During the financial year 2020-21 seven (7) Board Meetings were held thedetails 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 MemberMr. 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 reconstitutedwith effect from December 1 2020. During the year five (5) meetings of the AuditCommittee 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 decadesof experience in banking and financial services technology finance governance andmanagement areas and are fully conversant and familiar with the business of the Company.The Company has an ongoing familiarisation programmes for all Independent directors withregard to their roles duties rights responsibilities in the Company nature of theindustry in which the Company operates the business model of the Company etc.

The Independent Directors on their appointment are familiarised about theCompany’s operations and businesses. Interaction with the senior leadership team(Business Heads and key executives) of the Company is also facilitated. Detailedpresentations on the business of each of the Division are made to the Directors from timeto time. A manual containing all important policies of the Company is given to theDirectors. Meetings with the Chairman and the Managing Director are facilitated for thenew appointee to familiarise him/ her about the Company its businesses and the practicesand policies of the Group. As part of the familiarisation programme a handbook isprovided to all the Directors including Independent Directors at the time of theirappointment. The handbook provides a snapshot to the Directors of their duties andresponsibilities rights appointment process and evaluation compensation boardprocedure and stakeholders’ expectations. The handbook also provides the Directorswith an insight into the Group’s practices. Further periodic emails are sent to allthe 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 inparticular. The details of the familiarisation programme as above are also disclosed onthe Company’s website. All the Independent Directors of the Company have registeredtheir names in the Independent Directors Databank as required under the Act and the Rulesreferred therein. The Independent Directors are also required to take up an onlineproficiency self-assessment test within two years from the date of inclusion of their namein the Independent Directors databank unless exempted from such requirement under theAct 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 theDirectors’ Responsibility Statement is enclosed as Annexure C to this Reportand 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 theKey Managerial Personnel of the Company.

During the year Mr. P Varadarajan Company Secretary retired from the services of theCompany with effect from August 31 2020 and Mr. Rajesh Mukhija was appointed as CompanySecretary with effect from September 1 2020.

16. Employees a) Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee the Board hasframed a policy for selection and appointment of Directors Senior Management and theirremuneration. Salient features of the Remuneration Policy are set out in the CorporateGovernance Report. The Remuneration Policy is available on the Company’s website athttps://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 therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Compliance Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees are covered under thisPolicy. 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 Actread 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 andthe particulars of employees as required under Section 197(12) of the Act read with Rule5(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 theannual report is being sent to the Members excluding the aforesaid annexure. In terms ofSection 136 of the Act the said annexure is open for inspection and any Member interestedin 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 Scheme2007) under which employees were granted Options. The Company made grants under the saidScheme during the period from 2007 to 2011. There were no vested Options outstanding atthe 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 Optionsunder the ESOP 2016 as would be exercisable into not exceeding 14581000 fully paid- upequity shares of Rs. 1 each in the Company. The Nomination and Remuneration Committee isempowered to formulate detailed terms and conditions of the ESOP 2016 administer andsupervise the same. The specific employees to whom the Options would be granted and theireligibility criteria would be determined by the Nomination and Remuneration Committee atits sole discretion. Further the Nomination and Remuneration Committee is empowered todetermine the eligible subsidiary companies whether existing or future whose employeeswill be entitled to stock options under ESOP 2016. Options granted under ESOP 2016 wouldvest on or after 1 (one) year from the date of grant but not later than 4 (four) yearsfrom the date of grant of such Options or any other terms as decided by the Nomination andRemuneration Committee. The Company has granted 213400 options to the employees duringthe year under the ESOP 2016. The number of Options vested and outstanding as at theyear-end were 968110. The disclosure required to be made under Regulation 14 of SEBI(Share Based Employee Benefits) Regulations 2014 is available on the website of theCompany 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 AnnualReturn as on March 31 2021 is available on the website of the Company athttps://coromandel.biz/

18. Vigil Mechanism/ Whistle Blower Policy

The Company has a Whistle Blower Policy which provides the employees customersvendors and directors an avenue to raise concerns on ethical and moral standards andcompliance with legal provisions in conduct of the business operations of the Company. Italso provides for necessary safeguards for protection against victimization for whistleblowing in good faith.

The Vigil Mechanism is also placed on the website of the Company athttps://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 exchangeearnings and outgo as prescribed under sub-section (3)(m) of Section 134 of the Act readwith Companies (Accounts) Rules 2014 are enclosed as Annexure E to this Reportand 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 establishingservice-oriented philanthropic institutions in the field of education and healthcare asthe core focus areas. The Company upholds the group’s tradition by earmarking a partof its income for carrying out its social responsibilities.

The Company has been carrying out corporate social responsibility (CSR) activities formany years now even before it was mandated under the Act. The Company has put in place aCSR policy which is available on the website of the Company athttps://coromandel.biz/csr_ policy.html.

As per the provisions of the Act the Company is required to spend at least 2% of theaverage net profits of the Company made during the three immediately preceding financialyears. This amount aggregated toRs.23.22 crores. The Company however spent Rs. 23.01crores towards CSR activities during the financial year 2020-21

Details of composition of the CSR Committee and the CSR Projects undertaken during theyear are given in the Annual Report on CSR Activities which is appended as Annexure Fto this Report.

In addition to the above CSR expenditure the Company also contributed Rs.5 crores toPM CARES Fund Rs.2 crores to Andhra Pradesh Chief Minister Relief Fund Rs.1 crores toTelangana Chief Minister Relief Fund Rs.2 crores to Gujarat Chief Minister Relief Fundand Rs.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 hasformulated a policy an to operate the facilities safely efficiently environmentallyresponsible manner. Your Company has put in robust processes and establishedwastesafetyperformance indicators to track its HSE performance.

Employees are consistently encouraged to raise safety concerns and these inputs areperiodically monitored and actioned. The Company has carried out Safety Culture survey forthe third consecutive year for fertilizer and Safety perception survey for CPC and anoverall improvement in performance has been observed. The process safety managementenhancement is being sustained by successfully rolling out the five enablers for processsafety management across the fertilizer facilities engaging Prism consultant anddeveloping framework for process safety culture in the manufacturing sites of CPC throughDupont sustainable solution and MS Chola. Technical safety audits of Ammonia facilities atfertilizer 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 andAnkleshwar) of Crop Protection Chemical Plants (CPC) successfully migrated to the newstandard "ISO 45001 - OH&S Management Systems" and got certifiedin 2020-21.

During the year the combined Total Recordable Injury Rate (TRIR) per million-man hoursstood at 0.85 for Fertilizer & SSP business and 0.91 for CPC. All key manufacturingsites continued with the phase-2 of structural integrity upgrading program to mitigateasset integrity risks which has been audited and ratified by competent third party. Aspart of emergency preparedness gap study of fire protection systems has been carried outand upgradation of fire protection systems across fertilizer & SSP business has beentaken up. The fire systems at Dahej and Ankleshwar sites were also upgraded. Thefertilizer facilities have carried out fleet management study to improve internal roadsafety and have established the action plan.

Your Company’s commitment towards environmental sustainability remainsfirm.Fertiliser SSP & CPC business units have made combined submission for plasticwaste management to CPCB and entered into agreement with competent recyclers. The Companyhas completed the plantation of around 145000 saplings under flagship programme ofGovernment of Andhra Pradesh known as "Green Visaka" and further planned 80000saplings in the year 2021. In addition around 9020 saplings were planted and maintainedunder TERIs bioremediation mycorrhiza Technology at Visakhapatnam unit. Across the SSPplants the green coverage has been increased by planting additional 2029 saplingscovering 8983 sqm. New HDPE lining of 10 acres was completed along the gypsum ponds ofVisakhapatnam and 2.25 acres at Ennore for gypsum storage. The plants continue to improvewater efficiency by recycling and Zero Liquid Discharge (ZLD) programmes.

CPC sites also implemented green initiatives through philosophy of 3Rs - Reduce thelandfilling the Multi Effect Evaporator condensate in process Reuse of raw materials andingredients. At Ankleshwar plant external green belt for 15597 Sqm is planned to becompleted 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 awardfor 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) awardsfor various Safety and health environment projects.

During Covid-19 Pandemic lockdown your Company has ensured safe plant shutdown andstart up at all manufacturing sites and continues to sustain all efforts in currentpandemic situation.

Your Company is continuously striving for occupational health and safety and toprotect the environment.

22. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance. Asstipulated under the Listing Regulations the Report on Corporate Governance is appendedas Annexure G to this Report.

The requisite certificate from the Auditor confirming compliance with the conditions ofCorporate Governance by the Company is also attached to the Report on CorporateGovernance.

23. Management Discussion & Analysis

The Management Discussion and Analysis Report highlighting the industry structure anddevelopments opportunities and threats future outlook risks and concerns etc. isprovided 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 BusinessResponsibility Report in line with the business principles as provided in the BusinessResponsibility Policy adopted by the Company. Business Responsibility Report is enclosedas Annexure H to this Report and the same is also available on the website of theCompany 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 Rs.29.33crore. During the year the Company has allotted 424930 equity shares of Rs.1 each underESOP Scheme 2007 (2150 shares) and under ESOP 2016 (422780 shares).

b) Material Subsidiary Policy

The Company has adopted a policy for determining material subsidiary in line with therequirements of the Listing Regulations. The Policy on Material Subsidiary is available onthe 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 ofCompany 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 theAuditors to report to the Audit Committee and / or Board under Section 143(12) of the Actand the rules made there under. by

e) Significant regulators or courts by There are no significant theRegulators or Courts which would impact the going concern status of the Company and itsfuture operations.

f) Insolvency and Bankruptcy Code

There are no applications made or any proceedings pending under the Insolvency andBankruptcy 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 differencebetween amount of the valuation done at the time of one time settlement and the valuationdone 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 thefinancial institutions / banks. During the COVID-19 Pandemic period it has not availedany moratorium on any of its payments to the institutions. Banks and FinancialInstitutions continue their unstinted support in all aspects and the Board records itsappreciation for the same.

27. Acknowledgement

Your Directors wish to express their grateful appreciation for the valuable support andco-operation received from bankers business associates lenders financial institutionsshareholders various departments of the Government of India as well as the StateGovernments the farming community and all our other stakeholders. The Directorsacknowledge and would like to place on record the commitment and dedication on the part ofthe employees of your Company for their continued efforts in achieving good results. TheDirectors deeply regret the loss of life caused due to the outbreak of COVID-19 and aregrateful to every person who risked their life and safety to fight pandemic.

On behalf of the Board of Directors

A Vellayan

Chairman

Place : Chennai

Date : April 29 2021

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