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Coromandel International Ltd.

BSE: 506395 Sector: Agri and agri inputs
NSE: COROMANDEL ISIN Code: INE169A01031
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VOLUME 18107
52-Week high 1094.40
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P/E 15.06
Mkt Cap.(Rs cr) 27,067
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OPEN 904.45
CLOSE 901.95
VOLUME 18107
52-Week high 1094.40
52-Week low 709.55
P/E 15.06
Mkt Cap.(Rs cr) 27,067
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 the pleasure of presenting the 60thAnnual Report on the operational and business performance of the Company together with theAudited Financial Statements (Standalone and Consolidated) for the financial year endedMarch 31 2022.

1. Standalone Financial Highlights

Rs. In crores

Particulars FY 2021-22 FY 2020-21
Revenue
From Operations 19088.26 14156.20
Other Income 143.17 74.49
Total Income 19231.43 14230.69
Profit
Profit before Interest Depreciation and Taxation 2178.86 2044.11
Less: Interest 75.43 105.62
Less: Depreciation 172.02 172.45
Profit Before Tax 1931.41 1766.04
Less: Provision for Tax (including deferred tax) 518.96 453.46
Profit After Tax 1412.45 1312.58

Your Company's Revenue from operations for the reporting year stood atRs. 19088.26 crores as against Rs. 14156.20 crores last financial year. The Profitbefore Interest Depreciation and Taxation grew to Rs. 2178.86 crores from Rs. 2044.11crores in the previous year registering a growth of 6.6%. The Net Profit for the yeargrew to Rs. 1412.45 crores from Rs. 1312.58 crores in the previous year an increase of7.6% YoY The EBITDA margin decreased 325 basis points to 10.66% and the PAT margindecreased 187 basis points to 7% in FY 2021-22 over the previous reporting period. TheEarnings Per Share (EPS) for the year stood at Rs. 48.14 per share an increase of 7.5 %compared to Rs. 44.77 per share for the previous reporting year.

2. Business Environment

The global economy witnessed its fastest growth in the last 80 years in2021. The World Bank estimates show that the global economy expanded by 5.7%. Relaxationof pandemic-related lockdowns and fiscal stimulus helped boost the demand. However theoutlook has deteriorated for 2022 as the emergence of new variants of Covid 19 theRussia-Ukraine crisis frequent and wider-ranging lockdowns in China persistent pricepressures leading to a tightening of monetary policies in many countries and a commodityprice surge in energy and food has increased the risk to growth prospects.

India has been staging a sustained economic recovery since the secondhalf of FY 2020-21. The GDP is expected to grow by 8.7% during the current financial year.Though the year started on a muted note as the second wave of Covid-19 pandemic stretchedthe country's health infrastructure the ramped-up public health measures and policyinterventions lent support and reversed the economic slowdown. Major economic indicatorslike forex reserves merchandise exports FDI inflows GST collections etc. remainhealthy. The inflationary trends experienced in the last six months remain a concern areafor the economy.

On the Covid-19 front India has made significant strides in ensuring aspeedy and efficient vaccine rollout for containment and management of the pandemic. Indiacommenced the world's largest vaccination program with an ambitious target to inoculateits entire eligible population by December 31 2021 with at least the first dose. In thelast year it has administered more than 180 crore vaccines. In addition India's effortand leadership role in ensuring global vaccine equality by supplying ~18 crores ofvaccines to the low- and middle-income Countries has been lauded globally.

Agriculture

The agriculture sector in India experienced strong Kharif and Rabiseasons and is expected to grow by 3.3% during the year. Normal monsoon ensured highercrop acreages and India is expected to record its highest food grain production (315million tons). Agricultural exports grew by 20% to USD 50 billion led by cereal marinesugar and cotton crops. Further disruptions in cereal supplies from the Baltic regionhave opened additional export opportunities for the Indian farmers.

The supportive Central and State Governments facilitated thecontinuance of sector operations by exempting agricultural activities during the lockdown.To improve liquidity in the system direct money transfer programs Agri credit schemesand record procurement under the MSP programme were implemented. The Government isfocusing on leveraging technology and data analytics in agriculture and introduced severalreforms to promote its adoption during the year.

On the subsidy front the government's increased subsidy disbursementswere in line with increased raw material prices and kept the Agri input prices undercontrol. For FY 2021-22 the revised estimate for fertiliser subsidies stands at Rs.140122 crores (Budget: Rs. 79529 Crore).

Going forward higher Agri commodity prices Government agriculturefocus the expectation of a normal monsoon and higher reservoir levels bodes well foragriculture.

3. Performance Review

Fertiliser

The Company's fertiliser business recorded a strong performance duringthe year strengthening its branding & marketing capabilities manufacturing andsupply chain efficiencies. Amidst the second wave of Covid-19 the business undertookvarious initiatives at its offices manufacturing plants and in the marketplace to ensurethe safety of its employees channel partners the neighbouring communities and thefarmers. The plants operated flexibly to moderate their Annual Turnaround period andmaximise production. Safety continued to be a key focus area and the business undertookstructural stability and preventive maintenance activities at the plants. To improve itsbackward integration capabilities the business initiated a brownfield project to expandits Sulphuric acid manufacturing capacity at the Vizag plant. The plant is expected tocome onstream in FY2024 and will help in reducing import dependence. The business has beenstrengthening its digital and automation capabilities to improve its consumer connectbusiness intelligence and predictive analytics. During the year it worked on severalinitiatives in this regard.

Overall the primary sales volumes of DAP and Complex fertilisers weremarginally lower at 33.2 lakh tons. Consumption as reflected through the point of salesfrom retailers to the farmers stood at 34.5 lakh tons. The Company's consumption marketshare improved to 16.7% (FY21: 15.7%) with gains in major operating markets. The businessintroduced 'Groshakti Plus' Zinc fortified NPK offering improved nutrient availabilityand balanced nutrition. Integrated nutrient marketing structure supported by theagronomist team and Nutriclinics continued to support the business in promoting itsbalanced nutrition approach and market development initiatives.

Despite disruptions in Q1 due to COVID-19 related restrictionsCompany's fertiliser plants operated at 84% capacity and produced 28.4 lakh tons of DAP +Complex Fertilisers.

Single Super Phosphate (SSP) product segment within fertiliser aneconomical source of Phosphate providing multiple nutrients like Sulphur and Calciumregistered 55% consumption growth and maintained its leadership position with a marketshare of 16.1% (Last year 12.8%). During the year sales volumes grew by 17% to 7.6 lakhtons. The business focused on providing farmers with superior granulated and fortifiedproducts like Groplus which continued to receive encouraging feedback from the market.Production for the year stood at 7.3 lakh tons 10% higher than the previous year.

Crop Protection

Crop Protection business of your Company witnessed a strong revenuegrowth improving its top line by 21% over last year. The increase was led by technicalsales in Exports and the domestic B2B channel. New and speciality products continue to dowell and have contributed ~56% of the domestic formulation sales.

Though Covid related disruptions impacted the supply chain thebusiness strengthened its sourcing capabilities by developing new vendors and customers.The business implemented manufacturing excellence initiatives that resulted in efficiencyimprove- ments. It continued to strengthen its safety focus and carried out structuralstrengthening across the manufacturing locations. During the year the business has beenaugmenting its Quality Safety Sales and Marketing functions.

With a view to enriching its product portfolio the business introduced6 new products during the year including one novel combination product. The Business isworking on a rich pipeline of new molecules and combination products. During the year itreceived more than 80 registrations including combination products and plans to leveragethem to strengthen its offerings in the domestic and international markets.

Bio Products

The Bioproducts business registered a moderate growth during the yeardespite the challenges encountered in neem seed sourcing due to delayed neem seedarrivals. The R&D team is working on several new products and applications to expandits product offerings in collaboration with leading agriculture universities. With theincreased focus on integrated pest management globally the business is working towardsramping up its Aza production capacity.

Retail

The Retail business which operates a network of 750 company-operatedstores in Andhra Telangana and Karnataka continued to focus on improving its productoffering and consumer connect with the farming community. Through its 2000+ marketingteam the business offers farm advisory with initiatives like 'Scientist at Store' soiltest-ing and agronomic recommendations including balanced nutrition and integrated pestmanagement.

During the year the stores followed strict safety protocols andsupported the farming community by offering Agri solutions including products andservices. The business has been testing out new technology solutions in the areas ofnutrient management crop diagnostics and spraying. During the year it initiated droneand boom spraying trials. Further it is partnering with the startup ecosystem tointroduce novel products and technologies. The business continued to diversify itsportfolio of products and services and focused on digital farming solutions to ensurebetter reach to the end customer.

Speciality Nutrients

Speciality Nutrients business which promotes balanced nutrition byoffering secondary & micro-nutrients organic products and water-soluble fertilisersregistered robust growth during the year.

The business set up a liquid fertiliser plant at Vishakhapatnam andintroduced 2 new products - a liquid fertiliser with Zinc and a water-soluble fertiliserfor the Grapes segment. It improved its sourcing capabilities for organic products andregistered a 27% volume growth. The business's water- soluble fertiliser plant at Kakinadareported an 18% production growth during the year. It partnered with a variety of valuechain partners including seed companies drip irrigation companies FPOs contractfarming companies e-commerce platforms and government institutions.

4. Finance

Your Company continued to focus on managing cash efficiently andensured that it had adequate liquidity and backup lines of credit. The Company's workingcapital remained at comfortable levels through the year and Net Cash from operations forthe year stood at Rs. 2093 crores.

During the year the Company's longterm credit rating by 'CRISIL' hasbeen revised to 'CRISIL AA+ (positive)' and its short-term debt rating stands at 'CRISILA1+'. The Company's long-term credit rating by 'India Ratings & Research (A FitchGroup Company) has been revised to 'IND AA+ (positive)' and its shortterm debt ratingstands at 'IND A1+'. This reflects a very high degree of safety regarding timely servicingof financial obligations and a vote of confidence reposed in the Company's financials.

There were no material changes and commitments 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 perequity share of Re.1/- each. Your Board had earlier approved the payment of an interimdividend of Rs. 6 per equity share at its meeting held on February 3 2022 and the samewas paid on March 2 2022. Accordingly the total dividend for the year ended March 312022 would be Rs. 12/- per equity share of Re.1/- each. The total outgo for the yearwould be Rs.352.20 crore including tax deducted at source (TDS). The Company has adopteda Dividend Distribution Policy in line with the requirements of the SEBI (ListingObligations and

Disclosure Requirements) Regulations 2015 (Listing Regulations). TheDividend Distribution Policy is available on the website of the Company at https://www.coromandel.biz/investors/policies/

6. Scheme of Amalgamation of Liberty Pesticides and Fertilisers Limited(LPFL) and Coromandel SQM (India) Private Limited (csqm)

Your Board approved the scheme of amalgamation of LPFL and CSQM withthe Company ('Scheme') subject to requisite statutory and regulatory approvals. Pursuantthereto the joint petition was filed before the Hon'ble National Company Law Tribunal(NCLT) Hyderabad seeking approval of the Scheme. The Hon'ble NCLT vide its order datedApril 26 2022 approved the Scheme. The Appointed Date for the scheme is April 1 2021.The Scheme shall be effective upon the filing of a certified true copy of the order withthe Registrar of Companies Hyderabad. Upon the Scheme becoming effective LPFL and CSQMwould stand dissolved without going through the process of winding up.

7. Consolidated Financial Results

The consolidated financial statements prepared in accordance with theprovisions of the Companies Act 2013 ('the Act') and the relevant accounting standardsform part of this Annual Report. As required under the provisions of the Act a statementshowing the salient features of the financial statements of the subsidiaries associatesand joint ventures are enclosed as Annexure A to this Report.

The financial statements of the subsidiary companies will be madeavailable to the members of the Company upon request. They will also be kept forinspection at the Registered Office of the Company.

8. Subsidiary Companies

Brief details of the performance of the subsidiaries of the Company aregiven below:

i. Parry Chemicals Limited (PCL):

PCL a wholly owned subsidiary of the Company earned a total revenueof Rs.0.97 crore for the year ended March 31 2022 and Profit after Tax was Rs.0.36crore. PCL has filed an application with the Ministry of Corporate Affairs (MCA) for achange of name of the Company to "Coromandel Chemicals Limited". MCA's approvalis awaited.

ii. Dare Ventures Limited (DVL) [Formerly Dare Investments Limited):

During the year the Ministry of Corporate Affairs accorded itsapproval for the change of name from "Dare Investments Limited" to "DareVentures Limited" ('DVL'). Further the Company acquired additional 7493188 equityshares of DVL at a consideration of Rs. 11 crores.

DVL a wholly owned subsidiary of the Company did not have anysignificant operations. It incurred a loss of Rs. 0.40 crore for the year ended March 312022.

DVL will serve as an investment vehicle for the Company in order to tapthe growing startup ecosystem and identify and invest in early stage to late stagestartups in the agri-tech and other sectors.

iii. CFL Mauritius Limited:

CFL Mauritius Limited a wholly-owned subsidiary incurred a loss of $0.04 million during the year ended March 31 2022. The primary source of income for thissubsidiary is dividend income from Foskor (Pty) Ltd. The subsidiary did not receive anydividend from Foskor during FY 2021-22.

iv. Coromandel Brasil Limitada (CBL):

CBL a Limited Liability Partnership owned 100% by the Company and itssubsidiary CFL Mauritius Ltd is primarily engaged in getting product registrations inBrazil and procuring orders for supplies from India. It earned a loss of Brazilian Reals0.80 million (equivalent to Rs.0.11 crore) for the year ended March 31 2022.

v. Coromandel Australia Pty Ltd (CAPL) [Formerly Sabero Australia PtyLtd]:

CAPL did not have any significant operations during the year endedMarch 31 2022.

vi. Sabero Organics America SA (SOAL):

SOAL is primarily engaged in getting product registrations in Braziland procuring orders for supplies from India. It incurred a net loss of Brazilian Reals0.30 million (equivalent to Rs.0.43 crore) for the year ended December 31 2021.

vii. Sabero Europe BV (SEBV):

SEBV is primarily engaged in getting product registrations in Europeand procuring orders for supplies from India. It did not have any significant operationsduring the year ended March 31 2022.

viii. Coromandel Agronegocios De Mexico SA de CV (Coromandel Mexico):

Coromandel Mexico is primarily engaged in getting product registrationsin Mexico and procuring orders for supplies from India. It earned a net profit of MexicanPeso 1.04 million (equivalent to Rs. 0.36 crore) for the year ended December 31 2021.

ix. Sabero Argentina SA (Sabero Argentina):

Sabero Argentina is primarily engaged in getting product registrationsin Argentina and procuring orders for supplies from India. It did not have significantoperations during the year ended March 31 2022.

x. Parry America Inc.:

Parry America Inc. is primarily engaged in the sale of bio-pesticidesin America. It made a net profit of USD 1.40 million (equivalent to Rs.10.40 crore) forthe year ended March 31 2022.

xi. Coromandel International (Nigeria) Limited (CINL):

CINL is engaged in getting product registrations in Nigeria andprocuring orders for supplies from India. It made a net profit of Naira 7.66 million(equivalent to Rs.0.01 crore) for the year ended December 31 2021.

xii. Coromandel Mali SASU (CMS):

Coromandel Mali SASU (CMS) was incorporated on February 04 2020 as aWholly Owned Subsidiary (WOS) of the Company for the purpose of obtaining registration forthe marketing of agrochemicals. CMS is registered with Ministry in Charge of StatisticsRepublic of Mali and is yet to commence its business operations.

Associate Company

Sabero Organics Philippines Asia Inc (SOPA)

SOPA an associate company based in the Philippines did not have anysignificant operations during the FY 2021-22.

Joint Venture Company-

Brief information on the performance of the Yanmar CoromandelAgrisolutions Private Limited (YCAPL) a Joint Venture (JV) Company is given below:

YCAPL a Joint Venture company between Coromandel Yanmar and Mitsuiis into sales and service of agri-tech equipment focussed on farm mechanisation in India.YCAPL has been consolidating its position as amongst the market leaders in India in theCombine Harvester and Rice Transplanter segments. The total income for the year was Rs.145.96 crores and the net profit was Rs.7.27 crore.

Strategic Investment(s):

Brief details of the performance of the Strategic Investment companiesare given below:

i. Tunisian Indian Fertilisers SA Tunisia (TIFERT):

TIFERT a company based in Tunisia manufactures phosphoric acid a keyraw material for operating Phosphatic Fertiliser plants. Your Company's strategicinvestment in TIFERT (15% equity) is aimed at securing a steady supply of phosphoric acidfor the Company's operations at Kakinada and Visakhapatnam. During the year TIFERToperations were impacted by the pandemic and other social and technical issues. Indianpartners Coromandel and GSFC continue to provide necessary technical support to TIFERTto improve the plant performance.

ii. Foskor (Pty) Limited South Africa (Foskor):

Your Company along with CFL Mauritius Limited holds 14% equity inFoskor. Foskor supplies high-quality phosphoric acid used for phosphatic fertilisermanufacturing at the Kakinada and Ennore plants of your Company. The financial performanceof Foskor improved during the year with efficient mining operations resulting in higherrock production. However acid production was affected due to the disruptions caused bythe pandemic resulting in lower capacity utilisation. Your Company is working with theFoskor team on a business turnaround plan and is providing technical assistance forimproving acid production and plant efficiency.

9. Risk Management Policy

The Company has constituted a Risk Management Committee. Details of theconstitution of the Committee are set out in the Corporate Governance Report. The Companyhas formulated a Risk Management Policy under which various risks associated with thebusiness operations are identified. Risk mitigation plans have been put in place detailsof which are set out in the Management Discussion and Analysis Report.

10. Internal Financial Control Systems and their adequacy

The Company has adequate internal controls consistent with the natureof business and size of the operations to effectively provide for the safety of itsassets reliability of financial transactions with adequate checks and balances adherenceto applicable statutes accounting policies approval procedures and to ensure optimumuse of available resources. These systems are reviewed and improved on a regular basis. Ithas a comprehensive budgetary control system to monitor revenue and expenditure againstthe approved budget on an ongoing basis.

The Company has a corporate internal audit function to monitor andassess the adequacy and effectiveness of the Internal Controls and Systems of all keyprocesses across various locations. Deviations arereviewedperiodically and due complianceis ensured. Summary of Significant Audit Observations along with recommendations and theirimplementations are reviewed by the Audit Committee and concerns if any are reported tothe Board.

11. Related Party Transactions

All related party transactions were placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee was obtained for thetransactions which are foreseen and are repetitive in nature. The related partytransactions entered by the Company are reviewed by independent chartered accountants toconfirm that they were in the ordinary course of business and at arm's length basis. FormAOC-2 will not form part of the Board's report as all the transactions with relatedparties are on an arm's length basis and in the ordinary course of business. There are nomaterially significant related party transactions during the year which may have apotential conflict with the interest of the Company at large.

As required under the Indian Accounting Standards related partytransactions are disclosed in Notes to the Company's financial statements for thefinancial year ended March 31 2022. The Policy on Related Party Transaction is availableon the Company's website at https://www.coromandel.biz/investors/ policies/

None of the Directors had any pecuniary relationship or transactionswith the Company except the payments made to them in the form of remuneration sittingfee commission and reimbursement of expenses if any.

12. Auditors

i. Statutory Auditors and their report

M/s. S.R. Batliboi & Associates LLP (Reg. No. FRN 101049W/E300004)were appointed as the Statutory Auditors of the Company to hold office from the conclusionof the 59th Annual General Meeting until the conclusion of the 64thAnnual General Meeting of the shareholders of the Company. The requirement of annualratification of the appointment of the Statutory Auditors at each Annual General Meetinghas been dispensed with; accordingly there is no requirement to seek annual ratificationof their appointment.

As required under Regulation 33 of the Listing Regulations theAuditors have confirmed that they hold a valid certificate issued by the Peer Review Boardof the Institute of Chartered Accountants of India.

The Auditor's Report given by M/s. S.R. Batliboi & Associates LLPon the financial statements of the Company for the year ended March 31 2022 forms partof the Annual Report. The Auditor's Report does not contain any qualification reservationor adverse remark. During the year under review the Auditors had not reported any matterunder Section 143(12) of the Act therefore no detail is required to be disclosed underSection 134(3)(ca) of the Act.

ii. Cost Auditors and their report

Pursuant to Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 and amendments thereof the Company is required to maintaincost accounting records in respect of certain specified products and accordingly suchaccounts and records are made and maintained in the prescribed manner. The cost accountingrecords maintained by the Company are required to be audited and accordingly M/s.Narasimha Murthy & Co. and Mrs. Jyothi Satish were appointed Cost Auditors for FY2021-22.

On the recommendation of the Audit Committee the Board hasre-appointed M/s. Narasimha Murthy & Co. Cost Accountants and Mrs. Jyothi SatishCost Accountant as Cost Auditors for auditing the cost records of the Company for thefinancial year 2022-23. The Act mandates that the remuneration payable to the Cost Auditoris ratified by the shareholders. Accordingly a resolution seeking ratification of theshareholders for the remuneration payable to the Cost Auditors for the financial year2022-23 is included in the Notice convening the 60th Annual General Meeting.

During the year the Company filed the Cost Audit Report for FY 2020-21with the Ministry of Corporate Affairs within the prescribed time limit.

iii. Secretarial Auditor and their report

Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board had appointedM/s. R Sridharan & Associates Practicing Company Secretaries to undertake thesecretarial audit of the Company for the financial year 2021-22.

The report of the Secretarial Auditor is enclosed as Annexure B andforms part of this report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

In terms of Regulation 24A of the Listing Regulations there is nomaterial unlisted subsidiary incorporated in India. Material unlisted subsidiary for thepurpose of the said Regulation is a subsidiary whose income/net worth exceeds 10% of theconsolidated income/net worth respectively of the Company and its subsidiaries in theimmediately preceding accounting year. Hence there is no requirement for a secretarialaudit for any of the Company's subsidiaries in India.

13. Board Committees of the Board and other information

i. Directors

Your Company is managed and controlled by a Board comprising an optimumblend of Executive and NonExecutive Directors. As on March 31 2022 the Board ofDirectors comprised of eleven (11) Directors consisting of Executive Vice ChairmanManaging Director and nine (9) Non-Executive Directors out of which six (6) Directors areIndependent Directors including one Independent Woman Director. The composition of theBoard is in conformity with Regulation 17 of Listing Regulations and the relevantprovisions of the Act. The Directors possess requisite qualifications and experience ingeneral corporate management strategy finance engineering information technology andother allied fields which enable them to contribute effectively to the Company in theircapacity as Directors of the Company.

Mr. Ramesh K B Menon stepped down from the Board of the Company asDirector with effect from the close of business hours on March 31 2022. The Board placedon record its appreciation of the significant contribution made and valuable servicesrendered by Mr. Ramesh K Menon during his tenure.

Mr. Sudarshan Venu was appointed as an Additional Director designatedas Non-Executive Independent Director of the Company effective from February 3 2022subject to the approval of the shareholders of the Company. Subsequently through a postalballot on March 17 2022 the shareholders approved the appointment of Mr. Sudarshan Venuas an Independent Director of the Company for a term of five years effective fromFebruary 3 2022.

Mr. Prasad Chandran ceased to be Director of the Company with effectfrom the close of business hours on April 20 2022 on completion of his term ofre-appointment as an Independent Director of the Company.

In accordance with Article 17.29 of the Company's Articles ofAssociation read with Section 152 of the Act Mr. A Vellayan retires by rotation at theensuing Annual General Meeting and being eligible offers himself for reappointment.

ii. Board Meetings

An annual calendar of Board meetings is prepared and circulated to theDirectors in advance. During the financial year 2021-22 five (5) Board Meetings wereheld the details of which are given in the Corporate Governance Report.

iii. Independent Directors and their declaration of Independence

As on March 31 2022 the Independent Directors of the Company includedMr. Prasad Chandran Mr. Sumit Bose Ms. Aruna B. Advani Mr. K V Parameshwar Dr. RNagarajan and Mr. Sudarshan Venu. All the Independent Directors of the Company havefurnished the necessary declaration in terms of Section 149(6) of the Act affirming thatthey meet the criteria of Independence as stipulated thereunder and under the ListingRegulations. All the Independent Directors of the Company have registered on theIndependent Directors Databank as required under the Act and the applicable Rules in thesaid regard. In the opinion of the Board all the Independent Directors have theintegrity expertise and experience including the proficiency required to effectivelydischarge their roles and responsibilities in directing and guiding the affairs of theCompany.

iv. Familiarisation Programmes for Independent Directors

The Company's Independent Directors are eminent professionals withseveral decades of experience in banking and financial services technology financegovernance and management. They are fully conversant and familiar with the business ofthe Company.

The Company has an ongoing familiarisation programme for allIndependent Directors regarding their roles duties rights responsibilities in theCompany nature of the industry in which the Company operates the business model of theCompany etc.

The Independent Directors on their appointment are familiarised withthe Company's operations and businesses. Interaction with the senior leadership team(Business Heads and key executives) of the Company is also facilitated. Detailedpresentations on each division's business are made to the Directors from time to time. Amanual containing all important policies of the Company is given to the Directors.Meetings with the Chairman Executive Vice Chairman and the Managing Director arefacilitated for new appointees to familiarise them with the Company its businesses andthe practices and policies of the Group.

As part of the familiarisation programme a handbook is provided to allthe Directors including Independent Directors at the time of their appointment.

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 Directors withan insight into the Group's practices. Further periodic emails are sent to all theDirectors covering events that may have an impact on the business of the Company and/ orthe 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.

v. Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee theBoard has framed a policy for the selection and appointment of Directors SeniorManagement and their remuneration. Salient features of the Remuneration Policy are set outin the Corporate Governance Report. The Remuneration Policy is available on the Company'swebsite at https ://www.coromandel. biz/investors/policies/

vi. Evaluation of the Board's performance its Committees and Directors

In accordance with the provisions of Section 134 of the Act andRegulation 17 of the Listing Regulations the Board has carried out the evaluation of itsown performance and the performance of Committees of the Board namely the AuditCommittee CSR Committee Risk Management Committee Stakeholders Relationship Committeeand Nomination and Remuneration Committee as well as of the Directors individually. Themanner of evaluation of performance and the process adopted for the purpose is explainedin the Corporate Governance Report.

vii. Audit Committee

As on March 31 2022 the Audit Committee comprised of Mr. Sumit BoseChairman Ms. Aruna B. Advani Member Mr. K V Parameshwar Member Mr. Prasad ChandranMember and Mr. Arun Al- agappan Member. 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.

viii. Directors' Responsibility Statement

As required pursuant to the provisions of Section 134(3)(c) and 134(5)of the Act the Directors' Responsibility Statement is enclosed as Annexure C to thisReport and forms part of the report.

14. Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr. ArunAlagappan Executive Vice Chairman Mr. Sameer Goel Managing Director Mrs. JayashreeSatagopan Chief Financial Officer and Mr. Rajesh Mukhija Company Secretary are the KeyManagerial Personnel of the Company.

15. Policy on prevention prohibition and redressal of SexualHarassment in the workplace

The Company has in place the Prevention of Sexual Harassment Policy(POSH) in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. An Internal Compliance Committee (ICC)has been constituted in compliance with the requirements of said Act to redress complaintsreceived regarding sexual harassment. All employees are covered under this policy.Employees at all levels are being sensitised about the policy and the remedies availablethereunder. During the financial year 2021-22 one complaint was received by the ICC anddisposed off during the year under review with its recommendations. No complaint waspending as of the end of the year.

16. Employee Stock Option Plans

Employee Stock Option Scheme 2007 -ESOP 2007

The Company had in the past approved an Employee Stock Option Scheme2007 (ESOP Scheme 2007) under which employees were granted Options. The Company madegrants under the said Scheme from 2007 to 2011. There were no vested Options outstandingat the end of the financial year and there will be no grants issued under the ESOP Scheme2007.

Employee Stock Option Plan - ESOP 2016

The Shareholders had through Postal Ballot on January 11 2017authorised the Board/ Nomination and Remuneration Committee to issue to the employees suchnumber of Options under the ESOP 2016 as would be exercisable into not exceeding14581000 fully paid-up equity shares of Rs. 1 each in the Company. The Nomination andRemuneration Committee is empowered to formulate detailed terms and conditions of the ESOP2016 and administer and supervise the same. The specific employees to whom the Optionswould be granted and their eligibility criteria would be determined by the Nomination andRemuneration Committee at its 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 331720 options to the employees duringthe year under the ESOP 2016. The number of Options vested and outstanding as of theyear-end was 1039370. The disclosure required to be made under Regulation 14 of SEBI(Share Based Employee Benefits and Sweat Equity) Regulations 2021 is available on thewebsite of the Company at https://www.coromandel.biz/inves- tors/annual-general-meetings/

17. Vigil Mechanism/

Whistle Blower Policy

The Company has a Whistle Blower Policy which provides the employeescustomers vendors and directors an avenue to raise concerns on ethical and moralstandards and compliance with legal provisions in the conduct of the business operationsof the Company. It also provides necessary safeguards for protection against victimisationfor whistleblowing in good faith. The Vigil Mechanism is hosted at https://www.coromandel.biz/investors/policies/

18. Corporate Governance

The Company is committed to maintaining the highest standards ofCorporate Governance. As stipulated under the Listing Regulations the Report on CorporateGovernance is appended as Annexure D to Board's Report. The requisite certificate from theM/s. R Sridharan & Associates Practising Company Secretary confirming compliance withthe conditions of Corporate Governance by the Company is also attached to the Report onCorporate Governance.

19. Management Discussion & Analysis

The Management Discussion and Analysis Report highlighting the industrystructure and developments opportunities and threats future outlook risks and concernsetc. is presented in a separate section on page 109 of the Integrated Report.

20. Business Responsibility Report

Pursuant to Regulation 34 of Listing Regulations the Company hasprepared the Business Responsibility Report in line with the business principles asprovided in the Business Responsibility Policy adopted by the Company. BusinessResponsibility Report is enclosed as Annexure E to Board's Report and the same is alsoavailable on the website of the Company.

21. Corporate Social Responsibility

The Murugappa group is known for its tradition of philanthropy andcommunity 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 part ofits income for carrying out its social responsibilities.

The Company has been carrying out Corporate Social Responsibility (CSR)activities for many years even before mandated under the Act. The Company has put inplace a CSR policy which is available on the website of the Company athttps://www.coromandel. biz/sustainability/

As per the provisions of Section 135 of the Act and the Rules madethereunder the Company is required to spend Rs.28.12 crores for the financial year2021-22 i.e. least 2% of the average net profits of the Company made during the threeimmediately preceding financial years. The Company however spent an amount of Rs. 24.65crores towards CSR activities during the financial year 2021-22. The unspent amount of Rs.3.47 crores on ongoing projects would be transferred to a separate bank account titled CSRunspent account for FY 2021-22 on or before April 30 2022 and shall be spent within thetime limits specified in the Act and the Rules made thereunder.

Details of the composition of the CSR Committee and the CSR Projectsundertaken during the year are given in the Annual Report on CSR Activities which isappended as Annexure F to this Report.

22. Health Safety and Environment (HSE)

Your Company gives high priority to Health Safety and Environment(HSE) and has formulated a policy to operate the facilities safely efficiently and in anenvironmentally responsible manner. Your Company has put in robust processes andestablished safety performance indicators to track its HSE performance. A participativeapproach is adopted where employees are consistently encouraged to raise safety concernsand these inputs are periodically monitored and actioned. The "Drive to Zero"campaign was launched across CPC sites to increase employee participation in mitigatingthe work hazard.

The Company has carried out a Safety Culture survey for the fourthconsecutive year for fertiliser and a Safety perception survey for CPC and an overallimprovement in performance has been observed. The process safety management enhancement isbeing firmed up by successfully rolling out the Asset Integrity Policy Coromandel CommonEngineering Standards & Philosophies and PSMS e-learning competency modules across thefertiliser facilities. In CPC business a framework is being developed for process safetyculture in the manufacturing sites of CPC through Dupont sustainable solution and Chola MSRisk Service. The key recommendations from the technical safety audit of Ammoniafacilities in the fertiliser business were implemented thus minimising the risk fromammonia storage & handling.

All facilities of the Fertiliser & Single Super Phosphate (SSP)business and three facilities (Sarigam Dahej and Ankleshwar) of Crop Protection ChemicalPlants (CPC) were successfully audited by an accredited third party and re-certified forIntegrated Management Systems (ISO-45001 ISO 14001 and ISO 9001) in 2021-22. Mitigationof chemical exposure at the Ankleshwar site was done through the implementation of aclosed loop Bromine handling system in the Phenthoate plant & installation of a Totebin system in the Malathion Plant to eliminate H2S gas exposure.

During the year the combined Total Recordable Injury Rate (TRIR) permillion-man hours for the Company stood at 0.60. All fertiliser facilities continued withphase-3 of the structural integrity upgrading program to mitigate asset integrity riskswhich has been audited and ratified by a competent third party. To enhance emergencypreparedness projects on fire protection systems upgradation were taken up at fertiliserfacilities and firewater systems have been installed and commissioned in SSP plants(Udaipur Nandesari Kota and Nimrani). The fire systems at Dahej and Ankleshwar siteswere also upgraded to mitigate the fire hazards by installing a CO2 flooding Systemsprinkler system smoke detectors and fire alarm & increasing the Firewater reservoircapacity.

Your Company's commitment to environmental sustainability remains firm.Fertiliser SSP & CPC business units have obtained the unified registration forplastic waste management from CPCB. During the FY 2021 -22 the Company has successfullyrecycled 5462 MT of Plastic Waste. The Company has completed the plantation of around225000 saplings under the flagship programme of the Government of Andhra Pradesh knownas "Green Visaka".

The Company has created a plantation Known as "HARITHA VANAM"at Visakapatnam unit where around 9020 saplings were planted and maintained under TERI'sbioremediation Mycorrhiza technology. The Company has planted 14000 saplings under the"Miyawaki Plantation" Methodology at Visakhapatnam Unit. Across the SSP plantsthe green coverage has been increased by planting additional 2029 saplings covering 8983sqm. A new HDPE lining of 5 acres was completed along with the gypsum ponds ofVisakhapatnam for gypsum storage. A scrubber efficiency study was carried out acrossfertiliser facilities to establish gaps and rectify them. At the Kakinada unit a newDe-dusting system has been installed at Screen House to improve fugitive emission. Toimprove efficiencies scrubber upgradation has been undertaken at the Kota unit.

The Company has upgraded the Online Continuous Emission MonitoringSystem (OCEMS) at all the Fertiliser & SSP units. During the FY21-22 a new onlineAAQMS system was installed at the Visakhapatnam unit. The Company has undertaken many jobsfor the improvements at Visakhapatnam including constructing a garland drain with waterrecycling arrangements and enhancing the greenery and aesthetics by creating additionalLawns. The plants continue to improve water efficiency by recycling and Zero LiquidDischarge (ZLD) programmes.

CPC sites also implemented green initiatives through the philosophy of3R's - Reduce the landfilling waste Recycle the Multi Effect Evaporator condensate inprocesses and Reuse raw materials and ingredients.

About 4000 saplings were planted across CPC Business including anexternal green belt area of 15597 Sqm (1560 trees) at Ankleshwar Plant to increase theGreen Belt Area using the concept of Social Forestry.

The Bioproducts business of your Company planted 2000 saplings whichcomprise of Cashew nary and Eucalyptus varieties in and around the Neem Plantationboundaries at Rasipatti and Kudikdu area as a preventive measure to act as a windbreaker.In addition to this it has developed a natural storm water drainage system inside thefactory to avoid stagnation of continuous water.

Coromandel International Limited Fertiliser Business was awardedIndustry Stewardship Champion Gold Award from International Fertilizer Association (IFA)in Dubai in October 2021. Kakinada Unit won Gold Award & Sectorial Topper Award fromCII- SR EHS Excellence Award 2021 and Ennore Unit won Bronze Award from CII-SR EHSExcellence Award 2021. Udaipur unit received an appreciation award for the plantationcampaign from the District Magistrate of Udaipur. SSP Corporate Function Won Silver Awardfrom CII Award 2020. Nimrani Won the Platinum & Silver Award from CII Award 2020.

During Covid-19 lockdowns your Company has ensured safe plant shutdownand start up at all manufacturing sites and continues to sustain all efforts throughoutthe pandemic.

23. Other disclosures

i. Share Capital

The paid-up equity share capital of the Company as on March 31 2022was Rs. 29.35 crore. During the year the Company has allotted 117730 equity shares ofRe. 1 each under ESOP 2016 (422780 shares). No equity shares were allotted under ESOP2007 during the year.

ii. Material Subsidiary Policy

The Company has adopted a policy for determining material subsidiaryin line with the requirements of the Listing Regulations and the same is available on thewebsite of the Company at https://www.coromandel. biz/investors/policies/

iii. Annual Return

In accordance with Section 92(3) read with Section 134(3)(a) of theAct the Annual Return as on March 31 2022 is available on the website of the Company athttps://www.coromandel.biz/inves- tors/annual-general-meetings/

iv. Conservation of energy technology absorption foreign exchangeearnings and outgo.

The particulars of conservation of energy technology absorptionforeign exchange earnings and outgo as prescribed under sub-section (3)(m) of Section 134of the Act read with Companies (Accounts) Rules 2014 are enclosed as Annexure G to thisReport and form part thereof.

v. Particulars of Employees and Remuneration

The disclosure with respect to remuneration as required under Section197 of the Act read with rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended as Annexure H to this report.

The statement containing names of the top ten employees in terms ofremuneration drawn and the particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate Annexure forming part of thisreport.

However the annual report is being sent to the Members excluding theaforesaid Annexure. In terms of Section 136 of the Act the said Annexure is open forinspection. Any Member interested in obtaining a copy of the same may write to the CompanySecretary.

vi. Particulars of Loans Guarantees and Investments

Details of loans and guarantees given and investments made underSection 186 of the Act are shown in the Notes to the Financial Statements.

vii. Public Deposits

The Company has not accepted any deposits from the public fallingwithin the ambit of Section 73 of the Act read with Companies (Acceptance of Deposits)Rules 2014. No amount of principal or interest was outstanding as on the Balance Sheetdate.

viii. Compliance of Secretarial Standards

The Company has complied with the applicable Secretarial Standardsissued by The Institute of Company Secretaries of India and approved by the CentralGovernment.

ix. Reporting of Frauds

There was no instance of fraud during the year under review whichrequired the Auditors to report to the Audit Committee and/or Board under Section 143(12)of the Act and the Rules made thereunder.

24. Declaration/Affirmations

During the year under review

• There are no significant material orders passed by theRegulators or Courts that would impact the Company's going concern status and futureoperations.

• There are no applications made or any proceedings pending underthe Insolvency and Bankruptcy Code 2016.

• The Company has not made any one time settlement with any Bankor Financial Institution as such disclosure or reporting requirements in respect of thedetails of difference between amount of the valuation done at the time of one timesettlement and the valuation done while taking loan from the Banks or FinancialInstitutions is not required.

25. Banks and financial institutions

Your Company is prompt in paying interest and repayment of loans to thefinancial institutions/banks. Banks and Financial Institutions continue their unstintedsupport in all aspects and the Board had placed its appreciation for the same on record.

26. Acknowledgement

Your Directors wish to express their grateful appreciation for thevaluable support and cooperation received from bankers business associates lendersfinancial institutions shareholders various departments of the Government of India aswell as the State Governments the farming community and all our other stakeholders.

The Directors acknowledge and would like to place on record thecommitment and dedication on the part of the employees of your Company for their continuedefforts in achieving good results.

Date: April 28 2022 On behalf of the Board of Directors A Vellayan
Place: Secunderabad Chairman

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