It gives me immense pleasure to share with you our performance for the year gone by andthe journey ahead. The year gone by was marked by tumultuous changes and challengingbusiness environment on several fronts. These changes driven by forces of SustainabilityDigitisation and Technology will create exciting and transformative opportunities. I amtruly energised by the strengths which our Company has built over the years and thetransformation agenda in front of us. The theme of this year's annual report also is abouttransformation. Reimagine LIFE - Reimagine Living Industry and Farm Essentials - as wecontinue to Serve Society through Science.
Overall business performance
FY2016-17 was an encouraging year for us. A year in which our businesses deliveredexcellent performance including sustained profitability in our international businesses.The performance was led by the Chemicals business which remains the mainstay of ouroperations. Our India and US businesses delivered stable margins with better volumesdespite challenges in terms of rising energy costs. The performance of our UK business wasrobust owing to consistent focus on cost rationalisation. Our Kenyan businesssuccessfully overcame its quality challenges during the year.
Tata Salt maintained its No1. position in the Food Category in the Brand Equity Survey.We continued to build our Consumer Food business on that foundation while we did pauseour pulses business for some time due to government price intervention structurally wesee a lot of potential in this space; and we will enhance our focus on value-addition witha range of besan protein rich mixes and other products. At the same time our spicescontinue to gain market share in the three regions even as we prepare to enter the SouthIndian market. Our Innovation Centre in Pune also launched the TATA Nx sweeteners (ZeroSugar and Lite & Sweet).
During the year our revenue from continuing operations was ` 13288.92 crore against `15220.23 crore last year. The decline was due to a management decision to run thePhosphate fertilisers business to maximise cash generation. This led to improvedprofitability and PAT sharply up by 29% over the previous year. The robust cash flow ofour businesses enabled us repay our ECB loan and achieve significant reduction in workingcapital borrowings and strengthened our balance sheet.
Going Forward - Our Strategy
Our strategy is to maintain our strengths in Chemicals Business while growing theSpecialty Business and Consumer Food Business even as we focus on the Farm Businessthrough our subsidiaries Rallis and Metahelix. We have a unique combination of a Farmbusiness in Rallis having the Farmer connect and a Food business in Tata ChemicalsLimited having the Household connect. Our decision to exit the Urea Business was acritical move in line with our strategy. The Specialty Business and Consumer Business aregoing to be our future growth catalysts. We are investing in manufacturing facilities inGujarat and Andhra Pradesh to develop scale in Specialty Businesses of New Materials likeHDS and Nanomaterials and New Nutrition and Foods such as Oligosaccharides and Polyols.
Emerging as future ready
We are focusing our Sustainability efforts around FEW (Food Energy and Water)challenges facing the world while we continue driving resource optimisation andutilisation in our operations launching innovative nourishing products and enablingself-reliance amongst farmers and the community. Our investments in our Food Farm andMaterials technology laboratories in Pune and Bengaluru are yielding several newinnovative solutions and products much of which is highlighted in the annual report. Ourdigital initiatives are having a positive impact on our balance sheet. In FY2016-17 weput in place Digitisation agenda and IT infrastructure for integrating our operationsparticularly in the domains of Supply Chain management Customer and Employee engagement.During the year Digital Projects in Chemicals Food and Farm businesses were initiatedwhich will enable us to automate processes improve data quality and predictive analyticsand promote innovation.
I would like to thank all our Shareholders including our promoter and principalShareholder Tata Group for their support especially during di3cult times few quartersago which only reinforced our commitment and our deep belief in our Values and Purposeand the very Principles on which Tata Chemicals Limited and Tata group was founded. WhileTata Chemicals Limited is on its way to celebrate 80 years in 2019 last year was 90 yearsof our founding as Okha Salt Works in Mithapur and next year will be 150 years of TataGroup I want to thank all our stakeholders who over the years have made this a memorablejourney and we are committed to Serving Society through Science and Reimagining LIFE(Living Industry and Farm Essentials) in all its facets.
I seek the support and guidance of all our stakeholders in this endeavour.
Managing Director & CEO
We live by our core values of
improving the quality of life for our
communities and building trust.
To uphold the legacy of Tata group
we invest in varied community
development programmes across
geographies. Over the years we
have established several not for profit
organisations which are working
closely with our communities
on the ground.
The organisations we established include Tata Chemicals Society of Rural Development(TCSRD) Uday Foundation Tata Chemicals Golden Jubilee Foundation Magadi Soda Foundationand Okhai-Centre for Empowerment all of these organisations help us improve ourreach.
Community Development Interventions across the Globe:
TATA CHEMICALS EUROPE
The Company engages closely with the community and carries out several activities forcharities and education establishment. During the year the Company: Contributed 10000to St Luke's Cheshire Hospice in Winsford Sponsored the Make it in Manufacturing'event where around 100 13-14 year old children learnt about career options inmanufacturing sector Employees volunteered for environmental causes like habitatconservation
TATA CHEMICALS NORTH AMERICA
The Company works for differ ent societal and environmental issues. Some activitiesinclude: Engaging with community organisations like Wyoming Mining3Association UnitedWay Chambers of Commerce environmental conservation groups3and local communities'boards and groups Donation of 200000 USD annually to local food banks and volunteerorganisations Employee volunteering for community events projects programs
TATA CHEMICALS MAGADI
The Company works towards community development for causes like education healthwomen empowerment. Some of the highlights during the year include: Community engagementfor Lake Magadi Loita Hills Conservation Project Development of the SWOT memorandum &capacity building workshops on strategic CSR
Bursaries for community health including development of mother and child care centre atMagadi hospital
Our Approach towards CSR
We follow an integrated approach in carrying out our CSR interventions and we work onlayering of differ ent initiatives so that each one further consolidates the developmentachievements of the communities we work with.
This integrated approach helps towards long-term sustainable development of thecommunity and environment. Over and above this TCL continues its focus on inclusion andempowerment of women and the socially backward communities. Our key areas of interventionare divided into Blossom Enhance Aspire Conserve and Nurture.
SOME OF OUR KEY INTERVENTIONS IN EACH OF THESE AREAS IN INDIA ARE LISTED BELOWFY2016317:
BLOSSOM: Capacity building and empowerment of local communities through sustainableand replicable handicraft development model
Expenditure - ` 128 lakh
TCL is promoting handicraft products under the brand OKHAI in all locations with theobjective of keeping alive the traditional skills while providing sustainable livelihoodto the artisans. Currently we are working with 900 artisans across sites - through thecluster development program and have been able to generate business turnover of ` 2.21crore. All the products developed by the artisans are linked to Okhai which provides astrong marketing platform.
CONSERVE - Maintain ecological balance and conserve natural resources throughparticipatory approach for environmental sustainability
Expenditure - ` 265 lakh
We have several on-going projects for nature and biodiversity conservation like - WhaleShark conservation Coral Reef restoration Mangrove plantation Biodiversity reserveplantation Marine Turtle monitoring Community conserved wetland Monitoring of birdlifeEco Clubs Program and Organic Waste Converter - in Mithapur. In Mithapur Babrala &Haldia TCSRD is also working with the Eco Clubs in schools. During the year 79 WhaleSharks caught accidentally in the 3shing nets along the Saurashtra coast were rescued andreleased taking the total rescue 3gure since the inception of the campaign to 670. Apartfrom this projects undertaken are Land development Water management and conservationenergy e3cient cook stoves and bio-gas plants.
ENHANCE: Enhance income of households in surrounding community
Expenditure - ` 241 lakh
Agriculture Development Program: We undertake programs that include capacity buildingof farmers crop demonstration crop diversi3cation promotion of organic farmingintroduction of improved agriculture practice like SRI. We also support throughagri-equipment and seeds. During the year approximately 5000 farmers were directlyBenefited from various interventions across locations. We have also started threeAgriculture Information Centres in three villages of Mithapur.
Animal Husbandry: In the financial year 2016-17 1.31 lakh cattle were covered fromdiffer ent interventions like health check-up in OPDs vaccination for FMD & HSArti3cial Insemination. Under Agri allied promotion work we supported 121 families for3sh culture and 86 households for poultry farming in Haldia.
NURTURE: Improve the health status of community through preventive and curativemeasures
Expenditure - ` 325 lakh
Health Care: We support healthcare of our neighbouring communities through Mithapurhospital mobile clinic services health and eye camps and OPD centres. We also focus onprevention through nutrition awareness training and monitoring programs.
Sanitation: We have collaborated with WASMO at Mithapur and during the year 1285households were provided tap connection for supply of water and 521 households weresupported with construction of toilets. In Barbala 63 and in Haldia five sanitation unitswere constructed.
ASPIRE: Facilitate and empower local communities to seek functional education andskills to enable sustainable socio-economic development
Expenditure - ` 306 lakh
Education: To ensure zero drop-out of students at all levels of education starting frompre-primary education we have started various education programmes. The programmesundertaken during the reporting year include : E- Library Learning Enhancement Program(LEP) Teacher training Scholarships Child learning and Improvement. The programmesBenefitted more than 20000 children across the three sites.3 Vocational skills: TCSRD isrunning the skill development program in Mithapur Babrala Haldia and Sriperumbudur totrain unemployed youth and facilitate their employment or entrepreneurship development.During the year 2434 youth were trained on differ ent vocational skills like mobile &computer repairing electrical 3tting nursing.
EMPOWERMENT: TCL works by empowerment of the marginalised section of the communitythat includes SC/ST community and women in all the programs. There are specific programsto reach out to such sections at remote locations such as Sundarbans (West Bengal) Kutchand Banaskantha districts (Gujarat).
Expenditure - ` 157 lakh
Relief Programs: Tata Chemicals provided relief support during 3oods in Assam.
Expenditure - ` 31 lakh