Coromandel International Limited
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Coromandel International Limited International Coromandel PROSPEROUS FARMER, PROGRESSIVE INDIA. Providing Holistic Agri Solutions Addressing Farmer's Needs Annual Report 2016-17 Fertilisers l Crop Protection l Specialty Nutrients l Retail Coromandel International Limited, “Coromandel House”, 1-2-10, Sardar Patel Road, Secunderabad - 500 003, India. CIN: L24120TG1961PLC000892, Email: [email protected] Tel: +91 40 2784 2034 / 2784 7212, Fax: +91 40 2784 4117, Web: www.coromandel.biz Coromandel International Limited Annual Report 2016-17 Corporate Overview | Management Reports | Financial Statements PROSPEROUS FARMER, PROGRESSIVE INDIA. Farmers are the sentinels of food security for the entire We, at Coromandel, aim towards bringing prosperity to a nation. Hence, working towards well-being of our farmers farmer’s life by being his ‘Partner for Growth’. Our farming is equivalent to strengthening foundation of India’s solutions, spread across Seed to Harvesting operations, progress. The Green Revolution in India undertaken offers sustainable value, bringing yield and quality about half a century ago, focused primarily on raising improvements in a cost effective manner. We directly agricultural output and improving food security. However, or indirectly connect close to 2 Crore farmers annually, the farm income has not grown in proportion to increase deepening our relationships with farmers by empowering in output, creating income disparity between farm and them with high quality cropping solutions. non-farm segments. As per the NSSO estimates, around a fi fth of rural households engaged in agriculture as their To secure nation’s progress and improve livelihood major occupation earn below the poverty line, putting a opportunities of half a billion masses, Indian agriculture serious challenge in achieving sustainable and inclusive needs to transform. Our efforts at Coromandel are aligned growth targets for the nation. towards bringing these technological advances to farming, and in conjunction with agri reforms and infrastructure Considering the paramount signifi cance that agriculture development, envision to drive the second wave of green holds in an Indian perspective, farmer’s wellbeing revolution. stands foremost to the nation’s advancement. With the introduction of recent reforms aiming to improve farmer’s income over the coming years, the growth momentum has started to witness a shift. “The hard working farmer is our Annadaata. Our schemes and initiatives are aimed towards bringing a qualitative change in the life of the farmer, one that will play a key role in Transforming India” - Narendra Modi Prime Minister of India Annual Report 2016-17 1 CONTENT 03 30 103 Corporate Management Financial Overview Reports Statements From the desk of the Chairman 03 Notice 30 Standalone 103 From the desk of the Managing Director 04 Director’s Report 34 Consolidated 169 Corporate Information 05 Management Discussion and Analysis 41 Directors’ Profi le 06 Corporate Governance Report 72 Financial Highlights 08 Business Responsibility Report 90 Business Overview 10 The World of Coromandel 22 Society & Environment 26 Forward-looking Statements Statements in the Annual Report detailing the Company’s objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Since these statements are based on certain assumptions and expectations of future events, the actual results could differ materially from those expressed or implied. The important factors that could make a difference to the Company’s operations include the economic conditions affecting the domestic demand-supply conditions, prices of fi nished goods, the changes in government regulations because of the tax regime, etc. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments, information or events. 2 Coromandel International Limited Corporate Overview | Management Reports | Financial Statements FROM THE DESK OF THE CHAIRMAN effi ciency through neem coating has been a positive step forward and the same needs to be replicated in Phosphatics as well. Further, reforms targeting improvement of farm output realization, crop insurance, agri infrastructure development, resource use effi ciency and soil health bodes well directionally towards enhancing farmer’s real income. Your Company has been expanding its products and services - our integrated farming solutions, extending from seed to harvesting services, have been adding value to the farmers lives, providing sustainable yield improvement and quality output. During the year, your Company’s initiatives primarily spanned around driving the twin objectives of Nutrient Security and Soil Security. Coromandel introduced technologically superior solutions in Phosphatics, Water Soluble Fertilisers and Crop Protection space by partnering with its global alliances, which have received positive response from the farming community. In line with the Government’s call for developing Model Retail outlets to improve soil and seed testing facilities for the farmers, Coromandel has transformed its 450 retail outlets as Krishi Suvidha Kendra, providing balanced nutrient recommendations to the growers as per soil and crop needs. Our Retail Mana Gromor Centers directly connect with around 2.8 million farmers, offering extension services through undertaking integrated nutrient trials, scientist connect and technology interventions. As the younger workforce enters into farming, we are aligning our solutions to drive this enterprising shift away from the conventional means. Farm Dear Shareholders, Mechanization, though still nascent, is seeing traction, as the farmers are realizing the need of improving productivity and managing costs. The year 2016-17 has been a dynamic one for India, with the economic Your Company is making gentle stride in this direction, partnering with activities shaped by tax reforms, normal southwest monsoon after the Government, towards offering cost effective farm mechanization two preceding drought years, globally weak commodity prices and solutions. demonetization drive. It is heartening to see Agriculture sector returning to higher growth numbers, as policy push and near normal monsoons On the operational front, Coromandel improved its performance, boosted sowings and consequent consumption. Agriculture, being driven by Crop Protection business and higher agri nutrients uptake on the mainstay of Indian society, closely drives the fortunes of around account of normal monsoons. The soft commodity price trend in the half a billion livelihood. As we stand today, the Urban-Rural economic international markets reduced overall sourcing costs and your Company divide, though less distant, is still evident. Government’s ambitious on its part, passed on the benefi ts of a benign raw material environment target towards doubling the farmer income by 2022 is a positive step to the farming community. Coromandel maintained its market share in forward, and we at Coromandel fi rmly believe and practice this vision Phosphatics segment, inspite of weak North East monsoon in Southern of enhancing prosperity of our farmers. We constantly endeavour India markets affecting consumption during Rabi season. Our unique and partner towards driving the agrarian shift from subsistence to fertiliser offerings have been doing well, balancing crop and soil needs, commercial nature of farming. and accounts for close to one-third of sales. Specialty nutrients and Organic manure businesses expanded its product offerings, targeting On the Policy front, Direct Benefi t Transfer (DBT) in fertilisers was pulses and horticulture segments. During the year, your Company moved introduced on a pilot basis in 16 districts across India, with pan India closer to the farmers by developing an integrated nutrient structure, ably roll out likely to follow in 2017-18. We welcome this initiative, aimed at supported by team of agronomists. Going forward, we expect this shift promoting balanced nutrition practices and improved subsidy targeting. to signifi cantly contribute towards strengthening our commitment and Though fi ner details are yet to evolve, we foresee DBT being benefi cial connect with the farming community. in propagating balanced nutrient application as per soil health status of the fi eld. In the longer time horizon, DBT may overcome the distortion As Indian agriculture stands at the cross roads, we at Coromandel fi rmly between N, P, K usage, which currently is highly lopsided towards believe in partnering with the farming community to drive this growth nitrogenous fertilisers. Goods & Services Tax (GST), slated to be story. We hope that our integrated crop solutions, extension services and introduced in early 2017, will bring transparency in operations, benefi ting close connect with the farmers will help in realizing the inherent potential organized players like Coromandel. Further, seamless movement of Indian agriculture. We are proud to be part of nation’s growth story and of products and services across the state boundaries, will create a continue our commitment towards empowering the farming community. common market for the products. On ‘Make in India’ front, Phosphatics industry has seen few interventions in terms of getting marketing access to newer geographies for domestic manufacturers over imports, though A. Vellayan lot of issues still need to be addressed to make indigenous