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DELIVERING CUSTOMER DELIGHT INNOVATING FOR A BETTER TOMORROW GOING BEYOND BOUNDARIES CREATING HAPPY CREATING A COMMUNITIES SUSTAINABLE BUSINESS SCALING GREATER HEIGHTS REDEFINING EXCELLENCE 72nd Annual Report - 2010-11 Seventy Second Annual Report 2010-2011 Tata Chemicals Limited Contents Page No. Board of Directors 01 Corporate Theme - The Power of One 02 Notice 17 Directors’ Report 21 Management Discussion and Analysis 33 Corporate Governance Report 50 Auditors’ Report 65 Balance Sheet 68 Profit and Loss Account 69 Cash Flow Statement 70 Schedules and Notes to Accounts 72 Summary of Financial Information of Subsidiary Companies 106 Financial Highlights-Last Decade 108 Consolidated Auditors’ Report 109 Consolidated Balance Sheet 110 Consolidated Profit and Loss Account 111 Consolidated Cash Flow Statement 112 Schedules and Notes to Accounts (Consolidated) 114 Financial Statistics 140 Proxy/Attendance Slip 143 Annual General Meeting : Tuesday, August 09, 2011 Time : 3.00 p.m. Venue : Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai - 400 020 BOOK CLOSURE DATES JULY 27, 2011 to AUGUST 09, 2011 Board of Directors R. Gopalakrishnan Nusli N. Wadia Prasad R. Menon Nasser Munjee Vice-Chairman Eknath A. Dr. Yoginder K. Alagh Dr. M. S. Ananth Kshirsagar Dr. Y. S. P. Thorat Ratan N. Tata Chairman R. Mukundan P. K. Ghose Managing Director Executive Director & CFO Company Secretary Rajiv Chandan Members of the Executive Committee Auditors R. Mukundan - Managing Director Deloitte Haskins & Sells P. K. Ghose - Executive Director & CFO Chartered Accountants De Lyle Bloomquist - President (Global Chemicals) Solicitors B. Sudhakar - Chief Human Resources Officer AZB & Partners, Mumbai Dr. Murali Sastry - Chief Scientific Officer Mulla & Mulla and Craigie, Dr. Arup Basu - Chief Operating Officer (Chemicals - India) Blunt & Caroe, Mumbai. Ashvini Hiran - Chief Operating Officer (Consumer Products) V .K. Bhatia - Senior VP (Manufacturing - Fertilisers) Registrar & Share Transfer Agent D. K. Sundar - Senior VP (Marketing - Fertilisers) TSR Darashaw Limited 6-10 Haji Moosa Patrawala Industrial Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011. 1 group onemany entities Facilities 2 Markets Tata Chemicals Profile: The Power of One Tata Chemicals is a part of the USD 67.4 billion Delivering Customer delight operations – truly redefining Tata Group. Established in 1939, Tata With a product portfolio ranging from excellence at TCL. Awards and Chemicals is currently the second largest Living, Industrial and Farm Essentials accolades for excellence in (LIFE), Tata Chemicals thrives on manufacturing, production, safety, producer of soda ash in the world with providing customer delight across sustainability, quality, communication manufacturing facilities in India, UK, Kenya and continents, touching lives and serving and financial reporting is vindication of USA. It is India’s leading Crop Nutrients Player society through Science. impressive efforts in this direction. with its own manufacturing of urea and phosphatic fertilisers and a leading player in Innovating for a better tomorrow Creating Sustainable business crop protection business through its subsidiary With tie-ups with leading academic Few examples that vindicate Tata Rallis. Tata Chemicals is a pioneer and India’s and research institute across the Chemicals Sustainable business market leader in the branded, iodised salt globe, our Innovation centre strives to practices are 60% Soda Ash capacity innovate for a better tomorrow. Tata being ‘Natural’, manufacturing of segment and Tata Salt has been recognised as Swach and Paras Farmoola being the Cement from solid wastes from the India’s No.1 Food Brand for more than five initial trend setters. Mithapur plant and one of the most years. energy efficient fertiliser unit in world. Creating happy communities With the policy of ‘reduce, recycle and Tata Chemicals has undertaken several key Corporate Social responsibility and reuse’, the company ensures that its steps recently to leverage its expertise in societal concern is an integral part of commitments towards improving its science to develop high-tech and more our business and it is guided by a eco-footprints are fulfilled. sustainable products. It has set up the Tata strong heritage of support to the communities within which it operates. Going beyond boundaries Chemicals Innovation centre in Pune to We contribute to the well being of Year 2011 would go in the history of develop world-class R&D capability in the economic, environmental and social Tata Chemicals as the year we emerging areas of nanotechnology and aspects systems through various integrated all our international biotechnology. Tata Chemicals have also means inclusive of adoption of operations under the Tata brand. From invested in a Center for Agri- Solutions & regional/international initiatives such 1st April 2011 onwards, the following Technology (CAT) at Aligarh to provide advice as UN Global Compact, Responsible corporate brand transition is in effect; on farming practices in general and crop Care and Global reporting initiative. General Chemicals Industrial Products nutrition practices and solutions in particular. Inc. - Tata Chemicals North America Scaling greater heights Inc., General Chemicals (Soda Ash) Rallis has acquired Metahelix Life Sciences for With manufacturing facilities across Partners - Tata Chemicals (Soda Ash) development and growth of seeds business. four continents and a global customer partners, Brunner Mond (UK) Limited - base we are today the second largest Tata Chemicals Europe Limited, Businesses: producer of Soda Ash in the world. Magadi Soda Company Limited - Tata Tata Chemicals operates broadly in three With a significant presence in the crop Chemicals Magadi Limited, Brunner sectors – Living Essentials, Industry Essentials nutrition and protection space in India Mond SA (Pty) Limited - Tata and with a portfolio of top product Chemicals South Africa Pty Limited. and Farm Essentials. It is structured in order to brands like Tata Salt, Tata Paras, Paras address all major segments of consumers in Farmoola, Tata Swach and British Salt, society namely Household (Living Essentials), our journey continues. Industry (Industry Essentials) and the Farmer (Farm Essentials). Redefining excellence Tata Chemicals has embarked upon an aggressive journey to promote excellence at all its businesses and 3 one mission diverse businesses 4 The Living Essentials business Comprises of consumer products, have launched ‘grow more pulses’ including salt, fresh produce, water purifiers program. As a part of this program Tata and pulses. Chemicals supplies pulses to the Indian market under the ‘I-Shakti’ brand. To meet ‘Tata Salt’ is a branded iodised edible salt the challenge of providing safe drinking and ‘Tata Salt Lite’, with 15 per cent less water to India’s population, Tata Chemicals sodium than ordinary salts, caters to the launched ‘Tata Swach’ – unique and needs of low sodium salt users. innovative water purifier that combines low- cost ingredients such as rice husk ash with The company’s market share of its salt nanotechnology. The product is a seamless portfolio is 62 per cent in India’s national blend of technology, performance, branded salt segment. Tata Salt has been convenience and, above all, affordability to recognised as one of India’s ‘Most Trusted meet the basic everyday need of millions of Food Brands’ by the Economic Times consumers. Brand Equity Survey To leverage its reach to farmers and housewives, Tata Chemicals and Rallis 5 The Industry Essentials business Comprises of products that serve as key Kenya, now Tata Chemicals Magadi ingredients in detergents, glass, and Limited, became a part of Tata Chemicals chemical processing – products that touch in 2006. Tata Chemicals South Africa Pty billions of lives, everyday. Limited and operations at Mombasa have significantly enhanced supply- chain Starting as a synthetic soda ash capabilities. manufacturer in India, Tata Chemicals has grown into a global producer with 60 per Two years later USA-based General cent of its soda ash now natural. Its Chemical Industrial Products, now Tata capacity and scale have been boosted by Chemicals North America Inc., joined the international acquisitions. Tata family. In early 2011, British Salt, producing approximately half of the UK’s Brunner Mond, now Tata Chemicals Europe pure salt, used in applications ranging Limited, with two production facilities at from food processing to chemicals Northwich, UK, and one at Lake Magadi, production, became part of Tata Chemicals Europe Limited. These acquisitions have made Tata Chemicals the world’s second largest producer of soda ash with an annual capacity of more than 5 million tonnes. Tata Chemicals developed its cement business from an environment and sustainability initiative. The cement plant at Mithapur, on the western coast of India, consumes the solid waste generated during the manufacture of synthetic soda ash. Thousands of tonnes of soda ash effluent have been converted into cement. This is then used for high quality construction projects. 61 The Farm Essentials business Comprises a full spectrum of products and services that improve the yield of farmlands in India. Products include fertilisers, pesticides, specialty nutrients, seeds and agri-services. The company is the pioneer of crop and region-specific customised fertilisers. Its products provide balanced crop nutrition to the soil, boost productivity and improve the overall quality of