Grow More - coromandel.biz

1 GrowMoreAnnual Report 2013-14 Coromandel International LimitedAcross thepagesForward-looking StatementsStatements in the Annual Report detailing the Company's objectives,projections, estimates, expectations or predictions may be forwardlooking statements within the meaning of applicable securities laws andregulations. These statements being based on certain assumptions andexpectation of future events, actual results could differ materially fromthose expressed or implied. Important factors that could make adifference to the Company's operations include economic conditionsaffecting domestic demand-supply conditions, finished goods prices,changes in government regulations because we are using tax regimeetc. The Company assumes no responsibility to publicly amend, modifyor revise any forward-looking statements on the basis of subsequentdevelopments, information or OverviewManagement ReportsFinancial StatementsExecutive Message02 Business Highlights06 Business Overview08 The World of CoromandelFertiliserCorporate Information28 Directors' ReportReport on47 Standalone59 Consolidated991618 Crop Protection20 Speciality Nutrients22 Retail23 Awarded India s Best Managed Board24 Board of Directors Profile2629 Management Discussion and Analysis32 Corporate GovernanceGrowMoreWith this objective at the core, Coromandel has notonly grown to become India's second largestphosphatic fertiliser manufacturer but has alsomade significant inroads in allied products.

2 It hasbuilt a strong pipeline of crop protection productsby growing through organic as well as inorganicroute. The crop protection business producesinsecticides, fungicides and herbicides that aremarketed in India and across the globe. To furtherenhance and offer a complete bouquet of plantnutrition solutions, Coromandel has also introduceda range of Specialty Nutrient products includingorganic fertilisers. To further accelerate growth, ithas set up a chain of retail outlets across AndhraPradesh & an organization cognizant of its growingresponsibilities, it has a well-structured andcomprehensive growth model in place. Apart fromremaining focused on growing its investor's value,Coromandel has also worked towards enhancing itsproduct portfolio to yield better results andformulate better HR policies for its employees tooffer them opportunities to grow and with this, Coromandel is also being sociallyresponsible by giving back to the society andparticipating in causes that can positively impactthe future of people related with Coromandel as we 'Grow More', we wouldcontinue seeking more means to conserve as wellas gain more yield and at the same time remaindedicated to even give back natural resources are pitted against growing human more from limited resources becomes imperative to meettoday's increased needs.

3 While meeting increased needs of today,one ought to conserve nature for future generations too. Amidcomplexities like these, Coromandel is championing the cause of'GROW MORE' in such a manner that tomorrow's needs are notcompromised International LimitedSince its inception, Coromandel has grown tobecome the largest private sector phosphaticfertiliser marketer & producer and has also addedcrop protection, specialty nutrient & organicmanure to its portfolio of products & offerings inorder to serve the farmer. Coromandel has alsoestablished retail outlets in AP and Karnataka inorder to offer the farmers a complete basket ofproducts and also technical advisory on journey of Coromandel to become one of theleading agri-inputs player in India was madepossible by the active engagement of variousstakeholders and I would like to take thisopportunity to thank everyone involved for theirChairman'sMessageunwavering support. I would also like to recognizethe contributions made by the dedicatedemployees of Coromandel in this journey and amconfident that their continued involvement willpropel the Company to a greater year completed was a good one for thefertilizer sector which saw the phosphatic fertiliserconsumption recover from the consumption lowsseen in 2012-13.

4 This consumption revival on theback of strong monsoons allowed the industry toliquidate pipeline inventory and recover workingcapital tied up in the markets. In addition to thestrong marketing performance, the Company alsooptimized its manufacturing facilities andmaintained strong relationships with raw materialDear Shareholders,The year completed was a good one forthe fertiliser sector which saw thephosphatic fertiliser consumption recoverfrom the consumption lows seen in also scaled up its cropprotection, retail and specialty nutrientbusinesses which has reduced theexposure to the base subsidy FERTILIZER CONSUMPTIONCROP PROTECTION &SPECIALITY NUTRIENT BUSINESSESC oromandel has been at the forefront of the Indian agriculturalinputs sector delivering high quality agri-inputs and crop protectionproducts to the farmers since 1961 and it gives me great pleasure tosee the Company take significant steps to continue this longstanding Report 2013-14suppliers for streamlined operations.

5 Coromandelalso scaled up its crop protection, retail andspecialty nutrient businesses which has reduced theexposure to the base subsidy long-term demand fundamentals of theagricultural sector continue to remain strong withthe increasing population & dietary mix fuellingfood grain demand and agricultural productivityhaving to increase to globally benchmarked highsto provide the supply response. These factors willcontinue to be the primary growth drivers for thissector and Coromandel is well placed to formation of the new Government with a strongmandate has the business community optimisticthat a pro-reform approach will prevail in thecentral government and policies that requireattention will be modified to eliminate constraintsfrom the system. The Urea subsidy policy hascontinued to distort the price disparity betweenUrea & phosphatic fertilisers and the resulting lowUrea price continues to influence its relativelyhigher application levels as compared tophosphatic, potassic & micronutrients required tomaintain healthy nutrient balance in the soil.

6 We arehopeful that this policy issue will be addressed atthe earliest to ensure not only the long-term healthof the agricultural sector but also considerablyimprove nutrient use efficiency. In addition to thesubsidy policy, there are a host of customs duty andtax related topics that also require urgent attentionof the policymakers to ensure the long-termsustainability of domestic am confident that Coromandel will continue tore-invent itself and remain the premier agri-inputand solution provider in India. The various initiativescompleted in the year have further strengthened theCompany's competitive position and will continue tobe levers of advantage for many years to best wishesA VellayanFinancial StatementsManagement ReportsCorporate OverviewDuring the year completed, your Company took adisciplined approach to reduce the fertiliser pipelineinventory on the strength of good monsoons in theCountry. The market contraction witnessed a yearago in 2012-13 has eased considerably and thephosphatic fertiliser application levels arecontinuing to grow from historic lows.

7 YourCompany also worked hard to strengthen the keyfertiliser brands, GROMOR and GODAVARI, and hasalso ensured production of high quality products atits manufacturing facilities which has helpedimprove its brand equity levels. In addition, theCompany also conducted several large farmdemonstrations and continued to increase directengagement levels with farmers. These efforts haveManaging Director'sMessageallowed your Company to increase its all-Indiamarket share from 13% in 2012-13 to 16% in upgraded manufacturing facilities and capacityexpansions have created considerable flexibility inthe Company's production portfolio to meet theemerging fertiliser requirements of markets it ispresent in and do so while producing qualitymaterial. In addition, the Company strengthened itsrelationships with key raw material suppliers toensure greater security of input Company has completed the launch of itsumbrella brand for its Crop Protection products andnow sells them under the GROMOR SURAKSHADear Shareholders,Your Company has been a leader in the agri-inputs sector for overfive decades and continues to be a pioneer in developing newervalue added products and solutions for use by the farmers.

8 It givesme great pleasure to be a member of the Coromandel family andwould like to extend my appreciation to all the stakeholders for theiractive International Limitedbrand with safety being one of the key brandvalues. This consolidation of the various brandsunder the umbrella brand will allow the Company toposition its products on one marketing platformand offer the farmer & dealers a consistentmessage. In addition, the Company has expandedits export business significantly and grown the keyLatin America business to achieve significant continuing growth of the Latin America, AsiaPacific & Africa markets and the Company's existingfootprint in these markets will continue to remain akey growth platform for the crop protectionbusiness in the near to middle Specialty Nutrients business has continued toincrease its scale by positioning its newly createdindependent marketing team as crop-based unitsand providing the farmer with crop specificsolutions. The Retail business has improved theoverall performance by significantly increasing theshare of non-fertiliser sales from its Mana Gromorcenters in AP and Namma Gromor centers inKarnataka.

9 These retail centers continue to providea complete portfolio of agri-inputs to the farmerswhile providing sound technical advice based onscientific principles. This combination of productsand advisory has positioned Retail as a completesolution provider to the farmer which positions thisbusiness for long-term viable addition to strengthening and growing thedifferent businesses, your Company also completedthe merger of Liberty group with Coromandel andalso completed the re-alignment of the twocompanies' marketing teams to ensure greaterrealization of synergies. The merger process for themerger of Sabero with Coromandel is progressingas per agricultural sector continues to remain a vibrantand critical part of the Indian economic landscapeand your Company is well positioned to continue tobe a premier player in this sector. With yourcontinued support and the enhanced capabilitiesof people, I am confident of the future successof the year completed, your Companytook a disciplined approach to reduce thefertilizer pipeline inventory on the strength ofgood monsoons in the PIPELINE INVENTORYThe Company also worked hard to strengthenthe key fertiliser brands, GROMOR andGODAVARI, and has also ensured productionof high quality productsHIGH QUALITY PRODUCTS with best wishesKapil Mehan5 Annual Report 2013-14 Financial StatementsManagement ReportsCorporate Overview6 Coromandel International LimitedBusinessHighlightsFinancial Highlights -(Standalone)(`Lakhs)Year Ended 31st March20142013201220112010200920082007200 62005 Gross revenueGross profitDepreciation andFinance costs21,096 Profit before tax49,438 Profit after tax34,485 Net fixed assets1,23,803 Networth2,23,332 Earnings per share ( )* on equity (%)

10 From 2010-11 onwards are presented as per Revised Schedule for 2013-14 include erstwhile Liberty Phosphate Limited and erstwhile Liberty Urvarak Limited which mergedwith Coromandel effective 1 April from 2007-08 onwards include erstwhile Godavari Fertilisers and Chemicals Limited which merged withCoromandel effective 1 April from 2006-07 onwards include Ficom Organics Limited and its wholly owned subsidiary Rasilah InvestmentsLimited which merged with Coromandel effective 1 April 2006*Earnings per share and book value per share upto the year 2010 recomputed based on split face value of 1/- per ,44,189 8,62,727 9,93,994 7,71,902 6,52,685 9,66,7813,80,011 2,08,4231,87,4711,55,41778,73780,1541,14 ,2441,13,64984,30494,90345,53721,81217,6 4514,6708,2035,8545,6166,1745,9235,6135, 2133,9843,7083,510amortisation expense17,66711,6518,6297,5378,4726,9833 ,1932,4011,87356,63396,97798,84670,84480 ,81833,34214,63511,5369,28744,39969,3276 9,44646,82049,63820,97610,0748,3556,9191 ,16,99994,02381,43481,73179,18473,53938, 24136,36737,1342,17,5612,37,1191,90,411 1,43,4991,12,71479,44451,24443,79937, ``Book value per share ( )*`8178149401,1701,238 Net Fixed Assets(crore)` Value Per Share()`HighlightsFY10FY11FY12FY13FY14FY 10FY11FY12FY13FY14 1 million tonnes of SSP capacity withmerger of Liberty PhosphateNew fertiliser grades fortified withmicro-nutrients and Sulphur Consolidation of Crop Protectionbusiness with the proposed mergerof Sabero and gaining wider accessof domestic and internationalmarkets Improved efficiencies, constantefforts to reduce conversion costNew production facility ('C' train) atKakinada stabilised6,5277,7 1 99,9408,6279,442 PAT(crore)`Net Sales(crore)`FY10FY11FY12FY13FY14FY10FY1 1FY12FY13FY144686946934443457 Annual Report 2013-14 Financial StatementsManagement ReportsCorporate OverviewGainMoreIn 1961, the world was feeding billion people by cultivating hectares of land.