Annualreport 07 08

C O N T E N T S
10 Years Financial Highlights Strong Fundamentals Notice to Members Directors Report Management Discussion and Analysis Report on Corporate Governance Auditors Report Balance Sheet Profit and Loss Account Cash Flow Statement Schedules to Accounts Balance Sheet Abstract Consolidated Financial Statements Auditors Report Balance Sheet Profit and Loss Account Cash Flow Statement Schedules to Accounts Attendance Slip & Proxy Form
3 4 5 8 10 21 31 34 35 36 38 61 63 64 65 66 68 87
Annual Report 2007-08
C O R P O R AT E
BOARD OF DIRECTORS
A Vellayan Chairman K Balasubramanian Director (from 22.01.2008) B V R Mohan Reddy Director (from 22.01.2008) T M M Nambiar Director (upto 24.07.2007) M K Tandon Director D E Udwadia Director M M Venkatachalam Director S Viswanathan Director V Ravichandran Managing Director
I N F O R M AT I O N
BANKERS
State Bank of India HDFC Bank Limited IDBI Bank Limited Andhra Bank ICICI Bank Limited Citibank N.A.
AUDITORS
Price Waterhouse 8-2-293/82/A/1131A Road No. 36, Jubilee Hills Hyderabad - 500 034
COST AUDITORS
Mr V Kalyanaraman Mr Dantu Mitra
MANAGEMENT TEAM
V Ravichandran Managing Director P Nagarajan Sr Vice President & Chief Financial Officer G Ravi Prasad Sr Vice President - Sales & Marketing (Fertilisers) P Gopalakrishna Sr Vice President - Retail G Veera Bhadram Sr Vice President - Pesticides SBU Arun Leslie George Sr Vice President & Head of HR S Govindarajan Sr Vice President & Head of Manufacturing
REGISTRARS & SHARE TRANSFER AGENTS

Karvy Computershare Private Limited 17-24, Vithal Rao Nagar Madhapur Hyderabd - 500 081
REGISTERED OFFICE
Coromandel House 1-2-10, Sardar Patel Road Secunderabad - 500 003
M R Rajaram Company Secretary
Coromandel Fertilisers Limited
FINANCIAL HIGHLIGHTS - TEN YEARS' RECORD

Rupees in Lakhs Year Ended 31st March 1999 Gross Income Gross Profit Depreciation Interest Profit Before Tax Profit After Tax Net Fixed Assets@ Investments Net Current Assets Total Capital Employed Shareholders' Funds@ Borrowings Deferred Tax Liability (Net) Total Capital Employed
@ @
2000 61385 10381 1227 1999 7155 4805 21973 23 12397 34393 19760 14633
2001 61282 10649 1456 2155 7038 5288 25003 63 18450 43516 23654 19862
2002 67972 10801 1724 1769 7308 4554 22269 298 14693 37260 21490 11210 4560
2003
2004
2005
2006
2007 208423 21812 3984 3193 14635 10074 38241 17408 57625 113274 51244 54896 7134 113274 7.93 100 40.1 1.07
2008 380011 45538 5213 6983 33342 20976 73539 35134 79215 187888 79444 100198 8247 187888 14.99 175 56.8 1.26
48447 9666 1136 1813 6717 4687 18969 23 13216 32208 19304 12904
58977 122259 155417 187471 7497 1560 1288 4649 2703 21821 1265 22674 45760 22954 17785 5021 45760 2.78 60 23.6 0.77 13213 3264 2872 7077 4311 37757 13617 20006 71380 33105 29559 8716 71380 3.39 65 26.0 0.89 14670 3510 1873 9287 6919 37134 13488 22768 73390 37906 26791 8693 73390 5.45 75 29.8 0.71 17645 3708 2401 11536 8355 36367 16181 41393 93941 43799 42626 7516 93941 6.57 85 34.5 0.97
32208 3.85 50 15.8 0.67
34393 4.56 55 20.4 0.74
43516 5.44 65 24.4 0.84
37260 4.68 70 22.0 0.52
Earnings Per Share (Rs.)* Dividend On Equity (%) Book Value per share (Rs.)* Total Debt:Equity (Ratio)
1. Financials from 2003-04 onwards include Farm Inputs Division (FIND) of E.I.D. - Parry (India) Limited which merged with CFL effective April 1, 2003. 2. Financials from 2006-07 onwards include Ficom Organics Limited and its wholly owned subsidiary Rasilah Investments Limited which merged with CFL effective April 1, 2006. 3. Financials for the year 2007-08 include Godavari Fertilisers and Chemicals Limited which merged with CFL effective April 1, 2007.
@ *
Excluding Fixed Assets Revaluation Reserve Earnings per share and Book value per share upto the year 2005 recomputed based on split face value of Rs.2/- per share
STRONG FUNDAMENTALS
Note: EPS & DPS upto year 2005 recomputed based on split face value of Rs.2/- share.
NOTICE
Notice is hereby given that the FORTY SIXTH Annual General Meeting of the Members of Coromandel Fertilisers Limited will be held on Tuesday, July 22, 2008 at 10.30 AM at Hotel Minerva Grand, CMR Complex, Beside Manju Theatre, Sarojini Devi Road, Secunderabad 500003. Ordinary Business 1. To receive, consider and adopt the audited Balance Sheet as at March 31, 2008 and the Profit and Loss Account of the Company for the year ended on that date and the Reports of the Directors and Auditors thereon. To declare a Dividend. To appoint a Director in place of Mr M K Tandon, who retires by rotation and, being eligible, offers himself for re-appointment. To appoint a Director in place of Mr A Vellayan, who retires by rotation and, being eligible, offers himself for re-appointment. To appoint Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and in this connection, to consider and if deemed fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: "RESOLVED THAT M/s Price Waterhouse, Chartered Accountants, be and they are hereby appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting, on a remuneration of Rs.24 lakhs (Rupees Twenty four lakhs) plus reimbursement of out of pocket expenses (excluding service tax)." Special Business 6. To appoint a Director in place of Mr K Balasubramanian, who was appointed as an Additional Director under Article 109 of the Articles of Association of the Company and holds office upto the date of this Annual General Meeting by reason of Section 260 of the Companies Act, 1956, but being eligible, offers himself for reappointment and in respect of whom a notice in writing has been left at the Registered Office of the Company by a Member under Section 257 of the Companies Act, 1956 signifying his intention to propose Mr K Balasubramanian as a candidate for the office of the Director. To appoint a Director in place of Dr B V R Mohan Reddy, who was appointed as an Additional Director under Article 109 of the Articles of Association of the Company and holds office upto the date of this Annual General Meeting by reason of Section 260 of the Companies Act, 1956, but being eligible, offers himself for reappointment and in respect of whom a notice in writing has been left at the Registered Office of the Company by a Member under Section 257 of the Companies Act, 1956 signifying his intention to propose Dr B V R Mohan Reddy as a candidate for the office of the Director. 9. 8. To consider, and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution: "RESOLVED THAT pursuant to the provisions of Sections 198, 309(4), 310 and other applicable provisions, if any, of the Companies Act, 1956, the Directors of the Company [including Alternate Directors but excluding the Managing Director(s) and Wholetime Director (s)] be paid remuneration by way of commission not exceeding 1% of the Company's net profits computed in the manner provided in Section 198 of the said Act, for each of the five financial years of the Company commencing from April 1, 2008; the proportion and manner of such payment and distribution to be as the Board may from time to time decide. RESOLVED FURTHER THAT the payment of commission, as aforesaid, shall be exclusive of the fees payable to such Directors for attending the meetings of the Board and Committees thereof." To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution: "RESOLVED THAT in supersession of the Ordinary Resolution passed at the Extra-ordinary General Meeting of the Company held on November 15, 2006 consent of the Company be and is hereby accorded under the provisions of Section 293(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, to the Board of Directors of the Company borrowing from time to time such sum or sums of money and on such terms and conditions as it may consider necessary for the purpose of the business of the Company, notwithstanding that the monies to be borrowed together with the monies already borrowed by the Company (apart from temporary loans obtained from Company's bankers in the ordinary course of business) may exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, provided, however, that the aggregate amount upto which monies may be borrowed by the Board of Directors shall not exceed the sum of Rs.1500 crore at any one time." By Order of the Board For COROMANDEL FERTILISERS LIMITED
2. 3.
4.
5.
7.
M R RAJARAM Company Secretary Registered Office: "Coromandel House" 1-2-10, Sardar Patel Road Secunderabad 500 003 Andhra Pradesh Dated: April 22, 2008
NOTES:
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF. A PROXY NEED NOT BE A MEMBER. An Explanatory Statement under Section 173 of the Companies Act, 1956, in respect of items 6 to 9 is appended hereto. The Register of Members and the Share Transfer Books of the Company will remain closed from July 16 to July 22, 2008 (both days inclusive). Members are requested to intimate at the earliest any change in their address registered with the Company. Pursuant to the provisions of Section 205C of the Companies (Amendment) Act, 1999, the amount of dividend remaining unclaimed upto the financial year 1999-2000 has been transferred to the Investors Education & Protection Fund. Members/Proxies attending the Meeting are requested to complete and bring the attendance slip enclosed with the Annual Report and hand over the same at the entrance of the meeting hall, duly signed. ITEM NO. 7 Dr B V R Mohan Reddy ("Dr Mohan Reddy") was appointed as an Additional Director of the Company by the Board of Directors at their meeting held on January 22, 2008 pursuant to Article 109 of the Articles of Association of the Company and Section 260 of the Companies Act, 1956. In terms of the said Section, Dr Mohan Reddy holds office only upto the forthcoming Annual General Meeting of the Company. Dr Mohan Reddy is the Founder, Chairman and Managing Director of Infotech Enterprises Limited. He is Member of the Executive Council of National Association of Software Services Companies (NASSCOM), apex IT body in India. He is the Chairman of the Engineering Services Forum of Nasscom. He is presently the Chairman of Southern Regional Council of the Confederation of Indian Industry (CII). He serves on various Advisory Boards and Councils of Educational Institutions. His guidance and contributions to the deliberations of the Board would be beneficial to the Company. The Directors recommend that he be appointed as a Director of the Company. Notice in writing under Section 257 of the Companies Act, 1956, has been received from a Member signifying his intention to propose Dr Mohan Reddy as a Director of the Company along with a deposit of Rs.500/- as required under the provisions of Section 257 of the Act, which will be refunded to the Member if Dr Mohan Reddy is elected as a Director. Dr Mohan Reddy is interested in the Resolution at this item of the Notice since it relates to his own appointment. A brief resume, as required pursuant to Clause 49(vi) of the Listing Agreement entered into between the Company and the Stock Exchanges, is set out in the Report on "Corporate Governance" appearing at page 24 of the Annual Report. ITEM NO. 8 At the Forty First Annual General Meeting of the Company held on July 17, 2003, the Members approved by a Special Resolution, the payment to Non Wholetime Directors' remuneration by way of commission not exceeding 1% of the Company's net profits for each of the five financial years commencing from April 1, 2003. The aforesaid five years period expired on March 31, 2008. The Company has performed consistently well and had recorded all round growth in leaps and bounds over the last five years. This has been largely due to the increasing contributions made by the Directors who are required to devote considerable quality time and effort providing valuable guidance and counsel to the management team. It is, therefore, considered desirable to pay the Non Wholetime Directors (including Alternate Directors) remuneration by way of commission not exceeding 1% of the Company's net profits for each of the five financial years commencing from April 1, 2008 in the manner stated in the text of the Special Resolution at item 8 of the Notice.
ANNEXURE TO NOTICE
Explanatory Statement pursuant to Section 173 of the Companies Act, 1956 (hereinafter referred to as "the Act"). ITEM NO. 6 Mr K Balasubramanian ("Mr Balasubramanian") was appointed as an Additional Director of the Company by the Board of Directors at their meeting held on January 22, 2008 pursuant to Article 109 of the Articles of Association of the Company and Section 260 of the Companies Act, 1956. In terms of the said Section, Mr Balasubramanian holds office only upto the forthcoming Annual General Meeting of the Company. Mr K Balasubramanian has close to 40 years of experience in International Banking. During his 25 years with American Express Bank, he held senior positions in Marketing, Credit and General Management in several Asian and European countries. He was also with ING Vysya Bank as the Managing Director and CEO. His guidance and contributions to the deliberations of the Board would be beneficial to the Company. The Directors recommend that he be appointed as a Director of the Company. Notice in writing under Section 257 of the Companies Act, 1956, has been received from a Member signifying his intention to propose Mr Balasubramanian as a Director of the Company along with a deposit of Rs.500/- as required under the provisions of Section 257 of the Act, which will be refunded to the Member if Mr Balasubramanian is elected as a Director. Mr Balasubramanian is interested in the Resolution at this item of the Notice since it relates to his own appointment. A brief resume, as required pursuant to Clause 49(vi) of the Listing Agreement entered into between the Company and the Stock Exchanges, is set out in the Report on "Corporate Governance" appearing at page 24 of the Annual Report.
The proposed payment of remuneration by way of commission to Non Wholetime Directors, requires the approval of the Company in General Meeting by a Special Resolution. Hence, the Special Resolution at item No. 8 of the Notice. All the Directors (other than Mr V Ravichandran) are interested in the Special Resolution to the extent of the remuneration by way of commission that may be received by them. ITEM NO. 9 The Members of the Company at the Extra-ordinary General Meeting held on November 15, 2006 authorised the Board of Directors of the Company to borrow upto a maximum amount of Rs.750 crore (Rupees seven hundred fifty crore). In order to fund the capital expenditure projects, long-term working capital expenditure, and in backward integration projects, it is considered desirable to increase the present borrowing powers of the Board of Directors from Rs.750 crore to Rs.1500 crore (Rupees One thousand five hundred crore). The Resolution at Item 9 of the
Notice is of an enabling nature. On this resolution being passed, it would supersede the resolutions passed in this behalf at the Extra-ordinary General Meeting held on November 15, 2006. The Board of Directors commends the resolution for Members' approval. By Order of the Board For COROMANDEL FERTILISERS LIMITED
M R RAJARAM Company Secretary Registered Office: "Coromandel House" 1-2-10, Sardar Patel Road Secunderabad 500 003 Andhra Pradesh Dated: April 22, 2008
DIRECTORS REPORT
Your Directors have pleasure in presenting their report together with the audited accounts for the financial year ended March 31, 2008. SUMMARY OF FINANCIAL RESULTS: (Rs in crore) 2007-2008 Income: From Operations Other TOTAL Profit: Profit before Interest, Depreciation and Taxation Less: Interest Depreciation Profit Before Tax Less: Provision for Tax (including FBT and deferred tax credit) (Net of excess provision for earlier years written back) Profit After Tax Add: Surplus brought forward Amount available for appropriation Appropriation: - Proposed Dividend (incl. dividend tax) - Transfer (from)/to debenture redumption reserve - Transfer to General Reserve - Surplus retained in the Profit and Loss Account 3757.34 42.77 3800.11 455.38 69.83 52.13 333.42 123.66 2006-2007 2065.49 18.74 2084.23 218.12 31.93 39.84 146.35 45.61
Total sales for the year was Rs.3757 crore compared to Rs.2065 crore in the previous year. The Profit Before Interest and Taxation for the year was Rs.403.25 crore (previous year Rs.178.28 crore). The Profit After Tax for the year was Rs.209.76 crore compared to Rs.100.74 crore in the previous year. Fertiliser Subsidy The uncertainty on the fertiliser subsidy front continues to be an area of concern for your Company. This assumes particular importance in the context of significant increase in the prices of key raw materials and intermediates like Rock Phosphate, Sulfur and Phosphoric Acid. During the year, the Government of India has settled a part of the subsidy dues in the form of Special Bonds. At this juncture, these bonds are being traded at a discount. The Company had accounted for the potential loss in respect of these Bonds on 'Mark to Market Basis'. The significant increase in the price of all raw materials and the delay in settlement of the subsidy dues has put a strain on the Company's Working Capital and will increase the interest cost in the coming year. Added to these, the Governments Policy to give part of subsidy in the form of bonds may affect the liquidity position of the Company. Rural Retail Centres
209.76 47.54 257.30
100.74 44.83 145.57
57.29 (3.00) 150.00 53.01
29.92 3.11 65.00 47.54
During the year under review, your Company has set up 20 Rural Retail Centres in the name and style of "Mana Gromor Centres" (MGC) in various District/Mandal Head Quarters of Andhra Pradesh and sold Fertilisers, Pesticides and other products to the rural customers. Your Company through these MGC also provides services such as Technical Training, Soil Testing Facilities etc. The response from the rural customers has been encouraging. Based on the experience from these Centres, your Company proposes to expand the number of Centres in the Financial Year 2008-09. Joint Venture Project The Joint Venture Company 'TIFERT' formed in Tunisia to set up a phosphoric acid plant has achieved technical closure and work on the Project is expected to commence soon. The revised Project Cost is estimated at US $ 515 Million and CFL's equity contribution to this Project is expected to be US $ 29 Million. The plant is expected to be commissioned by 2010. This strategic investment is aimed at securing uninterrupted supply of phosphoric acid for our operations. Amalgamation of Godavari Fertilisers and Chemicals limited The Scheme of Amalgamation of Godavari Fertilisers and Chemicals Limited (GFCL) with your Company was approved by the Hon'ble High Court of Andhra Pradesh. Pursuant to the Scheme of Amalgamation, 1,20,37,182 equity shares were issued and allotted to the shareholders of GFCL on a fully paid up basis, in the ratio of 3 (three) equity shares of Rs.2/- each of your Company for every 2 (two) equity shares of Rs.10/- each of GFCL. Consequent to this, the paid up equity capital of Company has become Rs.27.98 crore. The current year's result, therefore, incorporates the results of GFCL and to that extent, is not comparable with previous year's figures.
The results for the current year include those of Godavari Fertilisers and Chemicals Limited, which has been amalgamated with your Company pursuant to a Scheme of Amalgamation approved by the Hon'ble High Court of Andhra Pradesh at Hyderabad. Your Company's performance for the year under review has been satisfactory despite steep increase in the price of key raw materials especially Sulphur, which resulted in suspension of production of Sulphur based Complex Fertilisers and Single Super Phosphate, resulting in lower production and sales volume and lower turnover. The seasonal conditions remained generally satisfactory in all the addressable markets of the Company. Operations The Company continued to improve on its performance. The improved profitability has been mainly due to improved operating efficiencies, change in subsidy policy resulting in recognition of raw material prices with one month lag instead of three months lag and higher freight neutralisation. The higher contribution from Pesticides and Speciality nutrients divisions also resulted in improved profitability.
Dividend Your Directors recommend a Dividend of 175% on the equity capital. The Members may recall that a Dividend of 100% was paid last year. Safety, Health and Environment Your Company's continued focus on Safety, Health and Environment (SHE) had yielded satisfactory results across all the plants. The Process Safety Management Systems (PSMS) that has been implemented continues to yield positive results with minimal lost time due to accidents. The Company had designated a senior official at corporate office to exclusively review the SHE, across all the plants on a continuous basis. Subsidiary Company - Parry Chemicals Limited (PCL) PCL achieved a turnover of Rs.100.68 lakhs for the year ended March 31, 2008 and the Profit After Tax was Rs.33.66 Lakhs. Consolidated Financial Results A Consolidated Financial Statement incorporating the operations of the Company, its subsidiary and associate companies has been appended. The Ministry of Company Affairs, while exercising its powers under Section 212 (B) of the Companies Act, 1956 has exempted the Company from publishing the Annual Report of its Subsidiary Company since a Consolidated Statement has been appended. In view of this, the Annual Report of the Subsidiary Company, i.e. Parry Chemicals Limited has not been annexed. However, the Accounts of the Subsidiary Company and the related information will be made available to the Members of Coromandel Fertilisers Limited and its Subsidiary Company on request and will also be kept for inspection in the Registered Office. Awards/Recognition Your Company continues to receive a number of awards/accolades from the Government of AP and Industry associations. During this year your Company received the following awards: FAI's Award for 2006-07 For Consistent Excellent Production of Phosphoric Acid Plant at Visak, and For Best Production Performance Award for Complex Fertilisers (P2O5 category) for Kakinada Plant Certificate of Merit for Energy Efficient Practices in Fertiliser Industry for the year 2007 from Bureau of Energy Efficiency for both Visak and Kakinada Plants. Certificate of Appreciation by NSC, A.P. Chapter, on the occasion of National Safety Day for Best Process Safety Management Practices at Visak and Kakinada Plants. May Day Award - 2007 for Best Management and for Outstanding Contribution in Maintenance of Industrial Relations, Labour Welfare and Productivity by Government of Andhra Pradesh. Prestigious CNBC TV 18 Employer of Choice Award for "Most Engaged Workforce" for erstwhile Godavari Fertilisers and Chemicals Limited.
Management Discussion & Analysis and Corporate Governance The "Management Discussion and Analysis Report" highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc. is furnished separately and forms part of this Directors' Report. As per the requirements of the Listing Agreement with Stock Exchanges, a report on Corporate Governance duly audited is annexed for information of the Members. Directors In accordance with Article 121 of the Company's Articles of Association, read with Section 255, 256 and 262 of the Companies Act, 1956, Mr M K Tandon and Mr A Vellayan are retiring at the ensuing Annual General Meeting. The Board of Directors appointed Mr K Balasubramanian and Dr B V R Mohan Reddy as Additional Directors effective January 22, 2008. The Company has received notice from the Members proposing their nominations for Directorship. Auditors M/s Price Waterhouse, Chartered Accountants, Auditors retire at the ensuing Annual General Meeting and are eligible for reappointment. Disclosures Additional information on conservation of energy, technology absorption and foreign exchange earnings/outgo, as required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of this Report. A statement concerning employees as required by Section 217(2A) of the Companies Act, 1956 is attached to this report. As required by Section 217 (2AA) of the Companies (Amendment) Act, 2000, Director's Responsibility Statement is annexed hereto and forms part of this report. During the year under review, your Company implemented Employee Stock Option Scheme for employees in the grade of General Manager and above. The disclosures as required under clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 is annexed to this report for information of the Members. Acknowledgement The Directors would like to acknowledge and place on record the commitment and dedication on the part of the employees of your Company in achieving good results. The Directors wish to acknowledge and record their appreciation of the continued support and assistance received by the Company from State Bank of India and other banks, financial institutions, mutual funds, as well as from various Government bodies both at the Centre and the State. On behalf of the Board
Place : Hyderabad Date : April 22, 2008
A Vellayan Chairman
MANAGEMENT DISCUSSION AND ANALYSIS

1. ORGANISATION - PROFILE: Coromandel Fertilisers Limited (CFL), engaged in the business of Farm Inputs (Fertilisers, Pesticides and Speciality Nutrients) is a constituent of the Murugappa Group and is a subsidiary of EID Parry (India) Ltd. (EIDP), which holds 62.7% of the equity in CFL. During the year, Godavari Fertilisers and Chemicals Limited (GFCL) was amalgamated with the Company after obtaining all necessary approvals. GFCL was a leading Phosphatic Fertiliser manufacturing Company with the Plant located at Kakinada and CFL was holding 74.92% of the equity in GFCL just before merger. The merger is expected to bring about greater synergy and help in consolidation and growth of business of the Company. The Pesticides Formulation Unit at Jammu was commissioned during the year. With this, the Company has now 8 manufacturing / formulations units located in the States of Andhra Pradesh, Tamil Nadu, Maharashtra, Gujarat and Jammu & Kashmir. The Company's products are marketed all over the country through a network of over 10,000 dealers, who act as an interface between the Company and ultimate consumer viz farmer. During the year, the Company set up 20 Retail Centres in the various District/Mandal head Quarters of Andhra Pradesh under the name 'Mana Gromor Centre'. The Company's Farm inputs Business comprise of three main divisions viz. Phosphatic Fertilisers Pesticides and Speciality Nutrients
b)
INDUSTRY SCENARIO: After achieving two years of over 9% growth in GDP, India is expected to record a real GDP growth rate of 8.7% in the fiscal year 2007-08 (2006-07 - 9.6%). Growth rate in agricultural sector fell sharply during the year to just 2.6% (2006-07 - 3.8%), which is well below the desired level of 4% per year, deemed pre-requisite for achieving the target GDP growth of 8% CAGR on a 'sustainable basis'. In the recent Economic Survey Report submitted to Parliament, Government of India has admitted that a healthy plant growth is possible only if all 16 nutrients including Sulphur, Zinc, Calcium, Iron, Boron and other micronutrients are also available, besides 'N','P' and 'K'. The Govt. has admitted that though NPK requirements are made available, micronutrient deficiency continues to affect the productivity of crops significantly. Government has emphasized that acceleration of growth in agricultural sector will not only push the overall GDP growth upward, it would also make the growth more inclusive. Increasing farm incomes is necessary for an equitable growth. Further, with uncertainties in global markets and hardening of the international prices of food, fuel and edible oils, domestic price stability and food security critically depend on the growth in the agricultural sector. In this context, food and fertiliser subsidies have supported agriculture sector. The Government has emphasized on the need for better targeting of these subsidies with a view to optimize the resource allocation and return therefrom. With area under cultivation remaining stagnant, improving the productivity of crops is necessary for strengthening the farm sector. While there has been an increase in the overall consumption of chemical fertilisers from a mere 89.63 KG per hectare in 2000-01 to 113.26 KG per hectare in 2006-07, there is still considerable scope for increasing fertiliser consumption esp. phosphatic fertilisers. In this context, CFL continued to focus its work on the project 'Green Leap Programme' with a view to educate the farmer on the need for increasing fertiliser consumption and providing balanced nutrition to the crops in order to improve the farm yields and maintain soil health. This programme was extended to 1700 villages in the States of Andhra Pradesh and Orissa and in the villages covered by the Programme, the yields have improved by about 15 to 20%. Fertiliser Industry in India India's current fertiliser production is 32.7 million MT, Nitrogen, Phosphates and Potash combined, while the demand is about 37.4 million MT. During 2007-08, the country imported 6.92 million MT of Urea, 2.9 million MT of DAP & MAP and 2.8 million MT of MOP. With a number of units in the country not producing phosphatic fertilisers to their full capacity for various reasons including non-availability of raw materials, the volume of DAP imports is expected to go up further in the year 2008-09.
The Management Discussion and Analysis given below discusses the key issues concerning each of the divisions. 2. FARM INPUTS: PHOSPHATIC FERTILISERS: a) BUSINESS: CFL is one of the leading manufacturers of Phosphatic Fertilisers in India. It produces and sells Phosphatic Fertilisers of various grades of complex fertilisers and Single Super Phosphate (SSP). The Company also trades in Potash, another key plant nutrient. These products are sold under the well-established brand names 'Gromor', 'Godavari', 'Paramfos', 'Parry Gold' and 'Parry Super'. CFL has a strong market presence and dealer network in Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra, Orissa, Chattisgarh, parts of Uttar Pradesh, Madhya Pradesh and West Bengal. The Company's fertiliser plants are located at Visakhapatnam and Kakinada in Andhra Pradesh, Ennore and Ranipet in Tamil Nadu and has a combined production capacity of 23.10 lakh tonnes of complex Fertilisers, 8.15 lakh tonnes of DAP and 1.32 lakh tonnes of SSP.
10
During the year, the fertiliser consumption showed a growth of 4.1% compared to the previous year. While the phosphatic fertiliser (DAP & MAP) usage recorded a growth of 5.9%, the complex fertiliser usage recorded a drop of 3.36% during the year 2007-08. There is obviously a strong case for higher usage of chemical fertilisers for improving farm productivity. c) GOVERNMENT POLICIES: Government of India is in the process of finalizing a new subsidy policy for the phosphatic fertilisers based on the recommendations of the Inter Ministerial Group (IMG) and Tariff Commission which carried out a cost price study of the various phosphatic fertiliser companies in the country. It is expected that under new policy, the cost of sulphur directly provided in some of the Complex Fertilisers like 20:20:0:13 and 16:20:0:13 will be compensated. The Government of India has recently announced a new subsidy policy for Single Super Phosphate (SSP) which provides for compensation for rock phosphate and sulphur in line with the cost of these materials. These changes in the subsidy policy are expected to offset the adverse cost escalation for these products and conducive for viability of operations. While there has been some improvement in the matter of settlement of subsidy dues during the year, the area of concern is with respect to the mode of settlement of dues in the form of 'Govt. Special Bonds'. These bonds, at this current juncture, are being traded at a discount. (The demand for these bonds is limited. Companies have to sell these bonds to realize cash for working capital). The Industry has appealed to the Govt. for settlement of its subsidy dues only in the form of cash instead of bonds. d) COMPANY'S FERTILISER BUSINESS: CFL's Fertilisers enjoyed a market share of about 65% - 70%, in the State of Andhra Pradesh. The Company achieved a total fertiliser sale volume of 21.71 lakh MTs, including 0.78 lakh MT of imported MOP. With a view to leverage on the relationship and goodwill created with the farmers over the years and to further strengthen the same, the Company had during the year set up 'Mana Gromor Centres' - a rural retail centre initiative in 20 District/Mandal head Quarters of Andhra Pradesh. These centres will essentially sell the Company's fertilisers, pesticides and speciality nutrients besides other companies' fertilisers and other products directly to the rural population. These centres will also impart technical training besides providing soil testing facilities to the farmers. During the year, the Company achieved a total sales turnover of Rs. 56 crore through these centres. PESTICIDES Industry Scenario: The global market for crop protection for the first time registered a real growth since 2004. The sales volume grew by 9% to reach US $ 33.2 billion. The major
contributor for this growth was the Latin American market which grew by almost 18%. Europe also registered a double digit growth. Asia registered a growth of 5.1%, mainly boosted by a shift from generics to speciality molecules. NAFTA consisting of USA was the only region which registered a de-growth in real terms, but this is expected to change this year with the demand for bio-fuel increasing and the planting of Maize going up by 19%. The generic molecules saw an upbeat in the price in the last quarter of the year, mainly due to the increase in the cost of raw materials, especially those based on sulphur and phosphorous and the constrained supply from the Chinese manufacturers, being affected by the change in their government's manufacturing and export policy. Indian pesticides industry is dominated by MNCs with their new chemistry molecules and Indian companies with widespread network in different states, serving the varied needs of regional agriculture. Of the three major product groups, Industry witnessed positive growth in insecticides, herbicides volumes (but de-growth in value due to reduction in prices of wheat herbicides) and de-growth in fungicides during the year. Adoption of BT cotton reached a new high with 65% of total acreage cultivated in the country coming under genetically modified varieties. The year witnessed a bounce back for business especially for insecticides due to severe attack of sucking pests in BT cotton and growth in volume of herbicides. However industry faced shortages in supplies of major products like Monocrotophos, Acephate and Acetaimiprid due to curtailed supplies from China. Prices of products also increased due to cost escalation reversing the trend seen in the last 3 years. COMPANY'S PESTICIDES BUSINESS: The formulation business achieved a significant growth of 36% in turnover contributed by expanded network through a special accelerated growth marketing plan launched in Andhra Pradesh and Maharashtra. Co-marketing tie-ups have been forged with leading MNCs for accessing speciality chemicals and strengthen portfolio in new crop segments like Wheat. Commencement of production from Jammu factory helped in achieving higher turnover and profitability. As regards exports, Endosulfan and Malathion continue to be the major contributors to the turnover. The growth in consumption in Latin America helped in improving sales of Endosulfan in the region. Phenthoate and Terbufos also registered substantial growth, mainly contributed by sales in the Asian markets. The Company's sales of Endosulfan and Profenofos registered good growth in domestic market powered by severe incidence of sucking pests in BT cotton and generally good pesticide season in the country. Overall the Pesticides division registered a turnover growth of 26% over the previous year.
11
SPECIALITY NUTRIENTS: The Company's thrust on Speciality Nutrients including 'Bentonite Sulphur (Gromor Sulphur), Water Soluble Fertilisers and other micro nutrients continued during the year. During the year, the Company could scale up the volume of 'Bentonite Sulphur' significantly, despite a steep increase in the price of sulphur. This has been possible due to the various brand building measures taken up in the market place and improvement in the Plant operations. During the year, the Company commissioned a 10 TPD and a 3 TPD Water Soluble Fertilisers (WSF) plant at Visak and Kakinada respectively. The Company also launched a new product 'Sulpho Zinc' during the year. Trading in imported 'BORON' a micro nutrient, also commenced during the year. There was a good market response for all the new products including the Municipal Compost which has been launched in the market under the brand name 'Godavari Gold'. The Company also achieved significant sales volume in Zinc based micro nutrient fertilisers. With these new products, the Company is able to provide a wide range of farm inputs and service the farming community through balanced fertilization. e) COMPANY'S PERFORMANCE: The Company continued to improve on its performance and deliver better results. This has been achieved despite lower production / sales volume of fertilisers during the year mainly resulting from nonavailability of raw materials. The Company also had to curtail the production of Sulphur based Complex fertilisers. viz., Complex 20:20:0:13, 16:20:0:13 and SSP in view of the steep increase in the price of Sulphur which was not being compensated under the current subsidy policy. The Company's performance for the year has been satisfactory considering the steep increase in the prices of some of the key raw materials viz., Rock Phosphate and Sulphur. While the Price of Rock Phosphate nearly doubled by the last quarter of the year, the price of Sulphur went up by nearly nine times compared to the price prevailing at the beginning of the year. The improved profitability has been mainly due to improved operating efficiencies, change in subsidy policy resulting in recognition of raw material prices with one month lag instead of three months lag and higher freight cost neutralisation. The higher contribution from Pesticides and Speciality Nutrients Divisions also resulted in improved profitability. The financial results for the year include those of the erstwhile Godavari Fertilisers and Chemicals Limited which has been merged with CFL effective April 1, 2007 and hence the figures for the current year are not comparable with that of the previous year. f) STRENGTHS AND OPPORTUNITIES: CFL's leadership position in the Industry is essentially due to its efficient cost structure and consumer focus. The Company continues to focus on improving the g)
infrastructure and supply chain management in order to reduce the costs further. The tie-ups with M/s Foskor, South Africa and M/s Groupe Chimique Tunisien, Tunisia and other major raw material suppliers would enable the Company to maximize the production of Complex Fertilisers from its existing plants. To support the higher volumes, the Company is expanding its infrastructural facilities further by investing in material handling equipments, material storage facilities etc. The Company also continued its efforts at brand building and expanded its retail network and developed relationship with Self Help Groups (SHG) to strengthen the distribution channel. The rural retail initiative through Company's 'Mana Gromor Centres will help in further strengthening the bond with the farming community. It is proposed to open more number of such retail centres during the year to leverage on the relationship and goodwill created with the farmers. The Company also plans to expand the product base in the Speciality Nutrient segments and increase its revenue and profitability from non-subsidy related activities. The new Joint Venture Company Tunisian Indian Fertilizer Company S.A (TIFERT) set up in Tunisia along with Gujarat State Fertilisers & Chemicals Ltd (GSFC) and two leading Tunisian Companies viz., Groupe Chemique Tunisien (GCT ) and Campagnie De Phosphates de Gafsa (CPG) to set up a Phosphoric acid plant in Tunisia has very recently achieved technical closure and work on the Project is expected to commence soon. The revised cost of this Joint Venture Project is estimated at US $ 515 million and CFL's investment in the equity of this Joint Venture Company will now be US $ 29 million i.e. about Rs.118 crore. This project is expected to go on stream by end of 2010. OUTLOOK: There has been a steep increase in the prices of almost all raw materials and intermediaries required for manufacture of phosphatic fertilisers during the last one year. The increase in the prices of Sulphur, Rock Phosphate, Potash, Sulpuric Acid and Phosphoric Acid has been alarming. There is also the issue of short supply with respect to availability of some of the key raw materials like Sulphur, Rock Phosphate and Phosphoric Acid. With the farm gate prices of raw materials remaining unchanged, the steep increase in the prices of raw materials and intermediates and the Govt's proposal to extend subsidy to micro-nutrients, it is expected that there will be a quantum jump in the fertiliser subsidy outgo of the Government of India. The initial allocation made in the current year's Central Budget towards fertiliser subsidy is inadequate and like in earlier years, the expectation is that the Government will supplement with further allocations during the year. This is critical to enable the fertiliser companies to order for the required raw materials in time and continue the operations. With substantial increase in the price of raw materials and
12
likely delay in settlement of subsidy dues, the Company's working capital will go up significantly and this will be a major challenge for the business. With increased thrust on irrigation and increased water storage levels in the reservoirs, the demand for phosphatic fertilisers is expected to go up further in the coming year. The shift in cropping pattern in the country from traditional food grains to high yielding and profitable crops such as maize, pulses, oilseeds etc. besides increased usage of BT seeds, will also lead to increased fertiliser consumption. As regards the Pesticides business, efforts will be made to improve the productivity and production levels at the Ankaleswar plant and also introduce new products to meet the market needs and fill gaps. Latin American market will continue to be the focus area for growth by improving the presence of Company's existing molecules and also introducing new molecules. h)
In respect of formulation business the accelerated growth Plan Model which was implemented successfully in Andhra Pradesh and Maharashtra will be repeated in Punjab and Karnataka. Also efforts will be made to strengthen co-marketing tie ups for new product introduction. The 'Mana Gromor Centres' will be fully leveraged to scale up the volume of formulations esp. the speciality products. Further efforts will also be made to enhance service level to the channel partners through buffer godowns, dedicated van delivery system and automation of operations in godowns etc. RISK MANAGEMENT: The Company's senior management team periodically reviews the various risks; its likely impact associated with the business and monitors the effectiveness of the mitigation measures to minimize the adverse impact. These are also reviewed by the Board of Directors periodically.
The major risks associated with the Company's business and mitigation mechanism evolved by the Company are: Risk category 1. Environmental Risks Nature of Risk
Mitigating strategy/measures
Handling and storage of hazardous materials.
Strict adherence to maintenance / inspection schedule, training and emergency / disaster management plans. Continuous Implementation of Process Safety Management System (PSMS); ISO 14001 (Environmental Management); ISO 18001 (Occupational, Health and Safety Management (OHSAS). Development of non-subsidy products and activities. Flexibility in Product Mix. Continuous cost reduction efforts Seek opportunities for better control on entire value chain and reduce the zone of uncertainty.
2. Regulatory Risks
Uncertainties in Government Policies with regard to Fertiliser subsidy affecting realization and profitability.
Restriction on sale / usage of some pesticide products in India / abroad.
Development of newer and safer formulations; extension of product life cycle and education on proper usage.
Non compliance with legal, taxation, corporate and other regulations.
Enforcement of code of conduct. Strict adherence to Standard Operating Procedures (SOPs) and audit of statutory compliance. Advise/consultation from expert professional firms. Compliance certification by Management Team.
13
Risk category 3. Economic or Business Portfolio Risks
Nature of Risk
Product/Market concentration affecting sales/profitability in case of seasonal failures.
Wide and balanced range of products catering to different crops / soils. Sustenance of secondary or tertiary markets. Well spread-out market area. Continuous development of new products Speciality Nutrients. Strengthened R&D activities & launch of new products. Identification of new off-patented molecules and field trials and commercialisation thereof. Promotion of specialties and creation of brand image. Co-marketing tie-ups and alternate source registrations. Identification of emerging pests and suitable molecules. Introduction of new products. Strict adherence to scheduled preventive maintenance and onsite emergency plans. Long term strategic alliances / supply contracts for all critical Raw Materials. Developing alternate source of Raw Materials. Flexibility in usage of Raw Materials from different sources. Pilot Plant for trial on new products / experiment with new sources of raw materials. Increased storage facilities and long term contracts for key Raw Materials. Some protection under the current concession scheme of Govt. of India albeit with a lag and some gaps. Careful procurement planning. Regular augmentation of storage facilities - both inside the plant and outside (when needed).
Absence of New Chemistry Enzymes Fermented products Monopoly products.
Introduction of pest / pesticideresistant BT crops. Change in cropping pattern, impacting sale volume. Critical equipments breakdown.
4. Operational Risks
Non availability of critical Raw Materials.
Volatility in the prices of key Raw Materials.
Storage limitation for Raw Materials causing disruption in production Additional cost of storage /transportation when stored in outside godowns. Non-availability of Rail/Road transport carriers disrupting dispatches and in turn production. Loss or damage to finished goods stored in field warehouses. Loss of inventory/cash at Rural Retail Centres.
Alternative mode of transportation including open rakes and additional finished goods storage facilities. Increase in direct dispatches to Rural retail centres and dealers and restricted use of field warehouses. Regular surprise inventory verification. Stocks Insurance Coverage. Tie up with banks for reduced cash handling. Regular inspection of inventories and cash. Stocks/cash insurance coverage.
14
Risk category 5. Financial Risks
Nature of Risk
Currency Risks / Exchange fluctuation Risks impacting cost of Raw Materials.
Prudent Forex Management Policies & practices to hedge the foreign currency exposures. Online monitoring of forex rates. Review by CFO & CEO regarding target rate, cutloss levels etc., Detailed evaluation of credit worthiness before fixing credit limits for dealers. Strict adherence to credit limits and continuous monitoring of receivables. Healthy debt: equity and interest cover ratio strong debt servicing capability. Healthy credit rating facilitating borrowing at relatively lower rate of interest. Close follow-up with government departments for subsidy dues. Strong cash generation from operations. Close monitoring of interest rate scenario and liquidation of bonds at the most appropriate time. Tie up with banks for adequate working capital and back up funding. Review of all material contracts by the in-house legal team. Services of independent outside experts for important contracts. Statutory regulations applicable across all functions are identified and the responsibility is fixed. Statutory Compliance audit at periodical intervals. Internal controls in place to comply with and monitor various statutory requirements. Career progression policy. Regular succession planning exercise. Multi-skills training. Engagement and training of Engineers and Management Trainees. Performance related incentives.
Credit Risks impacting working capital and translating into bad debts.
Interest rate risk impacting cost of borrowing.
Liquidity Risks resulting from delay in subsidy disbursement receipt of subsidy in the form of bonds.
6. Legal and Statutory Risks
Contractual Liability Risks that may impose onerous responsibility.
Non-compliance of statutes resulting in heavy penalties.
7. Human Resource Risks
High attrition of skilled / trained manpower.
(h) Other Risks: In addition, there are also other risks including IT related risks etc. which can result in loss of important data etc. leading to disruption in operations. These are addressed through back-up mechanism, authorization verification, regular training programmes and other preventive measures. 3. INTERNAL CONTROLS: The Company has completed detailed mapping and updating of documentation of all its internal processes and the controls are in place covering the various aspects of 4.
business such as sales and distribution cycle, procurement (both imported and indigenous) cycle, production cycle, projects, scrap sales, financial closure, treasury, taxation and information technology (IT). Action plans have been put in place for regular monitoring of such controls and for necessary corrective actions where gaps have been identified. FINANCE: The Company continued to maintain its healthy credit rating of P1+ for short term borrowings and 'AA' for long-term borrowings with a 'stable' outlook from CRISIL.
15
During the year, CFL generated Rs.354.67 crore of cash from its operations before changes in working capital. There was an improvement in the area of settlement of subsidy dues and reduction of market outstandings. There was a net reduction in the working capital to the tune of Rs.264.62 crore. But this is offset by the increase in current investments in the form of 'Special Bonds' issued by Government of India to settle the subsidy dues. As on March 31, 2008, the Company held bonds with a face value of Rs.291.95 crore which will be liquated at the appropriate time, keeping in mind the market conditions. The overall borrowings as on March 31, 2008 stood at Rs.1001.98 crores (including erstwhile GFCL) compared to Rs.548.96 crores as on March 31, 2008. The long term Debt Equity as on March 31, 2008 stands at a healthy 0.32:1. The Company was able to maintain its overall cost of working capital borrowing at 6.12%, through judicious mix of foreign currency Buyers' Credit, Export Packing Credit and short term borrowings at lesser rates.
5.
HUMAN RESOURCES/INDUSTRIAL RELATIONS: During the year, long term settlement agreements were signed with the workers unions of the units at Visakhapatnam, Kakinada and Navi Mumbai. During the year, CNBC TV 18 conferred the "Most Engaged Workforce Award". The Company also received the May Day Award - 2007 for Best Management and for outstanding contribution in maintenance of industrial relations, Labour Welfare and Productivity from Govt. of AP. Consequent to the merger of GFCL the integration of policies and processes was successfully completed. A number of key HR initiatives were taken up to strengthen business processes and people capability. These included think tanks for new business opportunities, mentoring new entrants and high potential individuals, training and development initiatives to bridge current and future competency gaps, focusing on Total Quality Management, apart from strengthening deployment of existing and new initiatives. The industrial relations across all the plants continue to remain cordial.
ANNEXURE TO THE DIRECTORS REPORT

DIRECTORS' RESPONSIBILITY STATEMENT The Board of Directors of Coromandel Fertilisers Limited confirm that in the preparation of the Profit & Loss A/c for the year ended March 31, 2008 and the Balance Sheet as at that date ("financial statements") : the applicable accounting standards referred to in subsection 3(c) of section 211 of the Act issued by the Institute of Chartered Accountants of India have been followed. appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function. The financial statements have been prepared on a going concern basis. On behalf of the Board Used Earned Information under Section 217(1)(e) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of Directors' Report. A. CONSERVATION OF ENERGY Various Energy Conservation Schemes formulated by Operational Improvement Teams in CFL, Navi Mumbai, have yielded considerable energy savings during the year 2007-08. Replacement of old cooling tower water pump of sulphuric acid plant with a new energy efficient plant and modification of old mill bag filter system at Visakhapatnam plant and installation of 3 energy savers for lighting circuits in Kakinada plant, resulted in considerable savings. Encon teams have been constituted to constantly look at the energy conservation methods and carryout improvements. B. TECHNOLOGY ABSORPTION No new technology has been adopted during the year under review. C. RESEARCH AND DEVELOPMENT During the year, the Company incurred Rs.99.90 lakhs towards revenue expenditure on account of Research and Development. The Company also incurred Rs.480.75 lakhs towards capital expenditure in respect of the R&D Unit at Visakhapatnam. D. FOREIGN EXCHANGE EARNINGS AND OUTGO Total foreign exchange used and earned: Rupees in Lakhs April'07-March'08 Current Year 265384.73 6085.52 April'06-March'07 Previous Year 132248.19 6539.77
A Vellayan Chairman
16
FORM A
A.
) Current Year 2007-08 Previous Year 2006-07
Power & Fuel Consumption 1. Electricity a) Purchased Units (lakh Units) Amount (Rs Lakhs) Rate / Unit (Rs / kwh) b) Own generation Thru' DG Sets Units (Lakh Units) Units / litre of HSD Rate / Unit (Rs / Kwh Thru' TG Set Units (Lakh Units) Units / litre LSHS Rate / Unit (Rs / Kwh) 2. 3. Coal a) Fuel: Furrnace oil / LSHS Quantity (K. Litres) Total cost (Rs Lakhs) Rate / Unit (Rs / K. Litres) b) Compressed Natural Gas Quantity (SM3 in Lakhs) Total amount (Rs in Lakhs) Average Rate per 1000 SM3 (Rs.) 64.50 468.46 7,262.75 73.54 0.658 3.05 46.81 284.87 6,086.06 69.65 0.766 4.12 3,999.00 903.00 22,578 5,010.00 1,022.00 20,406 350.80 0.08 Not used 593.73 0.24 Not used 24.52 3.83 9.65 19.63 4.68 7.91 1,195.58 4,092.78 3.42 1,188.68 3,787.84 3.19
B.
Consumption per MT of Complex Fertilisers produced (Units) Electricity (KWH) Fuel: Furnace Oil / LSHS (K.Litres) Compressed Natural Gas (SM3)
17
Statement under Section 217(2A) of the Companies Act, 1956

a) Employed throughout the Financial Year and in receipt of remuneration aggregating Rs.24,00,000 or more Name, age and Qualification V Ravichandran, 51 BE (Hons), AICWA, ACS, PGDM (IIM-A) P Nagarajan, 57 B.Com., BGL. A.C.A. P Gopalakrishna, 49 B.Sc (Ag), PGDM (IIM-A) G Veera Bhadram, 49 M.Sc.(Ag), PGDM (IIM-A) Arun Leslie George, 41 M.A(SW), PMIR Dr G Ravi Prasad, 52 Ph.D in Agricultural Chemicals S Govindarajan, 45 B.Tech (Mech), GDMM (IIM-M) N Seetaram, 55 B.Tech (Chem) Dr Amit Rastogi, 43 B.Tech (Chem), M.S.(Chem) Ph.D (Chem) Designation and nature of duties Managing Director Date of Experience Remuneration commencement in years (Rs) of employment 01.12.2003 28 1,03,07,136 Last Employment Vice President EID Parry (India) Limited Sr. Vice President Visakha Industries Ltd. Deputy General Manager-Marketing EID Parry (India) Limited General Manager-Marketing EID Parry (India) Limited Deputy General Manager-HR EID Parry (India) Limited Vice President-Commercial Zuari Industries Limited Asst. Manager National Fertilisers Limited Joined Coromandel Fertilisers Ltd
Sr Vice President & Chief Financial Officer Sr Vice President Retail Sr Vice President Pesticides SBU Sr Vice President & Head of HR Sr Vice President Sales & Marketing (Fertilisers) Sr Vice President & Head of Manufacturing Vice President Technical Services & Projects Vice President Technology
09.06.1997 01.12.2003 01.12.2003 01.10.2003 09.09.2004
33 25 24 18 25
53,42,940 42,15,078 33,78,180 34,60,473 42,73,025
26.09.1992
23
32,15,764
02.09.1977
31
29,92,426
25.10.2005
17
28,14,419
General Manager-Technology Hindalco Industries Limited
S Sankarasubramanian, 39 Vice President-Business B.Sc, AICWA Finance & Treasury b)
01.12.2003
17
24,67,583
Dy General Manager-Finance EID Parry (India) Limited
Employed for part of the Financial Year, and in receipt of remuneration aggregating Rs.2,00,000 or more per month. Head-Manufacturing (GFCL) Chief Financial Officer (GFCL) General ManagerManufacturing Managing Director (GFCL) 14.04.2005 23 11,96,180 Sr General Manager-Works Navin Fluorine Industries Senior Manager-Corp. Fin ITW Signode (India) Ltd. Factory Manager Asian Paints (Cuddalore) Sales & Tech. Services Manager, ICI (India) Ltd., Fert. Division, Kanpur
D S Ravindra Raju, 47 B.Tech (Chem), M.S (Chem)-IIT S V Raghavendra, 47 B.Com, ACA K Vijaya Raghavan, 53 B.E (Chem) K A Nair (late), 57 B.Tech (Chem) MBA-Business Admn. 1.
01.03.1996 11.07.2005 02.09.1991
23 36 33
15,72,729 8,90,688 27,82,211
Remuneration includes salary and allowances, commission where applicable, Company's contribution to Provident Fund, Superannuation Fund and Group Gratuity Scheme, reimbursement of medical expenses at actuals, and monetary value of perquisites calculated in accordance with the Income Tax Act/Rules. The employment of all employees of the Company is of contractual nature. There are no employees in the service of the Company within the category covered by Sub-Section (2)(iii) of Section 217(2A) of the Companies Act, 1956. None of the above employees is a relative of any Director of the Company. On behalf of the Board
2. 3. 4.
Place : Hyderabad Dated : April 22, 2008
A Vellayan Chairman
18
Disclosure pursuant to Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999.
Nature of Disclosure a. Options granted Particulars 22,17,800 Options were granted during the year (in two tranches i.e. on 31.08.2007 and 22.01.2008). Each Option gives the grantee a right to subscribe to one equity share of Rs.2/- each of the Company. The Options carry a right to subscribe to equity shares at the closing price on the Stock Exchange in which there was highest trading volume, prior to the date of grant of the Options. Nil Nil 22,17,800 equity shares assuming all Options are exercised. Nil No variation has been done Not applicable since none of the Options have been exercised till 31.3.2008. 22,17,800 Name and Designation V Ravichandran Managing Director P Nagarajan Sr Vice President & Chief Financial Officer P Gopalakrishna Sr Vice President-Retail G Veerabhadram Sr Vice President- Pesticides SBU Dr G Ravi Prasad Sr Vice President-Sales & Marketing (Fertilisers) Arun Leslie George Sr Vice President & Head of HR S Govindarajan Sr Vice President & Head of Manufacturing (ii) Any other employee who received a grant in any one year of Option amounting to 5% or more of Options granted during the year Nil No of Options granted 483500 135200 135200 135200 135200 135200 135200
b.
The pricing formula
c. d. e. f. g. h. i. j.
Options vested Options exercised The total no of shares arising as a result of exercise of option Options lapsed/surrendered Variation of terms of Option Money realised by exercise of Options Total no of Options in force (i) Details of Options granted to Senior Management Personnel
(iii) Employees who were granted Options, during any one year, equal to or exceeding 1% of the issued capital of the Company at the time of grant. k. Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Option calculated in accordance with Accounting Standard AS-20.
Nil
Nil
19
l.
(i)
Method of calculation of employee compensation cost
The employee compensation cost has been calculated using the intrinsic value method of accounting to account for Options issued under the ESOP Scheme 2007. The stock based compensation cost as per the intrinsic value method for the financial year 2007-08 is Nil.
(ii)
Difference between the compensation cost using Rs.589 lakhs the intrinsic value of the stock Options(which is the method of accounting used by the Company) and the compensation cost that would have been recognized in the accounts if the fair value of Options had been used as the method of accounting. Net Income As reported Less: fair value compensation cost (Black Scholes model) Basic (Rs) 14.99 14.57 Rs in lakhs 20976 589 20387 Diluted (Rs) 14.94 14.52
(iii) Impact of the difference mentioned in (i) above on the profits of the Company
(iv) Impact of the difference mentioned in (i) above on the EPS of the Company m. (i) (ii) n. (i) (ii) Weighted Average exercise price of Options Weighted average fair value of Options Method used to estimate the fair value of Options Significant assumptions used (weighted average information relating to all grants):Risk-free interest rate Expected life of the Option Expected volatility Expected dividend yields Price of the underlying share in market at the time of option grant
As reported As Adjusted Rs.89.94 per equity share Rs.55.89 per equity share Black Scholes Model
(a) (b) (c) (d) (e)
8% 5 years 0.478 100% Rs.89.94
20
REPORT ON CORPORATE GOVERNANCE

Company's Philosophy Coromandel Fertilisers Limited (CFL), a constituent of the Murugappa Group, is committed to the highest standards of corporate governance in all its activities and processes. CFL looks at corporate governance as the corner stone for sustained superior financial performance, for serving all its stakeholders and for instilling pride of association. Apart from drawing on the various legal provisions, the group practices are continuously benchmarked in terms of the CII Code and international studies. The entire process begins with the functioning of the board of directors, with leading professionals and experts serving as independent directors and represented in the various board committees. Systematic attempt is made to eliminate informational asymmetry between Executive and Non-Executive Directors. Key elements of corporate governance are transparency, disclosure, supervision and internal controls, risk management, internal and external communications, high standards of safety, health, environment, accounting fidelity, product and service quality. The Board has empowered responsible persons to implement its broad policies and guidelines and has set up adequate review processes. The following is a report on the corporate governance. I. Board of Directors
Composition The present strength of the Board is eight Directors of which the Managing Director is an Executive Director. Out of the seven Non-Executive Directors, five are Independent Directors and two Directors are Non Independent Directors. The Non-Executive Directors bring independent judgment in the Board's deliberations and decisions.
Attendance of each Director at the Board Meetings and the last Annual General Meeting (AGM) and details of other Directorships etc. Name of the Director Category of Directorship Attendance particulars Board Meetings Mr K Anil Nair* Mr K Balasubramanian** Dr B V R Mohan Reddy** Mr T M M Nambiar*** Mr V Ravichandran Mr M K Tandon Mr D E Udwadia Mr A Vellayan Mr M M Venkatachalam Mr S Viswanathan NE/NID NE/ID NE/ID NE/ID MD/NID NE/ID NE/ID NE/NID NE/NID NE/ID 2 2 1 6 7 6 6 5 5 Last AGM Yes Yes Yes Yes Yes Yes Yes No. of other directorships and committee memberships (other than CFL) Other Directorships# 4 5 2 2 14 8 10 2 Committee@ M 1 2 2 9 3 2 1 C 1 1 1 1
*Expired on April 30, 2007 **Appointed w.e.f January 22, 2008 ***Retired on July 24, 2007 @Comprises of Audit and Investors' Grievance Committee of Public Limited Companies. #Directorships in private limited companies, foreign companies, mutual funds, associations as well as alternate Directorships are excluded M C MD/NID NE/ID NE/NID
= = = = =
Membership Chairmanship Managing Director/Executive Non-Executive/Independent Non-Executive/Non-Independent
Number of Board Meetings held and the dates on which held Seven Board Meetings were held during the year, as against the minimum requirement of 4 meetings. The dates on which the meetings were held are as follows: May 3, 2007, June 18, 2007, July 24, 2007, October 23, 2007, January 22, 2008, February 27, 2008, and March 28, 2008.
21
2.
Audit Committee
Terms of Reference/Powers & Composition, Names of Members and Chairman. The Audit Committee presently comprises of Mr M K Tandon (Chairman), Mr D E Udwadia, Dr B V R Mohan Reddy and Mr A Vellayan, all being Non-Executive Directors. Company Secretary is the Secretary of the Committee. The Managing Director, Chief Financial Officer, Sr Vice Presidents, General Manager-Head of Management Audit, along with the Statutory Auditors and the Cost Auditors are required to attend by invitation/when invited to the Meeting. The Terms of Reference/ Powers of this Committee are wide enough covering all the matters specified for Audit Committee under the Listing Agreements with Stock Exchanges.
Meetings and attendance during the year. There were four meetings of the Audit Committee during the year 2007-2008. The attendance of each Member of the Committee is given below: Name of the Director Dr B V R Mohan Reddy* Mr T M M Nambiar** Mr M K Tandon Mr D E Udwadia Mr A Vellayan *Appointed to the Committee w.e.f March 28, 2008 **Retired on July 24, 2007 No. of Meetings Attended 1 4 4 2
3.
Subsidiary Company The Minutes of the Meetings of the Board of Directors and the Financial Statements for the year ended March 31, 2008 of Parry Chemicals Limited, a wholly owned Subsidiary Company, are placed before the Board of Directors and Audit Committee, respectively, for review.
4.
Remuneration to Directors a) Policy Executive Directors
The compensation of the executive directors comprises of fixed component and a performance incentive/commission. The compensation is determined based on levels of responsibility and scales prevailing in the industry. The performance incentive/commission is determined based on certain pre-agreed performance parameters. The executive directors are not paid sitting fees for any Board / Committee meetings attended by them. The compensation of the non-executive directors is in the form of commission paid out of profits. Though the shareholders have approved payment of commission upto 1% of net profits of the Company for each year calculated as per the provisions of the Companies Act, 1956, the commission paid to the directors is usually restricted to a fixed sum. This sum is reviewed periodically taking into consideration various factors such as performance of the Company, time spent by the directors for attending to the affairs and business of the Company and extent of responsibilities cast on directors under general law and other relevant factors. The aggregate commission paid to all non-executive directors currently is well within the limit of 1% of net profits as approved by the shareholders. The non-executive directors are also paid sitting fees as permitted under the relevant statutory provisions for every Board / Committee meeting attended by them. Shareholdings The details of Shareholdings as at March 31, 2008 of the Non-Executive Directors is as follows: Name Dr B V R Mohan Reddy* Mr K Balasubramanian* Mr M K Tandon Mr D E Udwadia Mr A Vellayan Mr M M Venkatachalam Mr S Viswanathan *Appointed w.e.f January 22, 2008 No. of Shares Nil Nil Nil Nil 29,255 80 9,375
Non-Executive Directors
22
b)
Remuneration & Nomination Committee
The Remuneration & Nomination Committee presently comprises of three Non-Executive Directors, viz. Mr S Viswanathan (Chairman), Mr D E Udwadia & Mr M M Venkatachalam. The main scope of the Committee is to determine and recommend to the Board the persons to be appointed/reappointed as Executive Director/Non- Executive Director. The Committee also determines and recommends to the Board on the financial component and the incentive/commission to the Executive Directors. The Committee has also been authorised for administration of the Employee Stock Option Scheme 2007 implemented during the year 2007-08. The Committee had met thrice during the year. The details of the attendance of each member of the Committee is given below: Name of the Director Mr D E Udwadia Mr M M Venkatachalam Mr S Viswanathan No. of Meetings Attended 2 3 3
c)
Details of remuneration paid to the Directors for the year:
The details of remuneration paid/payable to the Managing Director for the financial year ended March 31, 2008 is as follows: (Rupees/Lakhs) Name Mr V Ravichandran Managing Director Salary 25.27 Contribution to Funds 8.85 Value of Perk & Allowances 48.35 Commission 27.57 Total 110.04
483500 options were granted to Mr V Ravichandran pursuant to Employee Stock Option Scheme 2007 at an exercise price of Rs.89.15. The agreement with the Executive Director is for a period of three years (January 18, 2006 to January 21, 2009). Either party to the agreement is entitled to terminate the agreement by giving not less than 180 days notice in writing to the other party. The details of remuneration paid/payable to Non-Executive Directors for the financial year ended March 31, 2008: Non-Executive Directors Mr K Anil Nair* Mr K Balasubramanian** Dr B V R Mohan Reddy** Mr T M M Nambiar*** Mr M K Tandon Mr D E Udwadia Mr A Vellayan Mr M M Venkatachalam Mr S Viswanathan *Expired on April 30, 2007 **Appointed w.e.f January 22, 2008 ***Retired on July 24, 2007 Sitting Fees (Rs) 30,000 30,000 25,000 1,65,000 1,50,000 1,30,000 1,05,000 1,05,000 Commission (Rs) 24,590 3,00,000 3,00,000 94,262 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000
5.
Share Transfer & Investors' Grievance Committee
Details of the Members, Compliance Officer, number of complaints received and pending, and share transfers pending as on close of the financial year. The Share Transfer & Investors' Grievance Committee presently comprises of Mr M K Tandon (Chairman), Mr A Vellayan, Non-Executive Director and Mr V Ravichandran, Managing Director. The Company Secretary is the Compliance Officer of the Company. During the year the Company had received 1205 letters/complaints from the shareholders and all of them were resolved satisfactorily by furnishing the requisite information/documents to the shareholders. There were no transfers pending at the close of the financial year.
23
In order to facilitate speedier redressal of investors' grievances the Company has created an exclusive email ID "Investorsgrievance@cfl.murugappa.com". Investors and shareholders may lodge their query/complaints addressed to this email ID which would be attended to immediately. The Committee had met twice during the year. The details of the attendance of each member of the Committee is given below: Name of the Director Mr M K Tandon Mr A Vellayan Mr V Ravichandran No. of Meetings Attended 2 2 2
6.
General Body Meetings: Location and date/time for last three Annual General Meetings were: Year 2004-2005 2005-2006 2006-2007
Location K L N Prasad Auditorium, The Federation of Andhra Pradesh Chambers of Commerce & Industry, Hyderabad K L N Prasad Auditorium, The Federation of Andhra Pradesh Chambers of Commerce & Industry, Hyderabad Hotel Minerva Grand, CMR Complex, Besides Manju Theatre, Sarojini Devi Road, Secunderabad.
Date 20/07/2005 18/07/2006 24/07/2007
Time 11.00 AM 10.00 AM 10.30 AM
Special Resolutions relating to delisting of equity shares from The Hyderabad Stock Exchange and The Stock Exchange, Mumbai and Employees Stock Option Scheme were passed in the above Annual General Meetings. A Court Convened Meeting of the Members was held at Hotel Minerva Grand, CMR Complex, Besides Manju Theatre, Sarojini Devi Road, Secunderabad 500 003 on October 8, 2007 at 2.00 PM to approve the Scheme of Amalgamation of M/s Godavari Fertilisers and Chemicals Limited with the Company. One Postal Ballot was conducted during the year seeking Members' approval for amending the Objects Clause of the Memorandum of Association of the Company. Mr S Anand S S Rao, Practicing Company Secretary was appointed as Scrutinizer to conduct the Postal Ballot. In all 2,094 Postal Ballots forms were received, out of which, 168 were invalid. 1,904 members holding 89835999 equity shares representing 99.996% of the equity capital approved the Special Resolution and 22 members holding 3,989 equity shares representing 0.004% of the equity capital dissented to the resolution. The Chairman announced the result of the Postal Ballot on August 6, 2007.
Whether Special Resolutions were put through postal Ballot last year:
NO
Whether any Special Resolutions proposed to be put through Postal Ballot this year: NO Notes on Directors seeking appointment / re-appointment Mr M K Tandon (66) has been associated with the Indian Insurance Industry for more than 37 years. He had, after completing his Masters Degree in Commerce and Degree in Law both from Lucknow University, started his career with LIC of India. Thereafter, he had held various senior positions and became Managing Director of General Insurance Corporation of India. He retired as Chairman & Managing Director of National Insurance Company Limited. Mr A Vellayan (55) holds a Diploma in Industrial Administration from Aston University, Birmingham, UK and Masters in Business Studies from the University of Warwick, Business School, UK. He held positions such as Vice President, Federation of Indian Export Organisation (FIECO) and Member of National Export Committee - Confederation of Indian Industry (CII). Mr K Balasubramanian (65), is a Graduate in Commerce from the University of Madras and has done Advanced Management programme from the Harvard Business School. He has 40 years of experience in International Banking. He worked in American Express Bank for 25 years and held senior positions in Marketing, Credit and General Management. He was Managing Director and CEO for ING Vysya Bank for 2 years. Dr B V R Mohan Reddy (57) is a Graduate in Mechanical Engineering and holds a Master's degree in Management Engineering from University of Michigan, Ann Arbor, USA; and a Master's Degree in Industrial Engineering from Indian Institute of Technology (IIT), Kanpur. Dr Mohan Reddy is the Founder Chairman and Managing Director of Infotech Enterprises Limited.
a.
24
b.
Other Directorships The details of Other Directorships and Committee Memberships of the above-referred Directors are as follows: Name of the Company Mr M K Tandon GIC Housing Finance Limited Welspun Syntex Limited Mr A Vellayan EID Parry (India) Limited Ambadi Enterprises Limited Cholamandalam DBS Finance Limited Kanoria Chemicals & Industries Limited Indfrag Limited Indian Potash Limited DBS Cholamandalam Distribution Limited Carborandum Universal Limited Mr K Balasubramanian GMR Hyderabad International Airport Ltd DQ Entertainment Limited GMR Infrastructure Limited Easy Access Financial Services Limited Dr B V R Mohan Reddy Infotech Enterprises Limited Infotech HAL Limited Vizag IT Park Limited Ocimum Bio-Solutions Limited Infotech Geospatial (India) Limited Chairmanship/ Directorship Director Director Chairman Chairman Chairman Director Director Director Director Director Committee Chairman/ Member Chairman Member Member Member Member Member
Audit Investors' Grievance Audit Audit Audit Shareholders/Investors Grievance Committee Audit Audit Investors' Grievance Committee Audit -
Director Director Director Director Chairman & MD Director Director Director Director
Member Chairman Member Member -
Excludes directorships in Private Limited Companies, Foreign Companies, Mutual Funds and Associations as well as Alternate Directorships. c. 7. Mr A Vellayan holds 29255 shares in the Company. CEO and CFO Certification The Managing Director and Chief Financial Officer have given a Certificate to the Board as contemplated in Clause 49 of the Listing Agreement.
Disclosures
Related Party Transactions There were no materially significant related party transactions, which had potential conflict with the interests of the Company at large. The Register of Contracts containing the transactions in which Directors are interested is placed before the Board regularly for its approval. Transactions with the Related Parties are disclosed in note no XVII of Schedule 17 to the Accounts in the Annual Report. Compliance At every Board Meeting a Statement of Compliance with all Laws and Regulations as certified by the Managing Director and the Company Secretary is placed for review by the Board. The Board considers materially important Show Cause/Demand Notices received from Statutory Authorities and the steps/action taken by the Company in this regard. The Board reviews the compliance of all the applicable Laws and gives appropriate directions wherever necessary.
Code of Conduct The Board of Directors have laid-down a "Code of Conduct" (Code) for all the Board Members and the senior management of the Company and this Code is posted on the Website of the Company. Annual declaration is obtained from every person covered by the Code.
25
Risk Management The Board regularly discusses the significant business risks identified by the management and the mitigation process being taken up. A detailed note on the risk identification and mitigation is included in Management Discussion and Analysis annexed to the Directors Report.
Pecuniary transactions with Non-Executive Directors The Company, during the year, had made a payment of Rs 8,29,576/- towards fee to M/s Udwadia & Udeshi, Solicitors & Advocates, Mumbai, for professional services rendered from time to time. Mr D E Udwadia, Director is a Partner in the above firm. During the last three years, there were no strictures or penalties imposed on the Company by either Stock Exchanges or Securities and Exchange Board of India or any statutory authority for non-compliance on any matter related to capital markets.
8.
Means of Communication Quarterly results are published in The Business Line (all editions) and Andhra Bhoomi (Hyderabad Edition). The results are also posted on the Company's Website: www.cflindia.com and SEBI's Website: www.sebiedifar.nic.in. Presentation made to the Analysts is posted on the Company's Website.
Management Discussion & Analysis is annexed to the Directors' Report which forms part of the Annual Report
9.
General Shareholder Information
Date, Time & Venue of AGM
July 22, 2008 - 10.30 A.M. Hotel Minerva Grand, CMR Complex, Beside Manju Theatre, Sarojini Devi Road Secunderabad 500 003 i) Financial Year - April to March ii) First Quarter Results - last week of July 2008* iii) Half-yearly Results - last week of October 2008* iv) Third Quarter Results - last week of January 2009* v) Results for the year ending March 31, 2009 - last week of June 2009 *provisional
Financial Calendar
Date of Book Closure Dividend 2007-2008 Dividend Payment date (s) Dividend declared in earlier years
July 16, 2007 to July 22, 2008 (both days inclusive) Proposed Dividend 175% (subject to approval by Members at the AGM) On or after July 22, 2008 2004-2005 - 75% 2005-2006 - 85% 2006-2007 - 100% Companys shares are listed at: The Bombay Stock Exchange Ltd. Phiroze Jeejeebhoy Towers Dalal Street Mumbai 400 001 National Stock Exchange of India Ltd Exchange Plaza, 5th Floor Plot No.C/1, G Block, Bandra-Kurla Complex Bandra (E), Mumbai 400 051 Listing fees for the year have been paid to all the above Stock Exchanges
Listing of Shares
Stock Code: - The Bombay Stock Exchange Limited - National Stock Exchange of Inida Ltd
Physical Scrip Code No.6395 Demat Scrip Code No.506395 COROMNFERT INE 169A01023
ISIN for (shares) of NSDL & CDSL
26
Market Price Data : High, Low during each month in last Financial Year/ Performance in comparison to BSE Sensex and S&P CNX Nifty Registrar and Transfer Agents
Please see Annexure 'A'
Karvy Computershare Pvt. Ltd Plot No. 17-24, Vithal Rao Nagar Madhapur, Hyderabad - 500 081 Tel.No.23420815-820 Fax No.23420814 All the transfers received are processed and approved by the Share Transfer & Investors' Grievance Committee at its meetings or by circular resolutions. The Company has earmarked 6,392,988 equity shares under the Employee Stock Option Scheme 2007. Each Option is convertible into an equity share of Rs.2/- each. As on March 31, 2008, all the Options are outstanding. The vesting period and the exercise period of the Stock Options shall be determined by the Remuneration & Nomination Committee subject to the minimum vesting period being one year. Please see Annexure 'B' 94.12% of the shareholding has been dematerialized as on 31.03.2008 The Company's plants are located at a) b) c) d) e) f) g) Malkapuram, Visakhapatnam, A.P Beach Road, Kakinada, A.P Ennore, Chennai, Tamil Nadu Ranipet, North Arcot, Tamil Nadu Ghansoli, Navi Mumbai Ankleshwar, Gujarat Baribrahmana, Jammu & Kashmir
Share Transfer System
Employee Stock Option Scheme
Distribution of Shareholding and Share holding pattern as on 31.3.2008 Dematerialisation of shares and liquidity Plant Locations
Registered Office / Address for Correspondence
Coromandel Fertilisers Limited Coromandel House 1-2-10, Sardar Patel Road, Secunderabad 500 003 Tel. No. 040 - 27842034 Fax No. 040 - 27844117 email:RajaramMR@cfl.murugappa.com email:Parvathi-KR@cfl.murugappa.com The Companies (Amendment) Act, 1999 has introduced through Section 109A, the facility of nomination to share / debenture / deposit holders. The facility is mainly useful for all those holding the shares / debentures / deposits in single name. In cases where the securities / deposits are held in joint names, the nomination will be effective only in the event of the death of all the holders. Investors are advised to avail of this facility, especially investors holding securities in single name. The nomination form may be had on request from the Company's Registrars & Transfer Agents for the shares held in physical form. For the shares held in dematerialized form, the nomination has to be conveyed by the shareholders to their respective Depository Participant directly, as per the format prescribed by them.
Nomination Facility
27
A. a.
NON-MANDATORY REQUIREMENT Remuneration & Nomination Committee The Board has constituted a Remuneration & Nomination Committee with three Non- Executive Directors. The Committee reviews and recommends to the Board on appointment/reappointment of Directors and recommends to the Board the remuneration package and incentive/commission on profits to the Executive Directors. Quarterly financial results are published in leading newspapers, viz. The Business Line and vernacular - Andhra Bhoomi. The audited results for the financial year are approved by the Board and then communicated to the members through the Annual Report and also published in the newspapers. The Company has established a whistle blower mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it and also for appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. We further affirm that during the year, no employee has been denied access to the audit committee. On behalf of the Board
b.
Shareholder Rights
c.
Whistle Blower Policy
d.
The list of promoters belonging to the Murugappa Group is given in Annexure 'C'
A Vellayan Chairman
AUDITORS' CERTIFICATE
Auditors' Certificate regarding compliance of conditions of Corporate Governance under Clause 49 of the Listing Agreement
To the Members of Coromandel Fertilisers Limited We have examined the compliance of conditions of Corporate Governance by Coromandel Fertilisers Limited ('the Company'), for the year ended 31st March, 2008, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the Company's management. Our examination was carried out in accordance with the "Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing Agreement)", issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
S. GOPALAKRISHNAN Partner Membership Number 18863 For and on behalf of Price Waterhouse Chartered Accountants
28
Declaration on Code of Conduct

This is to confirm that the Board has laid down a Code of Conduct for all Board members and senior management personnel of the Company. The Code of Conduct has also been posted on the website of the Company. It is further confirmed that all directors and senior management personnel of the Company have affirmed compliance with the Code of Conduct of the Company for the financial year ended on March 31, 2008, as envisaged in clause 49 of the listing agreement with stock exchanges.
V Ravichandran Managing Director
Annexure 'A'
Monthly High/Low of market price of the Company's shares traded on The Bombay Stock Exchange Limited, (BSE) and National Stock Exchange of India Limited, Mumbai, and performance in comparison to BSE Sensex and S&P CNX Nifty during the period from April 2007 to March 2008 is furnished below: Period The Bombay Stock Exchange Ltd., (Rs) High Apr 2007 May 2007 Jun 2007 Jul 2007 Aug 2007 Sep 2007 Oct 2007 Nov 2007 Dec 2007 Jan 2008 Feb 2008 Mar 2008 76.95 78.80 80.30 89.50 97.80 123.80 123.85 126.35 135.00 155.00 143.95 125.10 Low 63.55 69.55 70.00 78.30 77.00 86.80 91.00 98.05 115.00 90.00 112.20 98.00 Sensex Index High 14383.72 14576.37 14683.36 15868.85 15542.40 17361.47 20238.16 20204.21 20498.11 21206.77 18895.34 17227.56 Low 12425.52 13554.34 13946.99 14638.88 13779.88 15323.05 17144.58 18182.83 18886.40 15332.42 16457.74 14677.24 National Stock Exchange of India Ltd., (Rs) High 78.00 78.95 80.00 95.00 98.00 123.90 123.70 127.00 135.00 142.00 143.80 125.95 Low 63.50 69.25 70.20 79.10 79.00 86.15 86.70 97.00 117.00 95.00 112.25 102.00 S&P CNX Nifty Index High 5043.03 5185.95 5223.82 5593.96 5411.29 6094.11 7169.67 7209.99 7479.08 7642.89 6672.07 6027.69 Low 4379.37 4908.99 4971.76 5218.32 4938.51 5424.33 6151.88 6701.81 6972.75 5955.22 5886.53 5481.22
Annexure 'B'
DISTRIBUTION OF HOLDINGS AS ON 31.03.2008 No. of equity shares held 1 5001 5000 10000 20000 30000 40000 50000 100000 No. of shares 13805336 1510738 1362096 926933 464273 694579 1743938 119389055 139896948 8227636 131669312 % 9.87 1.08 0.97 0.66 0.33 0.50 1.25 85.34 100.00 5.88 94.12 No. of shareholders 51043 205 98 36 13 15 25 56 51491 30866 20625 % 99.12 0.40 0.19 0.07 0.03 0.03 0.05 0.11 100.00 59.94 40.06
10001 20001 30001 40001 50001 Total
100001 and above Physical mode Demat mode
29
SHAREHOLDING PATTERN AS ON 31.03.2008 Sl.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Category Promoters UTI & Mutual Funds Banks, Financial Institutions & Insurance Companies Foreign Institutional Investors Private Corporate Bodies Indian Public NRI's/OCBs Foreign Nationals Foreign Company Foreign Bank FCB Trust Fractional Allotment Clearing Members TOTAL No. of shares 89109620 8995067 6630263 2414449 3288728 23154225 1422247 47905 250 920 4800000 27658 285 5331 139896948 % 63.70 6.43 4.74 1.73 2.35 16.55 1.02 0.03 0.00 0.00 3.43 0.02 0.00 0.00 100.00
Annexure 'C'
I. List of Promoters of the Company belonging to the Murugappa Group pursuant to Regulation 3(e)(i) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Sl No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Note : Names of the Promoters EID Parry (India) Ltd.& its subsidiaries Silkroad Sugar Private Ltd New Ambadi Estates Pvt. Ltd. Parry Agro Industries Ltd. Parry Enterprises India Ltd New Ambadi Investments and Enterprises Pvt. Ltd. & subsidiaries Ambadi Enterprises Ltd. & its subsidiaries Tube Investments of India Ltd. & its subsidiaries Cholamandalam MS General Insurance Company Ltd. TII Shareholding Trust Presmet Pvt Ltd Carborundum Universal Ltd. & its subsidiaries Sterling Abrasives Ltd. Volszhsky Abrasives Works Laserwords Private Ltd & its subsidiaries Cholamandalam DBS Finance Ltd. & its subsidiaries Coromandel Engineering Company Limited & its subsidiaries AMM Educational Foundation 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 AMM Arunachalam & Sons P Ltd. AMM Vellayan Sons P Ltd. MM Muthiah Sons P Ltd. Murugappa & Sons Yelnoorkhan Group Estates Kadamane Estates Company MM Muthiah Research Foundation A R Lakshmi Achi Trust AMM Foundation AMM Medical Foundation M V Murugappan & family M V Subbiah & family S Vellayan & family A Vellayan & family A Venkatachalam & family M M Murugappan & family M M Venkatachalam & family M A Alagappan & family Arun Alagappan & family M A M Arunachalam & family
Family for this purpose include spouse, dependent children and parents
30
AUDITORS' REPORT
TO THE MEMBERS OF COROMANDEL FERTILISERS LIMITED 1. We have audited the attached Balance Sheet of Coromandel Fertilisers Limited ('the Company'), as at March 31, 2008, and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto which we have signed under reference to this report, in which are incorporated the financial statements of the fertiliser unit of the Company at Kakinada, which have been audited by other auditors and whose report has been appropriately considered by us. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Attention is drawn to Note XIX on schedule 17, regarding accrual of subsidy for the period October 1, 2007 to March 31, 2008 amounting to Rs.2,689.91 lacs based on management estimates, pending final announcement by the Government of India for the said period. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; Place: Hyderabad Date : April 22, 2008 (b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books; The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act; On the basis of written representations received from the directors, as on March 31, 2008 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2008 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, give in the prescribed manner the information required by the Act and read with paragraph 4 above, give a true and fair view in conformity with the accounting principles generally accepted in India: (i) (ii) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2008; in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(c)
(d)
2.
(e)
(f )
3.
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
4.
5.
S. Gopalakrishnan Partner Membership Number 18863 For and on behalf of Price Waterhouse Chartered Accountants
31
ANNEXURE TO AUDITORS' REPORT

[Referred to in paragraph 3 of the Auditors' Report of even date to the members of Coromandel Fertilisers Limited on the financial statements for the year ended March 31, 2008] 1. (a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. 5. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year. The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material. The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. 4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, commenting on transactions made in pursuance of such contracts or arrangements does not arise. In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the company in respect of the aforesaid deposits. In our opinion, the company has an internal audit system commensurate with its size and nature of its business. We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(b)
2.
(a)
6.
(b)
(c)
7.
3.
(a)
8.
(b)
32
9.
(a)
According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities, except as given below: Name of the statute Bombay Sales Tax Act, 1959 Maharashtra Sales Tax Act, 1946 Central Sales Tax Act, 1956 Delhi Sales Tax Act, 1975 Nature of dues Amount (Rs. in lacs) 1.08 0.01 0.67 0.22 Period to which the amount relates 1999-2000 2002-2003 2002-2003 2004-2005 Due date Date of Payment
Sales tax -do-do-do-
Various dates in 1999-2000 Various dates in 2002-2003 Various dates in 2002-2003 Various dates in 2004-2005
(b)
According to the information and explanations given to us and the records of the company examined by us, there are no dues of income-tax, wealth tax and customs duty which have not been deposited on account of any dispute. The particulars of dues of salestax, service tax, excise duty and cess as at March 31, 2008 which have not been deposited on account of dispute are indicated in Note X (c) on Schedule 17.
17. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment. 18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. 19. The company has created security in respect of debentures issued and outstanding at the year-end. 20. The company has not raised any money by public issues during the year. 21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management. 22. The other clauses, (iii)(b), (iii)(c), (iii)(d), (iii)(f ), (iii)(g), and (v)(b) of paragraph 4 of the Companies (Auditor's Report) Order 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, are not applicable in the case of the company for the current year, since in our opinion there is no matter which arises to be reported upon under the aforesaid order.
10. The company has no accumulated losses as at March 31, 2008 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. 11. According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. 12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The provisions of any special statute applicable to chit fund/ nidhi/mutual benefit fund/societies are not applicable to the company. 14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments. 15. In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year. 16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.
Place: Hyderabad Date : April 22, 2008
33
BALANCE SHEET AS AT MARCH 31, 2008

Rupees in Lakhs Schedule I. SOURCES OF FUNDS 1. Shareholders' Funds (a) Capital (b) Capital Suspense (c) Reserves and Surplus Loan Funds (a) Secured Loans (b) Unsecured Loans 1 1A 2 2,797.94 76,645.56 79,443.50 2. 3 4 51,226.65 48,970.87 100,197.52 3. Deferred Tax Liability (net) TOTAL II. APPLICATION OF FUNDS 1. Fixed Assets (a) Gross Block (b) Less : Depreciation (c) (d) Net Block Capital Work-in-Progress 5 112,592.91 40,138.11 72,454.80 1,084.10 73,538.90 2. 3. Investments Current Assets, Loans and Advances (a) Inventories (b) Sundry Debtors (c) Cash and Bank Balances (d) Loans and Advances 6 7 8 9 10 35,133.71 86,486.83 10,258.95 6,631.64 59,399.49 162,776.91 Less : Current Liabilities and Provisions (a) Liabilities (b) Provisions 11 12 73,195.88 10,365.91 83,561.79 Net Current Assets TOTAL Notes to the Accounts 16 & 17 79,215.12 187,887.73 72,365.64 35,251.56 37,114.08 1,126.94 38,241.02 17,408.39 40,472.65 16,051.59 16,949.16 43,893.33 117,366.73 53,598.84 6,143.51 59,742.35 57,624.38 113,273.79 8,246.71 187,887.73 2,540.56 16.64 48,686.21 51,243.41 26,643.91 28,252.13 54,896.04 7,134.34 113,273.79 March 31, 2008 March 31, 2007
The schedules referred to above form an integral part of the Balance Sheet This is the Balance Sheet referred to in our report of even date For and on behalf of the Board
S. GOPALAKRISHNAN Partner For and on behalf of Price Waterhouse Chartered Accountants Hyderabad: April 22, 2008
V RAVICHANDRAN Managing Director
A VELLAYAN Chairman
P NAGARAJAN Chief Financial Officer
M R RAJARAM Company Secretary
34
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2008
Rupees in Lakhs Schedule I. Income Sales (Gross) Less: Excise duty Sales (Net) Government subsidies Other income Year ended March 31, 2008 221,276.33 4,430.98 216,845.35 158,888.69 4,277.03 380,011.07 II. Expenditure Manufacturing and other expenses Interest Depreciation Year ended March 31, 2007 140,397.12 3,662.44 136,734.68 69,814.36 1,873.49 208,422.53
13
14 15
334,473.63 6,983.11 5,212.52 346,669.26
186,610.25 3,193.27 3,984.26 193,787.78 14,634.75 4,888.00 (288.00) (125.00) 86.10 10,073.65 4,483.18 14,556.83 6,500.00 311.00 2,557.20 434.59 4,754.04 7.93 7.88
III.
Profit before taxation and extraordinary item Provision for Taxation - Current - Provision for taxation relating to earlier years - Deferred - Fringe Benefits Tax Profit after taxation Balance brought forward Available for Appropriation Transfer to General Reserve Transfer (from)/to Debenture Redemption Reserve Proposed Dividend Dividend Tax Balance carried to Balance Sheet Earnings per share - Basic (Rs.) Earnings per share - Diluted (Rs.) (Refer note XIII on Schedule 17) Notes to the Accounts 16 &17
33,341.81 12,900.00 120.30 (774.99) 120.50 20,976.00 4,754.04 25,730.04 15,000.00 (300.00) 4,896.39 832.14 5,301.50 14.99 14.94
IV.
V.
VI.
The schedules referred to above form an integral part of the Profit and Loss Account This is the Profit and Loss Account referred to in our report of even date For and on behalf of the Board
A VELLAYAN Chairman
35
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2008
Rupees in Lakhs 2007-2008 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax Adjustments for: Depreciation Interest expense Loss on sale of fixed assets (Profit)/Loss on sale of Investments Interest income Dividend income Foreign exchange fluctuation Provision for dimunition in value of Investments Provision for doubtful debts no longer required, written back Provision for doubtful debts and advances Bad debts written off Operating Profit Before Working Capital Changes Adjustments for: (Increase)/Decrease in trade and other receivables (Increase)/Decrease in inventories Increase/(Decrease) in trade payables Increase/(Decrease) in other liabilities Cash Generated From Operations Interest received Direct Taxes paid (net of refunds) Net Cash from Operating Activities B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of fixed assets Purchase of investments - others Receipt of Fertiliser Companies' Government of India Special Bonds Proceeds from sale of Fertiliser Companies' Govt of India Special Bonds Sale of investments - units of mutual funds Dividends received Inter-corporate Deposits received back Net Cash Used In Investing Activities (4,287.99) 75.46 (16,829.44) (51,194.60) 21,952.50 343.17 (49,940.90) (3,068.14) 128.58 (1,353.28) 28.11 289.94 1,650.00 (2,324.79) 51,648.56 (24,251.78) (1,085.86) 150.96 72,741.70 419.45 (11,231.12) 61,930.03 (5,895.53) (47.81) 2,756.36 114.98 17,922.87 96.79 (5,708.34) 12,311.32 5,212.52 6,983.11 80.13 47.50 (968.98) (343.17) 503.11 1,303.71 (254.34) 85.12 289.30 46,279.82 3,984.26 3,181.55 167.80 (154.47) (289.94) (582.50) (105.03) 50.70 107.75 20,994.87 33,341.81 14,634.75 2006-2007
36
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2008
Rupees in Lakhs 2007-2008 C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from long term borrowings Repayment of long term borrowings Increase/(Decrease) in working capital finance Dividends paid (including tax thereon) Interest paid Net Cash from Financing Activities 1,212.46 (7,284.35) (5,916.29) (3,509.77) (7,153.05) (22,651.00) 9,467.46 (3,742.72) 4,193.65 (2,455.67) (3,052.37) 4,410.35 2006-2007
Net Increase/ (Decrease) in Cash And Cash Equivalents Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year
(10,661.86) 17,293.51 6,631.64
14,396.88 2,552.28 16,949.16
Notes: 1. The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard 3 on Cash Flow Statements notified under section 211 (3C) of the Act. Pursuant to the Scheme of Amalgamation of Godavari Fertilisers and Chemicals Limited with the Company cash and cash equivalents as at April 1, 2007 amounting to Rs.344.35 lacs have been taken over by the Company. The amalgamation has been considered as a non-cash transaction. Purchase of Investmentsothers includes an amount of Rs.143,29.44 lakhs made by the Company in Godavari Fertilisers and Chemicals Limited prior to the amalgamation (Refer Note II on Schedule 17). In view of note 2 above, the current year's figures are not comparable with those of the previous year.
2.
3.
This is the Cash Flow Statement referred to in our report of even date For and on behalf of the Board
A VELLAYAN Chairman
37
SCHEDULES FORMING PART OF THE BALANCE SHEET

Rupees in Lakhs March 31, 2008 I. CAPITAL Authorised 175,000,000 Equity Shares of Rs.2/- each Issued and Subscribed* 139,896,948 (2007: 127,027,785) Equity Shares of Rs.2/- each fully paid-up * NOTES: (A) Of the above, since inception: (i) 5,806,100 Equity Shares of Rs.2/- each fully paid-up have been allotted pursuant to contracts without payments being received in cash. 69,278,790 Equity Shares of Rs.2/- each fully paid-up have been issued as Bonus Shares by capitalisation of a part of General Reserve. 3,500.00 2,797.94 3,500.00 2,540.56 March 31, 2007
(ii)
(iii) 4,409,440 Equity Shares of Rs.2/- each fully paid-up have been issued at a premium of Rs.2/- per share to the Debenture Holders and Public Financial Institutions pursuant to the right exercised by them for converting a part of their Debentures/Loan amounts into fully paid-up Equity Shares. (B) 4,864,000 Equity Shares of Rs.10/- each fully paid-up have been bought back at a price of Rs.65/- per share from the shareholders pursuant to the offer for buy back of equity shares made during the year March 31, 2000. 29,749,505 Equity Shares of Rs.2/- each fully paid-up have been allotted to the shareholders of E.I.D. Parry (India) Limited in the ratio of one share of the Company for every three shares of E.I.D. Parry (India) Limited, pursuant to the scheme of arrangement (demerger) between E.I.D. Parry (India) Limited and the Company for the acquistion of Farm Inputs Division of E.I.D. Parry (India) Limited.
(C)
(D) 831,981 Equity shares of Rs.2/- each fully paid-up have been allotted to the shareholders of Ficom Organics Limited in the ratio of 3 shares of the company for every 11 shares of Ficom Organics Limited pursuant to the Scheme of Amalgamation between Ficom Organics Limited and Rasilah Investments Limited and the Company. (E) 12,037,182 Equity shares of Rs.2/- each fully paid-up have been allotted to the shareholders of Godavari Fertilisers and Chemicals Limited in the ratio of 3 shares of the company for every 2 shares of Godavari Fertilisers and Chemicals Limited pursuant to the Scheme of Amalgamation between Godavari Fertilisers and Chemicals Limited and the Company. Of the total Equity Share Capital, as at March 31, 2008, E.I.D. Parry (India) Limited (Holding Company) holds 87,719,035 Equity Shares of Rs.2/- each fully paid-up. (2007: 87,719,035 Equity Shares) Total 1A. CAPITAL SUSPENSE 831,981 Equity Shares of Rs.2/- each fully paid-up, to be issued pursuant to the Scheme of Amalgamation of Ficom Organics Limited and Rasilah Investments Limited with the Company. Total 16.64 2,797.94 2,540.56
(F)
16.64
38
...SCHEDULES
Rupees in Lakhs March 31, 2008 2. RESERVES AND SURPLUS Capital Reserve Per last Balance Sheet Add: On amalgamation (Refer Note II on Schedule 17) (A) Capital Reserve (Transferred on amalgamation, refer Note II on Schedule 17) Capital Redemption Reserve Share Premium Account Central Subsidy (B) Debenture Redemption Reserve Per last Balance Sheet Add: Transfer (to)/from Profit and Loss Account (C) Investment Allowance (Utilised) Reserve Per last Balance Sheet Add: Transferred on amalgamation (Refer Note II on Schedule 17) (D) General Reserve Per last Balance Sheet Add: Transfer from Profit and Loss Account Less: Adjustment on account of initial adoption of Accounting Standard 15 (revised 2005) on 'Employee Benefits' Profit and Loss Account Less: Amalgamation Adjustment Account (Refer Note II on Schedule 17) Total 3. SECURED LOANS (Refer Note IX on Schedule 17) (a) Debentures (b) Term Loans - Banks - Foreign Currency Loans - Rupee Loans - Others (c) Banks - Cash Credit and Working Capital Demand Loans - Foreign Currency Loans - Rupee Loans Total 4. UNSECURED LOANS (a) Short Term Loans - From Banks - Foreign Currency Loans - Rupee Loans (b) From other than banks, other than short term - Sales tax deferral - Security/Trade and other deposits Total (E) (F) {A+B+C+D+E+F} March 31, 2007
852.94 12,711.89 13,564.83 14.97 486.40 6,006.01 11.25 6,518.63 1,613.87 (300.00) 1,313.87 1,428.42 1,428.42 34,961.70 15,000.00
0.06 852.88 852.94 486.40 6,006.01 11.25 6,503.66 1,302.87 311.00 1,613.87 28,968.37 6,500.00
49,961.70 5,301.50 78,088.95 1,443.39 76,645.56
506.67 34,961.70 4,754.04 48,686.21 48,686.21
5,250.00
7,500.00
6,549.73 12,427.08 2,653.95 21,322.77 3,023.12 51,226.65
5,337.27 8,208.06 2,000.00 98.18 3,500.40 26,643.91
33,513.72 6,450.25 77.15 8,929.75 48,970.87
12,280.17 12,500.00 137.75 3,334.21 28,252.13
39
40
...SCHEDULES
5.
COST or VALUATION Additions Deductions/ Adjustments 2.90 3.96 354.89 74,621.85 32,420.79 4,651.27 632.64 229.88 28.79 3.74 247.61 724.28 66.90 13.07 6,586.02 1,256.11 194.58 0.83 1,287.51 101.71 18.39 120.10 1,449.86 79.97 254.93 36,824.45 26,067.98 As at March 31, 2008 For the year 26,067.98 1,167.41 5,136.16 644.31 377.71 37,797.40 As at April 1, 2007 On Deductions/ Adjustments As at March 31, 2008 As at March 31, 2008 DEPRECIATION NET BOOK VALUE
FIXED ASSETS Rupees in Lakhs

As at March 31, 2007 342.29 1,049.43 3,723.63 377.88 274.12 30,464.95 55.83 136.37 896.25 56.18 23.49 2,713.77 712.93 223.32 109.11 168.60 49.07 4,398.71 2,837.76 1,000.65 72,365.64 481.56 112,592.91 10.98 10.98 35,251.56 31,971.57 199.32 75.19 759.51 270.94 317.50 44.62 1,902.14 894.25 185.17 121.25 5,212.52 3,984.26 34.05 39.74 325.97 704.27 1,045.37 352.45 10.98 40,138.11 35,251.56 856.77 407.06 72,454.80 37,114.08 1,084.10 566.41 315.37 37,114.08 1,126.94
Description
As at 1st April 2007
Amalgamation (Refer Note 1)
Land - Freehold
342.29
25,669.86
- Leasehold
1,151.14
Buildings
4,979.74
Roads
444.78
Railway Siding
504.00
Plant and Machinery
62,885.74
9,377.23
Office Equipment, Furniture and Fittings
1,460.66
Vehicles
586.31
Technical Know-how
10.98
Total
72,365.64
36,310.12
Previous Year
67,772.21
2,756.32
Capital work in Progress (Including capital advances)
Notes:
1. Taken over at fair values pursuant to the Scheme of Amalgamation of Godavari Fertilisers and Chemicals Limited (GFCL) with the Company. (Refer Note II on Schedule 17)
2. Land taken over from GFCL, pursuant to the above referred amalgamation is pending mutation in the name of the Company.
...SCHEDULES
Rupees in Lakhs March 31, 2008 6. INVESTMENTS - LONG TERM - AT COST I. TRADE INVESTMENTS QUOTED Godavari Fertilisers and Chemicals Limited # Nil (2007 : 14,422,252 Equity Shares of Rs.10/- each, fully paid) Market value - Nil (2007 - Rs.17,292.28 lacs) #Amalgamated with the Company during the year (Refer Note II on Schedule 17) A UNQUOTED Prathyusha Chemicals and Fertilisers Limited 1,430,000 Equity Shares of Rs.10/- each, fully paid-up Less: Provision for diminution in value Indian Potash Limited 90,000 Equity Shares of Rs.10/- each, fully paid-up Foskor (PTY) Limited, South Africa 199,590 Ordinary shares of South African Rand 1 each fully paid-up 23,500,000 "B" Class Shares of South African Rand 1 each fully paid-up Tunisian Indian Fertilisers S.A., Tunisia 1,350,000 Ordinary Shares of Tunisian Dinars 10 each, Tunisian Dinar 2.50 per share paid-up Bharuch Enviro Infrastructure Limited 16,100 Equity Shares of Rs.10/- each, fully paid-up Bharuch Eco Aqua Infrastructure Limited 275,000 Equity Shares of Rs.10/- each, fully paid-up A.P.Gas Power Corporation Limited ** 1,340,000 Equity shares of Rs.10 each fully paid B II. OTHER THAN TRADE INVESTMENTS - UNQUOTED IDBI Flexibonds 40 bonds of Rs.5,000/- each, fully paid-up C III. SUBSIDIARY COMPANY - UNQUOTED Parry Chemicals Limited 500,000 Equity Shares of Rs.10/- each, fully paid-up D CURRENT INVESTMENTS - AT COST OR BELOW* QUOTED Glaxo Smithkline Pharmaceuticals Limited 38 Equity Shares of Rs.10/- each, fully paid-up Morarjee Realties Limited 49 Equity Shares of Rs.10/- each, fully paid-up Tata Motors Limited 28 Equity Shares of Rs.10/- each, fully paid-up Alpha Laval Limited 47 Equity Shares of Rs.10/- each, fully paid-up Corporation Bank Limited 500 Equity Shares of Rs.10/- each, fully paid-up Birla Global Finance Limited 36 Equity Shares of Rs.10/- each, fully paid-up 0.16 0.14 0.10 0.24 0.40 0.01 0.16 0.14 0.10 0.24 0.40 0.01 143.00 141.00 2.00 4.50 143.00 129.00 14.00 4.50 March 31, 2007
13,419.32
13,419.32
23.02 2,670.09 1,193.17
23.02 2,670.09 1,193.17
1.61 27.50 753.75 4,675.64 2.00 2.00 50.00 50.00
1.61 27.50 3,933.89 2.00 2.00 50.00 50.00
41
...SCHEDULES
Rupees in Lakhs CURRENT INVESTMENTS - AT COST OR BELOW* (Contd...) QUOTED PH Capital Limited 2900 Equity Shares of Rs.10/- each, fully paid-up Gupta Carpets Udyog Limited 140 Equity Shares of Rs.10/- each, fully paid-up Indian Card Clothing Company Limited 2 Equity Shares of Rs.10/- each, fully paid-up Indian Seamless Metal Tubes Limited 100 Equity Shares of Rs.10/- each, fully paid-up Indian Seamless Steel Alloys Limited 300 Equity Shares of Rs.10/- each, fully paid-up I G Petrochemicals Limited 13,000 Equity Shares of Rs.10/- each, fully paid-up Laxmi Electrical Control Systems Limited 2 Equity Shares of Rs.10/- each, fully paid-up UTI Master Shares 1,000 Master Shares of Rs.10/- each, fully paid-up Super Sales Agencies Limited 80 Equity Shares of Rs.10/- each, fully paid-up Tata Iron and Steel Company Limited 49 Equity Shares of Rs.10/- each, fully paid-up Tata Power Company Limited 120 Equity Shares of Rs.10/- each, fully paid-up Indian Seamless Steel Alloys Limited 30 debentures of Rs.10/- each, fully paid-up Less: Provision for diminution in value E UNQUOTED Government of India Special Fertiliser Bonds Less: Provision for dimunition in value of investments Investment in Mutual Funds DBS Chola Short Term Floating Rate Fund 24,959,067.13 units of Rs.10/- each A+B+C+D+E *Aggregate Market Value of Quoted Investments - Rs.10.90 lacs (2007: Rs.10.75 lacs) *Aggregate Market Value of Unquoted Investments - Rs.27,902.89 lacs (2007: Rs. Nil) ** Represent investments taken over pursuant to the Scheme of Amalgamation of Godavari Fertilisers and Chemicals Limited with the Company. Aggregate Value of Quoted Investments - Rs.3.18 lacs (2007: Rs.13,422.50 lacs) Aggregate Value of Unquoted Investments - Rs.32,630.53 lacs (2007: Rs.3,985.89 lacs) For investments purchased and sold during the year, Refer Note XV on Schedule 17 0.29 0.05 0.04 0.03 12.64 0.15 0.04 0.10 0.16 14.55 11.37 3.18 29,194.60 1,291.71 27,902.89 2,500.00 35,133.71 0.29 0.05 0.04 0.03 12.64 0.15 0.04 0.10 0.16 14.55 11.37 3.18 17,408.39 March 31, 2008 March 31, 2007
42
...SCHEDULES
Rupees in Lakhs 7. INVENTORIES Stores and Spare Parts* Raw Materials* Work-in-process** Finished Goods** Total *At cost or below **At cost or net realisable value, whichever is lower Raw Materials include Materials in Transit of Rs.8,226.50 lacs (2007: Rs.4,781.10 lacs). 8. SUNDRY DEBTORS (Considered good, unless otherwise stated) Debts outstanding for a period exceeding six months Secured Unsecured Unsecured - Considered doubtful Less: Provision for doubtful debts A Other Debts Secured Unsecured* B A+B *Include dues from subsidiary : Rs.269.84 lacs (2007: Rs.261.90 lacs) 9. CASH AND BANK BALANCES Cash on Hand Balances with Scheduled Banks: - On Current Accounts - On Deposit Accounts - On Margin Money Accounts Balances with non-Scheduled Banks: - On Current Account - Ned Bank, South Africa* Total *Maximum balance outstanding during the year - Rs.33.54 lacs (2007: Rs.36.95 lacs) 71.00 715.18 437.78 1,223.96 437.78 786.18 1,106.99 8,365.78 9,472.77 10,258.95 70.33 544.22 585.13 1,199.68 585.13 614.55 2,080.14 13,356.90 15,437.04 16,051.59 March 31, 2008 3,070.78 63,657.36 934.57 18,824.12 86,486.83 March 31, 2007 2,280.40 17,954.50 837.32 19,400.43 40,472.65
13.65 5,280.10 1,000.00 336.54 1.35 6,631.64
10.72 4,528.13 12,408.91 1.40 16,949.16
10. LOANS AND ADVANCES (Unsecured and Considered Good Unless Otherwise Stated) Interest accrued but not due on deposits/loans/ Fertilisers special bonds Advances recoverable in cash or in kind or for value to be received Considered Good Considered Doubtful Government Subsidies Receivable Deposits with Government Bodies Advance Fringe benefit tax (net of provisions) Balances with Excise, Customs, Port Trust etc., Less: Provision for doubtful advances Total 608.83 5,065.60 6.08 52,193.68 863.10 9.34 658.93 59,405.57 6.08 59,399.49 59.30 3,479.67 6.08 38,970.78 670.50 (7.25) 720.33 43,899.41 6.08 43,893.33
43
...SCHEDULES
Rupees in Lakhs March 31, 2008 11. LIABILITIES Acceptances Sundry Creditors - Outstanding dues of Micro enterprises and Small enterprises - Outstanding dues of other than Micro and Small enterprises Unclaimed dividends* Unclaimed matured fixed deposits* Unclaimed interest on fixed deposits* Unclaimed Application Money Cheques issued but not encashed - Fixed Deposit Refunds* - Fixed Deposit Interest* Advances and Deposits Other Liabilities Interest accrued but not due on loans/security deposits Total * There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund. 0.09 4,218.77 2,209.51 813.97 73,195.88 0.09 1,551.47 853.56 705.70 53,598.84 65,509.23 109.06 0.86 0.06 42,121.90 35.62 1.32 0.22 0.31 334.33 8,328.65 March 31, 2007
12. PROVISIONS Taxation (net of advance tax) Dividend Tax on dividend Employee Benefits Total 3,102.10 4,896.39 832.14 1,535.28 10,365.91 2,084.25 2,557.20 434.59 1,067.47 6,143.51
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT

Year ended March 31, 2008 13. OTHER INCOME Interest on loans/deposits, Fertiliser Special Bonds, income tax refunds, etc. (Gross) [Tax deducted at source Rs.44.58 lacs (2007: Rs.40.71 lacs)] Dividend (Gross) - On trade investments [Tax deducted at source Rs.Nil (2007: Rs.Nil)] - On other investments [Tax deducted at source Rs.Nil (2007: Rs.Nil)] Provision for doubtful debts no longer required, written back Service Income DEPB Income / Excise Benefits Miscellaneous Income Total
Rupees in Lakhs Year ended March 31, 2007
968.98
154.47
1.63 341.54 254.34 501.76 725.35 1,483.43 4,277.03
289.94 105.03 532.49 28.00 763.56 1,873.49
44
SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT

Rupees in Lakhs Year ended March 31, 2008 14. MANUFACTURING AND OTHER EXPENSES Raw Materials Consumed Stores Consumed Power, Fuel and Water Purchase of goods for resale Salaries, Wages and Bonus Contribution to Provident Fund and Other Funds Staff Welfare Expenses Equipment lease rentals Rent Repairs to: Plant and Machinery Buildings Others Insurance Rates and Taxes Travel expenses Communication expenses Freight and distribution expenses Commission to other selling agents Directors' Fees Loss/(Profit) on sale/scrap of fixed assets (net) Provision for doubtful debts and advances Loss on sale of Fertiliser Special Bonds Provision for dimunition in Fertiliser Special Bonds Provision for diminution in value of other investments Bad debts written off Miscellaneous expenses (Increase)/Decrease in stock: Stock as at April 1, Work-in-Process Finished Goods Add: On amalgamantion - Finished goods (Refer Note II on Schedule 17) 259,778.33 8,338.23 6,618.10 13,711.55 7,943.00 794.70 1,028.30 181.51 508.96 3,083.62 549.99 461.64 283.23 342.58 1,105.78 256.82 16,588.27 134.65 9.55 80.13 85.12 47.50 1,291.71 12.00 289.30 4,379.47 Year ended March 31, 2007 138,335.20 6,152.52 5,711.14 10,086.36 5,235.90 504.97 650.74 265.45 2,666.82 168.18 120.60 288.84 586.87 739.26 179.99 12,132.46 145.99 8.90 167.80 50.70 107.75 3,027.56
837.32 19,400.43 6,090.54 26,328.29
907.78 18,606.22 19,514.00 837.32 19,400.43 20,237.75 (723.75) 186,610.25
Less: Stock as at March 31, Work-in-process Finished Goods
934.57 18,824.12 19,758.69
(Increase)/Decrease in stock Total 15. INTEREST On Debentures/Term Loans Others Total
6,569.60 334,473.63
2,316.60 4,666.51 6,983.11
1,777.79 1,415.48 3,193.27
45
...SCHEDULES
Rupees in Lakhs Year ended March 31, 2008 Metric Tonnes 16. Capacity, Production, Sales, Consumption and Stocks Quantitative information in respect of goods manufactured/purchased (A) Licensed Capacity per annum (i) Fertilisers Ammonium Phosphatic Fertilisers Di-Ammonium Phosphate (DAP) Single Super Phosphate In terms of plant nutrients, this works out to N (Nitrogen) P2O5 (Phosphorus Pentoxide) The above capacities for the year ended March 31, 2008 include 685,000 MT of Ammonium Phosphatic Fertilisers and 8,15,000 MT of DAP capacity taken over, pursuant to the amalgamation of Godavari Fertilisers and Chemicals Limited with the Company. (Refer Note II on Schedule 17). In terms of plant nutrients these work out to 242,600 MT of N and 614,650 MT of P2O5. (ii) Plant Protection Products Plant Protection Products are not covered by the list of industries in respect of which industrial licensing is compulsory. 2,310,000 815,000 132,000 572,600 1,035,770 1,175,000 132,000 238,500 318,870 Year ended March 31, 2007 Metric Tonnes
Not applicable
Not applicable
(B) Installed Capacity per annum (as certified by the management and not verified by the auditors, being a technical matter) (i) Fertilisers - Phosphatic fertilisers of various grades equivalent in terms of plant nutrients N (Nitrogen) P2O5 (Phosphorus Pentoxide) The installed capacity in terms of products is capable of being varied within the overall capacity in terms of nutrients shown above. The above capacities for the year ended March 31, 2008 include 172,600 MT of N and 439,650 MT of P2O5 taken over, pursuant to the amalgamation of Godavari Fertilisers and Chemicals Limited with the Company. (Refer Note II on Schedule 17). (ii) Plant Protection Products Technicals Formulations - Liquids (in KL) Formulations - Others 13,905 10,900 5,600 13,905 8,400 1,500
411,100 758,520
238,500 318,870
(C) Production (i) Fertilisers Ammonium Phosphatic Fertilisers Di-Ammonium Phosphate (DAP) Single Super Phosphate In terms of plant nutrients, this works out to N (Nitrogen) P2O5 (Phosphorus Pentoxide) (ii) Plant Protection Products (including third party production) Technicals Formulations - Liquids (in KL) Formulations - Others
1,381,524 567,785 67,829 346,146 620,679
1,283,123 122,381 265,983 332,549
6,483 4,916 2,829
6,153 3,435 2,037
46
...SCHEDULES
Rupees in Lakhs Year ended March 31, 2008 Metric Tonnes (D) Purchase of goods for resale Muriate of Potash Ammonia Plant Protection Chemicals Others (E) Sales - Produced/Purchased* (i) Fertilisers Di-Ammonium Phosphate (DAP) Ammonium Phosphatic Fertilisers Single Super Phosphate Muriate of Potash (ii) Plant Protection Products Technicals Formulations -Liquids (in KL) Formulations - Others (iii) Ammonia (iv) Others * Sales are net of excise duty. (F) Raw Materials Consumed Ammonia Rock Phosphate Urea Sulphur Muriate of Potash Mono Ammonium Phosphate Phosphoric Acid Plant Protection Chemicals Others 339,504 637,438 1,64,112 232,376 256,689 2,236 443,581 44,479.72 28,648.64 24,001.90 13,294.48 26,577.47 256.33 104,990.57 13,501.69 4,027.53 259,778.33 238,296 842,130 167,906 292,178 52,203 21,454 73,704 33,165.31 34,322.97 21,019.92 11,086.04 5,364.02 2,781.96 16,199.22 10,756.23 3,639.53 138,335.20 83,368 11,171 Rupees in Lakhs 8,505.48 1,794.54 1,402.91 2,008.62 13,711.55 47,241.14 119,793.76 2,479.11 3,306.92 10,128.67 10,742.34 5,183.67 2,204.89 15,764.85 216,845.35 Year ended March 31, 2007 Metric Tonnes 56,795 12,942 Rupees in Lakhs 5,614.70 2,174.73 1,470.86 826.07 10,086.36 95,596.63 4,194.45 4,324.02 8,746.55 8,396.93 3,315.60 2,500.08 9,660.42 136,734.68
5,21,065 1,497,605 74,072 78,286 5,756 4,902 3,464 11,171
1,222,741 129,382 102,828 4,902 3,739 2,253 12,942
(G) Stock Particulars of goods - Produced/Purchased Opening Stock: (i) Fertilisers Ammonium Phosphatic Fertilisers Single Super Phosphate Muriate of Potash Add: Acquired on Amalgamation Arrangement Ammonium Phosphatic Fertilisers Di-Ammonium Phosphate (DAP) Others (ii) Plant Protection Products Technicals Formulations - Liquids (in KL) Formulations - Others (iii) Others Closing Stock: (i) Fertilisers Ammonium Phosphatic Fertilisers Di-Ammonium Phosphate (DAP) Single Super Phosphate Muriate of Potash (ii) Plant Protection Products Technicals Formulations - Liquids (in KL) Formulations - Others (iii) Others
101,514 6,826 39,602 43,261 1,221 1,321 548 472
10,530.90 225.97 4,069.71 5,898.85 156.45 35.25 2,392.68 1,250.52 517.22 413.43 25490.98 3,112.55 7,046.78 20.99 4,658.72 1,018.41 1,523.67 825.05 617.95 18,824.12
42,109 13,833 85,546 ---1,051 573 536
5,176.20 480.76 8,770.99 ---2,243.70 1,301.11 430.86 202.60 18,606.22 10,530.90 -225.97 4,069.71 2,392.68 1,250.52 517.22 413.43 19,400.43
28,284 47,788 583 44,708 743 711 866
101,514 -6,826 39,602 1,321 548 472
47
...SCHEDULES
17. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2008 I. Significant Accounting Policies Basis of preparation of accounts The financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified under Sec 211 (3C) of the Companies Act, 1956 ("the Act") and the relevant provisions of the Act. Fixed Assets Fixed assets are shown at cost or valuation less depreciation. Cost comprises of the purchase price and other attributable expenses including cost of borrowings till the date of capitalisation in the case of assets involving material investment and substantial lead time. Depreciation on Fixed assets Depreciation is provided on the straight-line method. Depreciation on all assets (except certain Plant and Machinery, Vehicles and Computers and related equipment) has been provided over the useful life of the assets as determined by the management or derived from the rates prescribed in Schedule - XIV of the Companies Act 1956, whichever is higher. The useful life of such assets is periodically reviewed and re-determined and the unamortised depreciable amount is charged over the remaining useful life of such assets. Leasehold land is being amortised over the lease period. The estimated useful lives of assets which are higher than those prescribed in Schedule XIV are as under: Asset Plant and Machinery Vehicles Computers and related equipments Foreign Currency Transactions Transactions made during the year in foreign currency are recorded at the exchange rate prevailing at the time of transactions. Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year-end are translated at the exchange rate prevalent at the date of Balance Sheet. Exchange differences arising on actual payment/realisation and year end reinstatement referred to above are recognised in the Profit and Loss Account. In respect of forward contracts entered into to hedge risks associated with foreign currency fluctuation, the premium or discount at the inception of the contract is amortised as income or expense over the period of the contract. Currency options/other swap contracts outstanding as at the Balance Sheet date are marked to market and the resultant gain/loss is recognised in the Profit and Loss Account. Any profit or loss arising on cancellation of such contracts is recognized as income or expense in the Profit and Loss Account of the year. Investments Long term investments are valued at cost. The diminution in the market value of such investments is not recognised unless it is considered permanent in nature. Current investments are valued at cost or market value, whichever is lower. Inventories Raw Materials and Stores and spares are valued at or below cost. Other inventories are valued at lower of cost and net realisable value. The method of determination of cost of various categories of inventories is as follows: (a) (b) (c) (d) Stores and Spares - Weighted Average Cost. Raw Material - First in First out basis. Cost includes purchase cost and other attributable expenses. Finished Goods and Work-in-process - Weighted average cost of production which comprises of direct material costs, direct wages and applicable overheads. Goods for resale - Weighted average cost Useful lives (in years) 5 - 14 5-7 3-5
Sundry Debtors and Advances Specific debts and advances identified as irrecoverable and doubtful are written off or provided for respectively. Revenue Recognition (a) (b) (c) (d) Sale of goods is recognized at the point of despatch to customers. Sales include amounts recovered towards excise duty and exclude sales tax. Dividend income from investments is accounted for in the year in which the right to receive the payment is established. Subsidy is recognized on the basis of the concession scheme announced by the Government of India from time to time. Subsidy is accounted for on the basis of sale made by the company. Export benefits under DEPB license and excise benefits are accounted for on accrual basis.
48
Employee Benefits a) Defined Contribution Plans Contributions paid/payable to defined contribution plans comprising of Superannuation (under a scheme of Life Insurance Corporation of India) and Provident Funds for certain employees covered under the respective Schemes are recognised in the Profit and Loss Account each year. The Company also makes contributions to three Provident Fund trusts for certain employees, at a specified percentage of the employees' salary. The Company has an obligation to make good the shortfall, if any, between the return from the investments of trust and the notified interest rates. Liability on account of such shortfall, if any, is provided for based on the actuarial valuation carried out in accordance with the revised Accounting Standard 15 (revised 2005) on 'Employee Benefits' notified under Sec 211 (3C) of the Act ('revised AS 15') as at the end of the year. b) Defined Benefit Plans Gratuity for certain employees is covered under a Scheme of Life Insurance Corporation of India (LIC) and contributions in respect of such scheme are recognised in the Profit and Loss Account. The liability as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with revised AS 15 as at the end of the year. The Company makes contributions for Superannuation and Gratuity (for employees not covered under the LIC Scheme) to trusts, which are recognised in the Profit and Loss Account. The Company's liability as at the Balance Sheet date is provided for based on the actuarial valuation in accordance with the requirements of revised AS 15 as at the end of the year. c) Other long term employee benefits Other long term employee benefits comprise of leave encashment which is provided for based on the actuarial valuation carried out in accordance with revised AS 15 as at the end of the year. d) Short term employee benefits Short term employee benefits including accumulated compensated absences as at the Balance Sheet date are recognised as an expense as per Company's schemes based on expected obligation on an undiscounted basis. Leases Assets taken on financial lease prior to 1.4.2001 are not capitalized and lease rentals are absorbed in the Profit and Loss Account without reference to the useful life of the asset. The Company's other significant leasing arrangements are in respect of operating leases for premises that are cancelable in nature. The lease rentals paid under such agreements are charged to the Profit and Loss Account. Taxes on Income a) b) Provision for current tax is made for the amount of tax payable in respect of taxable income for the year under Income Tax Act, 1961. Deferred tax is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in subsequent periods, subject to consideration of prudence.
Earnings per Share The earnings considered for ascertaining the Company's Earnings Per Share comprises the net profit after tax. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted EPS comprises the weighted average shares considered for deriving basic EPS, and also the weighted average number of equity shares that would be issued on the conversion of all dilutive potential equity shares. In case of dilutive options, the difference between the number of shares issuable and the number of shares that would be issued at fair value are treated as diluted potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Employee Stock Option Scheme Stock options granted to the employees under the stock option scheme established are evaluated as per the accounting treatment prescribed by the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by Securities & Exchange Board of India. The Company follows the intrinsic value method of accounting for the options and accordingly, the excess of market value of the stock options as on date of grant over the exercise price of the options, if any, is recognized as deferred employee compensation and is charged to the Profit and Loss Account on graded vesting basis over the vesting period of the options. The unamortized portion of the deferred employee compensation if any, is shown under Reserves and Surplus. II. Amalgamation of Godavari Fertilisers and Chemicals Limited with the Company a) Pursuant to the Scheme of Amalgamation ('the Scheme') of the erstwhile Godavari Fertilisers and Chemicals Limited (GFCL) with the Company, as approved by the Hon'ble High Court of Judicature of Andhra Pradesh on December 18, 2007, the entire business and undertaking of GFCL including all assets, liabilities, duties and obligations have been transferred to and vested in the Company with effect from April 1, 2007.
49
...SCHEDULES
Schedule 17 (Contd.) b) c) d) GFCL is engaged in the business of manufacture and sale of phosphatic fertilisers. The Amalgamation has been accounted for under the 'Purchase Method' as prescribed by Accounting Standard 14, "Accounting for Amalgamations", notified under Sec 211 (3C) of the Act. In accordance with the Scheme, the assets and liabilities of GFCL have been taken over at their fair values as on April 1, 2007, determined by an independent valuer and Rs.10,328 lacs being the excess of the fair value of the net assets over the paidup value of the shares issued to the shareholders of GFCL and the cost of investment in GFCL, has been credited to the Capital Reserve in the books of the Company. Further as per the terms of the scheme , the identity of 'Capital Reserve' and 'Investment allowance (utilised) Reserve' accounts amounting to Rs.14.97 lacs and Rs.1428.42 lacs respectively of erstwhile GFCL is required to be retained in the books of the company. Accordingly, corresponding amount has been debited to 'Amalgamation Adjustment Account' and the same is disclosed under Reserves and Surplus (Schedule 2). As per the Scheme, 23,975,212 Equity Shares of Rs.10 each of GFCL held by the Company, stand cancelled. In terms of the Scheme, the Company has allotted 12,037,182 Equity Shares of Rs.2 each as fully paid-up to the shareholders of GFCL in the proportion of three fully paid-up Equity Shares of Rs.2 each of the Company for every two fully paid-up Equity Shares of Rs.10 each of GFCL. Investments, assets, liabilities and licenses held in the name of erstwhile GFCL are in the process of being transferred in the name of the Company. In view of the aforesaid amalgamation with effect from April 1, 2007, the figures of the current year are not strictly comparable with those of the previous year. Pursuant to the decision of the shareholders, at their meeting held on July 24, 2007, the Company has established an 'Employee Stock Option Scheme 2007' ('ESOP 2007' or 'the Scheme') to be administered by the Remuneration and Nomination Committee of the Board of Directors. Under the Scheme, options not exceeding 6,392,988 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting. The exercise price of the option is equal to the latest available closing market price of the shares on the stock exchange where there is highest trading volume as on the date prior to the date of the Remuneration and Nomination Committee resolution approving the grant. Pursuant to the above mentioned scheme, the Company has, during the year, granted 2,217,800 options vesting over a period of four years commencing from the respective dates of grant. The exercise price being equal to the closing market price prevailing on the date prior to the date of grant, there is no deferred compensation cost to be amortised in this regard. The following are the number of options outstanding during the year: Stock Options At the beginning of the Year Granted Exercised Cancelled At the end of the Year f) g) Year ended March 31, 2008 2,217,800 2,217,800 Year ended March 31, 2007
e) f)
g) h) III.
Employee Stock Option Plan - ESOP 2007 a)
b)
c)
d)
e)
The above outstanding options have been granted in two tranches, 2,141,300 options at Rs.89.15 per option and 76,500 options at Rs.112.15 per option. In accordance with the requirements of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, and the Guidance Note on "Accounting for employee share based payments" issued by The Institute of Chartered Accountants of India, had the compensation cost for the employee stock option plan been recognized based on the fair value at the date of grant in accordance with the Black Scholes' model, the proforma amounts of the Company's Net Profit and Earnings per share would have been as follows:
50
...SCHEDULES
Schedule 17 (Contd.) Profit after Taxation ( Rs.in Lakhs) - As reported - Proforma Earnings Per Share Basic - No of Shares - EPS as reported (Rs.) - Proforma EPS (Rs.) Diluted - No. of shares - EPS as reported (Rs.) - Proforma EPS (Rs.) The following assumptions were used for calculation of fair value of grants: Dividend Yield (%) Expected Volatility (%) Risk free interest rate (%) Expected term (in years) 100 0.478 8 5 Rupees in Lakhs IV. Managerial Remuneration A. To the Directors of the Company (i) Remuneration to Wholetime director Salary Commission/Incentive Contribution to Provident Fund and other Funds Perquisites including Personal allowance (ii) Commission to non Wholetime Directors (iii) Sitting Fee B. To the Directors of erstwhile Ficom Organics Limited (i) Remuneration to Wholetime Director Salary Contribution to Provident Fund Perquisites (ii) Sitting Fee To the Directors of erstwhile Godavari Fertilisers and Chemicals Limited (i) Remuneration to Wholetime director Salary Contribution to Provident Fund and other Funds Others / Perquisites (ii) Sitting Fee Total Note: Managerial Remuneration above does not include leave encashment benefit, since the same is computed actuarially for all the employees and the amount attributable to the Managerial person cannot be ascertained separately. Year ended March 31, 2008 Year ended March 31, 2007 140,407,022 14.94 14.52 139,896,948 14.99 14.57 20,976 20,387 Year ended March 31, 2008
25.27 27.57 8.85 48.35 22.19 7.40 139.63
18.30 18.30 5.83 35.80 14.01 7.10 99.34
16.93 1.04 6.95 1.80 26.72
C.
23.44 0.38 21.38 2.15 47.35 186.98
126.06
51
...SCHEDULES
Schedule 17 (Contd.) Computation of net profit under Section 309(5) of the Companies Act, 1956 ('the Act') Profit before tax Add: Depreciation as per books Directors' sitting fee Directors' remuneration Loss on sale of fixed assets as per the books of account Less: Depreciation as per Section 350 of the Act Loss on sale of fixed assets as per Section 349 of the Act Net Profit as per Section 309(5) of the Act Commission/Incentive to Wholetime director, as per the resolution of the Board of Directors 1% Commission to non-Wholetime directors - restricted to Year ended March 31, 2008
Rupees in Lakhs Year ended March 31, 2007
33,341.81 5,212.52 9.55 177.43 80.13 38,821.44 5,212.52 80.13 33,528.79 27.57 22.19
14,634.75 3,984.26 8.90 117.16 167.80 18,912.87 3,984.26 167.80 14,760.81 18.30 14.01
V.
(a)
Payment to Auditors Audit fees Tax Audit fees Fees for other services Reimbursement of expenses Total 20.00 3.50 16.60 1.16 41.26 6.00 2.00 10.08 0.24 Total 18.32 18.00 3.50 17.65 0.67 39.82 2.75 3.25 0.08 6.08
(b) Payment to Branch Auditors Audit fees Tax Audit Fees Fees for other services Reimbursement of expenses
VI.
Expenditure in Foreign Currency (a) Expenditure in foreign Currency (on payment basis) Export Commission Interest Others (b) Amount remitted in foreign currency on account of dividend Financial Year 2007 - 2008 2006 - 2007 2007 - 2008 2006 - 2007 Relating to 2006 - 2007 2005 - 2006 2006 - 2007 2005 - 2006 No. of shares held (Rs.2/- each) 265,050 266,975 No. of shares held (Rs.10/- each) 3,200,000 3,200,000 No. of Non-Resident Shareholders 55 48 2 2 Amount Rs.in Lakhs 5.30 4.54 128.00 64.00 71.17 2,271.17 156.28 110.50 919.30 130.14
Erstwhile Godavari Fertilisers and Chemicals Limited
52
...SCHEDULES
Schedule 17 (Contd.) VII. (A) Value of imports on C.I.F. basis Raw Materials Stores and Spare Parts Components and Spare Parts incorporated in the goods produced Capital goods Traded goods (B) Earnings in Foreign Exchange F.O.B. value of exports of goods Others Year ended March 31, 2008 249,607.38 189.47 250.74 12,705.22 5,884.94 200.58
Rupees in Lakhs Year ended March 31, 2007 123,764.36 135.27 173.24 7,010.84 6,323.92 215.85 Rupees in Lakhs Year ended March 31, 2008 Amount % Year ended March 31, 2007 Amount %
VIII. Consumption of Raw materials (a) Raw Materials - Imported (includes acquired through canalizing agents) - Indigenous
237,868.87 21,909.46 259,778.33
91.57 8.43 100.00
124,680.91 13,654.29 138,335.20
90.13 9.87 100.00
(b)
Components and Spare Parts
Note: In furnishing information under VI(A) and VII above, Components and spare parts referred to in paragraph 4D(c) of Part II of Schedule VI to the Companies Act, 1956 are assumed to be those incorporated in the goods produced and not those used for maintenance of plant and machinery. IX. Secured Loans (Schedule 3) (A) Debentures 525 numbers, 6.10% Privately Placed Secured redeemable Non-Convertible debentures of face value of Rs.1,000,000 each as at March 31, 2008 are to be redeemed at par on October 27, 2008. Security: The debentures are secured by a first mortgage in English form on the Company's specified property in the State of Gujarat and further secured by specified immovable assets in the plant of the Company situated at Visakhapatnam. (B) Loans a) b) The term loans from banks and others are secured by an exclusive first charge on the specific assets. The term loans from banks taken over pursuant to the amalgamation of Godavari Fertilisers and Chemicals Limited with the Company, are secured by way of first charge on fixed assets and current assets ranking pari-passu with other lending institutions and banks holding first charge and second charge on their assets. The working capital facilities from banks are secured by a hypothecation of stock of raw materials, work-in-process, finished goods, stores and spare parts and book debts of the Company. These are further secured by a second charge on the movable fixed assets of the Company. In respect of working capital facilities taken over from GFCL, they are further secured by second mortgage charge on the company's immovable and movable properties, both present and future, ranking pari-passu among financing banks and institutions except short term lenders.
c)
53
...SCHEDULES
Schedule 17 (Contd.) Rupees in Lakhs Year ended March 31, 2008 X. (a) Contingent Liabilities In respect of matters under dispute: Income Tax Excise Duty Sales Tax Others (b) Land : Liability for additional compensation payable in respect of land purchased from M/s. Nagarjuna Fertilisers and Chemicals Limited has not been provided for, pending court orders and determination of the amount payable. 301.04 256.18 140.89 1,086.42 290.00 47.10 37.34 55.64 Year ended March 31, 2007
(c)
Disputed Statutory Dues Name of the Statute Karnataka Sales Tax Act, 1957 Electricity Supply Act, 1948 Central Excise Act, 1944 Nature of Dues Turnover Tax on chemical mixture fertilisers Cess on generation of electricity Disallowances / Demands relating to excise duty Service tax on warehousing charges Sales tax on scrap sales and other disallowances Amount Rs.in Lakhs 8.33 Years to which they relate 1993-1994 to 1996-1997 2003-2004 to 2007-2008 1999-2003 Forum where the dispute is pending Sales Tax Appellate Tribunal Honble High Courts of Madras and Andhra Pradesh Commissioner(Appeals) / Customs, Excise, Service Tax Appellate Tribunal Customs, Excise, Service Tax Appellate Tribunal Appellate Deputy commissioner Sales Tax
152.28
15.16
Finance Act, 1994 Andhra Pradesh General Sales Tax Act, 1957
0.97
2002-2003
10.38
2003-2004 2005-2006
Gujarat Sales Tax Act,1969
Sales tax on Stock transfer and rejection of Form 'H' and non submission of forms Taxable turnover / Tax on stock transfer / Tax on Government of India Subsidy/ Lease rentals / Set-offs
20.73
1999-2000 2002-2003
Assistant/ Deputy Commissioner (Appeals)
Various State Sales Tax Acts, where the Unit is a registered dealer.
91.10
1995-96 to 2003-04
Sales Tax Appellate Tribunal / Joint Commissioner of Commercial Taxes / Commercial tax Officer / Assistant Commissioner (CT)
54
...SCHEDULES
Schedule 17 (Contd.) Rupees in Lakhs Year ended March 31, 2008 XI. Capital Commitments Capital expenditure commitments Commitment towards investments XII. Deferred Tax a) Deferred Tax Asset: - On Employees separation and retirement Costs - Other timing differences mainly relating to statutory dues allowable on payment basis b) Deferred Tax Liability -On account of depreciation Deferred Tax Liability (net) XIII. Earnings Per Share i) ii) Profit after tax as per the Profit and Loss Account - (Rs. in lacs) [a] Weighted average number of equity shares of Rs.2/- each outstanding during the year [b] Dilution in equity on account of Capital Suspense (effective April 1, 2006) Effect of Potential ordinary shares on employees stock options outstanding Weighted average number of equity shares of Rs.2/- each outstanding during the year [c] Basic - [a]/[b] - (Rs.) 20,976.00 10,073.65 Basic 139,896,948 127,027,785 9540.64 8,246.71 7,896.87 7,134.34 876.02 1,293.93 425.51 762.53 417.91 337.02 807.42 3,534.40 502.83 17,744.60 Year ended March 31, 2007
Dilution iii) iv) v) 510,074 140,407,022 14.99 14.94 831,981 127,859,766 7.93 7.88
Earnings Per Share vi) vii) Diluted - [a]/[c] - (Rs.) XIV. Segment Reporting (A) Business Segment The Company has considered business segment as the primary segment for disclosure. The Company is primarily engaged in the manufacture and trading of Farm Inputs, which in the context of Accounting Standard 17 notified under Sec 211 (3C) of the Act is considered the only business segment. (B) Geographical Segment The Company sells its products mainly within India where the conditions prevailing are uniform. Since the sales outside India are below the threshold limit, no separate geographical segment disclosure is considered necessary.
55
...SCHEDULES
Schedule 17 (Contd.) XV. Investments The following investments in mutual funds were purchased and sold during the year. S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. Particulars Reliance Liquidity Fund HDFC Cash Management Fund ICICI Prudential Liquid Fund HSBC Cash Fund DSPML Cash Plus Fund TATA Liquid Fund SBI Premier Liquid Fund DEUTSCHE Mutual Fund UTI Mutual Fund Kotak Mutual Fund Birla Mutual Fund LIC Mutual Fund JM HIGH Liquidity Fund ABN Amro Bank Birla Sun Life Mutual Fund DBS Chola Mutual Fund DSP Merrilynch Mutual Fund Fidelity Mutual Fund Franklin Templeton Mutual Fund HDFC Mutual Fund HSBC Mutual Fund ICICI Prudential Mutual Fund JM Financial Mutual Fund Lotus India Mutual Fund Reliance Mutual Fund SBI Mutual Fund Sundarm BNP Paribas Mutual Fund TATA Mutual Fund No. of units Purchased 2007-2008 29,131,050 60,416,265 54,931,681 29,966,074 580,335 12,121,094 9,967,605 76,044,168 1,129,385 43,719,607 19,260,783 28,221,373 21,988,755 10,000,000 35,913,610 93,862,466 189,972 22,999,820 32,657,821 38,124,781 47,480,793 87,450,381 19,967,054 14,976,487 104,266,481 108,135,657 14,922,552 24,166,257 2006-2007 No. of units Sold 2007-2008 29,157,099 60,600,572 55,026,429 30,004,861 581,212 12,195,309 9,987,245 86,334,417 1,863,067 63,877,024 19,338,173 38,288,933 22,014,123 10,071,141 61,045,991 94,061,382 190,428 33,119,461 32,947,380 48,754,241 57,234,762 102,052,967 40,055,809 15,018,149 115,064,272 108,396,745 14,938,425 34,230,130 2006-2007
XVI. Leases The Company has entered into certain operating lease agreements and an amount of Rs.508.96 lacs (2007: Rs.265.45 lacs) paid under such agreements has been charged to the Profit and Loss Account. These agreements are cancelable in nature. XVII. Related Party Disclosures Information relating to Related Party Transactions as per Accounting Standard 18 notified under Section 211 (3C) of the Act.. (A) Names of the Related Parties and their relationship : Name of the Related Party E I D Parry (India) Limited Parry Chemicals Limited Parry America Inc., Parry Sugars Private Limited Parry Investments Limited Parry Infrastructure Co., Pvt Ltd.,(PICPL) Parry Glamourooms Private Limited (PGPL) (upto May 2006) Prathyusha Chemicals and Fertilisers Limited (PCFL) Godavari Fertilisers and Chemicals Ltd., (GFCL) (up to March 31, 2007) Mr V Ravichandran Mr K A Nair (Upto April 30,2007) Relationship Holding Company Subsidiary Company Fellow Subsidiary Company Fellow Subsidiary Company Fellow Subsidiary Company Fellow Subsidiary Company Fellow Subsidiary Company Associate Associate Key Management Personnel Managing Director Key Management Personnel Managing Director of erstwhile Godavari Fertilisers and chemicals Limited Relationship Key Management Personnel Chairman and Managing Director
(B) Name of the Related Parties and the relationship of erstwhile Ficom Organics Limited Name of the Related Party Mr R P Dalal (upto May 30, 2006)
56
...SCHEDULES
Schedule 17 (Contd.) Rupees in Lakhs 2007-2008 (C) Transactions during the year i) of finished goods/raw materials/services (net of discounts) Holding Company Fellow Subsidiary - (PGPL) Subsidiary Company - Finished goods - Sales Returns d) Associate (Finished goods) - GFCL e) Associate (Raw material) - GFCL f) Associate (Services) - GFCL g) Associate (Raw material) - PCFL ii) Interest received from a) Subsidiary Company - PCL b) Associate - GFCL iii) Rent received a) Fellow Subsidiary Company - (PICPL) b) Associate - GFCL iv) Expenses reimbursed by a) Holding Company b) Associate - GFCL v) Purchase of finished goods and services a) Holding Company b) Associate - PCFL vi) Material given on loan to and received back from Associate - GFCL vii) Material taken on loan from Associate and returned - GFCL viii) Rent paid to Associate - GFCL ix) Commission on sales to Subsidiary Company x) Expenses reimbursed to a) Holding Company b) Subsidiary Company c) Fellow Subsidiary - PGPL d) Associate - GFCL e) Associate - PCFL xi) Purchase of Fixed Assets a) Holding Company b) Associate - GFCL xii) Final dividend a) Holding Company b) Received from Associate - GFCL xiii) Inter Corporate Deposit given/received back from Associate - GFCL xiv) Loan repaid to Key management Personnel of erstwhile Ficom Organics Limited xv) Rental Deposit received a) Fellow subsidiary Company - PICPL xvi) Outstanding balances as at the year end : a) Debtors/Receivables - Holding Company - Subsidiary Company (PCL) - Associate (GFCL) b) Creditors/Payables - Holding Company Note: Details of remuneration to Directors are disclosed in note IV above. Sale a) b) c) 21.74 1.90 18.93 175.00 2.09 3.79 34.95 268.72 2.40 7.00 1,754.38 3,000.00 6.09 50.68 133.62 320.68 57.27 1.89 24.16 20.41 4.60 29.64 3.69 64.74 5.55 58.65 856.00 703.77 0.18 27.28 149.02 2.40 21.25 147.40 36.60 43.66 1,491.22 288.45 1,000.00 70.00 2006-2007
0.16 269.84 35.84
261.90 52.55 35.00
57
...SCHEDULES
Schedule 17 (Contd.)
XVIII. Employee benefits a) Defined benefit plans The following table sets forth the status of the Gratuity Plan, Superannuation and other Pension Plans of the Company and the amounts recognized in the Balance Sheet and Profit and Loss Account. Rs. in Lakhs Particulars Gratuity Plan Superannuation and other Pension Plans 2007-2008 Projected benefit obligation at the beginning of the period Current service cost Interest cost Actuarial loss/(gain) Benefits paid Projected benefit obligation at the end of the period Amounts recognised in the balance sheet Projected benefit obligation at the end of the period Fair value of plan assets at end of the period Funded status of the plans - (asset)/ liability Liability recognised in the balance sheet Cost for the period Current service cost Interest cost Expected return on plan assets Net actuarial (gain)/loss recognised in the period Net cost recognised in Profit and Loss Account Nature and extent of investment details of the plan assets State and Central Securities Bonds Special Deposits Actual Return on Plan Assets Assumptions Discount rate Estimated rate of return on plan assets Expected rate of salary increases b) Defined contribution plans In respect of the defined contribution plans, an amount of Rs.446.57 lacs (2007: Rs.266.42 lacs) has been recognised in the Profit and Loss Account during the year. XIX. The Government of India grants price concession on sale of Phosphatic Fertilisers. Pending announcement of final rates of concession for the period October 2007 to March 2008, differential subsidy income (in excess of the base rate) of Rs.2,689.91 lacs has been recognised having regard to the prevailing concession scheme and according to the management estimates of final price concession receivable. 7.00% 7.00% 3.50% 7.00% 7.00% 3.50% 7.00% 7.00% 3.50% 7.00% 7.00% 3.50% 36.00% 26.00% 38.00% 97.15 35.00% 24.00% 41.00% 52.79 17.80% 82.20% 74.45 17.68% 82.32% 20.33 57.73 38.21 (45.04) 0.20 51.10 30.62 40.48 (49.27) (10.30) 11.53 31.11 40.46 (16.10) (131.87) (76.40) 34.08 43.34 (13.98) (88.93) (25.49) 649.70 672.82 (23.12) 658.17 721.23 (63.06) 564.98 266.99 297.99 297.99 589.04 193.00 396.04 396.04 590.12 57.73 38.21 52.30 (88.66) 649.70 2006-2007 2007-2008 663.52 30.62 40.48 32.24 (108.69) 658.17 589.04 31.11 40.46 (73.48) (22.15) 564.98 2006-2007 652.62 34.08 43.34 (74.11) (66.89) 589.04
58
...SCHEDULES
XX.
Other Matters (a) (b) (c) Based on the information available with the company, there are no dues/interest outstanding to Small and Micro enterprises as at March 31, 2008. Sales are net of discounts, other than usual trade discounts, Rs.3,742.46 lacs (2007: Rs.2,975.85 lacs). The net difference in foreign exchange (i.e., difference between the spot rate on the dates of the transactions and the actual rate at which the transactions are settled / appropriate rates applicable at the year end) credited to Profit and Loss Account is Rs.3,880.60 lacs (2007: Rs.179.46 lacs). Exchange difference in respect of forward exchange contracts to be recognised in the Profit and Loss Account in the subsequent accounting period is Rs.81.76 lacs Debit (2007: Rs.48.74 lacs-debit). The company has four open swap contracts equivalent to USD 15 million outstanding as at March 31, 2008. Considering that these contracts are specific hedges for converting dollar liability to fixed rupee liability including interest thereon, mark to market has not been carried out for these contracts. Research and Development expenses included under schedule 14 - Rs.99.90 lacs (2007: Rs.34.25 lacs) Land - Lease deed in respect of land admeasuring 9.80 acres taken on lease from Visakhapatnam Port trust by the erstwhile GFCL, is pending execution. During the year, the Government of India, Ministry of Chemicals and Fertilisers, has issued 'Government of India Special Bonds' towards the subsidy receivable. These bonds have been treated as Current Investments (included in Schedule 6). (Rs. in Lakhs) Particulars Amounts receivable from Subsidiary Company Name of the Company Parry Chemicals Limited As at March 31, 2008 269.84 (261.90) Maximum amount outstanding during the year 284.62 (639.80)
(d)
(e) (f ) (g) XXI.
Disclosures as per Clause 32 of the listing agreement
Figures in brackets relate to those of the previous year. XXII. Previous year's figures have been regrouped wherever necessary to conform to the classification adopted for the current year.
59
STATEMENT OF HOLDING COMPANY'S INTEREST IN SUBSIDIARY COMPANIES

(PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956) 1 2 3 Name of the Subsidiary Company The financial year of the subsidiary ended on (a) No of shares held by Coromandel Fertilisers Limited in its subsidiary (b) Extent of holding 4 The net aggregate amount of Profit/(Loss) of the subsidiary as far as it concerns the holding company 1. Dealt with in the accounts of Coromandel Fertilisers Limited by way of Dividend on the shares held in the subsidiary: (a) (b) For the subsidiary's financial year ended on 31.03.2008 For the previous financial year(s) of the subsidiary since it became subsidiary of Coromandel Fertilisers Limited Parry Chemicals Limited 31st March 2008 5,00,000 100% Rs.Lakhs
2. Not dealt with in the accounts of Coromandel Fertilisers Limited (a) (b) For the subsidiary's financial year ended on 31.03.2008 For the previous financial year(s) of the subsidiary since it became subsidiary of Coromandel Fertilisers Limited 33.66 75.12
For and on behalf of the Board
A VELLAYAN Chairman
60
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

[As per Schedule VI, Part (iv) of the Companies Act, 1956] I REGISTRATION DETAILS Registration No. State Code Balance Sheet Date II CAPITAL RAISED DURING THE YEAR (AMOUNT IN Rs. THOUSANDS) Public Issue Right Issue Bonus Issue Private Placement III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN Rs. THOUSANDS) Total Liabilities Total Assets SOURCES OF FUNDS Paid-up Capital Reserves and Surplus Secured Loans Unsecured Loans Deferred Tax Liability APPLICATION OF FUNDS Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Accumulated Losses IV PERFORMANCE OF COMPANY (AMOUNT IN Rs. THOUSANDS) Turnover Total Expenditure Profit Before Tax Profit After Tax Earnings per share (Rs.) - Diluted Dividend Rate (%) V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF COMPANY (as per monetary terms) Item Code No. (ITC Code) 3 3 3 1 1 1 0 0 0 5 5 5 3 4 4 0 0 0 . . . 0 0 0 0 0 0 Product Description Di-Ammonium Phosphate Complex Fertilisers Complex Fertilisers 18 28 20 : : : 46 28 20 : : : 0 0 0 3 3 8 4 3 2 0 6 3 0 0 6 3 9 1 1 6 4 7 4 1 9 1 6 . 1 0 2 8 0 9 7 7 6 1 0 4 5 2 2 7 7 1 1 2 6 1 8 8 3 5 9 4 4 7 6 2 9 2 5 1 2 N N 4 4 9 4 2 7 4 3 3 1 I I 9 9 7 5 6 0 6 8 3 5 L L 5 5 9 5 6 8 7 9 7 1 2 2 4 6 5 7 1 0 1 2 N N N N I I I I L L L L 3 1 0 3 0 1 0 0 8 9 0 0 2 1 8
7 5 4
7 3 7
61
CONSOLIDATED FINANCIAL STATEMENTS

Coromandel Fertilisers Limited and its Subsidiary and Associate Companies
62
AUDITORS REPORT
To The Board of Directors Coromandel Fertilisers Limited 1. We have audited the attached Consolidated Balance Sheet of Coromandel Fertilisers Limited ('the Company') and its subsidiary (collectively referred to as 'the Group') as at March 31, 2008, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report, in which are incorporated the financial statements of the fertiliser unit of the Company at Kakinada ("the Unit") which have been audited by other auditors and whose report has been appropriately considered by us. These Consolidated Financial Statements are the responsibility of the Company's management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Attention is drawn to the following: a) We did not audit the financial statements of the subsidiary, whose financial statements reflect the Group's share of total assets of Rs.178.33 lacs as at March 31, 2008 and Group's share of total revenues of Rs.100.68 lacs and net cash outflows amounting to Rs.3.12 lacs for the year ended on that date as considered in the consolidated financial statements. These financial statements and other information of the subsidiary has been audited by other auditor whose report has been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of such subsidiary, is based solely on the report of the other auditor. Note I on schedule 16, regarding discontinuance of recognition of further losses in reporting of an investment in an associate, Prathyusha Chemicals and Fertilisers Limited, under the equity method, based on the last available audited financial statements for the year ended March 31, 2007, audited by other auditor. Note XIV on schedule 16, regarding accrual of subsidy amounting to Rs.2,689.91 lacs for the period October 1, 2007 to March 31, 2008 based on management estimates, pending final announcement by the Government of India.
2.
3.
b)
c) 4.
We report that the Consolidated Financial Statements have been prepared by the Companys management in accordance with the requirements of Accounting Standard 21, 'Consolidated Financial Statements' and Accounting Standard 23, 'Accounting for Investments in Associates in Consolidated Financial Statements' notified under section 211 (3C) of the Companies Act, 1956. Based on our audit and on consideration of the reports of the other auditors on the financial statements and other information of the subsidiary/ the Unit, in our opinion and to the best of our information and according to the explanations given to us, and read with paragraph 3 (c) above, the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) (b) (c) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2008; in the case of the Consolidated Profit and Loss Account, of the profit for the year ended on that date; and in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
5.
63
CONSOLIDATED BALANCE SHEET OF COROMANDEL FERTILISERS LIMITED AND ITS SUBSIDIARY AND ASSOCIATES AS AT MARCH 31, 2008
Rupees in Lakhs Schedule I. SOURCES OF FUNDS 1. Shareholders' Funds (a) (b) (c) 2. Capital Capital Suspense Reserves and Surplus 1 1A 2 2,797.94 76,752.35 79,550.29 Loan Funds (a) (b) 3. II. Secured Loans Unsecured Loans 3 4 51,226.65 48,990.42 100,217.07 Deferred Tax Liability (net) TOTAL APPLICATION OF FUNDS 1. Fixed Assets (a) (b) (c) (d) 2. 3. Gross Block Less : Depreciation Net Block Capital Work-in-Progress 6 7 8 9 10 5 113,109.72 40,170.76 72,938.96 1,084.12 74,023.08 Investments Current Assets, Loans and Advances (a) (b) (c) (d) Inventories Sundry Debtors Cash and Bank Balances Loans and Advances 86,486.83 9,991.25 6,633.39 59,400.61 162,512.08 Less : Current Liabilities and Provisions (a) (b) Liabilities Provisions 11 12 73,233.78 10,369.02 83,602.80 Net Current Assets TOTAL Notes to the Accounts 16 78,909.28 188,014.07 53,712.34 6,134.65 59,846.99 57,292.84 117,176.82 40,481.42 15,810.14 16,954.03 43,894.25 117,139.84 35,081.71 72,882.45 35,276.03 37,606.42 1,126.94 38,733.36 21,150.62 8,246.71 188,014.07 26,643.91 28,287.79 54,931.70 7,134.34 117,176.82 2,540.56 16.64 52,553.58 55,110.78 March 31, 2008 March 31, 2007
The schedules referred to above form an integral part of the Balance Sheet This is the Balance Sheet referred to in our report of even date For and on behalf of the Board
A VELLAYAN Chairman
64
CONSOLIDATED PROFIT AND LOSS ACCOUNT OF COROMANDEL FERTILISERS LIMITED AND ITS SUBSIDIARY AND ASSOCIATES FOR THE YEAR ENDED MARCH 31, 2008
Rupees in Lakhs Schedule I. Income Sales (Gross) Less: Excise duty Sales (net) Government subsidies Other income Year ended March 31, 2008 221,276.33 4,430.98 216,845.35 158,888.69 4,321.43 380,055.47 II. Expenditure Manufacturing and other expenses Interest Depreciation 14 15 334,455.97 6,985.09 5,220.68 346,661.74 III. Profit before taxation and extraordinary item Provision for Taxation - Current - Provision for taxation relating to earlier years - Deferred - Fringe Benefits Tax IV. Profit after taxation Share of net profit of Assocites Balance brought forward V. Available for Appropriation Transfer to General Reserve Transfer (from)/to Debenture Redemption Reserve Proposed Dividend Dividend Tax Balance carried to Balance Sheet Earnings per share - Basic (Rs.) Earnings per share - Diluted (Rs.) (Refer note X on Schedule 16) Notes to the Accounts 16 33,393.73 12,918.26 120.30 (774.99) 120.50 21,009.66 21,009.66 8,584.80 29,594.46 15,000.00 (300.00) 4,896.39 832.14 9,165.93 15.02 14.96 Year ended March 31, 2007 140,498.64 3,662.44 136,836.20 69,814.36 1,604.75 208,255.31 186,713.86 3,195.84 3,992.41 193,902.11 14,353.20 4,894.40 (288.00) (125.00) 86.11 9,785.69 1,886.13 11,671.82 6,715.77 18,387.59 6,500.00 311.00 2,557.20 434.59 8,584.80 9.19 9.13
13
VI.
The schedules referred to above form an integral part of the Profit and Loss Account This is the Profit and Loss Account referred to in our report of even date For and on behalf of the Board
A VELLAYAN Chairman
65
CONSOLIDATED CASH FLOW STATEMENT OF COROMANDEL FERTILISERS LIMITED AND ITS SUBSIDIARY & ASSOCIATES FOR THE YEAR ENDED MARCH 31, 2008
Rupees in Lakhs 2007-2008 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax Adjustments for: Depreciation Interest expense Loss on sale of fixed assets (Profit)/Loss on sale of Investments Interest income Dividend income Foreign exchange fluctuation Provision for dimunition in value of Investments Provision for doubtful debts no longer required, written back Provision for doubtful debts and advances Bad debts written off Operating Profit Before Working Capital Changes Adjustments for: (Increase)/Decrease in trade and other receivables (Increase)/Decrease in inventories Increase/(Decrease) in trade payables Increase/(Decrease) in other liabilities Cash Generated From Operations Interest received Direct Taxes paid (net of refunds) Net Cash from Operating Activities B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of fixed assets Purchase of investments - others Receipt of Fertiliser Companies' Government of India Special Bonds Proceeds from sale of Fertiliser companies' Govt of India Special Bonds Sale of investments - units of mutual funds Dividends received Inter-corporate Deposits received back Net Cash Used In Investing Activities (4,287.99) 75.46 (16,829.44) (51,194.60) 21,952.50 343.17 (49,940.90) (3,068.12) 128.58 (1,353.28) 28.11 289.94 1,650.00 (2,324.79) 51,734.34 (24,243.01) (1,177.58) 150.96 72,765.50 400.81 (11,237.42) 61,928.89 (5,957.00) 62.31 2,597.70 114.98 17,866.90 77.43 (5,711.14) 12,233.20 5,220.68 6,985.09 80.13 47.50 (950.34) (343.17) 503.11 1,303.71 (317.30) 85.36 292.29 46,300.79 3,992.41 3,195.84 167.80 (135.11) (1.49) (582.50) (108.06) 56.05 110.78 21,048.92 33,393.73 14,353.20 2006-2007
66
CONSOLIDATED CASH FLOW (Contd.)

Rupees in Lakhs 2007-2008 C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from long term borrowings Repayment of long term borrowings Increase/(Decrease) in working capital finance Dividends paid (including tax thereon) Interest paid Net Cash (used in) / from Financing Activities Net Increase/ (Decrease) in Cash And Cash Equivalents Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents at the end of the year 1,212.46 (7,284.35) (5,916.29) (3,509.77) (7,155.03) (22,652.98) (10,664.98) 17,298.38 6,633.39 9,467.46 (3,742.72) 4,110.23 (2,455.67) (3,066.66) 4,312.64 14,221.05 2,732.98 16,954.03 2006-2007
Notes: 1. The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard 3 on Cash Flow Statements notified under section 211(3C) of the act. Pursuant to the Scheme of Amalgamation of Godavari Fertilisers and Chemicals Limited with the Company cash and cash equivalents as at April 1, 2007 amounting to Rs 344.35 lacs have been taken over by the Company. The amalgamation has been considered as a non -cash transaction. Purchase of Investmentsothers includes an amount of Rs.143,29.44 lakhs made by the Company in Godavari Fertilisers and Chemicals Limited prior to the amalgamation (Refer Note III on Schedule 16). In view of note 2 above, the current year's figures are not comparable with those of the previous year.
2.
3.
This is the Cash Flow Statement referred to in our report of even date For and on behalf of the Board
A VELLAYAN Chairman
67
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

Rupees in Lakhs March 31, 2008 I. CAPITAL Authorised 175,000,000 Equity Shares of Rs.2/- each Issued and Subscribed* 139,896,948 (2007: 127,027,785) Equity Shares of Rs.2/- each fully paid-up *Notes: (A) Of the above, since inception: (i) (ii) 5,806,100 Equity Shares of Rs.2/- each fully paid-up have been allotted pursuant to contracts without payments being received in cash. 69,278,790 Equity Shares of Rs.2/- each fully paid-up have been issued as Bonus Shares by capitalisation of a part of General Reserve. 3,500.00 2,797.94 3,500.00 2,540.56 March 31, 2007
(iii) 4,409,440 Equity Shares of Rs.2/- each fully paid-up have been issued at a premium of Rs.2/- per share to the Debenture Holders and Public Financial Institutions pursuant to the right exercised by them for converting a part of their Debentures/Loan amounts into fully paidup Equity Shares. (B) 4,864,000 Equity Shares of Rs.10/- each fully paid-up have been bought back at a price of Rs.65/- per share from the shareholders pursuant to the offer for buy back of equity shares made during the year March 31, 2000. 29,749,505 Equity Shares of Rs.2/- each fully paid-up have been allotted to the shareholders of E.I.D. Parry (India) Limited in the ratio of one share of the Company for every three shares of E.I.D. Parry (India) Limited, pursuant to the scheme of arrangement (demerger) between E.I.D. Parry (India) Limited and the Company for the acquistion of Farm Inputs Division of E.I.D. Parry (India) Limited.
(C)
(D) 831,981 Equity shares of Rs.2/- each fully paid-up have been allotted to the shareholders of Ficom Organics Limited in the ratio of 3 shares of the company for every 11 shares of Ficom Organics Limited pursuant to the Scheme of Amalgamation between Ficom Organics Limited and Rasilah Investments Limited and the Company. (E) 12,037,182 Equity shares of Rs.2/- each fully paid-up have been allotted to the shareholders of Godavari Fertilisers and Chemicals Limited in the ratio of 3 shares of the company for every 2 shares of Godavari Fertilisers and Chemicals Limited pursuant to the Scheme of Amalgamation between Godavari Fertilisers and Chemicals Limited and the Company. Of the total Equity Share Capital, as at March 31, 2008, E.I.D. Parry (India) Limited (Holding Company) holds 87,719,035 Equity Shares of Rs.2/- each fully paid-up. (2007: 87,719,035 Equity Shares) Total 2,797.94 2,540.56
(F)
IA.
CAPITAL SUSPENSE 831,981 Equity shares of Rs.2/- each fully paid-up to be issued pursuant to the Scheme of Amalgamation of Ficom Organics Limited and Rasilah Investments Limited with the Company Total
16.64 16.64
68
...SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

Rupees in Lakhs March 31, 2008 2. RESERVES AND SURPLUS Capital Reserve Per last Balance Sheet Add: On amalgamation (Refer Note III on Schedule 16) (A) Capital Reserve (Transferred on amalgamation, refer Note III on Schedule 16) Capital Redemption Reserve Share Premium Account Central Subsidy (B) Debenture Redemption Reserve Per last Balance Sheet Add: Transfer (to)/from Profit and Loss Account (C) Investment Allowance Reserve Per last Balance Sheet Add: Transferred on amalgamation (Refer Note III on Schedule 16) (D) General Reserve Per last Balance Sheet Add: Transfer from Profit and Loss Account Less: Adjustment on account of initial adoption of Accounting Standard 15 (revised 2005) on 'Employee Benefits' (E) Profit and Loss Account Less: Adjustment on Amalgamation (Refer Note III on Schedule 16) (F) {A+B+C+D+E+F} Less: Amalgamation Adjustment Account (Refer Note III on Schedule 16) 3. Total SECURED LOANS (Refer Note VI on Schedule 16) (a) Debentures (b) Term Loans - Banks - Foreign Currency Loans - Rupee Loans - Others (c) Banks - Cash Credit and Working Capital Demand Loans - Foreign Currency Loans - Rupee Loans Total 4. UNSECURED LOANS (a) Short Term Loans - From Banks - Foreign Currency Loans - Rupee Loans (b) From other than banks, other than short term - Sales tax deferral - Security/Trade and other deposits Total March 31, 2007
889.55 12,711.89 13,601.44 14.97 486.40 6,006.01 11.25 6,518.63 1,613.87 (300.00) 1,313.87 1,428.42 1,428.42 34,961.70 15,000.00
36.67 852.88 889.55 486.40 6,006.01 11.25 6,503.66 1,302.87 311.00 1,613.87 28,968.37 6,500.00
49,961.70 9,165.93 3,794.25 5,371.68 78,195.74 1,443.39 76,752.35
506.67 34,961.70 8,584.80 8,584.80 52,553.58 52,553.58
5,250.00
7,500.00
6,549.73 12,427.08 2,653.95 21,322.77 3,023.12 51,226.65
5,337.27 8,208.06 2,000.00 98.18 3,500.40 26,643.91
33,513.72 6,450.25 77.15 8,949.30 48,990.42
12,280.17 12,500.00 137.75 3,369.87 28,287.79
69
70
Rupees in Lakhs
COST or VALUATION Additions Deductions/ Adjustments 2.90 3.96 354.89 74,621.85 32,420.79 4,651.27 632.64 229.88 28.79 3.74 247.61 724.28 66.90 13.07 6,586.02 1,256.11 194.58 0.83 1,449.86 79.97 254.93 36,824.45 1,788.27 126.20 26.55 152.75 26,084.03 26,084.03 1,635.52 5,136.16 644.31 377.71 37,797.40 As at March 31, 2008 For the year As at April 1, 2007 On Deductions/ Adjustments As at March 31, 2008 As at March 31, 2008 DEPRECIATION NET BOOK VALUE As at March 31, 2007 358.34 1,525.71 3,723.63 377.88 274.12 30,464.95 55.83 136.37 896.25 56.18 23.49 2,713.77 712.93 223.32 109.11 168.60 49.07 4,398.71 2,837.76 1,000.65 72,882.45 481.56 113,109.72 10.98 10.98 35,276.05 31,987.89 199.32 75.19 759.51 270.94 317.50 44.62 1,902.14 894.25 185.17 121.25 5,220.68 3,992.41 34.05 39.74 325.97 704.27 1,045.37 352.45 10.98 40,170.76 35,276.03 856.77 407.06 72,938.96 37,606.42 1,084.12 566.41 315.38 37,606.42 1,126.94
5.
FIXED ASSETS
Description
As at April 1, 2007
Amalgamation (Refer Note 1)
Land - Freehold
358.34
25,669.86
Land - Leasehold
1,651.90
Buildings
4,979.74
Roads
444.78
Railway Siding
504.00
Plant and Machinery
62,885.74
9,377.23
Office Equipment, Furniture and Fittings
1,460.66
Vehicles
586.31
Technical Know-how
10.98
Total
72,882.45
36,310.12
Previous Year
68,289.02
2,756.32
Capital work in Progress (Including capital advances)
Notes:
1.
Taken over at fair values pursuant to the Scheme of Amalgamation of Godavari Fertilisers and Chemicals Limited (GFCL) with the Company. (Refer Note III on Schedule 16)
2.
Land taken over from GFCL, pursuant to the above referred amalgamation is pending mutation in the name of the Company.

Rupees in Lakhs March 31, 2008 6. INVESTMENTS - LONG TERM - AT COST I. TRADE INVESTMENTS QUOTED Godavari Fertilisers and Chemicals Limited # Nil (2007 : 14,422,252 Equity Shares of Rs.10/- each, fully paid) Market value - Nil (2007 - Rs.17,292.28 lacs) Less : Adjustment on account of dividend received # Amalgamated with the Company during the year (Refer Note III on Schedule 16) Add: Group's share of profits for the year A UNQUOTED Prathyusha Chemicals and Fertilisers Limited 1,430,000 Equity Shares of Rs.10/- each, fully paid-up Less: Provision for diminution in value Indian Potash Limited 90,000 Equity Shares of Rs.10/- each, fully paid-up Foskor (PTY) Limited, South Africa 199,590 Ordinary shares of South African Rand 1 each fully paid-up 23,500,000 "B" Class Shares of South African Rand 1 each fully paid-up Tunisian Indian Fertilisers S.A., Tunisia 1,350,000 Ordinary Shares of Tunisian Dinars 10 each, Tunisian Dinar 2.50 per share paid-up Bharuch Enviro Infrastructure Limited 16,100 Equity Shares of Rs.10/- each, fully paid-up Bharuch Eco Aqua Infrastructure Limited 275,000 Equity Shares of Rs.10/- each, fully paid-up A.P.Gas Power Corporation Limited** 1,340,000 Equity shares of Rs.10 each fully paid B II. OTHER THAN TRADE INVESTMENTS - UNQUOTED IDBI Flexibonds 40 bonds of Rs.5,000/- each, fully paid-up C III. SUBSIDIARY COMPANY - UNQUOTED Parry Chemicals Limited 500,000 Equity Shares of Rs.10/- each, fully paid-up D CURRENT INVESTMENTS - AT COST OR BELOW* QUOTED Glaxo Smithkline Pharmaceuticals Limited 38 Equity Shares of Rs.10/- each, fully paid-up Morarjee Realties Limited 49 Equity Shares of Rs.10/- each, fully paid-up Tata Motors Limited 28 Equity Shares of Rs.10/- each, fully paid-up Alpha Laval Limited 47 Equity Shares of Rs.10/- each, fully paid-up Corporation Bank Limited 500 Equity Shares of Rs.10/- each, fully paid-up Birla Global Finance Limited 36 Equity Shares of Rs.10/- each, fully paid-up 15,627.86 March 31, 2007
288.45 15,339.41 1,886.13 17,225.54
4.50
4.50
23.02 2,670.09 1,193.17
23.02 2,670.09 1,193.17
1.61 27.50 753.75 4,673.64 2.00 2.00
1.61 27.50 3,919.89 2.00 2.00
0.16 0.14 0.10 0.24 0.40 0.01
0.16 0.14 0.10 0.24 0.40 0.01
71

Rupees in Lakhs CURRENT INVESTMENTS - AT COST OR BELOW* (Contd...) QUOTED PH Capital Limited 2,900 Equity Shares of Rs.10/- each, fully paid-up Gupta Carpets Udyog Limited 140 Equity Shares of Rs.10/- each, fully paid-up Indian Card Clothing Company Limited 2 Equity Shares of Rs.10/- each, fully paid-up Indian Seamless Metal Tubes Limited 100 Equity Shares of Rs.10/- each, fully paid-up Indian Seamless Steel Alloys Limited 300 Equity Shares of Rs.10/- each, fully paid-up I G Petrochemicals Limited** 13,000 Equity Shares of Rs.10/- each, fully paid-up Laxmi Electrical Control Systems Limited 2 Equity Shares of Rs.10/- each, fully paid-up UTI Master Shares 1,000 Master Shares of Rs.10/- each, fully paid-up Super Sales Agencies Limited 80 Equity Shares of Rs.10/- each, fully paid-up Tata Iron and Steel Company Limited 49 Equity Shares of Rs.10/- each, fully paid-up Tata Power Company Limited 120 Equity Shares of Rs.10/- each, fully paid-up Indian Seamless Steel Alloys Limited 30 debentures of Rs. 10/- each, fully paid-up Less: Provision for diminution in value D UNQUOTED Government of India Special Fertiliser Bonds Less: Provision for dimunition in value of investments E Investment in Mutual Funds DBS Chola Short Term Floating Rate Fund 24,959,067.13 units of Rs.10/- each F A+B+C+D+E+F *Aggregate Market Value of Quoted Investments - Rs.10.90 lacs (2007: Rs.10.75 lacs) *Aggregate Market Value of Unquoted Investments - Rs.27,902.89 lacs (2007: Rs.Nil) ** Represent investments taken over pursuant to the Scheme of Amalgamation of Godavari Fertilisers and Chemicals Limited with the Company. Aggregate Value of Quoted Investments - Rs.3.18 lacs (2007: Rs.13,422.50 lacs) Aggregate Value of Unquoted Investments - Rs.32,630.53 lacs (2007: Rs.3,985.89 lacs) 0.29 0.05 0.04 0.03 12.64 0.15 0.04 0.10 0.16 14.55 11.37 3.18 29,194.60 1,291.71 27,902.89 2,500.00 35,081.71 0.29 0.05 0.04 0.03 12.64 0.15 0.04 0.10 0.16 14.55 11.37 3.18 21,150.62 March 31, 2008 March 31, 2007
72

Rupees in Lakhs 7. INVENTORIES Stores and Spare Parts* Raw Materials* Work-in-process** Finished Goods** Total *At cost or below **At cost or net realisable value, whichever is lower Raw Materials include Materials in Transit of Rs.8,226.50 lacs (2007: Rs.4,781.10 lacs) . 8. SUNDRY DEBTORS (Considered Good, Unless Otherwise Stated) Debts outstanding for a period exceeding six months Secured Unsecured Unsecured - Considered doubtful Less: Provision for doubtful debts A Other Debts Secured Unsecured* B A+B *Include dues from subsidiary : Rs.269.84 lacs (2007: Rs.261.90 lacs) 9. CASH AND BANK BALANCES Cash on Hand Balances with Scheduled Banks: - On Current Accounts - On Deposit Accounts - On Margin Money Accounts Balances with non-Scheduled Banks: - On Current Account - Ned Bank, South Africa** Total ** Maximum balance outstanding during the year - Rs.33.54 lacs (2007: Rs.36.95 lacs) 10. LOANS AND ADVANCES (Unsecured and Considered Good Unless Otherwise Stated) Interest accrued but not due on deposits/loans/ Fertilisers special bonds Advances recoverable in cash or in kind or for value to be received Considered Good Considered Doubtful Government Subsidies Receivable Deposits with Government Bodies Advance Fringe benefit tax (net of provisions) Balances with Excise, Customs, Port Trust etc., Less: Provision for doubtful advances Total 608.83 5,066.52 6.08 52,193.68 863.31 9.34 658.93 59,406.69 6.08 59,400.61 59.30 3,480.58 6.08 38,970.78 670.50 (7.25) 720.34 43,900.33 6.08 43,894.25 73.10 715.22 450.85 1,239.17 450.85 788.32 1,106.99 8,095.94 9,202.93 9,991.25 75.08 550.42 600.00 1,225.50 600.00 625.50 2,080.53 13,104.11 15,184.64 15,810.14 March 31, 2008 3,070.78 63,657.36 934.57 18,824.12 86,486.83 March 31, 2007 2,280.40 17,954.50 837.32 19,409.20 40,481.42
13.65 5,281.85 1,000.00 336.54 1.35 6,633.39
10.72 4,533.00 12,408.91 1.40 16,954.03
73

Rupees in Lakhs March 31, 2008 11. LIABILITIES Acceptances Sundry Creditors - Outstanding dues of Micro enterprises and small enterprises - Outstanding dues of other than Micro and Small enterprises Unclaimed dividends* Unclaimed matured fixed deposits* Unclaimed interest on fixed deposits* Unclaimed Application Money Cheques issued but not encashed - Fixed Deposit Refunds* - Fixed Deposit Interest* Advances and Deposits Other Liabilities Interest accrued but not due on loans/security deposits Total * There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund. 12. PROVISIONS Taxation (net of advance tax) Dividend Tax on dividend Employee Benefits Total 3,105.21 4,896.39 832.14 1,535.28 10,369.02 2,075.40 2,557.20 434.59 1,067.47 6,134.65 0.09 4,236.02 2,230.15 813.97 73,233.78 0.09 1,577.82 940.63 705.70 53,712.34 65,509.23 109.06 0.86 0.06 42,121.98 35.62 1.32 0.22 0.31 334.33 8,328.65 March 31, 2007
SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

Rupees in Lakhs Year ended March 31, 2008 13. OTHER INCOME Interest on loans/deposits, Fertiliser Special bonds, income tax refunds, etc. (Gross) [Tax deducted at source Rs.44.58 lacs (2007: Rs.40.71 lacs)] Dividend (Gross) - On trade investments [Tax deducted at source Rs.Nil (2007: Rs.Nil)] - On other investments [Tax deducted at source Rs.Nil (2007: Rs.Nil)] Provision for doubtful debts no longer required, written back Service Income DEPB Income / Excise Benefits Miscellaneous Income Total Year ended March 31, 2007
950.34
135.11
1.63 341.54 317.30 825.70 725.35 1,159.57 4,321.43
1.49 108.06 532.49 28.00 799.60 1,604.75
74
...SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

Rupees in Lakhs Year ended March 31, 2008 259,778.33 8,338.23 6,618.10 13,711.55 7,948.54 794.70 1,028.30 181.51 506.56 3,083.62 549.99 461.64 283.23 343.68 1,105.78 256.82 16,588.27 99.70 9.55 80.13 85.36 47.50 1,291.71 12.00 292.29 4,380.52 Year ended March 31, 2007 138,335.20 6,152.52 5,711.14 10,086.36 5,243.10 504.97 650.74 263.21 2,666.82 168.18 120.60 289.35 588.06 739.26 179.99 12,134.41 118.71 8.90 167.80 56.05 110.78 3,031.34
14. MANUFACTURING AND OTHER EXPENSES Raw Materials Consumed Stores Consumed Power, Fuel and Water Purchase of goods for resale Salaries, Wages and Bonus Contribution to Provident Fund and Other Funds Staff Welfare Expenses Equipment lease rentals Rent Repairs to: Plant and Machinery Buildings Others Insurance Rates and Taxes Travel expenses Communication expenses Freight and distribution expenses Commission to other selling agents Directors' Fees Loss/(Profit) on sale/scrap of fixed assets (net) Provision for doubtful debts and advances Loss on sale of Fertiliser Special Bonds Provision for dimunition in Fertiliser Special Bonds Provision for diminution in value of other investments Bad debts written off Miscellaneous expenses (Increase)/Decrease in stock: Stock as at April 1, Work-in-Process Finished Goods Add: On amalgamantion - Finished goods (Refer Note III on Schedule 16) Less: Stock as at March 31, Work-in-process Finished Goods
837.32 19,409.20 6,090.54 26,337.06 934.57 18,824.12 19,758.69
907.78 18,725.11 19,632.89 837.32 19,409.20 20,246.52 (613.63) 186,713.86
(Increase)/Decrease in stock Total
6,578.37 334,455.97
15. INTEREST On Debentures/Term Loans Others Total 2,316.60 4,668.49 6,985.09 1,780.37 1,415.47 3,195.84
75
...SCHEDULES CONSOLIDATED ACCOUNTS

16. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2008 I. Principles of consolidation The consolidated financial statements have been prepared in accordance with historical cost convention, to comply in all material respects with applicable accounting principles in India, the Accounting Standards notified under Sec 211 (3C) of the Companies Act, 1956 ("the Act") and the relevant provisions of the Act. The consolidated financial statements include accounts of Coromandel Fertilisers Limited ('the Company') and its wholly owned subsidiary Parry Chemicals Limited. These financial statements have been prepared in accordance with Accounting Standard 21 - "Consolidated Financial Statements" and Accounting Standard 23 - "Accounting for Investments in Associates in Consolidated Financial statements" notified under Sec 211 (3C) of the Act. Investment in associate is accounted for by using the equity method whereby the investment is initially recorded at cost and adjusted thereafter for the post acquisition changes based on share of profit or losses since the acquisition. All inter company transactions, balances and unrealized surpluses and deficits on transactions between group companies are eliminated. The companies considered in the consolidated financial statements (which along with the Coromandel Fertilisers Limited, Constitute the Group) are: Name of the Company Parry Chemicals Limited (PCL) Pratyusha Chemicals and Fertilisers Limited (PCFL) Relationship Subsidiary Associate Country of Incorporation India India Percentage of voting power as at March 31, 2008 100.00 26.00
The financial statements of PCL have been drawn up to March 31, 2008 and that of PCFL is for the year ended March 31, 2007. Since the Group share of losses in PCFL has exceeded the carrying amount of the investment in that company, recognition of further losses has been discontinued and the investment is reported at 'nil' value. II. Significant Accounting Policies: Basis of preparation of accounts The consolidated financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified under Sec 211 (3C) of the Companies Act, 1956 ("the Act") and the relevant provisions of the Act. Fixed Assets Fixed assets are shown at cost or valuation less depreciation. Cost comprises of the purchase price and other attributable expenses including cost of borrowings till the date of capitalisation in the case of assets involving material investment and substantial lead time. Depreciation on Fixed assets Depreciation is provided on the straight-line method. Depreciation on all assets (except certain Plant and Machinery, Vehicles and Computers and related equipment) has been provided over the useful life of the assets as determined by the management or derived from the rates prescribed in Schedule - XIV of the Companies Act 1956, whichever is higher. The useful life of such assets is periodically reviewed and re-determined and the unamortised depreciable amount is charged over the remaining useful life of such assets. Leasehold land is being amortised over the lease period. The estimated useful lives of assets which are higher than those prescribed in Schedule XIV are as under: Asset Plant and Machinery Vehicles Computers and related equipments Useful lives (in years) 5 - 14 5-7 3-5
76

Schedule 16 (Contd.) Foreign Currency Transactions Transactions made during the year in foreign currency are recorded at the exchange rate prevailing at the time of transactions. Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year-end are translated at the exchange rate prevalent at the date of Balance Sheet. Exchange differences arising on actual payment/realisation and year end reinstatement referred to above are recognised in the Profit and Loss Account. In respect of forward contracts entered into to hedge risks associated with foreign currency fluctuation, the premium or discount at the inception of the contract is amortised as income or expense over the period of the contract. Currency options/other swap contracts outstanding as at the Balance Sheet date are marked to market and the resultant gain/loss is recognised in the Profit and Loss Account. Any profit or loss arising on cancellation of such contracts is recognized as income or expense in the Profit and Loss Account of the year. Investments Long term investments are valued at cost. The diminution in the market value of such investments is not recognised unless it is considered permanent in nature. Current investments are valued at cost or market value, whichever is lower. Inventories Raw Materials and Stores and spares are valued at or below cost. Other inventories are valued at lower of cost and net realisable value. The method of determination of cost of various categories of inventories is as follows: (a) (b) (c) (d) Stores and Spares - Weighted average Cost. Raw Material - First in First out basis. Cost includes purchase cost and other attributable expenses. Finished Goods and Work-in-process - Weighted average cost of production which comprises of direct material costs, direct wages and applicable overheads. Goods for resale - Weighted average cost
Sundry Debtors and Advances Specific debts and advances identified as irrecoverable and doubtful are written off or provided for respectively. Revenue Recognition (a) (b) (c) (d) Sale of goods is recognized at the point of despatch to customers. Sales include amounts recovered towards excise duty and exclude sales tax. Dividend income from investments is accounted for in the year in which the right to receive the payment is established. Subsidy is recognized on the basis of the concession scheme announced by the Government of India from time to time. Subsidy is accounted for on the basis of sale made by the company. Export benefits under DEPB license and excise benefits are accounted for on accrual basis.
Employee Benefits a) Defined contribution Plans Contributions paid/payable to defined contribution plans comprising of Superannuation (under a scheme of Life Insurance Corporation of India) and Provident Funds for certain employees covered under the respective Schemes are recognised in the Profit and Loss Account each year. The Company also makes contributions to three Provident Fund trusts for certain employees, at a specified percentage of the employees' salary. The Company has an obligation to make good the shortfall, if any, between the return from the investments of trust and the notified interest rates. Liability on account of such shortfall, if any, is provided for based on the actuarial valuation carried out in accordance with the revised Accounting Standard 15 (revised 2005) on 'Employee Benefits' notified under Sec 211 (3C) of the Act ('revised AS 15') as at the end of the year. b) Defined Benefit Plans Gratuity for certain employees is covered under a Scheme of Life Insurance Corporation of India (LIC) and contributions in respect of such scheme are recognised in the Profit and Loss Account. The liability as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with revised AS 15 as at the end of the year. The Company makes contributions for Superannuation and Gratuity (for employees not covered under the LIC Scheme) to trusts, which are recognised in the Profit and Loss Account. The Company's liability as at the Balance Sheet date is provided for based on the actuarial valuation in accordance with the requirements of revised AS 15 as at the end of the year.
77

c)
Other long term employee benefits Other long term employee benefits comprise of leave encashment which is provided for based on the actuarial valuation carried out in accordance with revised AS 15 as at the end of the year.
d)
Short term employee benefits Short term employee benefits including accumulated compensated absences as at the Balance Sheet date are recognised as an expense as per Company's schemes based on expected obligation on an undiscounted basis.
Leases Assets taken on financial lease prior to 1.4.2001 are not capitalized and lease rentals are absorbed in the Profit and Loss Account without reference to the useful life of the asset. The Company's other significant leasing arrangements are in respect of operating leases for premises that are cancelable in nature. The lease rentals paid under such agreements are charged to the Profit and Loss Account. Taxes on Income a) b) Provision for current tax is made for the amount of tax payable in respect of taxable income for the year under Income Tax Act, 1961. Deferred tax is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in subsequent periods, subject to consideration of prudence.
Earnings per Share The earnings considered for ascertaining the Company's Earnings Per Share comprises the net profit after tax. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted EPS comprises the weighted average shares considered for deriving basic EPS, and also the weighted average number of equity shares that would be issued on the conversion of all dilutive potential equity shares. In case of dilutive options, the difference between the number of shares issuable and the number of shares that would be issued at fair value are treated as diluted potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Employee Stock Option Scheme Stock options granted to the employees under the stock option scheme established are evaluated as per the accounting treatment prescribed by the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by Securities & Exchange Board of India. The Company follows the intrinsic value method of accounting for the options and accordingly, the excess of market value of the stock options as on date of grant over the exercise price of the options, if any, is recognized as deferred employee compensation and is charged to the Profit and Loss Account on graded vesting basis over the vesting period of the options. The unamortized portion of the deferred employee compensation if any, is shown under Reserves and Surplus. III Amalgamation of Godavari Fertilisers and Chemicals Limited with the Company a) Pursuant to the Scheme of Amalgamation ('the Scheme') of the erstwhile Godavari Fertilisers and Chemicals Limited (GFCL) with the Company, as approved by the Hon'ble High Court of Judicature of Andhra Pradesh on December 18, 2007, the entire business and undertaking of GFCL including all assets, liabilities, duties and obligations have been transferred to and vested in the Company with effect from April 1, 2007. GFCL is engaged in the business of manufacture and sale of Phosphatic fertilisers. The Amalgamation has been accounted for under the 'Purchase Method' as prescribed by Accounting Standard 14, "Accounting for Amalgamations", notified under Sec 211 (3C) of the Act. In accordance with the Scheme, the assets and liabilities of GFCL have been taken over at their fair values as on April 1, 2007, determined by an independent valuer and Rs.10,328 lacs being the excess of the fair value of the net assets over the paid-up value of the shares issued to the shareholders of GFCL and the cost of investment in GFCL, has been credited to the Capital Reserve in the books of the Company. Further as per the terms of the scheme , the identity of 'Capital Reserve' and 'Investment allowance (utilised) Reserve' accounts amounting to Rs.14.97 lacs and Rs.1428.42 lacs respectively of erstwhile GFCL is required to be retained in the books of the company. Accordingly, corresponding amount has been debited to 'Amalgamation Adjustment Account' and the same is disclosed under Reserves and Surplus (Schedule 2).
b) c) d)
78

Schedule 16 (Contd.) e) f) As per the Scheme, 23,975,212 Equity Shares of Rs.10 each of GFCL held by the Company, stand cancelled. In terms of the Scheme, the Company has allotted 12,037,182 Equity Shares of Rs.2 each as fully paid-up to the shareholders of GFCL in the proportion of three fully paid-up Equity Shares of Rs.2 each of the Company for every two fully paid-up Equity Shares of Rs.10 each of GFCL. Investments, assets, liabilities and licenses held in the name of erstwhile GFCL are in the process of being transferred in the name of the Company. In view of the aforesaid amalgamation with effect from April 1, 2007, the figures of the current year are not strictly comparable with those of the previous year. Investment in GFCL was accounted as an 'Associate' as prescribed under Accounting Standard 23 "Accounting for Investments in Associates in Consolidated Financial Statements" till 2006-07. Pursuant to the scheme with effect from April 1, 2007, opening reserves and investment in associate have been adjusted to the extent of share of profits of Associate accounted up to March 31,2007.
g) h) i)
IV.
Employee Stock Option Plan - ESOP 2007 a) Pursuant to the decision of the shareholders, at their meeting held on July 24, 2007, the Company has established an 'Employee Stock Option Scheme 2007' ('ESOP 2007' or 'the Scheme') to be administered by the Remuneration and Nomination Committee of the Board of Directors. Under the Scheme, options not exceeding 6,392,988 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting. The exercise price of the option is equal to the latest available closing market price of the shares on the stock exchange where there is highest trading volume as on the date prior to the date of the Remuneration and Nomination Committee resolution approving the grant. Pursuant to the above mentioned scheme, the Company has, during the year, granted 2,217,800 options vesting over a period of four years commencing from the respective dates of grant. The exercise price being equal to the closing market price prevailing on the date prior to the date of grant, there is no deferred compensation cost to be amortised in this regard. The following are the number of options outstanding during the year: Year ended March 31, 2008 2,217,800 2,217,800 Year ended March 31, 2007
b)
c)
d)
e)
Stock Options At the beginning of the Year Granted Exercised Cancelled At the end of the Year f) g)
The above outstanding options have been granted in two tranches, 2,141,300 options at Rs.89.15 per option and 76,500 options at Rs.112.15 per option. In accordance with the requirements of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) guidelines, 1999, and the Guidance Note on "Accounting for employee share based payments" notified under Sec 211 (3C) of the Act, had the compensation cost for the employee stock option plan been recognized based on the fair value at the date of grant in accordance with the Black Scholes' model, the proforma amounts of the Company's Net Profit and Earnings per share would have been as follows:
79

Schedule 16 (Contd.) Year ended March 31, 2008 Profit after Taxation ( Rs.in Lakhs) - As reported - Proforma Earnings Per Share Basic - No of Shares - EPS as reported ( Rs.) - Pro forma EPS ( Rs.) Diluted - No. of shares - EPS as reported ( Rs.) - Proforma EPS ( Rs.) The following assumptions were used for calculation of fair value of grants: Dividend Yield (%) Expected Volatility (%) Risk free interest rate (%) Expected term ( in years) 100 0.478 8 5 Rupees in Lakhs V. Managerial Remuneration A. To the Directors of the Company (i) Remuneration to Whole-time director Salary Commission/Incentive Contribution to Provident Fund and other Funds Perquisites including Personal allowance (ii) Commission to non Whole-time Directors (iii) Sitting Fee B. To the Directors of erstwhile Ficom Organics Limited (i) Remuneration to Wholetime Director Salary Contribution to Provident Fund Perquisites (ii) Sitting Fee To the Directors of erstwhile Godavari Fertilisers and Chemicals Limited (i) Remuneration to Whole-time director Salary Contribution to Provident Fund and other Funds Others / Perquisites (ii) Sitting Fee Total Note: Managerial Remuneration above does not include leave encashment benefit, since the same is computed actuarially for all the employees and the amount attributable to the Managerial person cannot be ascertained separately. Year ended March 31, 2008 Year ended March 31, 2007 140,407,022 14.96 14.54 139,896,948 15.02 14.60 21,010 20,421
25.27 27.57 8.85 48.35 22.19 7.40 139.63
18.30 18.30 5.83 35.80 14.01 7.10 99.34
16.93 1.04 6.95 1.80 26.72
C.
23.44 0.38 21.38 2.15 49.35 186.98
126.06
80

Schedule 16 (Contd.) VI. Secured Loans (Schedule 3) (A) Debentures 525 numbers, 6.10% Privately Placed Secured redeemable Non-Convertible debentures of face value of Rs.1,000,000 each as at March 31, 2008 are to be redeemed at par on October 27, 2008. Security: The debentures are secured by a first mortgage in English form on the Company's specified property in the State of Gujarat and further secured by specified immovable assets in the plant of the Company situated at Visakhapatnam. (B) Loans a) b) The term loans from banks and others are secured by an exclusive first charge on the specific assets. The term loans from banks taken over pursuant to the amalgamation of Godavari Fertilisers and Chemicals Limited with the Company, are secured by way of first charge on fixed assets and current assets ranking pari-passu with other lending institutions and banks holding first charge and second charge on their assets. The working capital facilities from banks are secured by a hypothecation of stock of raw materials, work-in-process, finished goods, stores and spare parts and book debts of the Company. These are further secured by a second charge on the movable fixed assets of the Company. In respect of working capital facilities taken over from GFCL, they are further secured by second mortgage charge on the company's immovable and movable properties, both present and future, ranking pari-passu among financing banks and institutions except short term lenders. Rupees in Lakhs Year ended March 31, 2008 VII. (a) Contingent Liabilities In respect of matters under dispute: Income Tax Excise Duty Sales Tax Others (b) Land : Liability for additional compensation payable in respect of land purchased from M/s. Nagarjuna Fertilisers and Chemicals Limited has not been provided for, pending court orders and determination of the amount payable. Rupees in Lakhs Year ended March 31, 2008 VIII. Capital Commitments Capital expenditure commitments Commitment towards investments IX. Deferred Tax a) Deferred Tax Asset: - On Employees separation and retirement Costs - Other timing differences mainly relating to statutory dues allowable on payment basis b) Deferred Tax Liability -On account of depreciation Deferred Tax Liability (net) 9,540.64 8,246.71 7,896.87 7,134.34 876.02 1,293.93 425.51 762.53 417.91 337.02 807.42 3,534.40 502.83 17,744.60 Year ended March 31, 2007 301.04 256.18 140.89 1,086.42 290.00 47.10 37.34 55.64 Year ended March 31, 2007
c)
81

Schedule 16 (Contd.) Year ended March 31, 2008 X. Earnings Per Share i) ii) Profit after tax as per the Profit and Loss Account - (Rs.in lacs) [a] Weighted average number of equity shares of Rs.2/- each outstanding during the year [b] Dilution in equity on account of Capital Suspense (effective April 1, 2006) Effect of Potential ordinary shares on employees stock options outstanding Weighted average number of equity shares of Rs.2/- each outstanding during the year [c] Basic - [a]/[b] - (Rs.) 21,009.66 11,671.82 Basic 139,896,948 127,027,785 Year ended March 31, 2007
Dilution iii) iv) v) 510,074 140,407,022 15.02 14.96 831,981 127,859,766 9.19 9.13
Earnings Per Share vi) vii) Diluted - [a]/[c] - (Rs.) XI Segment Reporting (A) Business Segment The Company has considered business segment as the primary segment for disclosure. The Company is primarily engaged in the manufacture and trading of Farm Inputs, which in the context of Accounting Standard 17 notified under Sec 211 (3C) of the Act is considered the only business segment. (B) Geographical Segment The Company sells its products mainly within India where the conditions prevailing are uniform. Since the sales outside India are below the threshold limit, no separate geographical segment disclosure is considered necessary. XII. Related Party Disclosures Information relating to Related Party Transactions as per Accounting Standard 18 notified under Sec 211 (3C) of the Act is given below: (A) Names of the Related Parties and their relationship : Name of the Related Party E I D Parry (India) Limited Parry America Inc. Parry Sugars Private Limited Parry Investments Limited Parry Infrastructure Co., Pvt Ltd.,(PICPL) Parry Glamourooms Private Limited (PGPL) (upto May 2006) Prathyusha Chemicals and Fertilisers Limited (PCFL) Godavari Fertilisers and Chemicals Ltd., (GFCL) (up to March31, 2007) Mr V Ravichandran Mr K A Nair (Upto April 30,2007) Relationship Holding Company Fellow Subsidiary Company Fellow Subsidiary Company Fellow Subsidiary Company Fellow Subsidiary Company Fellow Subsidiary Company Associate Associate Key Management Personnel Managing Director Key Management Personnel Managing Director of erstwhile Godavari Fertilisers and chemicals Limited
(B) Name of the Related Parties and the relationship of erstwhile Ficom Organics Limited Name of the Related Party Mr R P Dalal (upto May 30, 2006) Relationship Key Management Personnel Chairman and Managing Director
82

Schedule 16 (Contd.) 2007-2008 (C) Transactions during the year i) Sale of finished goods/raw materials/services (net of discounts) a) b) c) d) e) f) ii) iii) a) a) b) iv) a) b) v) a) b) vi) Holding Company Fellow Subsidiary - (PGPL) Associate (Finished goods) - GFCL Associate (Raw material) - GFCL Associate (Services) - GFCL Associate (Raw material) - PCFL Associate - GFCL Fellow Subsidiary Company - PICPL Associate - GFCL Holding Company Associate - GFCL Holding Company Associate - PCFL from Associate - GFCL 21.74 175.00 2.09 3.79 268.72 7.00 1,754.38 3,000.00 6.09 320.68 57.27 1.89 24.16 4.60 29.64 3.69 64.74 5.55 58.65 856.00 703.77 0.18 149.02 21.25 147.40 36.60 43.66 1,491.22 288.45 1,000.00 70.00 Rupees in Lakhs 2006-2007
Interest received from Rent received
Expenses reimbursed by
Purchase of finished goods and services
Material given on loan to and received back
vii) Material taken on loan from Associate and returned - GFCL viii) Rent paid to Associate - GFCL ix) Expenses reimbursed to a) b) c) d) x) a) b) xi) a) b) Holding Company Fellow Subsidiary - PGPL Associate - GFCL Associate - PCFL Holding Company Associate - GFCL Holding Company Received from Associate - GFCL
Purchase of Fixed Assets
Final dividend
xii) Inter Corporate Deposit given/received back from Associate - GFCL xiii) Loan repaid to Key management Personnel of erstwhile Ficom Organics Limited xiv) Rental Deposit received a) a) Fellow subsidiary Company - PICPL Debtors/Receivables - Holding Company - Associate (GFCL) b) Creditors/Payables - Holding Company Note: Details of remuneration to Directors are disclosed in note IV above. xv) Outstanding balances as at the year end :
0.16 35.84
52.55 35.00
83

Schedule 16 (Contd.) XIII. Employee benefits a) Defined benefit plans The following table sets forth the status of the Gratuity Plan and the Superannuation and other Pension Plans of the Company and the amounts recognized in the Balance Sheet and Profit and Loss Account. Rs. in Lakhs Particulars Gratuity Plan Superannuation and other Pension Plans 2007-2008 Projected benefit obligation at the beginning of the period Current service cost Interest cost Actuarial loss/(gain) Benefits paid Projected benefit obligation at the end of the period Amounts recognised in the balance sheet Projected benefit obligation at the end of the period Fair value of plan assets at end of the period Funded status of the plans - (asset)/ liability Liability recognised in the balance sheet Cost for the period Current service cost Interest cost Expected return on plan assets Net actuarial (gain)/loss recognised in the period Net cost recognised in Profit and Loss Account Nature and extent of investment details of the plan assets State and Central Securities Bonds Special Deposits Actual Return on Plan Assets Assumptions Discount rate Estimated rate of return on plan assets Expected rate of salary increases b) Defined contribution plans In respect of the defined contribution plans, an amount of Rs.446.57 lacs (2007: Rs.266.42 lacs) has been recognised in the Profit and Loss Account during the year. XIV. The Government of India grants price concession on sale of Phosphatic Fertilisers. Pending announcement of final rates of concession for the period October 1, 2007 to March 31, 2008, differential subsidy income (in excess of the base rate) of Rs.2,689.91 lacs has been recognised having regard to the prevailing concession scheme and according to the management estimates of final price concession receivable. 7.00% 7.00% 3.50% 7.00% 7.00% 3.50% 7.00% 7.00% 3.50% 7.00% 7.00% 3.50% 36.00% 26.00% 38.00% 97.15 35.00% 24.00% 41.00% 52.79 17.80% 82.20% 74.45 17.68% 82.32% 20.33 57.73 38.21 (45.04) 0.20 51.10 30.62 40.48 (49.27) (10.30) 11.53 31.11 40.46 (16.10) (131.87) (76.40) 34.08 43.34 (13.98) (88.93) (25.49) 649.70 672.82 (23.12) 658.17 721.23 (63.06) 564.98 266.99 297.99 297.99 589.04 193.00 396.04 396.04 590.12 57.73 38.21 52.30 (88.66) 649.70 2006-2007 2007-2008 663.52 30.62 40.48 32.24 (108.69) 658.17 589.04 31.11 40.46 (73.48) (22.15) 564.98 2006-2007 652.62 34.08 43.34 (74.11) (66.89) 589.04
84

Schedule 16 (Contd.) XV. Other Matters (a) (b) (c) Based on the information available with the company, there are no dues/interest outstanding to Small and Micro enterprises as at March 31, 2008. Sales are net of discounts, other than usual trade discounts, Rs.3,742.46 lacs (2007: Rs.2,975.85 lacs). The net difference in foreign exchange (i.e., difference between the spot rate on the dates of the transactions and the actual rate at which the transactions are settled / appropriate rates applicable at the year end) credited to Profit and Loss Account is Rs.3,880.60 lacs (2007: Rs.179.46 lacs). Exchange difference in respect of forward exchange contracts to be recognised in the Profit and Loss Account in the subsequent accounting period is Rs.81.76 lacs Debit (2007: Rs.48.74 lacs-debit). The company has four open swap contracts equivalent to USD 15 million outstanding as at March 31, 2008. Considering that these contracts are specific hedges for converting dollar liability to fixed rupee liability including interest thereon, mark to market has not been carried out for these contracts. Research and Development expenses included under schedule 14 - Rs.99.90 lacs (2007: Rs.34.25 lacs) Land - Lease deed in respect of land admeasuring 9.80 acres taken on lease from Visakhapatnam Port Trust by the erstwhile GFCL, is pending execution. During the year, the Government of India, Ministry of Chemicals and Fertilisers, has issued 'Government of India Special Bonds' towards the subsidy receivable. These bonds have been treated as Current Investments (included in Schedule 6).
(d)
(e) (f ) (g) XVI.
Previous year's figures have been regrouped wherever necessary to conform to the classification adopted for the current year. Disclosure of information relating to Subsidiary Company - Parry Chemicals Limited (vide letter No.47/402/2007-CL-III dated December 27, 2007 of the Ministry of Company Affairs) Rupees in Lakhs Share Capital Reserves Total Liabilities Total Assets Investments Turnover PBT Taxation Profit After Tax Proposed Dividend Total Liabilities include Unsecured Loans, Current Liabilities. Total Assets include Fixed Assets, Current Assets. 50.00 108.78 330.39 489.17 100.68 51.92 18.26 33.66
85
NOTES
86
COROMANDEL FERTILISERS LIMITED

Regd. Office: "Coromandel House", 1-2-10, Sardar Patel Road, Secunderabad - 500 003, Andhra Pradesh.
ATTENDANCE SLIP
PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE HALL. ONLY MEMBERS OR THEIR PROXIES ARE ENTITLED TO BE PRESENT AT THE MEETING R.F.NO./CLIENT ID: NAME AND ADDRESS: D.P.ID:
I hereby record my presence at FORTY SIXTH ANNUAL GENERAL MEETING to be held on Tuesday, July 22, 2008 at 10.30 A.M at Hotel Minerva Grand, CMR Complex, Beside Manju Theatre, Secunderabad - 500 003. NAME OF PROXY IN BLOCK LETTERS SIGNATURE OF THE MEMBER/PROXY*
*Strike out whichever is not applicable
TEAR OFF HERE
COROMANDEL FERTILISERS LIMITED

Regd. Office: "Coromandel House", 1-2-10, Sardar Patel Road, Secunderabad - 500 003, Andhra Pradesh.
PROXY FORM
R.F.NO./CLIENT ID: I / We of
Being a Member / Members of Coromandel Fertilisers Limited hereby appoint of or failing him or failing him of of
as my / our Proxy to attend and vote for me / us in the manner indicated below* and on my / our behalf at the FORTY SIXTH ANNUAL GENERAL MEETING of the Company to be held at 10.30 A.M on Tuesday, July 22, 2008 and at any adjournment thereof. * 'For' Item Nos. : ____________________________________________ * 'Against' Item Nos. _________________________________________: Dated this ________________________ day of _______________ 2008
Affix Revenue stamp
Signature of the Member(s) _________________________ 1. 2. 3.* In the case of Corporation, this Proxy shall be either given under the Common Seal or signed by an Attorney or Officer of the Corporation. Proxy to be valid must be deposited at the Registered Office of the Company not later than 48 hours before the time for the meeting. This is only optional. Please fill up the item Nos. as appearing in the notice of the AGM. If you leave the item Nos. blank, your proxy will be entitled to vote in the manner as he/she thinks appropriate.
87

Annualreport 07 08

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Annualreport 07 08

Загружено:

Авторское право:

Доступные форматы

C O N T E N T S

Annual Report 2007-08

REGISTRARS & SHARE TRANSFER AGENTS

M R Rajaram Company Secretary

Coromandel Fertilisers Limited

FINANCIAL HIGHLIGHTS - TEN YEARS' RECORD

32208 3.85 50 15.8 0.67

34393 4.56 55 20.4 0.74

43516 5.44 65 24.4 0.84

37260 4.68 70 22.0 0.52

Annual Report 2007-08

Coromandel Fertilisers Limited

Annual Report 2007-08

Coromandel Fertilisers Limited

Annual Report 2007-08

209.76 47.54 257.30

100.74 44.83 145.57

57.29 (3.00) 150.00 53.01

29.92 3.11 65.00 47.54

Coromandel Fertilisers Limited

Place : Hyderabad Date : April 22, 2008

Annual Report 2007-08

MANAGEMENT DISCUSSION AND ANALYSIS

Coromandel Fertilisers Limited

Annual Report 2007-08

Coromandel Fertilisers Limited

Handling and storage of hazardous materials.

Restriction on sale / usage of some pesticide products in India / abroad.

Non compliance with legal, taxation, corporate and other regulations.

Annual Report 2007-08

Risk category 3. Economic or Business Portfolio Risks

Product/Market concentration affecting sales/profitability in case of seasonal failures.

Absence of New Chemistry Enzymes Fermented products Monopoly products.

Non availability of critical Raw Materials.

Volatility in the prices of key Raw Materials.

Coromandel Fertilisers Limited

Risk category 5. Financial Risks

Currency Risks / Exchange fluctuation Risks impacting cost of Raw Materials.

Interest rate risk impacting cost of borrowing.

6. Legal and Statutory Risks

Contractual Liability Risks that may impose onerous responsibility.

Non-compliance of statutes resulting in heavy penalties.

7. Human Resource Risks

High attrition of skilled / trained manpower.

Annual Report 2007-08

ANNEXURE TO THE DIRECTORS REPORT

Place : Hyderabad Date : April 22, 2008

Coromandel Fertilisers Limited

) Current Year 2007-08 Previous Year 2006-07

Annual Report 2007-08

Statement under Section 217(2A) of the Companies Act, 1956

09.06.1997 01.12.2003 01.12.2003 01.10.2003 09.09.2004

53,42,940 42,15,078 33,78,180 34,60,473 42,73,025

General Manager-Technology Hindalco Industries Limited

S Sankarasubramanian, 39 Vice President-Business B.Sc, AICWA Finance & Treasury b)

Dy General Manager-Finance EID Parry (India) Limited

01.03.1996 11.07.2005 02.09.1991

15,72,729 8,90,688 27,82,211

Place : Hyderabad Dated : April 22, 2008

Coromandel Fertilisers Limited

The pricing formula

Annual Report 2007-08