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Updated:31 Mar, 2020, 15:58 PM IST

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Updated:31 Mar, 2020, 16:01 PM IST





The Directors hereby présent their seventy seventh Annual Report together with the audited financial statements for the Financial Year (FY) ended 31st March, 2016


For the year under review, the Directors have recommended a dividend of Rs. 10 per share (100%) on the Ordinary Shares of the Company (previous year Rs. 10 per share and platinum jubilee year special dividend of Rs. 2.50 per share) amounting to Rs. 301.67 crore including Dividend Tax. The dividend payment is subject to approval of the members at the ensuing Annual General Meeting (AGM).



The consolidated net revenue from the operations increased from Rs. 17,204.48 crore to Rs. 17,708.14 crore, an increase of 2.9% over the previous year. Earnings before interest, depreciation, tax and amortisation (EBITDA) was marginally up at Rs. 2,165.17 crore compared to Rs. 2,164.29 crore in the previous year. Profit before tax was up by 9.74% at Rs. 1,271.40 crore against Rs. 1,158.51 crore in the previous year. Profit after tax before minority interest and our share  of losses in associates was at Rs. 979.87 crore against Rs. 807.39 crore in the previous year, up by 21.36%. Profit attributable to the Group after deducting the minority interest and share of loss in associates was up by 30.80% at Rs. 780.16 crore against Rs. 596.46 crore in the previous year.


The net revenue from the operations of the Company increased from Rs. 10,083.60 crore to Rs. 10,649.91 crore, registering a growth of 5.6% over the previous year. EBITDA was marginally down at Rs. 1,026.51 crore compared to Rs. 1,038.83 crore earned in the previous year. Profit before tax was Rs. 801.92 crore against Rs. 854.09 crore in the previous year, down by 6.1%. Profit after tax was at Rs. 594.58 crore against Rs. 637.97 crore in the previous year, down by 6.8%.

Tata Chemicals Limited's ('TCL' or 'the Company') operation is organised under four segments i.e. (1) Inorganic Chemicals comprising Soda Ash, Salt, Sodium Bicarbonate, Marine Chemicals, Caustic Soda and Cement, (2) Fertilisers comprising Fertilisers and other traded products, (3) Other Agri–inputs including Rallis India Limited's operations and (4) Others – comprising Pulses, Spices, Water Purifier, Nutritional Solutions. Performance review of these businesses is as under:



During the year, the Inorganic Chemicals business posted a revenue on standalone basis of Rs. 3,507.19 crore against Rs. 3,320.24 crore in the previous year, registering a growth  of 5.63%.

The Company is an integrated manufacturer of basic and value–added chemicals; key among them being soda ash, sodium bicarbonate and cement. Continued strong focus on operational efficiency and lower energy cost contributed to improved profitability of the business in a mixed business environment. Production levels of most key products remained steady in FY 2015–16 with second highest annual production of Soda Ash and record production of Sodium Bicarbonate.

Soda Ash

During the year under review, the domestic soda ash market remained almost flat due to subdued demand from the two key end–use industries. Weak rural demand impacted detergent sales and lower infrastructure spends adversely impacted glass demand. Manufacturing volumes at Mithapur remained marginally higher at 8.10 Lac Tonnes Per Annum (LTPA) as against 7.89 LTPA in the previous year. The total sales volume for the year stood at 6.85 LTPA (rest of the manufactured volume was used primarily for captive consumption to produce bicarbonate). Prices remained under pressure due to demand slowdown and high import volumes.

Sodium Bicarbonate

Indian sodium bicarbonate demand grew by almost 4% in FY 2015–16 against the trend of 7–8% growth. Even though growth was subdued this year, the Company believes in the long term attractiveness of this business and continues to maintain market share in excess of 50%. Production for the year stood at ~97,000 tonnes as against ~94,000 tonnes in the previous year. Sales volume at ~89,000 tonnes showed a similar trend. As with soda ash, bicarbonate prices were under pressure. Going forward, the Company will continue to focus on expanding its portfolio of value added offerings for high–end applications.


Demand and price pressures were prevalent for most of  FY 2015–16 due to lackluster demand from the infrastructure development sector. Sales volume and realisation were both under pressure throughout the year. The Company is focused on driving profitability in this business by consciously operating in low freight zones and by expanding into value added products.


Iodised salt production in Mithapur was 8,56,984 tonnes, up by 7% over the previous year. Overall, branded salt sales grew by 9% over the previous year and stood at 10,42,202 tonnes in FY 2015–16. The Company retained its strong market share of 68.5% in the National Branded Salt segment.

Tata Salt grew over 9% in sales volume over the previous year to reach sales volume of 8,67,157 tonnes in FY 2015–16. It continues to be the largest distributed brand with a reach of 16.8 lac retail outlets across India.

Tata Salt Lite grew by 31% in sales volume and achieved volumes of 17,731 tonnes in FY 2015–16. Tata Salt Plus, a double fortified salt that contains Iron and lodine, was launched pan India during the year.

Sale of I–Shakti salt in FY 2015–16 was 1,41,358 tonnes.

I–Shakti salt continues to address the iodisation movement, complimenting Tata Salt.

The outlook for the business remains positive, as the business continues to work on distribution expansion, brand building initiatives, strengthening of supply chain while scaling up differentiated products such as Tata Salt Plus – iron fortified iodised salt.


1.2.1 Tata Chemicals North America Inc. (TCNA)

Soda Ash production volumes at TCNA during the year were 21,21,544 tonnes against the previous year volume of 23,15,824 tonnes. Volumes were lower due to plant reliability issues faced by the unit during the year. Sales volumes for the year were 21,03,566 tonnes against 23,62,711 tonnes in the previous year.

TCNA posted gross revenue of US$ 460.47 million (Rs. 3,014.66 crore) for the year ended 31st March, 2016 against US$ 494.50 million (Rs. 3,024.38 crore) in the previous year. The reduction was due to lower sales volumes which was partially offset by sales mix and pricing.

TCNA registered EBITDA of US$ 98.10 million (Rs. 642.25 crore) against US$ 120.80 million (Rs. 738.82 crore) in the previous year. EBITDA was lower due to adverse sales volumes and plant costs partly offset by favourable sales price and mix. Profit before tax and profit after tax for the year were at

US$ 68.50 million (Rs. 448.46 crore) and US$ 33.48 million  (Rs. 219.19 crore) respectively against US$ 62.59 million (Rs. 382.80 crore) and US$ 26.36 million (Rs. 161.21 crore) respectively during the previous year. Profit before tax and profit after tax were down in the previous year due to one–time impairment charge of US$ 19.91 million (Rs. 121.77 crore) on the investment in the Natronx joint venture.

1.2.2 Tata Chemicals Europe Holdings Limited (TCEHL)

TCEHL is the holding company for Tata Chemicals Europe Limited with operations in soda ash, bicarbonate and energy businesses as well as British Salt Limited which carries on the business of manufacturing and sale of industrial salt.

Production of soda ash at the Lostock site was the highest since 2012 and this, together with the efficient operation of a dedicated import facility, enabled the company to maintain its share in the UK market. Production of sodium bicarbonate was 13% higher than in FY 2014–15, with improvements seen at both of the company's plants. Sales volume of soda ash were up 14% whereas bicarbonate volumes were up by 19% from FY 2014–15 levels, however, sales income from continental Western Europe were affected by the weakening of Sterling against Euro.

In the Energy business, external sales of electricity to the National Grid were boosted by commissioning of the new steam turbine project at the Winnington combined heat and power plant during third quarter.

Salt production and sales volumes were marginally lower than the previous year. Weak and poor quality brine impacted the production volumes.

TCEHL's overall turnover for the year was GBP 166.82 million (Rs. 1,647.21 crore) against GBP 164.84 million (Rs. 1,624.45 crore) in the previous year. EBITDA for the year was GBP 17.75 million (Rs. 175.27 crore) against GBP 13.4 million (Rs. 132.05 crore) in the previous year.

Despite the positive operating performance improvement over the prior year, the loss after tax during the year was GBP 2.87 million (Rs. 28.34 crore) against profit of GBP 0.21 million (Rs. 2.07 crore) in the previous year. This was due to accounting for the non–cash movement in gas derivative contracts of GBP 3.1 million (Rs. 30.61 crore) against the previous year credit of GBP 3.5 million (Rs. 34.49 crore) and expenses relating to the scheduled refinancing of the group's debt.

1.2.3 Tata Chemicals Magadi Limited (TCML)

During the year, TCML recorded soda ash production of 3,10,907 tonnes against 3,71,531 tonnes during the previous year.

Soda ash sales volume for the year were at 3,06,803 tonnes against 3,01,686 tonnes during the previous year. Crushed refined soda and salt sales volume in FY 2015–16 were 15,191 tonnes and 21,540 tonnes respectively.

TCML achieved total sales of US$ 74.1 million (Rs. 485.13 crore) during the year against US$ 87.67 million (Rs. 536.19 crore) during the previous year.

TCML achieved an EBITDA of US$ 17 million (Rs. 111.30 crore) for the year compared to negative EBITDA of US$ 7.53 million (Rs. 46.05 crore) during the previous year. The major contributing factors for positive EBITDA performance were low operating cost as a result of favourable HFO prices, lower sea freight and cost rationalisation.

The year registered an impressive profit before tax of US$ 10.6 million (Rs. 69.40 crore) compared to loss before tax of US$ 17.51 million (Rs. 107.09 crore) in the previous year.

1.2.4 Tata Chemicals International Pte Limited (TCIPL)

TCIPL is a wholly owned subsidiary and holds the Company's investments in the UK, USA and Kenya in addition to carrying on the business of trading of goods. TCIPL is trading soda ash of different grades in South East Asia and Middle East and also exploring opportunities in allied products in these markets.

During the year under review, TCIPL revenue was US$ 61.24  million (Rs. 400.93 crore) against US$ 30.16 million (Rs. 184.46  crore) in the previous year and other income representing dividend from wholly owned subsidiaries was US$ 18.43 million (Rs. 120.66 crore) [previous year US$ 17.38 million (Rs. 106.30 crore)]. Profit after tax for the year was US$ 9.89 million (Rs. 64.75 crore).


During the year, the fertiliser business posted sales of Rs. 6,409.10 crore against Rs. 6,268.61crore in the previous year.


CNAB comprises two manufacturing units, i.e. Babrala Plant manufacturing Urea and Customised Fertilisers and the Haldia Plant producing Phosphatic Fertilisers like Di–ammonium Phosphate (DAP), NPK and Single Super Phosphate (SSP). In addition to these, the Company imports and sells bulk fertilisers like Muriate of Potash (MOP) and DAP. The Company also supplies other products like Specialty Fertilisers, Organic Fertilisers, Seeds and Pesticides.

The CNAB's performance has been under considerable strain due to poor recent monsoons and an unfavourable cost structure at Haldia when compared to imported alternatives.

While the revenue grew marginally, EBITDA fell to Rs. 264 crore during the year from Rs. 341 crore in the previous year. The fall in Profit before tax has been much sharper from Rs. 129 crore in the previous year to Rs. (0.06) crore during the year due to tough market conditions and high outstanding subsidy from the Government.


Babrala plant achieved a total Urea production of 12,30,819 tonnes, lower by 19,712 tonnes compared to the previous year. The specific energy consumption level of plant was 5.170 GCal / tonnes against 5.135 GCal /tonnes in the previous year.

Complex Fertilisers (DAP / NPK / SSP)

Haldia plant achieved a combined production of 6,66,731 tonnes of DAP, NPKs and SSP during the year against the previous year's production of 8,68,157 tonnes. The sales of DAP, NPKs and SSP from the Haldia Plant was 7,25,852 tonnes against 7,89,292 tonnes in the previous year.

Imported Products (DAP / MOP)

The Company sold imported DAP of 4,15,145 tonnes during the year against 3,30,488 tonnes in the previous year. MOP sale was at 1,10,986 tonnes against the previous year's sale of  1,23,306 tonnes.

Specialty Crop Nutrients and Agri Inputs

Despite farmers being faced with a poor monsoon and depressed crop prices, the Company could marginally grow in this segment.

Customised Fertilisers

The Company manufactures 3 grades of fertilisers applicable to Paddy, Potato and Sugarcane.

The sales of Customised Fertilisers during the year were 23,327 tonnes against 28,492 tonnes in the previous year. This being a new concept it would be promoted in a phased manner and the Company believes that this will slowly gain acceptance.

Tata Kisan Sansar (TKS)

TKS, a dedicated network for distribution of agri inputs provides a trustworthy store offering "One Stop agri input  and services shop" to farmers. Apart from dealing in Primary Nutrients (Urea, DAP, MOP, NPK etc.), Specialty Fertilisers (Zinc sulphate, boron, micronutrients, calcium nitrate, organics, water soluble fertilisers, PGR etc.), Seeds (field crops, vegetable crops) and the entire range of Pesticides, they also act as active agents for knowledge transfer and adoption of best management practices. They provide direct connect with the farmers to understand their changing needs and tailor products and services accordingly. TKS offers farm advisory services, subsidised Soil Testing, Hello Krishi–mobile based agri information service, Smart Krishi– service offered to the farmer for certain critical farm operations with the use of latest technology and well researched farm practices.


3.1 During the year, the other agri–inputs recorded revenues on standalone basis of Rs. 422.29 crore against Rs. 373.22 crore in the previous year, registering a growth of 13.15% over the previous year. The Company has expanded its network in new geographies in western and southern parts of India with increased focus on own brands.

3.2 Rallis India Limited (Rallis)

Rallis achieved a sales turnover of Rs. 1,727 crore on a consolidated basis for the year against Rs. 1,918 crore of the previous year. Profit before tax on consolidated basis was at Rs. 186 crore against Rs. 222 crore of the previous year. Net profit for the year was at Rs. 143 crore against Rs. 157 crore of the previous year.

FY 2015–16 witnessed very challenging times, with back to back drought years, accompanied by low farmer netbacks and tough market conditions. This had an adverse impact on the usage of crop protection products. Below normal rainfall and a later–than–normal withdrawal from northern and central parts of India pushed the countrywide cumulative rainfall deficiency to 14%. Rainfall deficit in 2015 affected crops spread over an area of 19 million hectare. Additionally, 3.2 million hectare of crop area was damaged by storms and floods since April. Key crops such as soya bean, cotton, paddy and pulses, on which the industry is dependent, were adversely impacted due to the drought. That apart, whitefly attack menace on cotton crop in northern India posed a serious threat to cotton growers this year, extensively damaging their crop. Government actions to contain the impact, by curbing sub–standard products being sold, led to overall slowdown in trade.

The International Business Division achieved sales of Rs. 402 crore in the current year, against Rs. 500 crore in the previous year.


During the year, the 'Others' comprising pulses, spices, water purifiers, nutritional solutions, etc. achieved a revenue of Rs. 461.90 crore against Rs. 283.47 crore in the previous year, registering a growth of 62.94%.


In FY 2015–16, the Tata Sampann Pulses and Besan businesses grew by ~72% to reach a turnover of Rs. 411 crore. During the year, the product availability grew from 91,000 outlets to over 1,22,000 outlets in the key focus markets. The brand was successfully re–launched as Tata Sampann, with increased focus on brand building activities to generate consumer pull and distribution initiatives to ensure our products are present in the right outlets consistently. The Company also successfully established the 'low oil absorb' proposition for Tata Sampann Besan, making it a clearly differentiated offering in the market place.

At the sourcing end, as part of its 'Grow More Pulses' initiative, TCL engages with 4,00,000+ farmers in 10 districts across 3 states. The Company sees high stickiness from farmers associated with the program with regular advisory training programmes enabling farmers to achieve yield increases of 20­50% through the crop cycle.


Though almost 75% of the market is still unbranded, the branded segment is growing at a faster rate of 26% p.a. in terms of value. This shift from unbranded to branded segment is being driven by increasing need for convenience and hygiene. Within the branded spices market, Blends are expected to outgrow Pures in terms of value over the next 5 years due to increasing consumer adoption of Blends.

Tata Sampann spices made a successful launch in the month of October, 2015 after a test launch in Punjab, Haryana and Himachal Pradesh. The product has been launched after making a major packaging change and rebranding exercise with a product portfolio of 7 blended spices and 3 straight spices. Currently, Tata Sampann spices are available in 13 states across northern parts of the country and north east.

Water Purifier

Tata Swach non–electric storage water purifiers achieved sales of 3,94,455 units of purifiers and bulbs in aggregate as it continues to focus on making affordable drinking water solutions available to a large section of Indian Populace. It is estimated that the Tata Swach Silver nanotech storage water purifier range has touched over 1.7 million families and 8  million lives since inception with over 11 billion litres of water being purified over the past 6 years.

Water purifier business continues to expand its footprint in affordable drinking water segment through alternate marketing channels including NGOs.

Nutritional Solutions

FY 2015–16 was the first full year of operations of the green–field manufacturing unit at Sriperumbudur, near Chennai. During the year, the unit produced several variants of Fructo Oligosaccharide (FOS) and FOS based formulations and sold over 450 tonnes of FOS in India. The product is already being available across 92 Indian cities servicing 615 customers and product related feedback from customers has been positive resulting in repeat orders from many customers. Additionally, based on customer inputs, several complementary products have been added to the portfolio to maximise synergistic benefits. Overall, in this first full–year of operations, the business achieved a turnover of Rs. 8.09 crore.


During the year under review, the Company did not undertake any new long term financing and none of the existing long term facilities were due for renewal. The disbursement of fertiliser subsidy slowed during the second half of the financial year, causing elevated levels of working capital. The outstanding balance of subsidy receivables as on 31st March, 2016 was Rs. 1,901.33 crore (31 March, 2015: Rs. 1,971.64 crore). The working capital funding requirement has been met mainly through buyers' credit. The outstanding balance of buyers' credit as on 31st March, 2016 was Rs. 1,294.32 crore (31st March 2015: Rs. 915.54 crore). Despite the continuous pressure on working capital, mainly due to the level of subsidy outstanding, the Company was able to contain interest costs through the competitive sourcing of working capital borrowings and active cash management. The overall interest cost during the year was Rs. 194.47 crore, slightly higher by Rs. 7.69 crore compared to the previous year.

During the year, Rallis, a subsidiary of the Company and IMACID, a joint venture, paid dividends of Rs. 19.25 crore (FY 2014–15: Rs. 23.36 crore) and Rs. 14.60 crore (FY 2014–15: Rs. 43.97 crore) respectively to the Company. TCNA Inc., step down subsidiary of the Company, paid a dividend of US$ 20 million (Rs. 130.94 crore) (FY 2014–15: US$ 20 million Rs. 122.32 crore) which has been mainly utilised towards operational requirements and intra group finance costs at TCIPL, Singapore.

The Company's subsidiary TCEHL refinanced its bridge facilities with five year term and revolver credit facilities aggregating to GBP 140 million.

The Company's credit ratings were not changed by any of the rating agencies. As on 31st March 2016, the Company had the following credit ratings:

– A Corporate Family Rating of Ba1/Stable from Moody's Investors Service

Foreign Currency Long–Term Issuer Default Rating (IDR) of BB+ with Stable outlook from Fitch Ratings

– INR denominated Non–Convertible Debentures of 250 crore are rated at AA+ by CARE Ratings and BWR AA+ (Stable) by Brickwork Ratings.

– Long term bank facilities (i.e. fund based working capital facilities) of Rs. 765 crore and short term bank facilities of Rs. 3,580 crore are rated at AA+ and A1+, respectively, by CARE Ratings.

Short term debt programme of Rs. 100 crore is rated at A1+ by  CRISIL Ratings.


All related party transactions entered into during FY 2015–16 were on an arm's length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 ('the Act') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'). Further, there were no transactions with related parties which qualify as material transactions under the Listing Regulations.

All transactions with related parties were reviewed and approved by the Audit Committee. Prior omnibus approvals are granted by the Audit Committee for related party transactions which are of repetitive nature, entered in the ordinary course of business and are on arm's length basis in accordance with the provisions of the Act read with the Rules issued thereunder and the Listing Regulations.

The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available on the Company's website at the link: <> investors/policies/pdf/tcl_rpt_policy.pdf. There are no transactions to be reported in Form AOC–2.

The details of the transactions with related parties are provided in the accompanying financial statements.


Risk management policy of the Company promotes a proactive approach in reporting, evaluating and mitigating risks associated with  the business. Mechanisms for identification and prioritisation of risks include business risk environment scanning and focused discussions in the Risk Management Group (at Senior Management Level) and Risk Management Committee meetings.

Identified risks are used as one of the key inputs for the development of strategy and business plan. The respective risk owner selects a series of actions to align risks with the Company's risk appetite and risk tolerance levels to reduce the potential impact of the risk should it occur and/or to reduce the expected frequency of its occurrence. Mitigation plans are finalised, owners are identified and progress of mitigation actions are monitored and reviewed.

Although non–mandatory, the Company has constituted a Risk Management Committee (RMC) to oversee the risk management efforts in the Company under the Chairmanship of Mr. E. A. Kshirsagar, Independent Director. The details of the Committee along with its terms of reference are set out in the Corporate Governance Report, forming part of the Annual Report.

A risk assessment update is provided to the RMC on periodical basis. The Committee assists the Audit Committee and the Board of Directors in overseeing the Company's risk management processes and controls. Some of the risks identified are set out in the Management Discussion and Analysis which forms part of the Annual Report.


The CSR, Safety and Sustainability Committee has formulated, and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company as approved by the Board.

The Company has taken up area specific need based CSR activities and has ensured participation of key stakeholders like community, NGOs, government departments etc. The focus of the Company is to reach out to marginalised and deprived section of the society and bridge the gap between the haves and have nots.

The Company's overall CSR initiatives called BEACoN focusses on the following sectors and issues:

Blossom : Promotion and development of traditional handicrafts including support to artisans through clusters and self–help groups

Enhance : Poverty alleviation, livelihood enhancement and infrastructure support, including programs on agriculture growth, animal husbandry development and promotion of social enterprises

Aspire : Education and vocational skill development

Conserve : Environment sustainability by investing in bio–diversity, natural resource management, awareness and environmental education, and mitigation of climate change impacts

Nurture : Health care, nutrition, sanitation and safe drinking water

In addition, the Company will promote women's empowerment and inclusion along with responding to any disasters, depending upon where they occur and its ability to respond meaningfully.

The CSR policy is available on the Company's website at the link: <http://> The Annual Report on CSR activities is enclosed as Annexure 1 to this Report.


The Company has adopted a Whistleblower Policy and Vigil Mechanism to provide a formal mechanism to the Directors, employees and its stakeholders to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or Ethics Policy. Protected disclosures can be made by a whistleblower through several channels. The policy provides for adequate safeguards against victimisation of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

The details of the policy are given in the corporate governance report and also posted on the website of the Company viz.


The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules.

No complaints of sexual harassment were received during the year. More than 30 sessions were conducted across locations covering permanent, contractual and third party. Two sessions conducted for capability building of POSH committee members. Online awareness training continued covering more then 80% leadership team, management, officer and POSH members.


The Company has not given any loans during the year. The details of investments made during the year are given hereunder –

During the year, the Company provided a corporate guarantee on behalf of homefield UK Pvt. Ltd. of Rs. 357.78 crore. Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.


The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the consolidated financial statements of the Company. A statement containing the salient features of the financial statements of the subsidiary companies is attached to the Financial Statements in Form AOC–1.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.

The annual accounts of the subsidiaries and related detailed information will be kept at the registered office of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors seeking information till the date of AGM.


As on 31st March, 2016, the Company had 40 (direct and indirect) subsidiaries (4 in India and 36 overseas), 5 joint venture companies and 1 associate company.

During the year, General Chemicals Great Britain Limited ceased to exist with effect from 16th June, 2015.

The Company's policy on material subsidiaries, as approved by the Board, is uploaded on the Company's website at the link: <http://>

A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Act is provided in Form AOC–1 attached to the Financial Statements.

The Company's wholly owned subsidiary, Bio Energy Venture –1 (Mauritius) Pvt. Ltd has entered into a Definitive Agreement ('Agreement') for sale of its entire stake in Grown Energy Zambeze Holdings Pvt. Ltd, Mauritius ('GEZ Mauritius') for a consideration of US$ 5.5 million subject to fulfillment of certain conditions laid down in the Agreement ('Closing Date'). The consideration for the said transaction will be discharged on deferred payment basis over a period of 5 years ending on 31st December, 2020.

GEZ Mauritius is the holding company of Grown Energy Zambeze Limitada ('GEZ Ltda'), which owns the Company's biofuel assets in Mozambique. The Company, through its subsidiaries, owns 95% stake in GEZ Ltda.  Upon the Closing Date, the Company will exit from the Biofuel business in Mozambique.


No significant and material orders were passed by the regulators or the courts or tribunals impacting the going concern status and Company's operations in future.


Internal financial control systems of the Company are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable accounting standards and relevant statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. The Company has a well–defined delegation of power with authority limits for approving revenue as well as expenditure, both capital and revenue. The Company uses an established ERP system to record day to day transactions for accounting and financial reporting.

The Company's internal audit function monitors and assesses the adequacy and effectiveness of the Internal Financial Controls. The Audit Committee deliberated with the members of the management, considered the systems as laid down and met the internal auditors and statutory auditors to ascertain, inter alia, their views on the internal financial control systems. The Audit Committee satisfied itself of the adequacy and effectiveness of the internal financial control system as laid down and kept the Board of Directors informed.

Details of internal control system are given in the Management Discussion and Analysis Report, which forms part of the Report.




In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. R. Mukundan, Managing Director of the Company, retires by rotation at the ensuing AGM, and being eligible, has offered himself for re–appointment.

On the recommendation of the Nomination and Remuneration Committee, Mr. Bhaskar Bhat was appointed as an Additional Director of the Company with effect from 20th October, 2015. In accordance with Section 161 of the Act, Mr. Bhaskar Bhat holds office upto the date of the forthcoming AGM of the Company and being eligible, offer his candidature for appointment as Director. Your approval for his appointment as Director has been sought in the Notice convening the forthcoming AGM of the Company.

On the recommendation of the Nomination and Remuneration Committee, Dr. Nirmalya Kumar was appointed as an Additional Director of the Company with effect from 26th May, 2016. In accordance with Section 161 of the Act, Dr. Nirmalya Kumar holds office upto the date of the forthcoming AGM of the Company and being eligible, offer his candidature for appointment as Director. Your approval for his appointment as Director has been sought in the Notice convening the forthcoming AGM of the Company.

Retirement /Resignation

In accordance with the Tata Group retirement policy for Board of Directors, Mr. R. Gopalakrishnan, Vice Chairman on the Board, retired on 25th December, 2015, after attaining the retirement age of 70 years. The Board of Directors place on record their deep appreciation for the valuable guidance and immense contribution made by Mr. Gopalakrishnan as the Vice–Chairman and Director of the Company.

Mr. Prasad R. Menon, Director of the Company, resigned from the services of the Company with effect from 21st October, 2015. The Board of Directors place on record their deep appreciation for the valuable guidance and immense contribution made by Mr. Menon during his tenure as the Director of the Company.

Mr. P. K. Ghose retired from the Board of the Company as Executive Director and CFO effective 30th September, 2015 after attaining superannuation age of 65 years in accordance with the Tata Group retirement policy adopted by the Company. The Board of Directors place on record their deep appreciation for the contributions made by Mr. Ghose during his tenure as Executive Director and CFO.

Independent Directors

The Independent Directors hold office for a fixed term of five years or until their completing 75 years, whichever is earlier and are not liable to retire by rotation in terms of Section 149(13) the Act. In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and the Listing Regulations.

Details of Familiarisation programme for Independent Director is provided separately in the Corporate Governance Report.

Key Managerial Personnel (KMP)

Mr. John Mulhall has been appointed as the Chief Financial Officer and KMP with effect from 20th October, 2015 after the retirement of Mr. P. K. Ghose as Executive Director and CFO.

Mr. R. Mukundan, Managing Director and Mr. Rajiv Chandan, General Counsel & Company Secretary are the other KMP as per the definition under Section 2(51) and Section 203 of the Act.

Governance Guidelines

The Company has adopted Governance Guidelines on Board Effectiveness. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director remuneration, subsidiary oversight, code of conduct, Board effectiveness review and mandates of Board committees.

Procedure for Nomination and Appointment of Directors

The Nomination and Remuneration Committee (NRC) is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects in–depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

NRC conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director's appointment or re–appointment is required. The Committee is also responsible for reviewing the profiles of potential candidates vis–à–vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

Criteria for Determining Qualifications, Positive Attributes and Independence of a Director

The NRC has formulated the criteria for determining qualifications,  positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and the Listing Regulations. The relevant information has been given in Annexure 2 which forms part of the Board's Report.

Board Evaluation

Pursuant to the provisions of the Act and the corporate governance requirements prescribed under the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, and that of its Committees and Individual Directors.

The performance of the Board and individual Directors was evaluated by the Board after seeking inputs from all the directors. The criteria for performance evaluation of the Board included aspects such as Board composition and structure, effectiveness of Board processes, contribution in the long term strategic planning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members. The criteria for performance evaluation of the committees included aspects such as composition of committees, effectiveness of committee meetings, etc.

The Board and the NRC reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of non–independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non–executive directors. The same was discussed in the Board Meeting that followed the meeting of the Independent Directors, at which the feedback received from the Directors on the performance of the Board, its Committees and individual directors was also discussed.


The Company has in place a Remuneration Policy for the Directors, KMP and other employees pursuant to the provisions of the Act and the Listing Regulations which is set out in Annexure 3 which forms part of the Board's Report.


Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s), including audit of internal financial controls

over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the FY 2015–16.

Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.



Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis and the Corporate Governance Report are presented in a separate section forming part of the Annual Report.


The Company's IT infrastructure is continuously reviewed and renewed in line with the business requirements and technology enhancements. The Company has implemented common ERP programme across all its wholly owned operating subsidiaries. To support the growth of its Consumer Products Business, the Company is implementing a Warehouse Management Solution. A cloud based platform to enhance collaboration within various functions and businesses has been implemented. The Company has enabled  its field force with mobile based applications to provide better and timely service to customers. A comprehensive data structure is being put in place to support business decision making.


The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed pursuant to the provisions of Section 134 of the Act read with the Companies (Accounts) Rules, 2014, are provided in Annexure 4 to this Report.


Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure 5 to this Report.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Further, the Report and the Accounts are being sent to the members excluding the aforesaid statement. In terms of Section 136 of the Companies Act, 2013, the said statement is open for inspection at the Registered Office of your Company. Any members interested in obtaining such particulars may write to the General Counsel & Company Secretary at the Registered Office of the Company.


I. Auditors and their report:

In the AGM held on 21st August, 2014, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, (DHS LLP) were appointed as Statutory Auditors of the Company for a period of three years. At the AGM held on 11th August, 2015, the shareholders ratified the appointment of DHS LLP for a period of one year. Ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM.

Further, the report of the Statutory Auditors along with notes to Schedules is enclosed to this Report. The observations made in the Auditors' Report are self–explanatory and therefore do not call for any further comments.

II. Cost Auditors and Cost Audit report:

As per the Cost Audit Orders, Cost Audit is applicable to the Company's products i.e. Fertilisers, Mineral products including cement and Inorganic chemicals

In view of the same and in terms of the provisions of Section 148 and all other applicable provisions of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s. N.I. Mehta & Co; and M/s. Ramanath Iyer and Co; Cost Accountants have been appointed as Cost Auditors to conduct the audit of cost records of your Company for the FY 2016–17. The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM.

III. Secretarial audit

In terms of Section 204 of the Act and Rules made there under, M/s. Parikh & Associates, Practicing Company Secretaries have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure 6 to this Report. The report is self–explanatory and do not call for any further comments.


i. Details of Board meetings

During the year, 8 (eight) Board meetings were held and the details of which are provided in the Corporate Governance Report.

ii. Composition of Audit Committee:

The Audit Committee comprises 3 (three) Members all of which are Independent Directors. Dr. Nirmalya Kumar, Non–executive Director, was inducted as a member of the Audit Committee effected 26th May, 2016. During the year, 8 (eight) Audit Committee meetings were held and the details of which are provided in the Corporate Governance Report.

iii. Composition of CSR, Safety and Sustainability Committee

The Committee comprises 4 (four) Members out of which 2 (two) (including the Chairman) are Independent Directors. During the year, 4 (four) CSR, Safety and Sustainability Committee meetings were held and the details of which are provided in the Corporate Governance Report.

iv. Listing Regulations

The Securities and Exchange Board of India (SEBI) has, by its notification dated 2nd September, 2015, issued the (Listing Obligations and Disclosure Requirements) Regulations, 2015 with an aim to consolidate and streamline the provisions of the  Listing Regulations for different segments of capital markets to ensure better enforceability. The Regulations became effective from 1st December, 2015 and have replaced the Listing Agreements. Accordingly, all listed entities were required to enter into the Listing Agreement within 6 (six) months from the effective date. The Company has entered into Listing Agreement with BSE Limited and the National Stock Exchange of India Limited during the month of January, 2016.

Pursuant to the Listing Regulations, the following policies were approved and adopted by the Board:

(i) Policy on determination of Materiality for disclosures of events or information.

(ii) Policy for preservation of documents, to classify documents in two categories, viz. documents which need to be preserved permanently and documents which need to be preserved for not less than 8 years after completion of the relevant transactions.

(iii) Archival Policy, to determine the period, for which information is required to be disclosed on the Company's website.

Policy on Materiality and Archival Policy are also available on the website of the Company under 'Investor Relations' section.


Pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return in Form MGT 9 is enclosed as Annexure 7 to this Report.


The Directors wish to place on record their appreciation for the continued support and co–operation by Financial Institutions, Banks, Government authorities and other stakeholders. Your Directors also acknowledge the support extended by the Company's Unions and all the employees for their dedicated service.

On behalf of the Board of Directors



Place : Mumbai,

date 26th May, 2016

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