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Unformatted text preview: Ann-Dhan-Sampann 9th A N N UA L RE P O RT 2 01 7 - 1 8 years of serving the farmers Zuari Agro Chemicals Limited Awards and recognition International Fertiliser Association Excellence Award 2017 to Adventz Agri Business Group Goa State Pollution Control Board Excellence Award as the 2nd best Company in the Best Environmental Practice 2014 to Zuari Agro Chemicals Limited Runner-up Award Best Production Performance Nitrogen Unit for the year 2016-17 for Zuari Agro Chemicals Limited by the Fertiliser Association of India Gomant Uchcha Suraksha Puraskar 2017 for outstanding Safety Performance in Occupational Safety, Health and Environment for Zuari Agro Chemicals Limited Indian Chamber of Commerce (ICC) Environment Excellence Award 2017 to Paradeep Phosphates Limited Fertiliser Association of India Best Production Performance in Phosphoric Acid Plant 2016-17 to Paradeep Phosphates Limited Annual 18th Greentech Environment Gold Award 2018 to Paradeep Phosphates Limited Golden Peacock - Occupational Health & Safety Award 2017 to Paradeep Phosphates Limited Government of Odisha Best Performance in Accident Prevention for Safety Management & Communication Award 2016 to Paradeep Phosphates Limited Karnataka State Pollution Control Board Environment Awards 2016 to Mangalore Chemicals & Fertilisers Limited Forward-looking statements In this annual report, we have disclosed forward – looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements – written and oral – that we periodically make, may contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Corporate Information Board of Directors Vice President & Company Secretary Saroj Kumar Poddar R. Y. Patil Chairman Sunil Sethy Statutory Auditors Managing Director S.R. Batliboi & Co. LLP, Chartered Accountants, 3rd & 6th Floor, World Mark-1, IGI Airport Hospitality District Aerocity, New Delhi – 110 087, India. Akshay Poddar Non-Executive Director N. Suresh Krishnan Non-Executive Director Marco P. A. Wadia Independent Director J. N. Godbole Independent Director Link Intime India Pvt. Limited C-101, 247 Park, LBS Marg, Vikhroli West, Mumbai - 400 083 Tel: 022-49186000 Fax: 022-49186060 Email: [email protected] Website: Bankers Listed On 1. State Bank of India National Stock Exchange of India Limited & BSE Limited Gopal Krishna Pillai 2. Canara Bank Independent Director 3. Corporation Bank Kiran Dhingra 4. Bank of Baroda Independent Director The Address of Our Share Transfer Agent 5. HDFC Bank Ltd Registered Office Zuari Agro Chemicals Limited Jai Kisaan Bhawan, Zuarinagar, Goa - 403 726 Tel: 91-832-2592180 / 81 website : Other Key Management Personnel 6. Axis Bank Ltd Naveen Kapoor 7. ICICI Bank Ltd President Agri Business 8. IDBI Bank Ltd Sandeep Agrawal 9. RBL Bank Ltd Corporate Office 10. Yes Bank Ltd Zuari Agro Chemicals Limited 5th Floor, Global Business Park, Tower A, M. G. Road, Sector 26, Gurugram - 122 002, Haryana Chief Financial Officer - Agri Business Nitin M. Kantak Chief Technical Officer - Agri Business 11. Coöperatieve Rabobank U.A. V. Seshadri 12. Federal Bank Vice President Strategy 13. Induslnd Bank Ltd P. K. Gandhi Group President Human Resource R.S. Chugh Chief Manufacturing Officer Legal Advisors Khaitan & Co., Kolkatta Tel: 91-124-4827800 Fax: 91-124-4212046 contents CORPORATE OVERVIEW STATUTORY REPORTS 02 50 Glorious Years 09 Board’s Report 03 Chairman’s Communique 17 Report on Corporate Governance 04 About Zuari Agro Chemicals Limited 06 Our manufacturing capability 08 Improving farmer connect FINANCIAL STATEMENTS 52 Standalone Financial Statements 122 Consolidated Financial Statements Notice of the Annual General Meeting is being sent separately through permitted mode as required under the Companies Act, 2013 and Rules made thereunder. Glorious Years A time to rejoice. A time to reflect. A time to re-dedicate. ZACL is proud to partner in the exceptional rise and performance of the Indian farmers. As we celebrate 50 years, we launched the Jai Kisaan Ann-Dhan-Sampann, an integrated campaign commemorating five decades of Jai Kisaan as well as marking the transformation of the agri-business. From shortage to self-sufficiency to surplus, Indian agriculture has made an impressive progress. Gradually, with time and perseverance, the Indian farmer has kept up with the country’s growth, a country that has emerged as the world’s fastest growing major economy today. This one-of-its-kind integrated campaign highlights the importance of empowered farmers for a prosperous and progressive India. It reflects the resurgence of India’s agriculture as a key agrarian economy on the global stage. The campaign is in line with the mission of Jai Kisaan - to enable farmers produce high-quality crops. Ann-Dhan-Sampann showcases Jai Kisaan’s role as a trusted national brand in farmer empowerment that goes beyond higher yields to improving their general quality of life. enabling farmers become agriculturists with modern agronomic techniques and technologies that are commensurate with the best in the world. Today, Jai Kisaan aspires to be more than just supplying products. It aims to become a one-stop solution offering R&D, soil health and collaborative knowledge-sharing from its Jai Kisaan Junctions, At Zuari Agro Chemicals Limited, as we rejoice and celebrate 50 years of Jai Kisaan, we also re-dedicate Jai Kisaan to play a larger role in nation-building by enriching the farmland and farmers. 02 Zuari Agro Chemicals Limited CORPORATE overview Statutory Reports Chairman’s Communique Financial statements As India aims at ‘Doubling the Farmer’s Income’ (DFI) by 2022, it is an ardent need of the hour for Agri-Business entities like ZACL to emerge as a key agent in transforming the lives of Indian Farmers for a better and prosperous future. Dear Members, On behalf of the Board of Directors, it is my honour and pleasure to present the Adventz Agri-Business annual report for the financial year ended on 31st March 2018 (FY 2017-18). Indian Agriculture sector is undergoing a much required change by adopting and implementing modern-age technologies. The Government of India has brought in innovative policies to boost the Agri Economy of the country, with path-breaking Direct Benefit Transfer (DBT), Soil Health Card, e-NAM (Electronic National Agriculture Market) and revising the Minimum Support Price (MSP) by 50% for 14 crops during Kharif season. Furthermore, policies pertaining to Crop Insurance, Irrigation and to ensure proper nutrient balance in the soil have been strengthened for achieving a sustainable agricultural growth. As India aims at ‘Doubling the Farmer’s Income’ (DFI) by 2022, it is an ardent need of the hour for Agri-Business entities like ZACL to emerge as a key agent in transforming the lives of Indian Farmers for a better and prosperous future. ZACL is committed to serving the farmers of India and its 50-year-old legacy is a testament to how ZACL’s brand Jai Kisaan has evolved in the life of a farmer by being a valuable partner for their success. In the 51st year of ZACL’s operation, as the Chairman of Board, I can assure that our engagement with the farming community shall further intensify. In the last year, we expanded the reach of Jai Kisaan Junction stores, which has emerged as a one-stop solution for all the cultivation requirements of the farmer, right from agri products to farm consultation services. Our penetration in the markets of Maharashtra and Karnataka has been deepened while our tryst with newer regions like Uttar Pradesh, West Bengal and Odisha has yielded encouraging results. We are reinforcing our efforts for the farmers by pushing for necessary R&D in agriculture. The Adventz Agri Park situated in Solapur-Maharashtra is the core R&D centre for farmers which exhibits model-farming practices induced with modern yet cost-effective technology. ZACL’s Soil-health Laboratories, situated across pan India, disseminate technological know-how to farmers across ZACL’s key market regions. ZACL has been fully compliant to the production of neem-coated Urea and adopting DBT while assisting the dealers, retailers and farmers in the supply chain of DBT. Our theme ‘Aan-Dhaan-Sampaan’ is not only symbolic but an actual reflection of our endeavour in creating a livelihood of fulfilment for the farmers of India. The Agri-Group this year further strengthened its share in the market. Mangalore Chemicals & Fertilisers Ltd (MCF), subsidiary of ZACL, has enabled deeper penetration in the southern markets and the acquisition of MCF has paid rich dividends for the Adventz Agri-Business. Paradeep Phosphates Ltd continues to yield robust business performance. The merger of subsidiaries, like Zuari Fertilisers & Chemicals, Zuari Speciality Fertilisers and Zuari Agri Sciences with Zuari Agro Chemicals Limited, has bolstered the consolidation of Adventz Agri-Business. ZACL is growing the business in a sustainable way so that the benefit reaches all our shareholders earning their trust over the long term by returning capital in a consistent and transparent way. With the support from our internal and external stakeholders, ZACL will continue to strive towards building a more sustainable business and enhancing shareholders’ value in the near and long-term. Best regards, Saroj Kumar Poddar Chairman, Zuari Agro Chemicals Limited Annual Report 2017-18 03 About Zuari Agro Chemicals Limited Founded by one of the eminent business personalities of India, Late Dr KK Birla in 1967, Zuari Agro Chemicals Limited (“ZACL” or the “Company”) is the flagship company of Adventz Group, steering the Group’s agriculture vertical ahead. Operating primarily in the realm of high-quality complex fertilisers of various grades along with seeds, pesticides, micro-nutrients, water soluble fertilisers and specialty fertiliser, ZACL was formed with two core fundamentals – to ensure economic prosperity and independence of the farmers by providing affordable fertilisers and to emerge as the single-window agricultural solution provider to them. Nutrients Crop Protection Urea Insecticides Cotton Water Soluble Zinc Sulphate DAP Fungicides Maize Specialty Agri Fluids Sulphur MOP Herbicides Paddy Soil Conditioner Boron Complex fertilisers Seeds Speciality fertilisers Micro-nutrients Mustard SSP Committed to effective utilisation of resources and adoption of innovative initiatives for the well-being of the farming community, ZACL’s success rests on responsible operation, adept execution, innovative manufacturing and proactive capturing of new opportunities. ZACL is driven by a management which believes in delivering excellence and creating a business edge over its competitors. The imminent need was to increase its market share, hence ZACL had to expand its geographical reach and product basket via strategic M&A and Joint Venture. At the turn of the new millennium, ZACL entered into a Joint Venture with OCP Morocco, the global major in Phosphate Fertilisers and acquired majority shares holdings 04 Zuari Agro Chemicals Limited of Paradeep Phosphates Limited in 2002. Paradeep Phosphate Limited (PPL) was a nearly sick and a perpetual loss-making entity at that time but today it is India’s largest NPK manufacturing unit with excellent business performance. With this landmark consolidation, ZACL strengthened its presence in the complex fertilisers segment, while at the same time helped PPL gain significant growth trajectory and emerge as a profit-making plant. In 2015, Mangalore Chemicals and Fertilisers Limited (MCF) became a subsidiary of ZACL. It was a strategy to boost ZACL’s product offerings in the chemical fertilisers segment such as Crop Care, ABC and SNF. MCF today is the largest manufacturer of chemical fertilisers in the state of Karnataka with ZACL having 53.03% stake in the company. CORPORATE overview Statutory Reports Financial statements Empowering the Indian farmers with high-quality products For 50+ 2.3 years addressing the agricultural requirements of a growth-intensive nation million farmers are associated with ZACL with a deep-rooted presence across India with a network of more than dealers 6,000 Our vision Our mission To be the one-stop solution for the farm economy To create value for farmers and stakeholders by providing integrated agri solutions to all farm needs Our core values Agility: Our uniqueness lies in our ability to be agile, balanced and adaptable. These qualities are achieved through our nimble workforce and robust processes that enable us to rapidly adapt to market and environmental changes and act quickly on new opportunities. Customer first: We are continuously focussed on empowering and enabling farmers to progress, along with exceeding all our customers’ expectations whose demand is the driving force behind our growth. We are constantly striving to create long-term value for them, improving each customer experience, focussing on supporting their needs, and delivering high quality services. Integrity: We, as an organisation, believe in demonstrating the highest level of ethical standards, honesty, fairness, transparency and openness at all times and in every situation. Sustainability: We are committed to growing consistently and responsibly, benefiting our employees, consumers, shareholders and other stakeholders; and contributing significantly towards environment, culture, society, economy and well-being of future generations. Annual Report 2017-18 05 Our manufacturing capability Our Six state-ofthe-art facilities located in different states of India enable ZACL to be cost-effective, enjoy economies-of-scale and offer consistent product quality. With over three million tonnes of manufacturing capacity, ZACL’s six manufacturing units are located at Goa, Mangalore, Paradeep, Baramati, Hyderabad and Mahad. Knowing ZACL’s manufacturing landscape Paradeep Phosphates Limited, ODisHa Established: 1981, acquired by ZACL in 2002 Capacity: 12 lakh MT per annum Mahad (Maharashtra) unit Uniqueness: Primary focus is the production and marketing of complex phosphatic fertilisers. India’s largest NPK manufacturing unit. Established: 2015-16 Capacity: [SSP: 600 tonnes per day] Uniqueness: Focussed on the manufacturing of complex fertilisers, the unit has a production capacity of 600 tonnes per day. Baramati unit Established: 2010-11 Capacity: Manufactures WSF grade of NPK fertiliser, 12,000 MT per annum Uniqueness: Operating in two shifts, the plant has helped ZACL to enhance its engagement with the farming community to maximise crop yield. Goa unit Commissioned: 1973 Capacity: Fertiliser: 14 lakhs MT per annum Uniqueness: Designed and engineered by the renowned Toyo Engineering Japan, the plant uses the latest in pipe reactor technology and are based on the slurry granulation process. 06 Zuari Agro Chemicals Limited Hyderabad unit Established: 1995 Capacity: Hybrid & High-Yielding Seeds: 2.5 MT per hour Uniqueness: It has three research and testing facilities to ensure the highest standards of quality. Mangalore Chemicals and Fertilisers Limited, Magalore, Karnataka Established: 1966, acquired by ZACL in 2015 Capacity: 6.91 lakhs MT per annum Uniqueness: Largest manufacturer of chemical fertilisers in the state of Karnataka CORPORATE overview Statutory Reports Micro-nutrients Fertilisers Speciality fertilisers Organic manure Adbor Jai Kisaan Samarth Atom 61 JK Compost Gandhak 90 Jai Kisaan Sampatti Boon 45 Granubor Natur Jai Kisaan Sampurna Boost 52 Zinc 21 Jai Kisaan Samrat Calnit 19 Jai Kisaan Urea Poorna 19 Jai Kisaan Suraksha Sanjeevani Financial statements Satej Sulpho 50 Product Nature Jai Kisaan Samrat Considered to be the most economical fertiliser for application of Nitrogen and Phosphorus. Jai Kisaan Urea One of the most recognised brands of urea amongst Indian farmers, Jai Kisaan Urea ensures crops recover quickly from nitrogen deficiency. Jai Kisaan Sampurna Jai Kisaan Samarth The star performer of the Company is deal for cash and food crops to provide plant nutrition. Rated the highest amongst the NPK range of fertilisers, helps in controlling the excessive vegetative growth of crops. How a wide product basket helps? Strong relationship amongst the distributor and the Company Stronger relationship between the farmer and the distributor Market focus Decreased distribution cost Lesser customer (farmer) switch owing to unavailability of a certain product Annual Report 2017-18 07 Improving farmer connect Since its inception, Zuari Agro Chemicals Limited has been a pillar of strength to the Indian farming community offering a wide range of quality and affordable products and focussed farmer engagement initiatives. These community engagement programmes aim to instil a holistic understanding of best farming practices, product usage and modern technology. The Company importantly aims to educate the farmer community on various aspects that can improve farm productivity while boosting their income in a sustainable manner. These farmer engagement initiatives are in line with the Company’s core ethos of promoting inclusive and sustainable growth and development of the farmers. Foremost among these is our 50-year-old “Jai Kisaan” brand of products and various programmes launched at regular intervals around it. From offering a wide range of customer-centric services and sustainable agri-solutions to offering technology-enabled solutions to the Indian farming community, Jai Kisaan has evolved as a symbol of trust over these five decades. Launch of Jai Kisaan Junctions, the first-of-its-kind agri-product stores is one such example. Aimed at creating a deeper farmer connect, these stores offer a world of convenience for the farmers by providing an entire range of agricultural products at affordable price points along with free agri-consultancy services ranging from sowing to harvesting of crops. Equipped with audio-visual aids to exhibit scientific crop management practices, the stores also offer value-added services such as soil testing, market information, facilitate crop insurance and agronomic expertise among others. Goa Agri Initiative (GAIN) is another such initiative to empower farmers. Aimed at reviving the ailing agricultural economy in Goa through the introduction and implementation of different farming techniques, better resource management and new technologies, the project was bestowed with the Agriculture Leadership Award in 2015 at the 8th Leadership Summit. Created with a vision to enhance technology awareness and knowledge diffusion amongst the community, Adventz Agri Innovation Centre (AAIC) is another one-of-its-kind farmer‑friendly initiative by ZACL, acting as an advisory center. The facility aims at helping the farmers in enhancing the yield and the farm income through the adoption of best agricultural technologies at the farmers’ level. Located near Solapur in Maharashtra and spread over 106 acres, the facility helps the farmer community with integrated diagnostics, skill enhancement and implementation of innovative technologie...
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