MIRA INFORM REPORT
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Report Date : |
22.11.2006 |
IDENTIFICATION DETAILS
|
Name : |
COROMANDEL FERTILISERS
LIMITED |
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Registered Office : |
`Coromandel House’, 1-2-10,
Sardar Patel Road, Secunderabad – 500 003, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
16.10.1961 |
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Com. Reg. No.: |
01-892 |
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CIN No.: [Company Identification No.] |
L24120AP1961PLC000892 |
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TAN No.: (Tax Deduction &
Collection Account No.) |
HYDC00011E |
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PAN No.: (Permanent Account No.) |
AAACC785ZK |
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Legal Form : |
Public
Limited Liability company. The company’s shares are listed on the Stock
Exchanges. |
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Line of Business : |
Manufacturing and marketing
of fertilisers and ammonium phosphates |
RATING & COMMENTS
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MIRA’s Rating : |
A |
RATING
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STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial &
operational base are regarded healthy. General unfavourable factors will not
cause fatal effect. Satisfactory capability for payment of interest and
principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 17500000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a part of
Murugappa Group, a well known and diversified industrial house of Southern
India. Available information indicates high financial responsibility of the
company. Financial position is good. Trade relations are fair. Payments are
usually correct and as per commitments. The company can be
considered good for any normal business dealings. |
LOCATIONS
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Registered Office : |
`Coromandel House’, 1-2-10,
Sardar Patel Road, Secunderabad – 500 003, Andhra Pradesh |
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Tel. No.: |
91-40-2784 2034 |
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Fax No.: |
91-40-2784 4117 |
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E-Mail : |
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Website : |
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Factory 1 : |
Fertiliser
Plants :
v
Sriharipuram, Fax:
91-891-2577665 v
Fertilisers /
Pesticides Factory Fax : 91-4172-272264 v
Compound Fertilisers
Factory Pesticide
Plant :
Plot No. 22/1, TTC
Industrial Area, Thane Balapur Road, Ghanasoli P.O., Navi Mumbai - 400 701,
Maharashtra, India. |
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Registrars & Share
Transfer Agent: |
Karve Computershare Private Limited
Karve House, 46, Avenue 4,
Street No.1, Banjara Hills, Hyderabad - 500034 |
DIRECTORS
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Name : |
Mr. K. Anil Nair |
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Designation : |
President
and Whole time Director Godavari
Fertilisers and Chemicals Limited |
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Name : |
Mr. J. Jayaraman |
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Designation : |
Former
Chairman and Managing Director Cochin
Refineries Limited |
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Name : |
Mr. M. M. Murugappan |
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Designation : |
Director-
Technical and HR Murugappa
Group |
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Name : |
Mr. T. M. M. Nambiar |
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Designation : |
Former
Managing Director Associated
Cement Companies Limited |
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Name : |
Mr. M. K. Tandon |
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Designation : |
Former
Chairman and Managing Director National
Insurance Company Limited |
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Name : |
Mr. D. E. Udwadia |
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Designation : |
Solicitor
and Advocate |
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Name : |
Mr. S. Viswanathan |
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Designation : |
Former
Group Director Finance Murugappa
Group |
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Name : |
Mr. V. Ravichandran |
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Designation : |
President
and Wholetime Director |
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Name: |
Mr.
A Vellayan |
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Designation: |
Chairman
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Name: |
Mr.
V Ravichandran |
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Designation: |
President
and Wholetime Director |
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Name: |
Mr.
P Nagarajan |
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Designation: |
Chief
Financial Officer |
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Name: |
Mr.
Arun leslie George |
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Designation: |
General
Manager |
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Name: |
Mr.
S Govindarajan |
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Designation: |
General
Manager |
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Name: |
Mr.
S Navaneetham |
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Designation: |
General
Manager |
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Name: |
Mr.
N Seetaram |
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Designation: |
General
Manager |
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Name: |
Mr.
G Veerabhadram |
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Designation: |
General
Manager |
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Name: |
Mr.
K Warriar |
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Designation: |
General
Manager |
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Name: |
Mr.
M R Rajaram |
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Designation: |
Company
Secretary |
KEY EXECUTIVES
|
Name |
Mr. M. N. Basavarajappa |
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Designation |
General Manager (Marketing) |
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Age |
57 Years |
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Qualification |
B.Sc. (Ag.) PG Diploma in
Marketing Management, PG DBA |
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Experience |
36 Years |
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Date of Joining |
20th November,
1992 |
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Previous Employment |
Manager-Marketing Madras Fertilisers Limited |
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Name |
Mr. K. V. Iyer |
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Designation |
Group Vice President-
Personnel |
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Age |
55 Years |
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Qualification |
B.E. (Mechanical), M. B. A. |
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Experience |
32 Years |
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Date of Joining |
18th October,
1993 |
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Previous Employment |
Vice President – Marketing
Nagarjuna Fertilisers and Chemicals Limited |
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Name |
Mr. P. Nagarajan |
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Designation |
Vice President – Finance
and Administration |
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Age |
51 Years |
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Qualification |
B.Com, BGL, ACA |
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Experience |
27 Years |
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Date of Joining |
09th June, 1997 |
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Previous Employment |
Senior Vice President –
Visaka IndustriesLimited |
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Name |
Mr. K. A. Nair |
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Designation |
Vice President –
Manufacturing & Projects |
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Age |
52 Years |
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Qualification |
B.Technical (Chemical),
M.B.A. Business Administration |
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Experience |
28 Years |
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Date of Joining |
02nd September,
1991 |
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Previous Employment |
Sales & Technical
Services Manager, ICI (India) Limited. (Fertiliser Division), Kanpur |
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Name |
Mr. R. S. Nanda |
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Designation |
President & Managing
Director |
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Age |
58 Years |
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Qualification |
B.Sc. Engineering
(Mechanical) |
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Experience |
36 Years |
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Date of Joining |
27th April, 1992 |
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Previous Employment |
Cyanamid India Limited,
Atul, Bulsar Dist., Gujarat, India – Production Director (Agro-Chemicals
Division) |
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Name |
Mr. A. Vellayan |
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Designation |
Senior Manager - Marketing |
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Age |
58 Years |
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Qualification |
B.Sc. (Ag), M.Sc. (Ag) |
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Experience |
30 Years |
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Date of Joining |
03rd November,
1967 |
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Previous Employment |
Managing Director – Tube
Investments of India Limited |
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Name |
Mr. E. Chennakesavulu |
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Designation |
Senior Manager – Marketing |
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Age |
58 Years |
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Qualification |
B.Sc. (Ag.),M.Sc. (Ag) |
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Experience |
30 Years |
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Date of Joining |
24th April, 1973 |
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Previous Employment |
Tobacco Research Assistant,
Andhra Pradesh Agricultural University, Kavati |
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Name |
Mr. N. V. Jagan Mohan |
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Designation |
Chief Engineer |
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Age |
58 Years |
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Qualification |
B. E. (Mechanical), M. E.
(Mechanical Designer) |
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Experience |
34 Years |
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Date of Joining |
03rd November,
1967 |
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Previous Employment |
Associate Lecturer, Andhra
University, Waltair |
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Name |
Mr. A. Sambasiva Rao |
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Designation |
Senior Manager – Safety,
Health and Enviornment |
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Age |
42 Years |
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Qualification |
B. Tech., PGD in Energy
Engineering & Industrial Safety (AU), PGD in Energy Engineering IIT
(Delhi) |
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Experience |
20 Years |
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Date of Joining |
01st June, 1996 |
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Previous Employment |
Assistant Manager – Safety,
Voltas Limited, Patancheru |
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Management Team |
Mr. V Ravichandran Managing Director Mr. P Nagarajan Chief Financial Officer Mr. P Gopalakrishna Vice President Mr. G Veerabhadram Vice President Mr. Amit Rastogi General Manager Mr. Arun Leslie George General Manager Mr. S Govindarajan General Manager Mr. N Seetaram General Manager Mr. M K Warriar General Manager |
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Name |
M R Rajaram |
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Designation |
Company Secretary |
MAJOR SHAREHOLDERS
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Names of Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters |
89109620 |
70.15 |
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UTI & Mutual Funds |
4340692 |
3.42 |
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Banks, Financial
Institutions & Insurance Companies |
7478088 |
5.89 |
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Foreign Institutional
Investors |
1158827 |
0.91 |
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Private Corporate Bodies |
3399258 |
2.68 |
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Indian Public |
20146105 |
15.85 |
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NRIs/OCBs |
1345955 |
1.06 |
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Foreign Nationals |
48070 |
0.04 |
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Foreign Company |
250 |
0.00 |
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Foreign Bank |
920 |
0.00 |
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Total |
127027785 |
100.000 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and marketing
of fertilisers and ammonium phosphates |
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Production Details: |
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GENERAL INFORMATION
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No. of Employees : |
2000 |
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Bankers : |
§
State Bank of India §
State Bank of
Travancore §
Standard Chartered
Grindlays Bank §
Citibank N.A. §
IDBI Bank Limited
§
HDFC Bank Limited §
ICICI Bank Limited |
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Facilities: |
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Banking Relations : |
Good |
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Auditors : |
Price
Waterhouse Chartered Accountants |
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Address : |
6-3-550,
II Floor, L.B. Bhavan, Somajiguda, Hyderabad-500 082 |
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Group Companies : |
§
Carborandum Universal
Limited §
Tube Investments of
India Limited §
E.I.D. Parry (India)
Limited §
Parry Agro Industries
Limited §
Coromandel Engineering
Company Limited §
Cholamandalam Investment
& Finance Company Limited §
Parry's Confectionery
Limited §
Parry Murray &
Company Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
35000000 |
Equity Shares |
Rs.10/- each |
Rs.350.000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
25,405,557 |
Equity Shares |
Rs.10/- each |
Rs. 254.056 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
254.056 |
254.056 |
254.056 |
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2] Reserves & Surplus |
4125.814 |
3598.248 |
3124.044 |
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NETWORTH
|
4379.870 |
3852.304 |
3378.100 |
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LOAN FUNDS |
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1] Secured Loans |
2109.306 |
1731.195 |
1862.161 |
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2] Unsecured Loans |
2153.293 |
947.930 |
1093.735 |
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TOTAL
BORROWING
|
4262.599 |
2679.125 |
2955.896 |
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DEFERRED TAX LIABILITIES |
751.641 |
889.527 |
889.038 |
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TOTAL
|
9394.110 |
7420.956 |
7223.034 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
3580.064 |
3653.091 |
3824.332 |
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Capital work-in-progress
|
56.635 |
122.035 |
18.949 |
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INVESTMENT
|
1618.093 |
1348.782 |
1361.682 |
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DEFERREX TAX ASSETS
|
0.000 |
20.227 |
17.461 |
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CURRENT ASSETS, LOANS & ADVANCES
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Inventories
|
3953.077 |
1910.989 |
1969.600 |
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Sundry Debtors
|
1067.501 |
999.995 |
1611.735 |
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Cash & Bank Balances
|
243.308 |
328.394 |
28.986 |
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Loans & Advances
|
4434.478 |
2202.667 |
1248.350 |
Total Current Assets
|
9698.364
|
5442.045
|
4858.671
|
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Less : CURRENT LIABILITIES & PROVISIONS
|
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Current Liabilities
|
4982.562 |
2716.151 |
2463.781 |
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Provisions
|
576.484 |
449.073 |
394.280 |
Total Current Liabilities
|
5559.046
|
3165.224
|
2858.061
|
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Net Current
Assets
|
4139.318 |
2276.821 |
2000.610 |
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
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TOTAL
|
9394.110 |
7420.956 |
7223.034 |
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PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
18747.063 |
15541.696 |
12225.874 |
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Profit/(Loss) Before Tax
|
1153.632 |
928.670 |
707.736 |
Provision for Taxation
|
|
236.723 |
276.680 |
Profit/(Loss) After Tax
|
835.464 |
691.947 |
431.056 |
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Export Value
|
218.546 |
390.303 |
308.445 |
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Import Value
|
13500.326 |
9307.041 |
6561.485 |
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Total Expenditure
|
17593.431 |
14600.126 |
11518.138 |
QUARTERLY
|
PARTICULARS |
|
30.06.2006 (1st Quarter) |
30.09.2006 (2nd Quarter) |
|
Sales
Turnover |
|
3561.600 |
7313.600 |
|
Other
Income |
|
19.900 |
60.300 |
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Total
Income |
|
3581.500 |
7373.900 |
|
Total
Expenditure |
|
3222.500 |
6407.200 |
|
Operating
Profit |
|
359.000 |
966.700 |
|
Interest |
|
75.300 |
67.300 |
|
Gross
Profit |
|
283.700 |
899.400 |
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Depreciation |
|
88.400 |
91.100 |
|
Tax |
|
87.000 |
288.600 |
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Reported
PAT |
|
123.700 |
520.200 |
200606
Quarter 1 - The above financial results are drawn in accordance with the
accounting policies consistently adopted by the Company. 2. In view of the
seasonal nature of the farm inputs business, the results of the first quarter
are not indicative of the overall performance of the Company for the whole
year. 3. Net Sales/Income from operations for the current quarter include
Rs.121.400 Millions (quarter ended 30.06.2005: Rs.78.800 Millions) relating to
the previous year received on account of announcement of the final rates of
concession for complex fertilisers by the Government of India. For the current
quarter, pending announcement by the Government of India of final rates of
concession for the Complex Fertilisers, income has been recognised having
regard to the existing concession scheme and according to management estimates
of price concession receivable. 4. During the current quarter, the Company has
acquired 50.72% of the equity share capital of M/s Ficom Organics Limited,
Ankaleshwar. Consequently, M/s Ficom Organics Limited has become a subsidiary
of the Company effective 30.05.2006. 5. Pursuant to the adoption of Accounting
Standard 15 (revised 2005) - Employee Benefits, the valuation of obligation and
plan assets in respect of long term employee benefits is being carried out by
the management. Adjustment in respect of employee benefits upto 31.03.2006
shall be made out of the opening revenue reserve. However, additional charge
for the current period on account of employee benefits amounting to Rs.03.700
Millions as estimated by the management have been provided for in the above
results. 6. The Company is engaged in the Farm Inputs business which, in the
context of the Accounting Standard-17, is considered the only business segment.
7. During the current quarter, 45 investor complaints were received and were
resolved. There were no complaints pending, both at the beginning and at the
end of the quarter. 8. The results were reviewed by the Audit Committee and
approved by the Board of Directors at their meeting held on 18.07.2006. 9. The
auditors of the Company have carried out a Limited Review of the Unaudited
Financial Results (Provisional) for the quarter ended 30.06.2006. 10. Figures
have been regrouped wherever necessary
200609
Quarter 2 -: Earnings per share-Basic
and diluted 1. The above results are drawn in accordance with the accounting
policies consistenly adopted by the Company. 2. The results were reviewed by the
Audit Committee and taken on record/approved by the Board of Directors at their
meeting held on 17.10.2006. 3. The Auditors of the company have carried out a
Limited Review of the unaudited Financial Results (Provisional) for the
quarter/half year ended 30.09.2006. 4. The company is engaged in the Farm
Inputs Business which, in the context of the Accounting standard 17, is
considered the only business segment. 5. Other income for the year - quarter
and half year ended 30.09.2005 includes interest received on income tax refund
(Net) amounting to Rs. 105.200 Millions (Current half year ended 30.09.2006 Rs
Nil). 6. Pending announcement by the Government of India of final rates of
concession for the complex fertilisers, for the Quarter, income has been recognised
having regard to the existing consession scheme and according to Management
estimates of price concession receivable. 7. During the quarter, the company
made an initial remittance of Rs 119.300 Millions (Tunisian Dollars 3.375
million) towards part of its 15% equity stake in the new joint venture company
'Tunisian Indian Fertilisers SA (TIFERT) formed for setting up a phosphoric
acid plant in Tunisia. 8. In respect of long term employee benefits upto
31.03.2006, the valuation of obligation and plan assets in terms of Accounting
standard 15 (revised 2005) is being carried out by the management and
Adjustment if any, will be made out of the opening revenue reserves. 9. During
the current quarter 7 investor complaints were received and were resolved. There
were no complaints pending, both at the beginning and at the end of the
quarter. 10. Figures have been regrouped wherever necessary
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt
Equity Ratio |
0.85 |
0.79 |
0.84 |
|
Long
Term Debt Equity Ratio |
0.46 |
0.55 |
0.57 |
|
Current
Ratio |
1.12 |
1.08 |
1.19 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
2.87 |
2.45 |
2.61 |
|
Inventory
|
6.51 |
8.15 |
7.86 |
|
Debtors |
18.46 |
12.12 |
8.82 |
|
Interest
Cover Ratio |
5.80 |
5.96 |
3.46 |
|
Operating
Profit Margin (%) |
9.24 |
9.27 |
10.45 |
|
Profit
Before Interest and Tax Margin (%) |
7.30 |
7.05 |
7.87 |
|
Cash
Profit Margin (%) |
6.32 |
6.59 |
5.99 |
|
Adjusted
Net Profit Margin (%) |
4.38 |
4.37 |
3.41 |
|
Return
on Capital Employed (%) |
18.44 |
17.52 |
19.25 |
|
Return
on Net Worth (%) |
20.45 |
19.49 |
15.38 |
STOCK PRICES
|
Face
Value |
Rs.2/- |
|
High |
Rs.81.50/- |
|
Low |
Rs.79.20/- |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
:
Subject, a subsidiary
of Murugappa group company EID Parry was originally promoted by EID Parry,
Chevron Chemical Company, US and International Minerals & Chemicals
Corporation(IMC) of US in 1964. The US partners in the venture Chevron Chemical
Company and IMC have divested their shareholding in favour of EID Parry India
Ltd in 1995 and 1998 respectively. As on Dec 2001, EID -Parry (India) and its
subsidiaries hold 78.21% of equity in company.
Subject from its fully integrated fertiliser plant at Visakhapatnam
manufactures complex phosphatic fertilisers using imported Rock Phospate and
Sulphur. The company imports Rock Phospate from Africa, the pacific countries
and China while the sulphur is imported from Japan and Middle East. The company
has supended its ammonia and urea production facilities due increase in prices
of hydrocarbans and start importing urea, ammonia and liquid sulphur. The
company has also written off the value of the ammonia plant Rs.254.200 millions
against the profit of FY2001-02.
Subject has continuously enhanced the
capacity from the modest start it made on 1967 with 0.25 million MTPa. The
capacity was further enhanced to 3 lakh MTPA. Again in 1995, the production
capacity was increased to 0.400 millionMTPA by retro-fitting the two existing
trains(A&B) of complex fertilzers plant with the retrofitting of B train
alone costing 75 million. The production capacity has increased to 0.600
million MTPA with the commissioning of Third Granualation Train in July 2000 at
a cost of Rs.400.000 million. The company has tested and commissioned the
liquid ammonia terminal/pipeline project in march 1999.
The company has diversified into manufacturing of cement and has also commissioned
a 1 million TPA cement plant in 1982. However, due to recurring losses, the
unit was sold to India Cements in Nov.'90.
The Company aims to increase its market share in the phosphatic fertilisers
segment through mergers and acquisitions. It is targetting East-coast companies
such as Godavari Fertilisers Ltd, Madras Fertilisers Ltd and Paradeep
Phosphates Ltd.
The company has signed MOU with FOSKAR of South Africa for supply of
rawmaterial and also for transferring of 5% equity shares held by Coromandel.
This is subject to approvals.
During 2003-04, the Company acquired 25.88% stake in M/s.Godavari Fertilisers
& Chemicals Ltd (GFCL) from Government of Andhra Pradesh. With this
acquisition the combined capacity is 2 million tonnes along with associate of
GFCL.
MILESTONES:
1959 -
Independent India realised that its largely agrarian economy needed a thrust in
the right direction for its people to benefit and prosper. Prime Minister
Jawaharlal Nehru invited the Ford Foundation to carry out a comprehensive study
of India agriculture and give its recommendations. The study revealed a
crucial need to produce indigenous chemical fertilisers to increase
agricultural output to meet the country's ever increasing food demand.
1961 - An
industrial license was granted to three companies - IMC ((the world's largest
producer of fertilisers then), Chevron Chemical Company (a major American
player in fertilisers / industrial chemicals) and E.I.D.Parry (I) Limited
(India's largest private fertiliser producer with 60 years' standing)) to set
up a giant chemical fertiliser complex.
The first board of Directors was constituted on October 16, with
Mr. H V R Iengar as its Chairman. Others on the Board included J Q Cope,
Charles Dennison, J K John, Dr L Bharat Ram, A W Horton, J T Gibson, S C
Dholakia, V K Rao and Raja Rameswar Rao. L L Powell and P J
Davies were the first Managing Director and Dy. Managing Director
respectively. Donald I Meikle was the first Company Secretary.
1962 -
Market development commenced in the form of a 'seeding programme'. E.I.D.Parry
was appointed CFL's principal sales agent in India for their product aptly name 'GROMOR' epitomising the
idea of GROwing MORe food for the nation.
A sprawling 483.5 acres site was identified at Visakhapatnam along
the 'Coromandel' cost (India's east coast), from where the Company derived its
name. The land, taken under a 50-year lease from Visakhapatnam Port
Trust, has a private jetty just 5 km from the plant site. With a capital
investment of Rs.50 crores, Lumus Company undertook construction of the plant.
1964 -
On March 2, Dr. Bharat Ram was elected Chairman of CFL's Board of
Directors. He was the longest-serving Chairman, with an innings of 37
years. Addressing the AGM as Chairman on July 15, 2004, he nostalgically
commented, "In my long innings in public life, business and industry, I
have the varied experience. But I would like to affirm today, the last
occasion when I shall address you as the Chairman of CFL, that no assignment
has given me such pleasure and a sense of fulfillment as working with you
all. CFL has been a role model, a commonwealth, in a co-operative
effort to build a great company, anchored in values and every aspect of what is
commonly known today as 'corporate governance'. You have indeed won many
prizes; but the most precious treasure is the loyalty and sense of belonging of
the men and women who were with you earlier, and who are happily still with
you".
1967 -
On December 10, Mr. Morarji Desai, the then Deputy Prime Minister of India,
dedicated the fertiliser plant to the nation, in the presence of Mr. Kasu
Brahmananda Reddy, the then Minister of Andhra Pradesh. Grandhi
Ramamurthy, a local farmer, was given the honour of cutting the ribbon.
The 245 ft high Urea prill tower was on of the tallest industrial structures in
India then. Though not operational today, it still presents a
formidable sight, towering against the skyline, recalling old memories for
those who were associated with its operation.
1970 - The
'GROMOR farmer' was developed as a marketing symbol and introduced on
their bags to spread the message of
'higher yields, bigger profits'. Today, farmer households across their addressable markets identify CFL's brand by
this symbol.
1971 - The
'Cormondel Lecture' was instituted to provide a forum for thinker, economists,
social and agricultural research scientist around the world to share their
thoughts on issues of global concern such as food security, environment and
extension activity. The 'Borlaug Award' , instituted in honour of Nobel
Laureate Dr Norman Borlaug (father of the Wheat revolution), honours eminent
men of science and industry for their distinctive contribution to the cause of
agriculture. This reflects CFL's concern to develop a symbiotic
interaction between agriculture, industry and academia.
1976 -
Their fertiliser retail outlet at
Secunderabad got a boost with garden lovers fervently seeking small quantities
of fertilisers for bigger and richer blooms and fruit.
1977 -
CFL completed a decade of participation in augmenting agricultural production
for the nation. Its vital role covered soil nourishment, sharing
agronomic expertise, supporting agricultural education and rewarding research -
all of which had progressively grown in width and depth during the decade.
1980-90 - Plans to diversify were afoot. A 'groundbreaking' ceremony
was performed in November 1980 at Chilamkur (Andhra Pradesh), which is rich in
limestone deposits, to set up a one million tonne cement plant. The fully
computerised plant (designed by world-renowned cement manufacturer Krupp
Polysius of West Germany) was commissioned in 1984. It was later sold to
India Cements in 1990.
1995-99 - Chevron Chemical Company divested its stake in favour of E.I.D.Parry
(I) Limited in 1995, followed by IMC in 1999. E.I.D.Parry (I) Limited
acquired majority shareholding in CFL, making it a part of Murugappa Group, a
highly reputed industrial conglomerate.
2000 -
CFL's growth over the years has been punctuated with several path-breaking
modernisation / upgradation programmes. Begun in 1975, the programme gathered
momentum in 1992-95, when the Sulphuric Acid, Phosphoric Acid and Complex
Granulation plant were debottlenecked. Production capacity went up from
the original 247,000 MT to 400,000 MT. On September 29, Mr N
Chandrababu Naidu, the then Chief Minister of Andhra Pradesh, inaugurated a new
complex granulation train. This further augmented capacity to 600,000 MT,
a boon to the entire farming community.
2003 - On
July 12, CFL consolidated its business by acquiring controlling stake in
Godavari Fertilisers & Chemicals Limited (GFCL).
To optimise synergy of operations in the Group, the Farm Inputs
Division of E.I.D.Parry (I) Limited was merged with CFL on December 1.
2004 - Mr.
V Ravichandran took over as President & WTD on January 22. Mr A
Vellayan took over as Chairman on September 1. Other Directors on the
Board are Mr. J Jayaraman, Mr M M Murugappan, Mr T M M Nambiar, Mr
M K Tandon, Mr D E Udwadia, Mr S Viswanathan and Mr K A Nair.
The first post merger AGM of the company was held on July 15.
Future
Plans :-
The
company is on the look out for opportunities for growth through acquisition of
existing phosphatic fertiliser units, especially in the eastern coast. It will
consider opportunities for trading in finished fertilisers at the appropriate
time. The members would be informed of further developments in this regard as
and when they materialise.
Awards /
Recognition :-
In
recognition of the efforts put in by the company towards higher productivity,
energy conservation, better environment and better management practices, the
company was given the following awards during the year :-
·
FAI’s “Best Operating
Phosphoric Acid Plant” for the year 2001. This is the 5th time the
company has received this award in the last 7 years.
·
CII’s “National Award
for Excellence in Energy Management” for the year 2001. This is the 2nd
consecutive year company has received the award.
·
A. P. Pollution Control
Board’s award for “Waste Minimisation at Source and Adopting Cleaner
Technologies.”
·
A. P. Government’s “Best
Management Award for Industrial Relations, Labour and Productivity.
·
CII’s award for “Best
Rainwater Harvesting Practices”.
The
company imports raw materials, stores & spare parts, capital goods and
trading goods from Europe and Far East against L/C, D/A and D/P terms.
It
employs around 2000 persons in its' set up.
The company’s fixed assets
of important value include :
v
Land-Freehold,
v
Leasehold,
v
Buildings, Roads,
v
Railway Siding,
v
Plant & Machinery,
v
Technical know-how,
v
Office Equipment,
v
Furniture & Fittings
v
Vehicles
Operations
Both Visak and Ennore Plants achieved new all time high levels of production
with improved efficiencies. Production of Complex fertilisers registered an
increase of 27% over the previous year. This has been possible through sweating
of the assets, strengthening of infrastructure facilities and entering into
long term alliances with raw materials suppliers.
The seasonal conditions were satisfactory throughout the year in the
Company's addressable markets. The Company achieved new records in terms of
sales of Complex Fertilisers. During the year under review, the sale volume of
Complex Fertilisers registered an increase of 18.5% over the previous year.
This could be achieved due to optimal product-mix, brand building efforts and
better logistics management. The performance of the Pesticides business was
satisfactory despite negative growth recorded by the Industry.
Total sales for the year was Rs.18470.000 Millions compared to Rs.15250.000
Millions in the previous year, recording a growth of about 21%. The Profit
Before Interest and Taxation for the year was Rs.1393.700 Millions (previous
year Rs.1116.000 Millions). The Profit After Tax for the year was Rs.835.500
Millions compared to Rs.692.000 Millions in the previous year.
Outlook:
With increased water storage levels in the reservoirs and also better
ground water availability, the demand for phosphatic fertilisers is expected to
go up further in the coming year. There is also an increase in the area under
irrigation in CFL's addressable markets. The shift in cropping pattern in the
country from traditional food grains to crops such as maize, sugarcane, pulses,
oil seeds etc., besides increased usage of BT seeds, will also lead to
increased fertiliser consumption. While there will be an increase in the
country's domestic production of phosphatic fertilisers, this will be absorbed
by the increased demand. It is also expected that there will be an increase in
the usage and demand for micronutrients like sulphur.
The availability of phosphoric acid will be a critical factor with no
fresh phosphoric acid production capacity coming up and production/supply
constraint in some producing countries. CFL expects to make progress in respect
of its joint venture in Tunisia for manufacture of phosphoric acid for which an
MOU has been concluded during 2005-2006.
As regards the pesticides operations, CFL will continue to focus on
marketing of specialty products in domestic markets and aggressive market
expansion in the export market esp. for Phenthonate and Profenofos. In this
context, the proposed acquisition of equity stakes in
Ficom Organics Limited will help in expanding the product range and
strengthening the customer base.
In domestic market, the company will continue to introduce new molecules
in growing product segments like fungicides and herbicides to reduce its dependence
on generic products. Through co-marketing tie-ups and alternate source
registrations, CFL has built a portfolio of specialties and this will remain
the focus in the future years also.
FINANCE:
The company continued to maintain its healthy credit rating of P1+ from
CRISIL for short-term borrowings and 'AA' for long-term borrowings with a
'stable' outlook.
During the year, CFL generated Rs.1677.600 Millions from its operations
before working capital changes. There was however a significant increase in the
subsidy outstanding from Government of India as subsidy dues from November 2005
remained unsettled till end March 2006. There was also an increase in the
inventory levels of certain key raw materials and finished products. As a
result of this, the net working capital recorded an increase of Rs.2049.400
Millions, thus resulting in a net deficit cash flow of Rs.371.800 Millions from
operating activities for the year.
In view of the aforesaid increase in the level of subsidy receivables and
inventory, there was an increase in the working capital borrowings during the
last quarter of the year, which in turn resulted in higher interest cost.
Through a judicious mix of foreign currency, Buyer's Credit, Export
Packing Credit and short-term rupee borrowings at sub MIBOR rates, the company
was able to finance its working capital needs at a highly competitive rate in
spite of a sustained rise in interest rate.
Business:
CFL is one of the leading producers of phosphatic fertilisers in India.
It produces and sells complex fertilisers of different grades and Single Super
Phosphate (SSP). The company also manufactures and sells 'Bentonite Sulphur'
which provides 'sulphur' to the soil. The company also trades in potash,
another key plant nutrient. These products are sold under well established
brand names 'Gromor', 'Paramfos', 'Parry Super' and 'Parry Gold'. CFL has a
strong market presence and dealer network in Andhra Pradesh, Orissa,
Chattisgarh, Tamil Nadu, Karnataka, parts of Madhya Pradesh and West
Bengal.
The company's fertiliser plants are located at Visakhapatnam (Andhra
Pradesh), Ennore and Ranipet (both in Tamil Nadu) and has a combined production
capacity of 1.175 Millions tonnes of complex fertilisers and 0.132 Millions
tonnes of SSP.
The company is also in the business of manufacturing and marketing of
pesticides with a technical manufacturing unit at Thane (Maharashtra) and a
formulation plant at Ranipet (Tamil Nadu). Pesticides account for nearly 10% of
the company's total turnover. The company is proposing to set up a formulation
unit at Jammu (J&K). The company has begun the process of acquiring
majority stake in Ficom Organics Limited, subject to regulatory and other
approvals.
ORGANISATION
- PROFILE:
Coromandel Fertilisers Limited (CFL), a leading manufacturer of farm inputs
comprising of phosphatic fertilisers and pesticides, is a constituent of the
Murugappa Group and is a subsidiary of EID Parry (India) Limited (EIDP), which
holds 69.05% of the equity of CFL.
CFL holds 45.07% of equity in Godavari Fertilisers and Chemicals Limited
(GFCL), another leading manufacturer of phosphatic fertilisers in the state of
Andhra Pradesh.
The company has 5 manufacturing/formulation units located in the States
of Andhra Pradesh, Tamil Nadu and Maharashtra. The company's products are
marketed through 13 marketing offices and a network of over 7,000 dealers, who
act as an interface between the company and the ultimate consumers, viz.,
farmers.
Promoters belonging to the
Murugappa Group:
1EID Parry (India) Limited,
and subsidiaries
2Dodavari Fertilisers and
Chemicals Limited
3Parry
Engineering and Exports Ltd.
4
Parry Agro Industries Ltd.
5
Parry Nutraceuticals Ltd
6
New Ambadi Estates Pvt. Ltd. and subsidiaries
7
Ambadi Enterprises Ltd.
8
Tube Investments of India Ltd. and subsidiaries
9
Pressmet Pvt Ltd
10
Carborundum Universal Ltd. and subsidiaries
11
Cholamandalam Investment and Finance Company Ltd. and subsidiaries
12
The Coromandel Engineering Company Ltd. and subsidiaries
13
AMM Educational Foundation
14
AMM Arunachalam & Sons P Ltd.
15
AMM Vellayan Sons P Ltd.
16
MM Muthiah Sons P Ltd.
17
Murugappa & Sons
18
Kademane Estates Company
19
MM Muthiah Research Foundation
20
A R Lakshmi Achi Trust
21
AMM Foundation
22
AMM Medical Foundation
News :
Coromandel Fertilisers Limited to provide
Technical and Management Expertise to South African Major
Murugappa
Group’s Fertiliser Forays into South Africa
Coromandel
Fertilisers Limited (CFL), a leading manufacturer of phosphatic fertilisers in
India has entered into an agreement with Foskor Limited, wholly owned
subsidiary of Industrial Development Corporation (IDC), South Africa for
acquiring 2.5% of its equity stake. Coromandel Fertilisers Limited has also
entered into a business assistance agreement with Foskor Limited to provide
assistance in the areas of plant performance, procurement, logistics, etc to
improve Foskor’s financial performance.
Foskor
Limited is one of the largest producers of phosphoric acid in the world and
exports large quantities of phosphoric acid to India. Foskor Limited holds 5%
equity in Godavari Fertilisers and Chemicals Ltd (GFCL), India, a part of
Murugappa Group with an agreement to supply phosphoric acid to CFL and GFCL.
This strategic alliance cum business assistance arrangement entered by
Coromandel Fertilisers Limited with Foskor will lead to improved availability
of phosphoric acid to the Indian sub-continent and especially to CFL &
GFCL. This strategic tie up will also help CFL and GFCL to further consolidate
its market position in South East coast of India. Further the business
assistance arrangement with Foskor gives CFL option to increase its stake up to
16.5% over a period of time.
At
the announcement of the agreement at Johannesburg, Mr. Raishibe Morathi, IDC’s
acting Chief Executive and President said, “They are pleased that they have
concluded this agreement with Coromandel Fertilisers Limited who has a sound
track record in turnaround strategies and going forward, they hope that the relationship
will yield mutually beneficial results among all the stakeholders.
Mr.
A Vellayan, Director – Marketing, Murugappa Group and Chairman, Coromandel
Fertilisers Limited, said “This is a culmination of a process of IDC to seek a
strategic equity partner, to inject strategic technical skills and access to
better technology. The capability of Coromandel Fertilisers to manage a diverse
supply chain, and its expertise to increase productivity of quality products
under environmental friendly operations will assist Foskor to improvising its
competitiveness to global best practice.” “This has strengthened the long
standing and proven relationship between the two companies. This agreement will
also help Coromandel and Godavari to further consolidate its market position in
India,” he further added.
CMT REPORT [Corruption, Money laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its
beneficial owners, controlling shareholders or senior officers as terrorist or
terrorist organization or whom notice had been received that all financial
transactions involving their assets have been blocked or convicted, found
guilty or against whom a judgement or order had been entered in a proceedings
for violating money-laundering, anti-corruption or bribery or international
economic or anti-terrorism sanction laws or whose assets were seized, blocked,
frozen or ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the
subject of any formal or informal allegations, prosecutions or other official
proceeding for making any prohibited payments or other improper payments to
government officials for engaging in prohibited transactions or with designated
parties.
3] Asset
Declaration :
No records exist to suggest that the property or
assets of the subject are derived from criminal conduct or a prohibited
transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.
8] Affiliation
with Government :
No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.
9] Compensation
Package :
Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.
10] Press Report :
No press reports / filings exists on the
subject.
CORPORATE
GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN
EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.70 |
|
UK
Pound |
1 |
Rs.85.57 |
|
Euro |
1 |
Rs.53.64 |
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
70 |
This score
serves as a reference to assess SC’s credit risk and to set the amount of
credit to be extended. It is calculated from a composite of weighted scores
obtained from each of the major sections of this report. The assessed factors
and their relative weights (as indicated through %) are as follows:
Financial condition (40%) Ownership background (20%) Payment record (10%)
Credit history (10%) Market
trend (10%) Operational
size (10%)
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely
sound financial base with the strongest capability for timely payment of
interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working
capital. No caution needed for credit transaction. It has above average
(strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial &
operational base are regarded healthy. General unfavourable factors will not
cause fatal effect. Satisfactory capability for payment of interest and
principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is
considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable &
favourable factors carry similar weight in credit consideration. Capability
to overcome financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are
apparent. Repayment of interest and principal sums in default or expected to
be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk
exists. Caution needed to be exercised |
Credit not recommended |