MIRA INFORM REPORT
|
Report Date : |
13.11.2006 |
IDENTIFICATION DETAILS
|
Name : |
UNITED
PHOSPHORUS LIMITED |
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Formerly Name |
Chem
Industries Limited |
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Registered Office : |
3-11,
GIDC, Vapi Valsad 396195, Gujarat, India |
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Country : |
India
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
02.01.1985 |
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Com. Reg. No.: |
04-25132 |
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CIN No.: [Company Identification No.] |
U24219GJ1995PLC025132 |
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TAN No.: [Tax Deduction & Collection Account No.] |
MUMU03710A |
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PAN No.: [Permanent Account No.] |
AABCS1698G |
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Legal Form : |
Subject
is a public limited liability company.
The company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing
of Chemicals such as Phosphorus Trichloride, Caustic Soda, Chlorine, etc. |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa |
RATING
|
STATUS |
PROPOSED CREDIT LINE |
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|
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 |
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Maximum Credit Limit : |
USD 43000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
The company has turned the
corner and wiped out all its previous losses during the year 2003-04.
Directors are reported as experienced and respectable businessmen. Trade relations are fair.
Payments are usually correct and as per commitments. The company can be
considered normal for business dealings at usual trade terms and conditions. It
can be regarded as a promising business partner in the long-run. |
LOCATIONS
|
Registered Office : |
3-11,
GIDC, Vapi Valsad 396195, Gujarat, India |
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Tel. No.: |
91-260-232716/232720/2400717 |
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Fax No.: |
91-260-24946974/2401823 |
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E-Mail : |
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Website : |
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Administrative Office : |
Uniphos House, Madhu Park
Centre, Opp. Madhu Park, Chitraker Dhurandar Marg, Khar (West), Mumbai - 400
052, Maharshtra, India |
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Tel. No.: |
91-22-26041111 |
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Fax No.: |
91-22-2401823 |
DIRECTORS
|
Name : |
Mr.
R. D. Shroff |
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Designation : |
Chairman
& Managing Director |
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Date of Birth/Age : |
66
years |
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Qualification : |
B.Sc. |
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Date of Appointment : |
29.05.1969 |
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Name : |
Mrs.
S. R. Shroff |
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Designation : |
Vice
Chairperson |
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Date of Birth/Age : |
59
years |
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Date of Appointment : |
29.05.1969 |
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Name : |
Mr.
J. R. Shroff |
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Designation : |
Executive
Director |
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Date of Birth/Age : |
35
years |
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Qualification : |
B.Sc. |
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Date of Appointment : |
01.01.1990 |
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Name : |
Mr.
A. C. Ashar |
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Designation : |
Director
– Finance |
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Qualification: |
B.Com,
ACA |
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Last Employment: |
Finance
Controller Excel Industries Limited |
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Name : |
Mr.
K. Banerjee |
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Designation : |
Wholetime
Director |
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Date of Birth/Age : |
57
years |
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Qualification : |
B.Tech. |
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Date of Appointment : |
21.10.2003) |
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Name: |
Mr.
Pradeep Goyal |
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Designation: |
Director |
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Name: |
Dr.
P. V. Krishna |
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Designation: |
Director |
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Name: |
Dr.
(Mrs.) R. Ramachandran |
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Designation: |
Director
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr.
Pradip Madhavji |
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Designation: |
Director
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Date of Appointment: |
29.01.2004 |
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Name: |
Mr.
A. L. Bongirwar |
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Designation: |
Nominee
Director |
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr.
A. A. Panjwani |
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Designation: |
Director
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr.
P. N. Devarajan |
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Designation: |
Director
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Date of Appointment: |
21.10.2003 |
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Name: |
Dr.
Nitish Sengupta |
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Designation: |
Director
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr.
D. A. Anandpura |
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Designation: |
Director
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Date of Appointment: |
21.10.2003 |
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Deceased On: |
4.11.2003 |
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Name: |
Mr.
Vikram R Shroff |
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Designation: |
Director
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Name: |
Mr.
Vinod Sethi |
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Designation: |
Director
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Name: |
Mr.
Chirayu R Amin |
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Designation: |
Director
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Name: |
Mr.
M B Trivedi |
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Designation: |
Company
Sectary |
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Other Personnel: |
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Name: |
K.
R. Srivastva |
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Designation: |
Chief
Operating Officer |
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Qualification: |
B.Chem,
PGDBMA (IIM), DSM |
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Last Employment: |
Predident-
Pharmaceutical Products of India Limited |
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Name: |
Vishnu
Bhat |
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Designation: |
President
Profit Center |
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Qualification: |
B.Tech
(Chemical Engineering) |
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Last Employment: |
CEO-Shaw
Wallace Agrochemical Limited |
MAJOR SHAREHOLDERS
|
Names of Shareholders |
Percentage of Holding |
|
Indian Public |
11.96% |
|
NRIs /OCB |
11.72% |
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Promoter |
33.45% |
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FIIs |
21.06% |
|
Corporate Bodies |
2.67% |
|
Mutual Funds/LIC/Banks |
19.12% |
|
Total |
100.00% |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing
of Chemicals such as Phosphorus Trichloride, Caustic Soda, Chlorine, etc. |
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Export to: |
Europe, Italy, Korea,
Malaysia, South Korea, Sri Lanka, UK and USA. |
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Import From: |
Europe and China. |
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
Speciality Chemicals |
Tonnes |
5470 |
5318 |
486 |
|
Chloro-Alkaline Products |
Tonnes NM3 |
101700 |
112500 |
105637 |
|
Industrial Chemicals |
Tonnes |
44600 |
36720 |
31097 |
|
Power |
MW |
48.50 |
48.50 |
2941 (Lacs
KWH) |
|
Pesticides |
Tonnes (Nos ) KL LB |
34886 -- -- -- |
36456 -- -- -- |
27789 -- -- -- |
|
Mercury Salts |
Tonnes |
100 |
100 |
-- |
|
Pesticides Intermediates |
Tonnes KL |
24701 |
25002 |
15944 323 |
GENERAL INFORMATION
|
No of Employees: |
1500 |
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Bankers : |
v
Dena Bank v
Bank of Baroda v
State Bank of India v
Union Bank of India v
Canara Bank, 84, Dr.
Annie Besant Road, Worli – 400018, Mumbai v
Indian Overseas Bank.
Sir P M Road, P O Box – 354, Mumbai – 400001 v
Centurion Bank Limited v
IDBI Bank Limited v
Punjab & Sind Bank v
Global Trust Bank
Limited v
Karur Vysya Bank Limited v
UTI Bank Limited v
Andhra Bank Limited v
State Bank of
Hyderabad v
Oriental Bank of
Commerce v
Export Import Bank of
India v
ICICI Bank Limited v
ING Vysya Bank Limited |
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Facility |
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Banking Relations : |
Good |
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Auditors : |
S.
V. Ghatalia And Associates Chartered
Accountant |
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Subsidiaries : |
v
Agrodan A/S v
Biowin Corporation
Limited v
Enviro Technology
Limited v
Bharuch Enviro
Infrastructure Limited v
United Phosphorus De
Mexico S.A.DE.C.V. v
United Phosphorus
Limited, Australia v
United Phosphorus
Limited, Hong Kong v
United Phosphorus
Limited, Russia v
United Phosphorus
Limited, Shanghai v
United Phosphorus Inc,
USA v
United Phosphorus
Limited, Japan v
United Phosphorus
Limited, UK v
United Phosphorus
Limited, Zambia v
United Phosphorus De
Argentina S.A. v
United Phosphorus
Belgium S P R L v
United Phosphrous
Zimbabwe Limited v
United Phosphorus
South Africa Limited v
United Phosphorus
(Korea) Limited v
United Phosphorus
Limited, New Zealand v
PT. United Phosphorus
Indonesia v
Shroffs United
Chemicals Limited v
United Phosphorus
Limited Gibraltar v
Inventa Corporation v
Agvalue Enterprise,
Inc. v
Agvalue, Inc. v
Agvalue Etho, LLC v
Agvalue D.P, LLC v
Agvalue Oryza, LLC v
Agvalue Metri, LLC v
Agvalue, Bromacil, LLC v
Agvalue, Propyzamide,
LLC v
Agvalue- Propargite,
LLC v
Agvalue-Picloram, LLC v
United Phosphorus Do
Brazil Limited v
United Phosphorus
Limited Gautemala |
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Associate Company: |
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Joint Venture Company: |
United Phosphorus Limited
Bangladesh |
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Membership: |
Confederation of Indian
Industry |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
55000000 |
Equity
Shares |
Rs. 10 Each |
Rs. 550.000 millions |
|
14000000 |
Preference
Shares |
Rs. 10 Each |
Rs. 1400.000 millions |
|
5000000 |
Preference
Shares |
Rs. 10 Each |
Rs. 50.000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
187134807 |
Equity
Shares |
Rs. 10 Each |
Rs. 374.300 millions |
|
117978 |
7%
Non-Convertible Non Cumulative Redeemable Preference Shares |
Rs. 10 Each |
1.200 Millions |
|
|
Total |
|
Rs. 375.500 Millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 (12 months) |
31.03.2004 (12 months) |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
375.500 |
369.079 |
531.199 |
|
|
2] Reserves & Surplus |
10329.700 |
6310.825 |
3996.555 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH
|
10705.200 |
6679.904 |
4527.754 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3535.100 |
3330.110 |
3431.996 |
|
|
2] Unsecured Loans |
7773.700 |
2312.156 |
1375.522 |
|
TOTAL
BORROWING
|
11308.800 |
5642.266 |
4807.518 |
|
|
DEFERRED TAX LIABILITIES |
659.500 |
423.559 |
432.270 |
|
|
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|
|
|
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TOTAL
|
22673.500 |
12745.729 |
9767.542 |
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APPLICATION OF FUNDS
|
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|
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|
|
|
FIXED ASSETS [Net Block]
|
4864.700 |
4782.234 |
4937.788 |
|
Capital work-in-progress
|
350.900 |
368.401 |
179.924 |
|
|
|
|
|
|
|
Intangible Assets
|
1554.100 |
1113.008 |
135.496 |
|
INVESTMENT
|
8597.500 |
413.596 |
397.882 |
|
DEFERREX TAX ASSETS
|
40.800 |
344.282 |
579.382 |
|
|
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CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
1985.000 |
1510.662 |
1004.669 |
|
|
Sundry Debtors
|
3873.100 |
3816.783 |
3414.538 |
|
|
Cash & Bank Balances
|
3419.200 |
46.502 |
32.275 |
|
|
Other Current Assets
|
451.700 |
458.467 |
347.291 |
|
|
Loans & Advances
|
2974.800 |
3963.484 |
1506.499 |
Total Current Assets
|
12703.800 |
9795.898 |
6305.272 |
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
5220.400 |
3929.356 |
2656.327 |
|
|
Provisions
|
222.500 |
157.969 |
151.440 |
Total Current Liabilities
|
5442.900 |
4087.325 |
2807.767 |
|
Net Current
Assets
|
7260.900 |
5708.573 |
3497.505 |
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
4.600 |
15.635 |
39.565 |
|
|
|
|
|
|
|
TOTAL
|
22673.500 |
12745.729 |
9767.542 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 (12 months) |
31.03.2004 (12 months) |
Sales Turnover [including other income]
|
13251.100 |
10847.465 |
8399.997 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
1494.600 |
972.305 |
579.930 |
Provision for Taxation
|
|
669.705 |
537.830 |
Profit/(Loss) After Tax
|
329.500 |
302.600 |
42.100 |
|
|
|
|
|
Export Value
|
NA |
5941.759 |
4716.605 |
|
|
|
|
|
Import Value
|
NA |
2176.172 |
1771.928 |
|
|
|
|
|
Total Expenditure
|
11756.500 |
9875.16 |
7753.929 |
QUARTER
|
PARTICULARS |
|
30.06.2006 (1ST Quarter) |
30.09.2006 (2nd Quarter) |
|
Sales Turnover |
|
2889.800 |
3631.400 |
|
Other Income |
|
106.700 |
278.900 |
|
Total Income |
|
2996.500 |
3910.300 |
|
Total Expenditure |
|
2156.600 |
2959.900 |
|
Operating Profit |
|
839.900 |
950.400 |
|
Interest |
|
486.400 |
138.700 |
|
Gross Profit |
|
353.500 |
811.700 |
|
Depreciation |
|
205.400 |
211.200 |
|
Tax |
|
4.000 |
4.100 |
|
Reported PAT |
|
93.100 |
395.200 |
200606
Quarter 1 - EPS is Basic Status of Investor Complaints for the quarter
ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 170 Complaints disposed off during the
quarter 170 Complaints unresolved at the end of the quarter Nil 1. The above
Unaudited Financial Results were reviewed by the Audit Committee and thereafter
approved at the Meeting of the Board of Directors held on 28.07. 2006. The
Statutory Auditors have carried out a Limited Review for the quarter ended
30.06. 2006. 2. The Company made an issue of Foreign Currency Convertible Bond
(FCCB's) aggregating to US $ 75 million, on 06.10.2004 and US $150 million on
06.01.2006. FCCB's aggregating to US $ 143.96 million have been converted into
equity shares resulting in increase in the paid up capital of the Company to Rs
374.40 million. 3. Interest and Other Finance Charges include exchange
difference of Rs 338.40 million arising due to valuation of outstanding foreign
currency loans. The amount for the corresponding quarter was income of Rs 2.90
million. 4. In accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternative Tax (MAT) under the Income-Tax Act,
issued by the Council of the Institute of Chartered Accountants of India on
23.03.2006, the Company has charged payment of MAT for the current quarter to
the Profit and Loss Account and recognised this MAT credit as an asset in the
current quarter under the head 'Loans and Advances'. Similar adjustment has
been made for the previous quarter (April to June 2005) due to which the profit
after tax is higher by Rs 18.500 million than reported in the April to June
2005 results. 5. Previous period / year's figures have been regrouped /
rearranged wherever necessary.
200609
Quarter 2 - Expenditure Includes (Increase)/Decrease in Stock in Trade Rs
(164.500) million Consumption of Raw Materials & Purchase of Traded Goods
Rs 1980.100 million Staff Cost Rs 168.600 million Other Expenditure Rs 971.100
million Interest indicates Interest and Other Finance Charges (net)
Depreciation indicates Depreciation / Amortisation Tax Includes Provision for
Current Tax Rs 66.300 million Mat Credit Entitlement Rs (66.300)million
Deferred Tax Rs 201.200 million Fringe Benefit Tax Rs 4.100 million EPS is
Basic Status of Investor Complaints for the quarter ended 30.09.2006 Complaints
Pending at the beginning of the quarter Nil Complaints Received during the
quarter 147 Complaints disposed off during the quarter 147 Complaints
unresolved at the end of the quarter Nil 1. The above Unaudited Financial
Results were reviewed by the Audit Committee and thereafter approved at the
Meeting of the Board of Directors held on 31.10.2006. The Statutory Auditors
have carried out a Limited Review of the said results. 2. The Company made an
issue of Foreign Currency Convertible Bond (FCCB's) aggregating to US $ 75
million, on 06.10.2004 and US $150 million on 06.01.2006. FCCB's aggregating to
US $ 143.96 million have been converted into equity shares resulting in
increase in the paid up capital of the Company to Rs 374.40 million. 3. Other
Income includes Rs 164.30 million for the quarter and Rs 213.40 million for the
half year ending September 2006 respectively toward income arising due to
foreign exchange fluctuations at the time of redemption of investments is
subsidiaries. 4. In accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternative Tax (MAT) under the Income-Tax Act,
issued by the Council of the Institute of Chartered Accountants of India on
23.03.2006, the Company has charged MAT for the current quarter to the Profit
and Loss Account and recognised this MAT credit as an asset in the current
quarter under the head Loans and Advances. Similar adjustment has been made for
the previous half year (April to September 2005) and previous quarter (July to
September 2005) due to which the profit after tax is higher by Rs 36.90 million
and Rs 18.40 million respectively than reported in the previous period. 5.
During the quarter, the Company has through its subsidiary i. Increased its
shareholding to 1.00% in Corpserve (pty) Limited, South Africa. ii. Purchased
certain Crop protection products from Bayer Cropscience, Germany. iii. acquired
Bensulfuron- methly business from Du Point USA. 6. Previous period / year's
figures have been regrouped / rearranged wherever necessary.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt
Equity Ratio |
1.04 |
1.01 |
1.49 |
|
Long
Term Debt Equity Ratio |
0.96 |
0.88 |
0.99 |
|
Current
Ratio |
2.00 |
1.91 |
1.27 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.29 |
1.21 |
1.34 |
|
Inventory
|
7.79 |
8.78 |
15.04 |
|
Debtors |
3.54 |
3.05 |
4.77 |
|
Interest
Cover Ratio |
2.70 |
2.28 |
1.79 |
|
Operating
Profit Margin (%) |
23.21 |
21.12 |
23.56 |
|
Profit
Before Interest and Tax Margin (%) |
17.41 |
15.67 |
17.52 |
|
Cash
Profit Margin (%) |
14.35 |
11.51 |
13.20 |
|
Adjusted
Net Profit Margin (%) |
8.55 |
6.07 |
7.17 |
|
Return
on Capital Employed (%) |
13.40 |
15.41 |
19.86 |
|
Return
on Net Worth (%) |
13.42 |
12.00 |
18.66 |
STOCK PRICES
|
Face
Value |
Rs.2/- |
|
High |
Rs.300.00/- |
|
Low |
Rs.265.10/- |
LOCAL AGENCY FURTHER INFORMATION
History
United Phosphorus Limited(formerly Search Chem Industries Limited), a subsidiary of erstwhile United Phosphorous Limited(presently Unipros Enterprises Limited) is into manufacture of Chlor alkali products, Industrial chemicals and speciality chemicals. The company is a leading manufacturer of chlorine and Phosphorous based industrial chemicals and speciality chemicals like Phosphorus Pentachloride, Phosphorus Trichloride, Phosphorus Oxychloride, HEDP, Tri Phenyl Phosphite, Tri Phenyl Phosphate, ATMP etc. The comapany is also into power generation. The surplus power after captive consumption is sold to Gujarat Electricity Board.
The company incorporated as Vishwanath Commercials on 02.01.1985 was
originally promoted by Debisingh Shekhawat, Lalit Kumar Sharma and Associates
and went public in Feb 1985.
R D Shroff ( alongwith his family and investment companies), acquired
majority stake in erstwhile Viswanath Commercials in Feb 1994 and changed its
name to Search Chem Inds Limited. As a result of reorganisation with in the
group, United Phosphorus(UPL) acquired 75% equity in Search Chem in March 1995
and UPL acquired further shares in August 1995 and became the promoter of the
company.
The company until the takeover was engaged in the business of trading in
shares/debentures. Subsequent to takeover it diversified into manufacture of
chemicals. The company's plants are located at Vapi and Jhagadia in Gujarat.
The company entered into manufacture of Chlor-alkali products by
commercialisation of Phase I of its Caustic and Chlorine and Phosphorus
Trichloride plants in 1995-96. During 1998-99, the company has installed a new
plant to manufacture POCI (Phosphorus Oxychloride) and also installing a plant
to manufacture Elemental Phosphorus, which is main input of the company.
The company has entered an agreement with General Electric Energy Plant
Operations LP for operation and maintenance of power plant.
The company has been referred to BIFR as the networth was fully eroded.
The capacity utilisation of both Speciality Chemicals and Industrial Chemicals
was higher compared to 1999-2000.
In attempt to restructure the business in the group, the manfufacturing
facilities of erstwhile United Phosphorous is transferred to this
company(formerly Search Chem Industries Limited). The High Court of Gujarat has
approved this scheme of demerger effective from March 31, 2003. According to
the scheme of demerger the company has reduced its share capital and has issued
to its shareholders one equity share of Rs.10/- each for every twelve equity
share of Rs.10/- each held by them in the company. Further one equity share or 14
preference shares of Rs.10/- each of the company were alloted to the
shareholders of Uniphos Enterprises Limited for every one equity share of
Rs.10/- each held by them in Uniphos Enterprises Limited.
During the 2004-05 the company has enhanced its installed capacity of
Pesticides and Pesticides Intermediates by 9940 Tonnes and 890 Tonnes. With
this expansion the total installed capacity of Pesticides and Pesticides
Intermediates has increased to 28040 Tonnes and 17546 Tonnes
respectively.
In June 2005 the company has acquired 100% stake of SWAL (Formerly known
as Shaw Wallance Agrochemicals Limited) for a consideration of Rs.234 Million
and also acquired CEQUISA, a distributor and registrant of crop-protection
products located in Barcelona Spain & its subsidiaries . In October 2005
the company sub-divided its equity share face value from Rs.10/- per share to
Rs.2/- per share. Further the company has acquired 100% stake through its UK
subsidiary of REPOSO S.A.I.C. (REPOSO) a manufacturer and distributor of crop
protection products located in Buenos Aires, Argentina. The company has also
acquired Agvalue in USA during November 2004.
OPERATIONAL
PERFORMANCE
During the year
under review, rainfall had been very good in India. In fact, in some parts,
there were heavy floods. U.S.A. suffered two devastating hurricanes. The
bountiful rains resulted in increase in agriculture activity throughout the
world. Rabi and Kharif crops yielded more agriculture output. The local sales
of agrochemicals and other chemicals increased and stood at Rs.6009.200
Millions. Like last year, the exports again surged ahead to Rs. 7154.100
Millions. The increase in sales was about 34%. Sale of caustic soda and
chlorine were higher. In the later part of the year the prices of caustic soda
and chlorine came down. However, in the current year, it has again started
moving up. The Company's total sales stood at Rs. 13621.200 Millions, Profit
before taxes were at Rs. 1494.600 Millions which is 50% higher as compared to
last year.
FUTURE
OUTLOOK
The preliminary
weather forecast indicate almost normal monsoon in India for the year
2006-2007. This is a good indication and near-normal monsoons should result
into overall better performance of the Company. Exports are also expected to go
up significantly. With the new acquisitions in recent times, the Company
expects that exports should go up in next year. The Company has recently
ventured into seeds business. There is a very good demand for genetically
developed seeds and it is expected that this business will also do very well.
Overall, barring unforeseen circumstances, the Company should perform well in
the year 2006-2007.
SUB-DIVISION
OF SHARES
The face value of
the Company's equity share was Rs.10 per share. In order to facilitate easy
accessibility to the Company's equity shares by the small investors and to
enhance the liquidity of the shares on the stock exchanges, the Company has
sub-divided its equity shares from a face value of Rs.10.per share to Rs.2 per
share. The Record Date for the sub-division was kept on 05.10.2005
DIVIDEND
The Directors have recommended dividend of Re.1/-
per Equity Share of Rs. 21- each and paise 70 per Preference Share on
1,17,978 - 7 % Preference Shares of Rs. 107-each for the financial year ended
31.03.2006, which if approved at the forthcoming Annual General Meeting, will
be paid to (i) all those Equity and Preference Shareholders of the Company
whose names appear in the Register of Members as on 19.09.2006 and (ii) to
those Equity and Preference Shareholders of the Company whose names appear as
beneficial owners as per list furnished by National Securities Depository
Limited and Central Depository Services (India) Limited.
FINANCE
It has always been
constant endeavour on part of the Company to save interest cost by availing of
low-cost debt and replacing the same in place of debts carrying higher interest
burden. During the year the Company issued Foreign Currency Convertible Bonds
of US $ 150 million. Of this, bonds worth US $ 70 million have been converted
into equity shares. This issue was made for raising finance for acquiring
overseas businesses / registrations, working capital requirements of overseas
subsidiaries and meeting capital expenditure requirements of the Company.
SAFETY,
HEALTH PERFORMANCE AND ENVIRONMENT
The
Company has taken initiatives at all its units in protection of environment and
to keep safe working environment. All units are certified under Environmental
Management System standards ISO 14001. During the year, some of the units have
availed re-certification. Focus in the environmental management system is on
reduction on waste generation and recovery, reuse of available resources, etc.
In all the manufacturing units, the Company has achieved considerable reduction
in the consumption of raw materials and utilities which is helpful in better
environmental compliance and helps in achieving sustainable growth. The Company
has upgraded pollution treatment system provided at various units as per
requirements. The entire incinerable wastes generated at the Company's units
which need thermal treatment are sent to the Common Incineration system at
Ankleshwar. The
Company is having valid Consent / Authorization from Pollution Control Board
for all the units. All statutory returns like Environmental Statement and
Hazardous Waste Return ace submitted well in time. Solar evaporation
ponds are avoided and Forced Evaporation System / Multiple Effect Evaporation
System have been introduced. The Company's associate viz. Bharuch Enviro
Infrastructure Limited (BEIL) has streamlined the operation of the Common
Incineration System. The Common Incineration System is first of its kind in
India and as per international standards. This facility is helpful to various
industries in the region in treafingthe organic wastes generated by them. BEIL
has also taken possession of additional 50 acres of land for expansion and the
land has been notified. Enviro Technology Limited (Common Effluent Treatment
Plant) at Ankleshwar has adopted energy efficient Diffused Aeration System and
replaced the surface aerators. All the manufacturing sites are certified under
Occupational Health and Safety Assessment Standards OHSAS 18001. In all the
units, emergency rescue teams are available in all shifts which are helpful in
case of any emergency situation in the Company's units or outside the units.
Company's ERT team performance in emergency situation of flood situation in
Damanganga river at Vapi was appreciated by District Collertor also. The
Company has received award from Gujarat Safety Council for 1 million accident
free man-hours. It also bagged National Energy Conservation award at the hands
of President of India Dr. A P J Kalam.
MANAGEMENT DISCUSSION AND
ANALYSIS
INDUSTRY
STRUCTURE AND DEVELOPMENT
The
core business of United Phosphorus Limited (UPL) is agrochemicals. UPL is the
biggest player in this field in India. Globally, it is among the first five
companies of generic agrochemical manufacturers. UPL also manufactures
industrial chemicals and specialty chemicals. Apart from this, it has a
chlor-alkali plant. At UPL chlorine is mainly used for captive consumption and
caustic soda is sold off through dealers. UPL also has a captive power
generation plant, having capacity of 53 MW. Power generated is mainly used in
chlor-alkali and white
phosphorus plants. Surplus power is sold off to Gujarat Electricity Board. With
changes in power policy on anvil in Gujarat, it may be possible for UPL to sell
power to other companies directly. UPL's area of operations is spread throughout
the world. It has business activities in more than 100 countries in the world. Agrochemicals usage is there throughout the world.
The consumption of agrochemicals is very high in countries like USA, UK, Japan,
etc. as compared to India. UPL's manufacturing plants are at Vapi, Ankleshwar,
Jhagadia, Halol and Jammu. Some of the subsidiaries have manufacturing
facilities at Haldia and Bangalore (India), Sandbach (U.K), Argentina,
Australia, Thailand, etc. Monsoons play an important role for agrochemical
industry. Good rainfalls in the country and in the world result into
substantial increase in the activity of agrochemical business. For sale of
agrochemicals, registrations are required. UPL holds product registrations for
various products throughout the world. UPL has made some of the acquisitions in
the recent past and thereby got new product registrations. This will help in
pushing its products in new markets. UPL's endeavour is to provide complete
solution to all the requirements of the farming community. It has now ventured
into seeds business, and seeds germplasm. This business has tremendous growth
potential. At present, UPL is trying to develop seeds for rice, sunflower and
cotton. To increase its exports, UPL has entered into various strategic alliances
in different parts of the world. In domestic markets, innovative ways to
enhance the sales are followed. Superior quality, full customer satisfaction,
providing complete solution for agro issues, farmers education and advisory
services, new product development, introducing new compounds, etc are steps
taken by the company to achieve commendable growth in business in last few
years. Agrochemical industry in India was predominantly the domain of few
multinational companies. However, UPL has strived hard to become leader in this
field, becoming one of the biggest Indian multinational company.
OPPORTUNITIES AND THREATS:
Agrochemical industry in India has lots of potential
for growth. In India, there is a pool of very good scientists and engineers. It
is in a position to manufacture some of the most complicated products at very
economical prices and having few superior quality. This is the main reason for
increase in country's exports of agrochemicals for last years. In India, every
year crops worth crores of rupees is lost due to pest and disease attack. If
this trend has to stop, farmers are required to be trained and properly
educated. As consumption of agrochemicals is much less in India, lots of
opportunities are available for growth outside India, the Indian agrochemicals
industry can capture a much larger market share in the world. The seeds
business also provides very good opportunities. It is set to change the pattern
of farming in India. UPL's venturing into this business should also turn out to
be a big opportunity for growth in this field. Another threat is from
manufacturers in China. Substandard material is supplied by them at
ccynpetitive prices in big volumes. In India, the manufacturers have taken
various step to adjust to these threats. Another threat is vagaries of monsoon
- either too much or too little resulting in floods or droughts. Agrochemicals
usage can be less in both the situations. However, increase in exports will
provide a hedge to this threat. Another threat is negative perception in the
minds of the people and government about the industry. This is further fuelled
by some environmentalists. The industry is taking all steps, legal or
otherwise, to give right picture of usefulness of the persticide industry.
Renowned scientists have also opined that pesticides are blessings for human
race and green revolution could not have taken place in the absence of
pesticides.
BUSINESS OUTLOOK:
Business outlook is favourable for the company. Last
year, monsoon in India had been fairly widespread and this year too, it is
expected to be good. This should augur well for the company. There is a good
demand for company's products in India and abroad. There is good network of
dealers in India. The company is entering into strategic alliances, coupled
with global acquisitions. Overseas subsidiaries are marketing arms and they
have also performed well. Company is carrying on research in few new products,
especially herbicides. This will help in introduction of new products in India
and abroad. Overall, the -business outlook is very encouraging.
RISKS AND CONCERNS:
Adequate risk management steps are taken by various
departments. The agrochemical industry has inherent risks such as weather
conditions, or regulatory restrictions on manufacture or use of certain
agrochemicals. At UPL, the global operations provide protection against
vagaries of nature. Broad product portfolio enables the company to manage the
risks effectively. Health, Safety and Environment is another area of risk. The
same is managed by not only compliance of all regulations but also upgrading
the system beyond regulatory needs, Constant safety audits are carried out.
Treasury management risks are taken care of by monitoring receivables, proper
credit control, credit insurance cover of all domestic and international
receivables, non-recourse factoring and efficient supply chain management.
Foreign exchange fluctuations are taken care by future covers and other
derivatives continuously. As company's export goes up year after year, it provides
adequate natural cover for servicing its external borrowings. Product and
public liability insurance covers are taken by the company.
FINANCIAL AND OPERATIONAL PERFORMANCE:
The year 2005-2006 was another year of excellent
performance.
The turnover of the company increased from
Rs.11041.400 Millions to Rs. 13621.200 Millions, registering a growth of 23%.
Profit before taxes went up by 54% from Rs.972.300 Millions to Rs. 1494.600
Milions. On the export front also the performance was excellent. During the
year, export on FOB basis were Rs.7154.100 Millions as against Rs.5925.300
Millions.
Website
details are attached herewith:
United Phosphorus Limited(formerly Search Chem Industries Limited), a subsidiary of erstwhile United Phosphorous Limited(presently Unipros Enterprises Limited) is into manufacture of Chlor alkali products, Industrial chemicals and speciality chemicals. The company is a leading manufacturer of chlorine and Phosphorous based industrial chemicals and speciality chemicals like Phosphorus Pentachloride, Phosphorus Trichloride, Phosphorus Oxychloride, HEDP, Tri Phenyl Phosphite, Tri Phenyl Phosphate, ATMP etc. The comapany is also into power generation. The surplus power after captive consumption is sold to Gujarat Electricity Board.
The company incorporated as Vishwanath Commercials on Jan 2, 1985 was
originally promoted by Debisingh Shekhawat, Lalit Kumar Sharma and Associates
and went public in Feb 1985.
R D Shroff ( alongwith his family and investment companies), acquired
majority stake in erstwhile Viswanath Commercials in Feb 1994 and changed its
name to Search Chem Inds Limited. As a result of reorganisation with in the
group, United Phosphorus(UPL) acquired 75% equity in Search Chem in March 1995
and UPL acquired further shares in Aug 1995 and became the promoter of the
company.
The company until the takeover was engaged in the business of trading in
shares/debentures. Subsequent to takeover it diversified into manufacture of
chemicals. The company's plants are located at Vapi and Jhagadia in Gujarat.
The company entered into manufacture of Chlor-alkali products by
commercialisation of Phase I of its Caustic and Chlorine and Phosphorus
Trichloride plants in 1995-96. During 1998-99, the company has installed a new plant
to manufacture POCI (Phosphorus Oxychloride) and also installing a plant to
manufacture Elemental Phosphorus, which is main input of the company.
The company has entered an agreement with General Electric Energy Plant
Operations LP for operation and maintenance of power plant.
The company has been referred to BIFR as the networth was fully eroded.
The capacity utilisation of both Speciality Chemicals and Industrial Chemicals
was higher compared to 1999-2000.
In attempt to restructure the business in the group, the manfufacturing
facilities of erstwhile United Phosphorous is transferred to this
company(formerly Search Chem Industries Limited). The High Court of Gujarat has
approved this scheme of demerger effective from March 31, 2003.
EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 198 Complaints disposed off during the quarter 198 Complaints unresolved at the end of the quarter Nil 1. The above Unaudited Financial Results were reviewed by the Audit Committee and thereafter approved at the Meeting of the Board of Directors held on July 22, 2005. The Statutory Auditors have carried out a Limited Review for the quarter ended June 2005. 2. The Company made an issue of Foreign Currency Convertible Bonds (FCCB's), aggregating to US $ 75 million on October 06, 2004, Bond holders holding FCCB's aggregating to US $ 58.23 million have converted Bonds into equity shares resulting into increase in the paid up capital of the Company to Rs 335.20 million. 3. During the quarter, the Company has acquired, through it subsidiary, the business of M/s CEQUISA, located in Spain, for a price of Euro 11.50 million. 4. During the quarter, the Company has acquired all the shares of M/s SWAL Corporation Limited (formerly known as Shaw Wallace Agrochemicals Limited) for a consideration of Rs 234 million. 5. The Board of Directors have recommended sub-division of 1(one) Equity Share of Rs 10/- each to 5 (five) Equity Shares of Rs 2/- each. 6. Previous period / year's figures have been regrouped / rearranged wherever necessary.
FIXED ASSETS
The company's fixed assets of important value include leasehold land, factory building, plant & machinery, furniture, fixtures & office equipment and vehicles.
UNITED PHOSPHORUS LIMITED ACQUIRES
ADVANTA’S SEED BUSINESS FROM FOX
PAINE & COMPANY
Mumbai, India (February 14,
2006) United Phosphorus Limited (UPL) announced today that its
subsidiary, Biowin Corporation
Limited based in Mauritius, has acquired Advanta Netherlands
Holdings BV, based in the
Netherlands, in an all cash transaction from the US-based private
equity firm, Fox Paine
& Company, LLC. UPL will finance the transaction with funds raised
through the recent foreign
currency convertible bond (FCCB) issues and bank borrowings. YES
Bank served as the
exclusive financial and strategic advisor to UPL.
Advanta is a
leading supplier of seeds and seed technologies to major global and regional
markets, providing added value to farmers, downstream industries and consumers
by combining superior genetics with essential technologies and techniques. With
operations in Australia, Asia and South America, the Company’s research and
development consists of superior breeding programs and bioscience techniques
that have driven the development of a portfolio of elite, proprietary and
highly differentiated germplasm. Advanta had total sales of EUR 61 million in
[FY] 2005. Established in 1996 through the combination of Royal Vanderhave
Group of the Netherlands and Zeneca Seeds of the United Kingdom, Advanta’s
corporate heritage extends back to the 19th century with important R & D
programs in rice, maize, sunflower, sorghum and canola. Commenting on the
transaction, Mr. Jai Shroff, Executive Director of UPL, said, “The acquisition of Advanta allows UPL to
jump start their entry in the high end of the seeds business where the future
of agriculture growth lies. This transaction not only makes us the largest
player in some segments but also gives us leadership position in many important
products. At the same time, it allows us further their relationship with
distributors and farmers in these markets. They welcome the Advanta employees
to the UPL family of companies, and will look for a smooth, quick integration.” Mr. Kevin Schwartz, Managing Director of Fox Paine, said,
"They believe the combination of Advanta and UPL will help both companies
accelerate their corporate strategies for growth. This transaction successfully
concludes their investment work with Advanta, which was to develop and invest
in its market positions, product portfolio and technologies and ultimately find
the strategic acquirers best positioned to further develop Advanta's diverse
global business units. The success of this endeavor is due to the substantial
efforts of many people within Advanta and Fox Paine who shared this
vision."
United
Phosphorus Limited (UPL) is the largest Indian agrochemical company and among
the top five generic companies globally in this industry. It is engaged in
research, manufacture and
distribution
of agrochemicals and specialty chemicals across the globe. The Company’s
revenue’s for the last 12 months ending Dec 2005 were in excess of USD 375
mm.(Rs. 16610.000 Millions)
About UPL
Through
acquisitions, strategic alliances and network of over 36 subsidiaries, UPL has
built a
marketing
network across the globe and its international revenues account for over 70% of
its
total
revenues. It exports to over 100 countries, with primary markets in Europe and
North America. UPL has over 2400 employees and has 10 operating plants (8 in
India and 1 in UK and Argentina) all of them are ISO compliant to the highest
standards of Quality, Safety, Environment and Occupational Health.
UNITED PHOSPHORUS LIMITED (UPL) SIGNS AGREEMENT FOR
PRODUCTION OF CERTAIN AGROCHEMICALS WITH
ISHIHARA SANGYO KAISHA LIMITED. (ISK)
Ishihara
Sangyo Kaisha, LIMITED. (ISK) has signed the agreement for the production of certain agrochemicals with United Phosphorus
LIMITED. (UPL) Mumbai, India and furthermore is exploring the possible business
alliance of distribution in India and certain other countries.
UPL
has been entrusted by ISK with manufacture of certain products developed by ISK
. ISK, UPL and Mitsui & Co., Limited.(Mitsui) have a plan to establish a
joint venture company for the
development, registration and distribution of ISK products in India. In
addition, the companies continue the discussion about the possible co-operation
in the countries other than India.
ISK
is intending to continue to focus on the Research and Development, especially
creating the new novel molecules and more than ninety (90) percentage of the
total turnover for agrochemical sales (turnover of 41.0 Billion Japanese Yen
and net earning of 8 Billion in March, 2006 as consolidated basis) is coming
from their proprietary products. ISK’s target for its agrochemical business is
turnover of 48.0 Billion Japanese Yen and net earning of 9 Billion Japanese Yen
on a consolidated basis in March 2009 expecting contribution of new products
(IKF-916/cyazofamid and IKI-220/flonicamid).
ISK has commenced on full-scale development work of its new fungicide (powdery
mildew fungicide) IKF-309 ( a common name to be proposed).
With
this venture, ISK will be able to access the world class manufacturing base of
UPL as well as UPL’s domestic marketing network. UPL presently has 8
manufacturing facilities in India, one each in UK and Argentina. UPL currently
has a 8% market share in India.
This
partnership will continue to allow UPL to grow organically, inorganically and
through business alliances. Current revenue of UPL for the year, 2005-2006 have
been USD 480 million.
As
stated by Mr. Jai Shroff, CEO of United Phosphorus Limited “They believe that
this alliance is of strategic importance and this business model will
differentiate UPL from other generic companies as being the most cost
competitive manufacturer with an access to new patented chemistries which can
be leveraged by the global distribution network set up by us. This will also compliment some of the recent
brand acquisitions”
ISK
intends to implement their new manufacturing business model for their
agrochemicals products as their one of the business strategies in addition to
the R & D aiming at increasing its global competitiveness and profitability.
ISK,
therefore, is strengthening the stability and global competitiveness of their
production through establishing the multi- production sites of technical
materials. Most of its agrochemical products already have been locally produced
not only in Japan but also in Europe, North America, Korea, China and
Brazil.
It is currently estimated that 70 percentage of total products used globally are off-patent products while the cost of the development and commercialization with new molecule have been increased significantly. UPL has been recognized as one of the most competitive producer of agrochemicals in India and the fastest growing Generic company in Agrochemical industry with direct presence in 35 countries and a sales in more than 80 countries
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 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. 44.64 |
|
UK
Pound |
1 |
Rs. 86.51 |
|
Euro |
1 |
Rs. 58.62 |
SCORE & RATING EXPLANATIONS
|
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 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--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 |
|
72 |
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 |