MIRA
INFORM REPORT
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Report Date : |
11.08.2007 |
IDENTIFICATION DETAILS
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Name : |
COROMANDEL FERTILISERS LIMITED |
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Registered Office : |
`Coromandel House’, 1-2-10, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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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 |
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RATING |
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 The company can be considered good for any normal business dealings. |
LOCATIONS
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Registered Office : |
`Coromandel House’, 1-2-10, |
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Tel. No.: |
91-40-2784 2034 / 7212 |
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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. |
DIRECTORS
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Name : |
Mr. K. Anil Nair |
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Designation : |
President and
Whole time Director |
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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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Address : |
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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 M.
Venkatachalam |
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Designation : |
Director |
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Name: |
Mr. M R Rajaram |
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Designation: |
Company Secretary |
KEY EXECUTIVES
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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 ( |
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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, |
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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 ( |
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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 / SHAREHOLDING PATTERN
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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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Products : |
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GENERAL INFORMATION
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No. of Employees : |
2000 |
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Bankers : |
§
State Bank of § 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 : |
HDFC Bank and Citibank Payment received on 20.03.2007 Cheque No. 213715 dated 17.03.2007 for
Rs. 0.011 Millions, Tamilnadu Mercantile Bank Limited, Andheri Branch |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
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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Associates/Subsidiaries : |
v Carborandum Universal Limited v Tube Investments of India Limited v
E.I.D. Parry ( v Parry Agro Industries Limited v Coromandel Engineering Company Limited v Cholamandalam Investment & Finance Company Limited v Parry's Confectionery Limited v Parry Murray & Company Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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35000000 |
Equity Shares |
Rs.10/- each |
Rs.350.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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255800000 |
Equity Shares |
Rs.10/- each |
Rs.255.800 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
255.800 |
254.056 |
254.056 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
4868.600 |
4125.814 |
3598.248 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
5124.400 |
4379.870 |
3852.304 |
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LOAN FUNDS |
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1] Secured Loans |
2664.400 |
2109.306 |
1731.195 |
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2] Unsecured Loans |
2825.200 |
2153.293 |
947.930 |
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TOTAL BORROWING |
5489.600 |
4262.599 |
2679.125 |
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DEFERRED TAX LIABILITIES |
0.000 |
751.641 |
889.527 |
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TOTAL |
10614.000 |
9394.110 |
7420.956 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
3711.400 |
3580.064 |
3653.091 |
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Capital work-in-progress |
112.700 |
56.635 |
122.035 |
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INVESTMENT |
1740.800 |
1618.093 |
1348.782 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
20.227 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
4047.300
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3953.077 |
1910.989 |
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Sundry Debtors |
1605.200
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1067.501 |
999.995 |
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Cash & Bank Balances |
1694.900
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243.308 |
328.394 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
4466.400
|
4434.478 |
2202.667 |
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Total
Current Assets |
11813.800
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9698.364 |
5442.045 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
6149.600
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4982.562 |
2716.151 |
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Provisions |
615.100
|
576.484 |
449.073 |
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Total
Current Liabilities |
6764.700
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5559.046 |
3165.224 |
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Net Current Assets |
5049.100
|
4139.318 |
2276.821 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
10614.000 |
9394.110 |
7420.956 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
Sales Turnover [including other
income]
|
21506.000 |
18747.063 |
15541.696 |
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Profit/(Loss) Before Tax
|
1463.500 |
1153.632 |
928.670 |
Provision for Taxation
|
456.100 |
|
236.723 |
Profit/(Loss) After Tax
|
1007.400 |
835.464 |
691.947 |
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Export Value
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NA |
218.546 |
390.303 |
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Import Value
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NA |
13500.326 |
9307.041 |
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Total Expenditure
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20114.900 |
17593.431 |
14600.126 |
QUARTERLY
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PARTICULARS |
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30.06.2007 1ST
Quarter |
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Sales Turnover |
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2487.800 |
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Other Income |
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|
28.800 |
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Total Income |
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|
2516.600 |
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Total Expenditure |
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2069.600 |
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Operating Profit |
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|
447.000 |
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Interest |
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|
113.800 |
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Gross Profit |
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|
333.200 |
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Depreciation |
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|
98.000 |
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Tax |
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|
117.100 |
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Reported PAT |
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129.700 |
200706 Quarter 1
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Notes Expenditure Includes (Increase) / Decrease in Stock in
Trade Rs (1895.70)million Consumption of Raw Materials Rs 2737.20 million
Purchase of Goods for Resale Rs 351.90 million Staff Cost Rs 164.20 million
Other Expenditure Rs 712.00 million Tax Includes Provision for Current Tax Rs
115.00 million Deferred Tax Rs (11.60) million Fringe Benefits Tax Rs 2.10
million EPS is Basic and Diluted Status of Investor Complaints for the quarter
ended June 30, 2007 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 01 Complaints disposed off during the
quarter 01 Complaints unresolved at the end of the quarter Nil 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 stand-alone and the consolidated results of the first
quarter may not reflect the performance for the whole year. 3. The results have
been reviewed by the Audit Committee and approved by the Board of Directors at
their meeting held on July 24, 2007. 4. The Auditors have carried out a limited
review of the stand-alone and consolidated Company results for the quarter
ended June 30, 2007. 5. The Company and its subsidiaries are engaged in the
Farm Inputs business which, in the context of the Accounting Standard-17, is
considered the only business segment. 6. Net sales/ Income from operation for the
current quarter include Rs 204.20 million (quarter ended June 30, 2006; Rs
121.40 million) relating to previous year received on account of announcement
of the final rates of concession for complex fertilizers by the Government of
India. For the current quarter, pending announcement by the Government of India
of final rates of concessions for the complex fertilisers, income has been
recognized having regard to the existing concessions scheme and according to
management estimates of price concessions receivable. 7.During the quarter, the
Company has received the orders from the Hon'ble Courts of Judicature at
KEY RATIOS
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Debt Equity Ratio |
1.03 |
0.85 |
0.79 |
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Long Term Debt
Equity Ratio |
0.47 |
0.46 |
0.55 |
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Current Ratio |
1.17 |
1.12 |
1.08 |
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TURNOVER RATIOS |
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Fixed Assets |
3.04 |
2.87 |
2.45 |
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Inventory |
5.33 |
6.51 |
8.15 |
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Debtors |
15.95 |
18.46 |
12.12 |
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Interest Cover
Ratio |
5.58 |
5.80 |
5.96 |
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Operating Profit
Margin (%) |
10.23 |
9.24 |
9.27 |
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Profit Before
Interest and Tax Margin (%) |
8.36 |
7.30 |
7.05 |
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Cash Profit
Margin (%) |
6.59 |
6.32 |
6.59 |
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Adjusted Net
Profit Margin (%) |
4.73 |
4.38 |
4.37 |
|
Return on Capital
Employed (%) |
18.52 |
18.44 |
17.52 |
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Return on Net
Worth (%) |
21.20 |
20.45 |
19.49 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.80.75/- |
|
Low |
Rs.77.00/- |
LOCAL AGENCY FURTHER INFORMATION
HISTORY:
Subject is a leading fertilizers manufacturing company. It
produces wide range of fertilizers and pesticides (technical and formulations).
CFL is a subsidiary company of Murugappa group company's EID Parry (
CFL has production facilities in several places. The company manufactures
Phosphatic Fertilisers of different grades at three plants. The
The pesticide business of the company encompasses over 35 types of
insecticides, fungicides and herbicides. The company produces pesticides at
Navi Mumbai and Ranipet plant. The first one produces technical-grade
pesticides such as Endosulfan, Monocrotophos, Phenthoate, Cypermethrin,
permethrin and Fenvalarate. The Ranipet plant produces 24 liquid formulations
and 11 powder formulation.
The company is continuously working on to develop its infrastructures and
reduction of operating cost. To achieve this, the company has set up its own 19
MW captive power plant to cater its needs and to reduce dependence on state
power. This facility assures continuous good quality supplies, simultaneously
reducing cost of power. The company has its own jetty. This helps receive cargo
at the plant doorstep and reduces the cost of handling. The jetty is hired out
earning a decent income.
The company quickly identifies opportunities and using the same for their
progress. Looking to the demands of the farmers, when required, the company
imports fertilizers, acting as a trader, and meets market requirement.
The company is managed by top level management
professionals. Their timely decisions have made the organization more efficient
one. The company has exited from high cost operations and stopped running the
urea plant following decontrol of hydrogen prices, the plant having become
unviable. Ammonia plant operations were also suspended after steep increase in
naphtha prices. 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' 1990.
During the year 2003-04, the company has undergone a merger plan.
According this, the Farm Inputs Division (FIND) consisting of fertilizers and
chemical pesticides business of EID Parry (
As part of company's growth plans, it decided to acquire existing
phosphatic fertilizer units, especially in the eastern coast such as Godavari
Fertilisers and Chemicals Ltd (GFCL), Madras Fertilisers Ltd and Paradeep
Phosphates Ltd. To give this effect, it has acquired 25.88% of the equity
capital of GFCL from Government of Andhra Pradesh. Further the company acquired
14.93% of the equity capital from the shareholders of GFCL through a public
offer. The company disinvested 10% of the GFCL in favour of strategic Partners,
viz., M/s Foskor Ltd.,
In the year 2004-05, the company has entered a Business Assistant
Agreement (BAA) with M/s Foskor Ltd, a wholly owned subsidiary of Industrial
Development Corporation of South Africa Ltd (a state owned undertaking) and a
leading manufacturer of phosphoric acid. According this agreement, the company
will provide technical and managerial assistance to Foskor for a period of
three years. The company will receive fees for the services partly by way of
shares in Foskor and partly in cash, based on results. The company has, on
April 6, 2005, acquired an initial equity stake of 2.5% in Foskor for an
investment of 37.5 million South African Rand equivalent to about
Rs.280.000 millions.
The company voted as one of the ten greenest companies in
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
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 (
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
A sprawling 483.5 acres site was identified at
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
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
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.
Director’s
Report
The results for the current year include that of Ficom
Organics Limited and its wholly owned subsidiary company, Rasilah Investments
Limited, which have been amalgamated with the Company pursuant to a Scheme of
Amalgamation approved by the Hon'ble High Courts of Andhra Pradesh and
Subsidy
The uncertainty on the subsidy front continues to be a major
area of concern for the Company. This assumes particular importance in the
context of significant increase in the prices of key raw materials and
intermediates like Rock Phosphate,
Joint Venture Project
During the year, the Company entered into a Shareholders Agreement with
M/s Groupe Chimique Tunisian and Campagnie Des Phosphates De Gafsa (CPG) and
Gujarat State Fertilisers and Chemicals Limited for setting up a Joint Venture
Company at
Amalgamation of Ficom Organics Limited and its wholly owned
subsidiary company Rasilah Investments Limited with Coromandel Fertilisers
Limited The Scheme of Amalgamation of Ficom Organics Limited (Ficom) and
Rasilah Investments Limited with the Company was approved by the Hon'ble High
Courts of Andhra Pradesh and
Pursuant to the Scheme of Amalgamation, 831981 equity shares would be
issued and allotted to the shareholders of Ficom Organics Limited, on a fully
paid up basis, in the ratio of 3 (three) equity shares of Rs.2/- each of the
Company for every 11 (eleven) equity shares of Rs.10/- each of Ficom.
Consequent to this, the paid up capital of the Company would go up from Rs 254.100
millions to Rs 255.700 millions. The current year's results incorporate the
results of the Ficom Organics Unit and to that extent, are not comparable with
the figures of the previous year.
Acquisition of Equity Shares of
During the year under review, the Company entered into a Share Purchase Agreement
with IFFCO for acquiring 8001000 equity shares of GFCL (representing 25% of the
equity capital of GFCL) at a price of Rs.150/- per share. Consequent to this,
an open offer for acquiring upto 64,00,000 equity shares (representing 20% of
the equity capital of GFCL) was made to the shareholders of GFCL as per the
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The
Company, through the open offer, acquired 15, 51,960 equity shares
(representing 4.85% of the equity capital of GFCL) at a price of Rs.150/- per
share. Subsequently, the Company concluded the acquisition of equity shares of
GFCL from IFFCO on April 12, 2007 and effective that date, GFCL has become a
subsidiary of CFL.
Consolidated
Financial Results
A Consolidated Financial Statement incorporating the operations of the
Company, its subsidiary and associate companies has been provided.
The Ministry of Company Affairs, while exercising its powers under Section 212
(B) of the Companies Act, 1956 has exempted the Company from publishing the
Annual Report of its subsidiary Company since a Consolidated Statement has been
provided. In view of this, the Annual Report of the Subsidiary Company, i.e.
Parry Chemicals Limited has not been annexed.
However, the Accounts of the Subsidiary Company and the
detailed related information will be made available to the investors of
Coromandel Fertilisers Limited and its subsidiary Company on request and will
also be kept for inspection in the Registered Office.
Awards / Recognition
The Company continues to receive a number of awards / accolades
from the industry associations. During this year the Company received the
following awards:
* The FAI Best Production Performance Award - 2006 for the Phosphoric
Acid Plant at Visak, for the 9th time. The award was presented by the Hon'ble
Union Minister for Chemicals & Fertilisers.
* Award for 2005-06 Best Energy Conservation in the Fertiliser sector
received by Visak Plant. The award was presented by the Hon'ble Union Minister
for Power at
* The FAI Best Video Film Award - 2006 for the film on 'Gromor Sulphur'
was received by Marketing Department (Fertilisers) for the 5th time. The award
was presented by the Hon'ble Union Minister for Chemicals &
Fertilisers.
Management Discussion &
Analysis and Corporate Governance
The 'Management Discussion and Analysis Report' highlighting the industry
structure and developments, opportunities and threats, future outlook, risks
and concerns etc. is furnished separately and forms part of this Directors'
Report.
As per the requirements of the Listing Agreement with Stock
Exchanges, a report on Corporate Governance duly audited is annexed for
information of the Members
MANAGEMENT
DISCUSSION AND ANALYSIS -
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 (
Consequent to the acquisition of 25% of the equity holding in Godavari
Fertilisers and Chemicals Limited. (GFCL) by the Company from IFFCO in April
2007 and the open offer made to the shareholders as per the SEBI guidelines,
the Company currently holds 74.92% of the equity in GFCL, another leading
manufacturer of Phosphoric fertilizers in the State of Andhra Pradesh.
During the year 2006-07, the Company acquired Ficom Organics Limited, a
technical grade Pesticides manufacturing Company based at Ankaleswar,
The Company has 6 manufacturing / formulation units located in the States of
Andhra Pradesh, Tamil Nadu, Maharashtra and
The Company's Farm Inputs Business comprise of three main divisions
viz.
- Phosphatic Fertilisers;
- Pesticides; and
- Speciality Nutrients
The Management Discussion and Analysis given below discusses the key
issues concerning each of the divisions.
FARM INPUTS:
PHOSPHATIC FERTILISERS:
(a) Business:
CFL is one of the leading producers of Complex Fertilisers in
The Company's fertiliser plants are located at
0.132 million tonnes of SSP.
(b)Industry Scenario:
The Indian economy has registered a growth rate of 9.2% during 2006-07,
although, the agriculture sector with which the Company is associated is
expected to achieve a growth rate of only 2.7%. The average growth of the
agriculture sector during the Tenth Plan period is estimated at only 2.3% and
is below the desired level of 4% per year, which is necessary for achieving the
target growth of 8% CAGR in total GDP on a 'sustained basis'.
In the recent Economic Survey released by Government of India, it has been
acknowledged that the low yield per Unit area across almost all the crops has
become a regular feature of Indian Agriculture. It is also admitted that
imbalanced fertiliser use is one of the major factors resulting in the
lackluster performance of the agricultural sector. The survey emphasises on the
need for taking agriculture to a 4% annual growth through various reforms aimed
at efficient use of resources and conservation of soil, water and ecology on a
sustainable basis and in a holistic framework. The recent moves to focus on
large investment in major and medium irrigation projects as well as for
renovation and restoration of water bodies directly linked to agriculture is
expected to provide a strong base for more consistent and broad based
growth.
The use of chemical fertilisers plays an important role in increasing
agricultural production, productivity and farm income. Equally important is the
fact that higher doses of fertilisers are required to replenish the doses of
fertilisers are required to replenish the nutrients that are removed by the
crops to prevent soil degradation. There is considerable scope for further
increasing fertiliser consumption especially Phosphatic fertilisers, though
there has been reasonably good increase in the consumption of Phosphatic
fertilisers during the last 3 years. In this context, CFL has been working on a
project covering more than 1200 low fertilisers consuming villages spread over
several districts of Andhra Pradesh and Orissa for educating the farmers on the
need for increasing fertiliser consumption and provide balanced nutrition to
the crops in order to improve the farm yields and maintain soil health.
A heartening development is the realization amongst policy makers on the
need for balanced and integrated use of plant nutrients including secondary and
micronutrients to obtain optimum yields from all the crops. Timely and normal
rainfall and good inflow into the major reservoirs especially during Kharif
season of 2006-07 and increase in irrigated acreage in the Company's primary
markets of Andhra Pradesh, Orissa and Karnataka provided impetus to cropping
pattern and supported higher consumption of fertilisers. The phosphatic
fertiliser industry recorded a growth of 6% during the year, driven by complex
fertilizers whose production registered a growth of about 7% over the previous
year.
The prices of key raw materials, such as ammonia, Sulphur etc. have
increased sharply during the last quarter of the year. There is also an
uncertainty on the likely price of Phosphoric Acid and Potash for next year.
But thanks to the long-term arrangements that the Company has entered into with
global players, the Company could secure its requirement of all the key raw
materials including ammonia, rock phosphate, sulphur and phosphoric acid on a
continuous basis without any disruption and this is expected to continue in the
coming year.
© Government Policies:
The subsidy policy of the government continues to remain both uncertain
and unfavourable for the domestic producers. The rise in subsidy bill is
directly linked to the rise in the cost of raw materials and unchanged MRP. It
is to be noted that increase in freight and other costs and impact of various
taxes and duties are not fully compensated under the subsidy formula and this
together with the undue delay in disbursement of subsidy dues for more than 6
months has affected the viability of the industry and has rendered fresh
investment unattractive.
The Government has also not notified the subsidy rates from July 2006 and
it is not clear whether the Government will follow Prof. Abhijit Sen Committee
recommendation for determination of the compensation for Phosphoric Acid based
on price of the Imported DAP on normative basis.
The Government has recently asked the Tariff Commission to make a Cost
Price' study of the Phosphatic Fertilisers and Potash and make its
recommendation with respect to the delivered price of these fertilisers. It
appears that further developments on the subsidy front will have to wait till
the recommendations of the Tariff Commission is received and considered by
Government of India.
PESTICIDES:
Business:
Pesticides are an integral part of the agricultural activity in
protecting crops from pests and diseases thereby reducing yield losses and
helping crops realize their yield potential. The industry is characterized by
MNC dominance with proprietary molecules, large number of generic players,
higher working capital requirements, price wars and vagaries of monsoon / pest
occurrence. Pesticide Industry comprise of three major product groups viz.,
Herbicides, Fungicides and Insecticides and the Indian industry is dominated by
insecticides with a 64% share followed by Herbicides and Fungicides.
During the year, the industry witnessed a negative growth due to
genetically modified crops dominance and low pest / disease / weed presence. BT
cotton acreage has gone up three times to reach almost 8.6 million acres in
2006-07 resulting in sharp reduction in the usage of generics. But the Company
through its focus on Specialties could achieve a marginal growth in turnover in
the formulation business.
As regards exports, these largely depend on generic molecules like
Endosulfan and Malathian.
The work on the new formulation unit at Jammu is nearing completion and
this is expected to result in faster service to northern and western markets
and improved profitability due to excise and tax benefits in the future years.
Besides, the merger of Ficom Organics with CFL will enable the Company to
expand its technical base especially in the export market.
SPECIALITY NUTRIENTS:
The Company has formed a Speciality Nutrients Division
(SND) with a view to give focused thrust to manufacturing and marketing of some
of the Specialty Nutrients, such as Bentonite Sulphur' (Gromor Sulphur), Water
Soluble Fertilisers and other micro nutrients. During the year, the Company
could scale up the volume of Bentonite Sulphur' significantly. This has been
possible due to the various brand building measures taken up in the market
place and stabilization of operations at the plant. The Company has also
recently commissioned a Pilot Plant for production of Water Soluble Fertilisers
(WSF) and the product has been successfully launched in 5 States.
(d) COMPANY'S PERFORMANCE:
For the fourth year in succession, CFL improved on its performance and
delivered better results. This has been possible due to significant increase in
production and sales, improved productivity, reduction in conversion and other
costs. The overall turnover of the Company registered a 12% growth over the
previous year and touched a new high of Rs.20650.000 millions for the
year.
The total complex fertiliser production during the year was 1.283 millions
tonnes compared to 1.189 millions tonnes in the previous year. Both the Visak
and Ennore plants recorded all time high production levels. The sale of complex
fertilisers was a record at 1.223 lmillions tonnes compared to 1.167 millions
tonnes in the previous year. The Company also sold 0.129 millions tonnes of SSP
and 0.103 millions tonnes of imported MOP.
Continuous cost reduction efforts yielded considerable reduction in the
conversion cost at its Visak plant. Besides, distribution and marketing costs
were also contained through various initiatives such as increased direct
despatches to dealers / customers etc. This was despite a steep increase in the
freight cost - both rail and road during the year.
The performance of pesticides business improved on the overall volume of
technical sales compared to the previous year, the increase coming mainly on
the export front. There was a drop in the volume of the formulation sales
mainly due to increased acreage of BT cotton, although the increased focus on specialties
enabled the Company to maintain its profitability from the formulation
sales.
The Company also improved on its performance in the Speciality Nutrient
segment. During the year, higher quantities of Bentonite Sulphur was sold and a
beginning was made with respect to Water Soluble Fertilisers (WSF) the sale of
which was launched in December 2006.
(e) STRENGTHS
AND OPPORTUNITIES:
CFL's leadership position is based upon its efficient cost
structure and the credibility of its product quality amongst the consumers. The
Company will continue to focus on improving the infrastructure and supply chain
management in order to reduce the costs further. The tie-ups with M/s.
The Company also continued its efforts at brand building and expanded its
retail network and developed relationship with 'Self-Help Groups' (SHG) to
strengthen the distribution channel. The Company has opened its first branded
agri retail sales and service centre, 'Mana Gromor' in
With the acquisition of Ficom Organics, the Company has a wide range of
products in the Pesticides business and has made entry into public health
business segment. The Company has also developed a strong dedicated team of
marketing professionals for the Pesticides business.
As per the terms of the 'Business Assistance Agreement' signed with M/s.
Foskor, South Africa, the Company has deputed a number of its senior technical
and management executives to that Company to assist them in improving their
operations and increase the production of phosphoric acid. This has proved to
be mutually beneficial.
(f) OUTLOOK:
With more areas being brought under irrigation in the Company's
addressable markets and increased water storage levels in the reservoirs, the
demand for phosphatic fertilisers is expected to go up further in the coming
year. The shift in cropping pattern in the country from traditional food grains
to crops such as maize, sugarcane, pulses, oil seeds etc., besides increased
usage of BT seeds, will also lead to increased fertiliser consumption. It is
also expected that there will be an increase in the usage and demand for
micronutrients like sulphur, boron, zinc etc.
The availability of phosphoric acid will be a critical factor with no fresh
phosphoric acid production capacity coming up and increased demand for
phosphoric acid from DAP manufacturers all over the world. However, the Company
expects to get its requirement of imported phosphoric acid - thanks to the tie
up that it has with M/s.
As regards pesticides business, the Company proposes to invest in
building / strengthening the marketing infrastructure with a view to achieving
critical size and respectable market share in the domestic market. This will be
brought about by increasing coverage in the key markets for servicing the
customers / consumers efficiently. Besides, the Company will also continue to
focus on demand generation activities especially for speciality formulations.
The Company also proposes to introduce new products and rationalize the product
portfolio on a continuous basis to meet market needs and fill gaps. Further,
efforts will also be made to enhance service level to the channel partners
through buffer godowns,
dedicated vans delivery system, automation of godowns etc.
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
Promoters belonging to the Murugappa Group:
1EID Parry (
2Dodavari Fertilisers and Chemicals Limited
3Parry Engineering
and Exports Limited.
4 Parry Agro
Industries Limited.
5 Parry
Nutraceuticals Limited
6 New Ambadi
Estates Private. Limited. and subsidiaries
7 Ambadi
Enterprises Limited.
8 Tube Investments
of India Limited. and subsidiaries
9 Pressmet Private
Limited
10 Carborundum
Universal Limited. and subsidiaries
11 Cholamandalam
Investment and Finance Company Limited. and subsidiaries
12 The Coromandel Engineering
Company Limited. and subsidiaries
13 AMM Educational
Foundation
14 AMM Arunachalam
& Sons P Limited.
15 AMM Vellayan
Sons P Limited.
16 MM Muthiah Sons
P Limited.
17 Murugappa &
Sons
18 Kademane
Estates Company
19 MM Muthiah
Research Foundation
20 A R Lakshmi
Achi Trust
21 AMM Foundations
22 AMM Medical Foundations
News:
Coromandel Fertilisers Limited to provide Technical and Management
Expertise to South African Major
Murugappa Group’s Fertiliser Forays
into
Coromandel Fertilisers Limited (CFL), a leading manufacturer of
phosphatic fertilisers in
Foskor Limited is one of the largest producers of phosphoric acid in the
world and exports large quantities of phosphoric acid to
At the announcement of the agreement at
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
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.40.67 |
|
|
1 |
Rs.82.12 |
|
Euro |
1 |
Rs.55.60 |
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 |
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 EXPLANATIONS
|
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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|