MIRA INFORM REPORT

Report Date :

08.03.2007

IDENTIFICATION DETAILS

Name :	ZUARI INDUSTRIES LIMITED
Registered Office :	Jai Kisaan Bhawan, Zuarinagar, Goa – 403 726
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	12.05.1967
Com. Reg. No.:	157 (under the name and style of Zuari Agro Chemicals Limited)
CIN No.: [Company Identification No.]	L65921GA1967PLC000157
TAN No.: [Tax Deduction & Collection Account No.]	BLRZ00130E
Legal Form :	Public Limited Liability company The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers and sellers of Urea, NPK Sampurna Uramphos Samrat.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 15000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company of K. K. Birla Group. Available information indicates high financial responsibility of the company. Their trade relations are fair. Financial position of the company is good. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Jai Kisaan Bhawan, Zuarinagar, Goa – 403 726, India
Tel. No.:	91-834-2592431/2513815/2555571 – 575
Fax No.:	91-834-2555179/2512231
E-Mail :	1. ryp@zuari.co.in 2. rm@zuari.cc.gw.wiprobt.ems.vsnl.net.in 3. corpcomm@cfert.com
Website :	1. http://www.zuari.co.in 2. http://www.zuari-chambal.com
Factory :	Fertiliser Jai Kisaan Bhawan, Zuarinagar, Goa – 403 726 Furniture G-106, SIDCO Industrial Estate, Kakkalur, Dist. Tiruvallur – 602 003, Tamilnadu

DIRECTORS

Name :	Mr. K. K. Birla
Designation :	Chairman
Name :	Mr. Saroj Kumar Poddar
Designation :	Co-Chairman
Name :	Mr. Shyam Bhartia
Designation :	Director
Name :	Mr. Arun Duggal
Designation :	Director
Name :	Mr. D. B. Engineer
Designation :	Director
Name :	Mr. M. D. Locke
Designation :	Alternate – K.H. Captain
Name :	Mr. S. V. Muzumdar
Designation :	Director
Name :	Mr. Vishwavir Ahuja
Designation :	Alternate – Manjit Singh Lokhmana
Name :	Mr. Marco Wadia
Designation :	Director
Name :	Mr. Manjit Singh Lakhmana
Designation :	Alternate Director
Name :	Mr. H. S. Bawa
Designation :	Managing Director
Age :	71 years
Qualification :	M.S. (Chem. Engg.), U.S.A.
Experience :	46 years
Date of Joining :	16^th April, 1979
Previous Employment :	Hindustan Petroleum Corporation Limited – General Manager (Refinery Division) – 3 years

KEY EXECUTIVES

Name :	Mr. R. Y. Patil
Designation :	Company Secretary
Name :	Mr. L. M. Chandrasekaran
Designation :	Vice President
Name :	Mr. Naveen Kapoor
Designation :	Vice President
Name :	Mr. V. Vijay Shankar
Designation :	Vice President
Name :	Mr. D. P. Sinha
Designation :	Vice President

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	10138183	34.43
Banks/Financial Institutions and Insurance Companies	3935993	13.37
Foreign Institutional Investors	195883	0.67
Mutual Funds	944573	3.21
NRIs/ OCBs	7990740	27.14
Private Bodies Corporate	1924492	6.54
Public	4310740	14.64
Total	29440604	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and sellers of Urea, NPK Sampurna Uramphos Samrat.

Products :

Item Code No. (ITC Code)	310210.00
Product Description	Urea
Item Code No. (ITC Code)	310490.00
Product Description	NPL Sampurna Uramphos Samrat

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Amomonia	Tonnes		660	231490
Urea	Tonees		1140	400178
Compounded fertilizers of the grades : N.P.K. 28:28:0 19:19.19 14:35:14 18:46:0	Tonnes		1100
D.A.P. 18:46:0 20:20:0 10:26:26 19:19:19 17:17:17 12:32:16	Tonees		1100	141109 219118 326496 26682
Argon (SM3)	Tonees		6600	1137585
Pesticides	Ltrs.			322968
	Kgs.			725470

GENERAL INFORMATION

No. of Employees :

1167

Bankers :

v State Bank of India

v HDFC Bank Limited

v Punjab National Bank

v Corporation Bank

v Canara Bank

v ING Vysya Bank Limited

v The Jammu and Kashmir Bank Limited

v Allahabad Bank Limited

Facilities :

Secured Loans :

Cash credits including demand loans	1960.975
Term loans from :
Banks	1728.563
Total	3689.538

Unsecured Loans :

Fixed deposit form director	3.800
Fixed deposits from Public	670.072
Term Loans:
From Banks	3790.000
Others	45.023
Trade deposits –Dealers/Stockists	143.988
Total	4652.883

Banking Relations :	--
Auditors :	S. R. Batliboi & Company Chartered Accountants New Delhi
Associates :	v Zuari Maroc Phosphate Limited v Paradeep Phosphates Limited v Simon India Limited v Zuari Investments Limited v Zuari Cement Limited v Gobind Sugar Mills Limited v Style Spa Furniture Limited v Gautier India Limited
Subsidiaries	v Indian Furniture Products Limited v Greentech Seeds International Private Limited v Zuari Seeds Limited v Simon India Limtied v Zuari Leasing and Finance Corporation Limited v Paradeep Phosphates Limited v Institute of Field and Vegetable Crops v KOP Investment, Cyprus v Sri Vishnu Cement Limited
Memberships :	Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
35,750,000	Equity Shares	Rs.10/- each	Rs.357.500 millions
10000000	Redeemable Cumulative Preference Shares	Rs.100/- each	Rs. 1000.000 millions
	GRAND TOTAL		Rs.1357.500 millions

Issued Capital :

No. of Shares	Type	Value	Amount
29,451,168	Equity Shares	Rs.10/- each	Rs.294.512 millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
29,440,604	Equity Shares	Rs.10/- each	Rs.294.406 millions
Add :	Forfeited Shares		Rs. 0.005 millions
	GRAND TOTAL		Rs.294.411 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital	294.411	294.411	294.411
2] Reserves & Surplus	3669.973	3475.365	3267.600
NETPROFIT	3964.384	3769.776	3562.011
LOAN FUNDS
1] Secured Loans	3689.538	3819.316	4016.983
2] Unsecured Loans	4652.883	2030.147	1740.982
TOTAL BORRWOING	8342.421	5849.463	5757.965
Deferred Payment Creditors	11.629	20.475	31.925
DEFERRED TAX LIABILITY	53.469	0.000	0.000
TOTAL	12371.903	9639.714	9351.901
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	1725.795	1734.712	1571.226
Capital work-in-progress	119.788	49.614	29.010
INVESTMENTS	4959.214	5086.112	5052.998
DEFERRED TAX ASSETS	0.000	13.894	9.316
CURRENT ASSETS, LOANS & ADVANCES
Inventories	2457.397	2250.889	2429.268
Sundry Debtors	6631.292	4316.673	2342.745
Cash & Bank Balances	344.584	178.885	31.229
Loans & Advances	1259.124	661.318	643.780
Total Current Assets	10692.397	7407.765	5447.022
Less :
Current Liabilities	4970.056	4564.934	2718.156
Provisions	213.639	168.963	143.101
Total Current Liabilities	5183.695	4733.897	2861.257
Net Current Assets	5508.702	2673.868	2585.765
MISCELLANEOUS EXPENSES	58.404	81.514	103.586
TOTAL	12371.903	9639.714	9351.901

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		21806.323	17571.061	17787.100
Other Income		339.327	348.238
Total Income		22145.650	17919.299	17787.100
Profit/(Loss) Before Tax		347.702	279.612	279.600
Provision for Taxation				11.400
Profit/(Loss) After Tax		261.748	268.190	268.200
Imports :
	Raw Materials	7435.116	5377.510	NA
	Stores & Spares	3.468	24.411	NA
	Capital Goods	0.000	5.416	NA
	Others	2305.907	951.409	NA
Total Imports		9744.491	6358.746	NA
Expenditures :
	Manufacturing Expenses	18088.999	15442.028
	Purchases made for re-sale	3009.039	1337.396
	Increase/(Decrease) in Finished Goods	23.704	182.696	16800.000
	Interest	492.253	493.020
	Depreciation & Amortization	160.187	160.953
	Other Expenditure	23.766	23.594
Total Expenditure		21797.948	17639.687	16800.000

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2006 (1^st Qtr.)	30.09.2006 (2^nd Qtr.)	31.12.2006 (3^rd Qtr.)
Type
Sales Turnover	5193.600	7671.500	6409.100
Other Income	3603.900	124.500	13.000
Total Income	8797.500	7796.000	6422.100
Total Expenditure	4998.400	7297.200	6100.300
Operating Profit	3799.100	498.800	321.800
Interest	147.000	78.300	90.300
Gross Profit	3652.100	420.500	231.500
Depreciation	42.800	43.000	43.800
Tax	125.200	2.000	(4.900)
Reported Profit After Tax	3493.300	386.400	122.500

200606 Quarter 1

Notes:

EPS is not annualized 1. Pending announcement of final rates of concession for complex fertilizer for the quarter ended 30th June 2006, the Company has accounted for the difference of Rs.175.1 millions between the interim on account payment and estimated final concession based on Known policy parameters. 2.The Company is primarily engaged in the business of manufacture and trading in fertilizers which is the single segment as per Accounting Standard (AS) 17 issued by the Institute of Chartered Accountants of India (ICAI). 3. No investor complaints were pending at the beginning of the quarter and 06 (six) complaints were received and resolved during the quarter. No complaints were pending on 30th June 2006 4. Previous period's figures have been regrouped wherever necessary. 5. The increase in Net Sales for the quarter is on account of higher sales volume and also due to increase in subsidy caused by raw material prices. 6. Exceptional item represents the gain on sales of long term investments in the equity and preference share capital in ots joint venture company Zuari Cement Limited. to the joint venture partner Ciments Francals their nominees. 7. During the quarter the Company has received on order from the Income Tax Appellate Tribunal disposing of the appeal filed against the demand of Rs.61.65 Millions from Income Tax authorities for the assessment Year 2001-02 mainly in respect of capital gain arising on transfer of cement undertaking. Consequently the company has made a provision for Capital gain tax 12.32 millions which is included in Current Tax. 8. The above audited financial results have been approved by the Board of Director at its meeting held on 22nd July 2006.

200609 Quarter 2

Notes:

1. The increase in Net Sales for the quarter and half year ending 30th September, 2006 is on account of higher sales volume of own and traded products and also due to increase in subsidy caused by higher raw material prices than the corresponding period of the previous year. 2. Pending announcement of final rates of concession for complex fertilizers for the quarters ended 30th June, 2006 and 30th September, 2006, the Company has accounted for the difference of Rs. 422.9 millions between the interim on account payment and estimated final concession based on known policy parameters. 3. Subsidy for Urea for the quarter and half year ended 30th September, 2006 has been considered based on Stage II parameters of the New Pricing Scheme since the impact, If any, of Stage III of the Scheme is not ascertainable at this stage. 4. In the audited accounts for the year ended 31st March, 2006, the auditors have referred to the following in their report: a. 'The Company has accounted for the concession on complex fertilizers for the quarters ended September 30, 2005, December 31, 2005 and March 31, 2006 at rates which are estimated based on the known policy parameters. The differential amount of concessions, if any, pursuant to receipt of relevant notification for the above period, can be ascertained only on such receipt. Accordingly, Its impact thereof, if any, on Company's profits and reserves is not presently ascertainable'. Upon receipt of notification announcing final rates of concession, the Company has accounted for the difference between estimated rates and final rates in the quarter ended 30th June, 2006. b. 'The Company has received a demand of Rs.616.5 millions (P.Y Rs.63.47 millions) from Income Tax Authorities for the assessment year 2001-02 mainly in respect of capital gains arising on transfer of the Cement Undertaking. Since the Company is contesting the same, based on legal opinion obtained, no provision has been made for this amount. We are not in a position to comment on its impact, if any, on the Company's profits and reserves. This had also caused us to qualify our audit opinion on the financial statements relating to preceding year'. During the quarter ended 30th June, 2006, the Company has received an order from the Income Tax Appellate Tribunal disposing off the appeal filed and accordingly, the Company has made a provision for capital gain tax of As. 123.2 millions. 5. 'Exceptional Item' represents the gain on sale of long term investment in the equity and preference share capital in its joint venture company Zuari Cement Limited., to the joint venture partner Ciments Francais and their nominees. 6. Interest expense for the quarter and half year ended 30th September, 2006 and the year ended 30th March, 2006 reported above are after netting off Interest income aggregating As 55.1 millions (previous comparative period As 16.2 millions), As 67.5 millions (previous comparative period As 27.5 millions) and Re 5.74 millions respectively. 7. The Company has received demand of Rs.14.26 millions for the assessment year 2001 - 02 under section 271(1) (c) of the Income Tax Act, 1961 pertaining to the capital gains arising on transfer of Cement Undertaking. Since the Company is contesting the same, based on legal opinion obtained, no provision has been made for this amount. 8. The Company is primarily engaged in the business of manufacture and trading in fertilizers which is the single segment as per Accounting Standard (AS) 17 issued by the Institute of Chartered Accountants of India (ICAI). 9. No Investor complaints were pending at the beginning of the quarter and 23 (twenty three) complaints were received and resolved during the quarter. No complaints were pending as on 30th September, 2006. 1O.Previous period figures have been regrouped wherever necessary. The results for the quarter ended 30th September, 2006 have been subjected to limited review by the Auditors of the Company and were taken on record by the Board of Directors at its meeting held on 28'' October, 2006.

200612 Quarter 3

Notes

Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (649.60) million Consumption of Raw Materials Rs 4211.00 million Staff Cost Rs 113.50 million Power, Fuel & Water Rs 402.20 million purchase of finished goods for re-sale Rs 1519.00 million Other expenditure Rs 498.20 million Miscellaneous expenditure written off Rs 6.00 million Tax Includes Provision for Fringe Benefit Tax Rs 2.00 million Current Tax Rs 12.80 million MAT credit entitlement Rs (19.70) million Deferred Tax Rs 70.10 million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 30 Complaints disposed off during the quarter 30 Complaints unresolved at the end of the quarter Nil 1. The increase in Net Sales for the nine months ended December 31, 2006 is on account of higher sales volume of own and traded products and also due to increase in subsidy caused by higher raw material prices than the corresponding period of the previous year. The Plant turn around is expected to be taken in February/March, 2007. 2. Pending announcement of final rates of concession for complex fertilizers for the quarters ended September 30, 2006 and December 31, 2006, the Company has accounted for the difference between the interim on account payment and estimated final concession based on known policy parameters. 3. Subsidy for Urea for the quarter and nine months ended December 31, 2006 has been considered based on Stage II parameters of the New Pricing Scheme since the impact, if any, of Stage II of the Scheme is not ascertainable at this stage. 4. In the audited accounts for the year ended March 31, 2006, the auditors have referred to the following in their report: a. 'The Company has accounted for the concession on complex fertilizers for the quarters ended September 30, 2005, December 31, 2005 and March 31, 2006 at rates which are estimated based on the known policy parameters. The differential amount of concessions, if any, pursuant to receipt of relevant notification for the above period, can be ascertained only on such receipt. Accordingly, its impact thereof, if any, on Company's profits and reserves is not presently ascertainable'. Upon receipt of notification announcing final rates of concession, the Company accounted for the difference between estimated rates and final rates in the quarter ended June 30, 2006. b. 'The Company has received a demand of Rs 616.50 million (P.Y. Rs 634.70 million) from Income Tax Authorities for the assessment year 2001-02 mainly in respect of capital gains arising on transfer of the Cement Undertaking. Since the Company is contesting the same, based on legal opinion obtained, no provision has been made for this amount. We arc not in a position to comment on its impact, if any, on the Company's profits and reserves. This had also caused us to qualify our audit opinion on the financial statements relating to preceding year'. During the quarter ended June 30, 2006, the Company received an order from the Income Tax Appellate Tribunal disposing off the appeal filed and accordingly, the Company made a provision for capital gains tax of Rs 116.30 million. 5. 'Exceptional Item' for the nine months ended December 31, 2006 represents the gain on sale of long term investment in the equity and preference share capital in its joint venture company Zuari Cement Limited to the joint venture partner Ciments Francais and their nominees. 6. Interest expense for the quarter and nine months ended December 31, 2006 and the year ended March 31, 2006 reported above is after netting off interest income aggregating Rs 64.90 million (previous comparative period Rs 15.90 million), Rs 132.50 million (previous comparative period Rs 43.40 million) and Rs 57.40 million respectively. 7. The Company has received a demand of Rs 142.60 million for the assessment year 2001_02 under section 271(1)(c) of the Income Tax Act, 1961 pertaining to the capital gains arising on transfer of the Cement Undertaking. Since the Company is contesting the same, based on expert tax opinion obtained, no provision has been made for this amount. 8. The Company is primarily engaged in the business of manufacture and trading in fertilizers which is the single segment as per Accounting Standard (AS) 17 issued by the Institute of Chartered Accountants of India (ICAI). 9. Previous period figures have been regrouped wherever necessary. 10. The results for the quarter ended December 31, 2006 have been subjected to limited review by the Auditors of the Company and were taken on record by the Board of Directors at its meeting held on January 18, 2007.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	1.84	1.59	1.55
Long Term Debt-Equity Ratio	1.41	1.09	0.96
Current Ratio	1.34	1.14	1.09
TURNOVER RATIOS
Fixed Assets	6.02	5.11	3.63
Inventory	9.27	7.52	6.08
Debtors	3.99	5.28	4.58
Interest Cover Ratio	1.63	1.57	1.37
Operating Profit Margin (%)	4.85	5.79	7.29
Profit Before Interest And Tax Margin (%)	4.11	4.88	6.24
Cash Profit Margin (%)	1.93	2.61	2.69
Adjusted Net Profit Margin (%)	1.20	1.69	1.63
Return On Capital Employed (%)	8.22	9.12	8.46
Return On Net Worth (%)	6.77	8.12	5.61

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.137.90/-
Low	Rs.131.50/-

LOCAL AGENCY FURTHER INFORMATION

History

The company was incorporated on 12^th May, 1967 at Zuari nagar in Goa having Company Registration Number 157 under the name and style of Zuari Agro Chemicals Limited. The name was subsequently changed to present w.e.f. 12^th February, 1998.

The company was promoted the Chambal Fertilizers and Chemicals Limited in 1987 and in February 28, 2002 it has acquired the 74% stake in public sector fertiliser company Paradeep Phosphates Limited, through Zuari Moroc Phosphates Private Limited, a 51:49 joint venture between Zuari Industries and Moroc Phosphore, SA, Morocco. The coampny has became the largest producer of fertiliser in private sector in India with the acquisition of Paradeep Phosphates which owns the second largest integrated DAP plant in India with an total installed capacity of 720000 MTPA.

The company has started marketing the biophos, an environment-friendly product to enhance efficient use of phosphorus which was manufactured by Ajay Biotech Laboratories Private Limited since 1993.

The company has come out with an right issue during the year 1996-97 in the ration of 1:1.

Subject was promoted by United Steel Corporation, USA and the Birla group as a 340,000 TPA urea fertilizer plant. Armour, USA, a division of United Steel Corporation provided the technical know-how. It manufactures urea, ammonia (for captive consumption) and compound fertilizers. In the eighties, the company set-up a 1 MTPA cements plant at Mandalgarh.

In 1993, the company commenced marketing biophos (an environment-friendly product to enhance efficient use of phosphorus) manufactured by Ajay Bio-Tech Laboratories Private Limited. The company diversified into steel, financial services, hybrid seeds and sugar. In 1993, it formed a joint venture named Zuari Seeds with the Institute of Field & Vegetable Crops (IFVC) and KOP Investments, Cyprus, to produce and market hybrid seeds. In 1995, it entered the project engineering and consultancy services sector through a joint venture with Simon Carves, U.K. The company set-up an argon recovery plant on its premises, which commenced production in May ’95. To market most of the argon production, the company has entered into an agreement with BOC (India).

The company took over the cement unit of Texmaco in Andhra Pradesh during 1995. In 1995-96, Zuari Leasing and Finance Corporation became a subsidiary of the company. During the year 1996-97, the company issued rights equity shares in the ratio of 1:1.

In 1998-99, it completed the expansion of cement plant to 1.7 million tonnes and commissioned 6 MW DG set. During the year 1999-2000, the waste heat boiler of the Wartsila generator as commissioned and it produces steam for use in NPK/DAP plants.

The company hived off its cement division as a separate company – Zuari Cement Limited to facilitate faster growth, by the order of the Panaji bench of Mumbai High Court. Zuari Cement Limited is a 50:50 joint venture between Zuari Industries Limited and Italian cement major, Italcementi SpA.

The company has acquired a 70% stake in Hyderabad based Green Tech Seeds International Private Limited. Green Tech is a closely held company in the business of research & development, production, processing and marketing of seeds.

The company has approved the amalgamation of Zuari Leasing & Finance Corporation, a wholly owned subsidiary with the company.

The company has acquired majority stake in Zuari Maroc Phosphate Private Limited. Consequently, the same has become a subsidiary of the company w.e.f. 2^nd February, 2002.

Fertiliser Division

The division was the major revenue generator for the company contributing around 95% of the top line of the company. The company started its operation by setting up a 3400000 tpa fertilizer plant in Goa with the technical know how obtained from Armour, a division of United Steel Corporation, U.S.A.

The company set up an argon recovery plant on its premises, which commenced commercial production in May '95. To market most of the argon production, the company has entered into

an agreement with BOC (India).

During the year 1999-2000, The waste Heat Boiler of the Wartsila generator was commissioned and it produces steam for use in NPK/DAP plants. 

Leasing & Finance  

 Zuari Leasing and Finance Corporation, which has became the wholly owned subsidiary of the ZIL in 1995-96 and in the business of finance, trading, HP, Leasing etc was amalgamated with ZIL subsequent to the legal clearance from High Court. The company has restricted the its operations in the field to its group companies only due to unfavourable business environment. 

Subsidiaries & Joint Ventures  

Indian Furniture Products Limited (IFPL), which was earlier amalgamated with company in 1998 was again came into existence with the hive off of company’s Furniture Products division into a separate company effective from April 2002. Consequent to allotment of 23000000 equity shares of Rs.10 each to ZIL, the IFPL has become a subsidiary of company. 

IFPL operates an Export Oriented Unit with facilities to manufacture Ready to Assemble(RTA) Furniture at Kakkalur near Chennai in Tamilnadu. IFPL has entered into technical and Financial collaboration with Messrs. Serbio, France who are one of the pioneers in the RTA furniture in Europe. 

The company launched a range of computer and entertainment furniture in 2000-01 under the brand name of Zuari. It has also forayed into office systems and executing some prestigious orders for Chambal Fertilisers, UNICEF, Ernst & Young, Delhi. etc. 

Zuari Cement, a 50:50 JV between ZIL and Ciments Francais is incorporated to takeover the cement division of the ZIL as per the agreement between the JV partners in year 2000. This hiving of cement business to a JV company was taken to give a better focus and facilitate faster growth. The cement division of ZIL has came into existence by the diversification into manufacturing of Cement in the eighties by setting up a 1 TPA cement plant in Mandalgarh. And in 1995 the company took over the cement unit of Texmaco in Andhra Pradesh. In 1998-99, it completed the expansion of cement plant to 17 lac tonnes and commissioned 6 MW DG set.

Simon India Limited, a 50:50 JV company between ZIL and Simon Carves of UK was promoted with an view to provide EPC and project management services to process industries.  

The company has a 50:50 JV between ZIL and Chambal Fertilizers and Chemicals is providing Depository services, Corporate Advisory Services, Retail Distribution of financial products besides making strategic long-term and short-term investments. Gautier India Limited is ZIL's joint venture for marketing furniture products. The company is now has established a network of 36 stores.  

Zuari Moroc Phosphates Private Limited (ZMPPL), a 51:49 JV company between ZIL and Moroc Phosphates, SA Moracco was incorporated on Jan 24, 2002 for carrying on the business of manufacture and marketing of fertilizers. It has acquired 74% stake of GOI in Paradeep Phosphates Limited (PPL) through disinvesment process thus making PPL a subsidiary of company. 

Zuari Seeds Limited, started in 1993 as a JV between Institute of Field & Vegetable Crops (IFVC) and KOP Investments, Cyprus to produce and market hybrid seeds has became the subsidiary of ZIL consequent to acquisition of holdings of JV partners by company.  

Greentech Seeds International Private Limited, a Hyderabad based company which is into the business of R&D, Production, Processing and Marketing of seeds was acquired by ZIL by buying 70% of the stake from the promoters.

The company is in trade terms with:

v Shri Sakthi Insulations

v Gokul Packages

v Carton Creations

v G. G. Packaging & Printing

v Vantech Chemicals Limited

v Ajay Bio-tech (India) Limited

v Sebfern Wood Craft

v Goldcoin Polypack Private Limited

v Zuari Structural Works

v Ram Tooling Systems

The company has joint venture with :-

v Zuari Cement Limited

v Zuari Indian Oil Taking Limited

v Zuari Maroc Phosphates Private Limited

v Shri Vishnu Cement Limited

v Pradeep Phosphates Limited

v Simon India Limited

The company’s fixed assets of important value include Land (freehold), Buildings, Railway Siding, Plant & Machinery, Vehicles, Furniture Fitting, Office Equipments and Books Marketing know-how.

Public Deposits:

Public Deposit Scheme of the Company was continued during the year and the public response has been good.

Deposits matured during the year, have been repaid along with interest as on 31.03.2006 in accordance with the terms of deposits. 733 deposits amounting to Rs. l 1.017 millions which had matured have not been claimed. The Company had written to these depositors for forwarding duly discharged receipts for repayment and/or renewal of the deposits. The Company has also sent reminders to the concerned depositors. During the year, the Company has transferred an amount of Rs.0.097 millions towards unclaimed / unpaid deposits and interest thereon to 'The Investors Education and Protection Fund', pursuant to Section 205 (C) of the Companies Act, 1956.

Capital Projects:

During the year, the titanium lined Urea Reactor was replaced with a Stainless Steel, lined reactor fitted with High Efficiency trays (supplied by Urea Casale, Switzerland), to improve the urea conversion efficiency.

Environment & Safety:

The Company's Fertilizer Plant continues to be a 'Zero Effluent Plant' since 1990 and the green bed around the entire Complex continues to flourish and attract a variety of wild life.

The Company received Million Work Hours Award from The National Safety Council, U.S.A. for achieving 4 million employee hours without occupational injury or illness. As of 31st March, 2006 the Company has achieved 4.92 million accident free man hours. Company also received the Gao State Safety Award for lowest accident frequency rate. Regular safety awareness programmes for employees and contract workers continued during the year.

Personnel:

Industrial relations remained cordial and peaceful throughout the year. The Company continues to give priority to manpower rationalization and appropriate deployment in the light of rapidly changing environment.

The training and development of employees at all levels continues to remain priority of the Company. The training is aimed at improving the overall skills of their employees leading to increasing operational efficiency and higher productivity. The training programmes include managerial effectiveness and programmes focusing on self and organizational development.

Particulars of employees to be furnished under Section 212 (2A) of the Companies Act, 1956 and the rules framed there under, are annexed to this Report as Annexure 'B'.

Subsidiary Companies:

Pursuant to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes the financial information of its subsidiaries. The Company has received approval of the Central Government U/s 212(8) of the Company's Act, 1956 for exempting the Company from the purview of section 212(8) of the Act.

Therefore the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Auditors of the Subsidiary Companies are not attached.

The Company will make available these documents/ details upon request by any member of the Company interested in receiving this information. The Annual Accounts of the Subsidiary Companies will also be kept for inspection by any investor at the Registered Office of the Company and subsidiaries.

A brief review of subsidiaries and joint ventures of the Company is given here below:-

Indian Furniture Products Limited (IFPL):

Indian Furniture Products Limited, a wholly owned subsidiary of the company has achieved a turnover of Rs. 745.2 millions during the financial year 2005-06.

The company is in the process of strengthening its mass distribution channel under 'ZUARI' brand with aggressive pricing. Similarly to strengthen the Office System segment, the company has introduced a new technology called Honeycomb technology and has also increased its offerings in terms of new designs. The company expects to achieve a turnover of around Rs. 1000 millions during the next financial year.

Zoari Seeds Limited (ZSL) :

Zuari Seeds Limited (ZSL), a subsidiary of the Company, is engaged in R&D, Production & Marketing of Hybrid Seeds of a wide range of crops. The R&D activity of the Company is focused at providing superior quality hybrid seeds to the farming community. During the year 2005-06, the Company made good progress in its BT cotton development. The government approval for the results of first stage trials of company's BT hybrids has been obtained and the company expects to receive government permission for large scale trials and production in Kharif 2006.

Simon India Limited (SIL) :

Simon India Limited, a wholly owned subsidiary of the Company is engaged in providing engineering consultancy services. During the financial year 2005-06, Simon India Limited, successfully commissioned both the Gas Cleaning Plant and new Inter Absorption Tower (IAT) for the Sulphuric Acid Plant of Hindustan Zinc Limited. Subsequently SIL has also been awarded another job of Drying Tower (DT) on which work has already commenced.

SIL has also commenced the preliminary work for Project Management Consultancy (PMC) Services to Saudi Formaldehyde Chemical Company Limited (SFCCL).

Joint Venture Companies:

Zuari Investments Limited :

Zuari Investments Limited a joint venture with Chambal Fertilizers & Chemicals Limited is depository participant with National Securities Depository Limited and Central Depository Services (India) Limited. The company is also a member of Over the Counter Exchange of India and a Category II Registrar and Share Transfer Agent registered with Securities and Exchange Board of India.

During the year, Zuari Investments Limited has secured the membership of National Stock Exchange (NSE) for equity as well as Future & Option (F&O) segment. With this the company has become one stop shop for stock broking, depository services and investment advisory services and is fully poised to reap the benefits of buoyant capital market.

Zuari Cement Limited (ZCL) :

Zuari Cement Limited is a 50:50 joint venture with Ciments Francois, S. A. France. ZCL and its subsidiary, Sri Vishnu Cement Limited, are in the business of manufacture and marketing of cement from plants located at Yerraguntala and Sitapuram in Andhra Pradesh. During the year, total clinker production was 1.742 millions MT (previous year 1.668 millions MT) and the cement production was 1.770 millions MT (previous year 1.698 millions MT). The sales volume, including quantities sourced from others was 1.889 millions MT (previous year 1.760 millions MT).

During the year the market witnessed an all India growth of around 9% and over 15% in South India.

The improved off take has helped to achieve higher capacity utilization of the plants and better price realization.

During the year, ZCL, has promoted a Special " Purpose Vehicle (SPV) by the name Sitapuram Power Limited (SPL) in joint venture with M/s. KSK Energy Venture Limited to set up a Coal based captive power plant of 43 MW capacity to cater its requirement of power. The plant is likely to be commissioned by March, 2007. ZCL along with its subsidiary Sri Vishnu Cement Limited holds 51% of the paid up capital of SPL and hence, SPL has become a subsidiary of ZCL.

Zuari Indian Oil Tanking Limited :

Zuari Indian Oil tanking Limited (ZIOL) a 50:50 joint venture between Zuari Industries Limited and Indian Oil tanking Limited (IOTL) has state-of-theart terminalling facility for oil & petroleum products namely Naphtha, MS, HSD & SKO . The Terminal at Goa with 64000 KL tankage is situated 85 M above sea level with a 14 KM long piggable pipeline from Mormugao Port Trust (MPT).

Apart from providing terminalling services to Zuari Industries Limited for Naphtha storage, the terminal is providing services to Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited, for then- storage and distribution requirement of petroleum products.

Currently the terminal is augmenting storage capacity by building additional tanks to take care

of projected increase in throughput.

In the year 2005-06, the terminal has achieved a throughput of 580,000 KL, an increase of 3 % over previous year. The Company has recommended a maiden dividend of Re.0.50 per share for the year 2005-06.

Zuari Maroc Phosphates Limited (ZMPL) :

The Company which has been floated as an SPV, is 51:49 Joint Venture with Maroc Phosphore S.A. Morocco, acquired majority stake in Paradeep Phosphates Limited (PPL) from the' Government of India under the Scheme of Disinvestment.

Paradeep Phosphates Limited is a subsidiary of Zuari Maroc Phosphates Limited and consequently of Zuari Industries Limited. PPL's sales and operating revenue including subsidy for the year 2005-06 was Rs. 1971 crore, representing a growth of 23.6% over the previous year. During the year, PPL achieved a distinctive feat of turnaround of its business resulting in net profit from its operations. The Company's operations for the year, ended with a profit before

tax of Rs. 12.74 crore in comparison to a loss of Rs. 15.08 crore last year. After ten years, PPL has returned to profit making company.

PPL achieved an all-time high production of 1.258 millions tonnes of DAP and complex fertilizers recording a growth of 23% over the previous year. Shortage of phosracid, a key raw material for production of phosphatic fertilizers, adversely affected most of DAP production in the country. However, PPL, with its long term supply arrangements with Maroc Phosphore S.A., Morocco, managed to meet the production targets. PPL, has also achieved highest ever capacity utilization of Sulphuric Acid and Phosphoric Acid plants during the year. Record production in all the three units was achieved by increasing the on-stream days through various debottlenecktng measures and regular maintenance.

PPL continues to improve its sales and marketing efficiency by increasing the market share in the primary markets. The sales for the year including traded fertilizers were 14,40,356 MT as compared to 12,45,296 MT during the previous year representing a 15% increase.

AS PER WEBSITE

Zuari Industries Limited- Fertiliser Division

Zuari Agro Chemicals Limited was incorporated in 1967 in financial and technical collaboration with US Steel Corporation to manufacture urea. In 1973, Zuari Agro Chemicals Limited set up Goa's first mega industrial undertaking. In 1998 Zuari Agro Chemicals Limited was rechristened Zuari Industries Limited.

The Fertilizer Division lies at the core of the company's operations and accounts for the major share of its business. The first large industrial undertaking in the state of Goa, Zuari's Fertilizer plant has an annual installed capacity of 946,200 metric tonnes of fertilizers. It comprises a single stream ammonia plant, a urea plant, an NPK plant and a DAP plant along with related on-site and off-site facilities for handling raw materials end products as well as the generation of steam and captive power.

Business Empires: The Birlas

Zuari Industries

[OCTOBER 28, 2004 03:50 PM]

Zuari Industries Limited (formerly Zuari Agro Chemicals), a K K Birla Group company was incorporated in 1967 by United Steel Corporation of USA and the Birla Group and is into manufacture of Chemical Fertilizers [Urea, DAP and NPK 19:19:19].

In 1973, Zuari Agro Chemicals Limited set up Goa's first mega industrial undertaking. In 1998, Zuari Agro Chemicals Limited was renamed Zuari Industries Limited.

The company has promoted the Chambal Fertilizers and Chemicals Limited in 1987 and in Feb 28, 2002 it has acquired the 74% stake in public sector fertiliser company Paradeep Phosphates Limited. Through Zuari Moroc Phosphates Pvt. Limited, a 51:49 JV between Zuari Inds and Moroc Phosphore, SA, Morocco.

ZIL has became the largest producer of fertilizer in private sector in India with the acquisition of Paradeep Phospates.

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.44.27
UK Pound	1	Rs.85.54
Euro	1	Rs.58.23

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	8
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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		66

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

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions